Big Radio-The Switch Towards Quality and Less Control

By Jeremy Joshua

Radio is a medium with big voices, great music and instant news that keeps you informed. The radio industry has been common place since the early 1900’s and has since been a staple in homes, cars, and street corners. Without it, we would have missed FDR’s fireside chats, Mayor LaGuardia reading the comics to the children of New York, Edward R. Murrow on the rooftops of London, the British invasion, school kids sneaking the World Series in math class, shock jocks and Howard Stern.

Radio is made up of music that has come from the hearts of musicians to the ears of avid listeners. Advertising is a key to how stations thrive. The ads are central to the revenue of a station. This is done by showcasing what certain placements can do for a station’s client. It’s vital for radio to bring its traffic (listeners), created by popular shows and music, and expose those listeners to the client in the form of ads. The content a radio station creates develops a strong, recognizable brand that people love to tune into. Strong, smart, funny radio personalities are, day in and day out, why an audience tunes in Radio develops relationships between the public, the artists and the advertisers who all benefit from the medium.

Currently, radio stations are made up of different departments that create and produce content — music, news and advertising. The consumer is the listener who tunes in to this content that is broadcast over a bandwidth via an antenna with up to 200,000 watts of power. Recently, radio has been delivered over the internet and mobile radio applications.

The main department of the station is the production department, which consists of the Production and Operations staff. The Production department makes sure that all program content and commercials are produced and lined up for broadcast in certain time slots. The production team has consistently used a pattern of taking content and structuring it around metrics and charts provided by ratings companies like Neilson and Billboard. This is something that can often be tiresome for listeners when music is played over and over again. Listeners may turn to other stations or sometimes just plug in their phone and listen to their own music on a mobile device or music player. The Creative department works with the production department developing content support. This department consists of copywriters who write well designed scripts for the commercials and for programs. The creative department helps to bring in revenue for the company. It is more of a manual craft instead of an automated job. The production department uses traffic managers to plan the broadcast of all the commercials produced to play on air. It is responsible for processing sales orders and arranging the daily production and the schedule of the advertisements air time. This allows production and business matters to converge.

The traffic manager has a team whose sole job is to schedule the ads and generate data that analyzes the effectiveness of campaigns for the sales team and its clients. The audio produced for broadcast can come from a range of sources, such as internally or from external production companies. They are also responsible for checking that this content meets quality standards, complies with legal and station requirements and is correctly reported within the terms of the stations music license. Managing these campaigns can be difficult because they are often more national branded campaigns, rather than local campaigns that directly connect with the station’s target audience. The operation department supervises the daily operations of the radio station. Most people know the on air personalities — hosts, co-hosts, anchors, disc jockeys or radio jockeys who people listen to everyday, from early in the morning to late into the night hour. On-air personalities deliver their content to listeners and they are the face of the station. The program director and those who work in the traffic and creative side allow the personalities to deliver the content that is curated for consumers.

The marketing department is responsible for generating direct revenue for the radio station by selling air time to advertisers. There are several people who perform different functions in this area, ranging from small to big. There always has to be a sales supervisor who oversees the functioning of the staff to make sure certain revenue targets are met. There are a large number of salespeople who reach out to current clients and prospective clients to sell them air time and negotiate terms and payment details.

The financial department is set up to handle the revenue and expenses of the entire station. It ensures that fees from clients are collected on time and all payments, like utilities, salary and others, are settled. It also handles all legal and financial matters relating to mobilizing funds from the market. If you were to analyze the radio market, for example, on the Kondratiev waves,which is a long-term cycle present in ecertain types of economies that represents long-term, ligh-growth and low-growth periods.The market would most likely be in stagnation — a point of no change and heading towards a recession — where the market is seemingly in decline.

Consequently, the radio industry seems to be on the verge of a major change that can be seen throughout different parts of technology and content distribution. There is a major ongoing change in how content is distributed to consumers via digital distribution, which is the switch to fully online radio and the utilization of streaming instead of radio towers to reach the masses. The innovations in technology are starting to allow for the capability to have radio outside of the station and bring more content that is catered to certain consumers who have different tastes. The industry is on the verge of a revolution in content through the usage of podcasts and the capabilities that it must build up for potential networks to amass a huge following. This can be seen as the eventual and inevitable restructuring of big radio. Radio as we know it may never be the same again.

The evolution of technology is making terrestrial radio a thing of the past because of the way people can obtain content. This is a trend where technological progress has had a strong effect on the medium. With the invention of the smart phone, technology has evolved to deliver music and news to mobile devices. There are now applications that allow listeners to switch between their local stations to stations all over the world. From the tune in app to iHeartRadio. these apps are bringing stations to a mobile front. Apps like Apple Music, Spotify, and Google Music are pay for service but they are disrupting the field by allowing people more control over the content they want to hear. The surge of freemium and pay as you go services has brought about by the large amount of economic growth in the past eight years. Radio outlets are starting to use these tools to switch from terrestrial airplay using towers to online and digital radio and the resurgence of HD radio. This resurgence is the shift people have for clearer listening and more content HD Radio stations broadcast in clear digital quality to your local area making static, radio hiss and fuzz a thing of the past. HD radio stations broadcast as a digital signal over traditional radio frequencies allowing the delivery of up to four stations of content in quality sound. All you do is tune in to your favorite station and your HD Radio receiver will automatically provide on-screen information such as: album art, song info, traffic and weather.

The field of radio is also changing in part due to what was once seen as a fad — the rise of the podcast. Podcast consumers, according to Edison Research, usually listen to about six episodes per week. Once they find a podcast they like, they become fans because the content is something that relates directly to them. Unlike online and terrestrial radio in which consumers tend to click and then turn away quickly if they are not satisfied with the content, podcasts draw people in for the entirety of an episode. Listeners begin to feel a deep, personal connection with the hosts. This is a trend Big radio will tap into especially in a time when their ad rates are plummeting and the level of connection and reach podcasts are gaining is something that most media outlets are dying for. Almost one in five Americans are, according to Wondery, listening to podcasts at least once a month. And nearly two-thirds of podcast listeners have engaged in various research and/or purchase related behaviors as a result of advertising exposure from podcasts. This can become a massive trend for the future of radio because a majority of its revenue is made up from client advertising. The potential of podcasts is that if they were to band together and form companies they could essentially take over the market. The capability to use advertising on mobile devices is a massive innovation and podcasts create the highest improvement in perception of audio content. The most viable advantage is that among all forms of digital advertising, podcast ads are considered the least intrusive.

The future of radio can become more centralized and focused on what the consumer needs and that means the shift to localization. The implementation of new technologies, and increased competition from startups in the podcast world against big radio is on the horizon. With new creations every day adding to the innovations of technology — like the connected car, and digital platforms that provide newer software — consumers are able to enjoy radio in a better way than ever before. These changes will be ones that will occur gradually but will affect the way we view current radio today drastically. Radio’s future are, in part, those ideas that HD radio will have a strong effect on in the terrestrial radio we see today

The future scenario for HD radio will see the rise of more localized stations. This can be seen from the improvement in audio quality as a major advantage in keeping listeners tuned in. Down the line there will be stations with content directed towards people who solely love a certain type of genre. An example; an indie rock lover frustrated because he can only listen to regular rock on his daily commute. With the addition of HD radio he will be able to listen to something more to his liking. The consumer will see playlists in advance and have more input into what is played by the station. This will make the jobs of those in the production department a lot less automated in terms of creating content for their listeners. It will, by necessity, expand the content so that it’s more individualized and appealing to individual consumers. This will also allow direct marketing of advertising to come into play where certain analytics can be discussed about the types of listeners who would purchase products directly associated with their listening patterns. This in itself will be the localization or homegrown addition to radio. With these additions, there will be more localization for the stations when it comes to ad revenue and marketing station events. Stations will be able to reach many more people than imagined and that means reaching into their pockets, as well. The HD radio arena may have some issues with all the possibilities available to listeners; syndicated programs that are now the norm will lose a lot of their listeners (and, consequently, stations) in smaller cities to the HD shows that have a more localized feel. There is always the possibility that radio doesn’t pick up HD radio and possibly continues to push towards more mobile phone usage as its future platform. This would likely mean HD radio fades into obscurity, even further that it currently is, with no hope of taking a stable piece of the major radio industry.

The future could also build up options of 60 db and NextRadio thatwill see the rise in how people listen to radio being outside of the car and more on the go.With apps like NextRadio that combines local FM radio inside the smartphones built-in tuner with great content via the Internet that enables you to see album art, station logos, and song & program details. NextRadio delivers interactive content you would normally listen with FM radio broadcasts and saves a large amount of data used by Internet streaming. 60dB is a new application that is looking to provide a more personalized radio service that is focused on short form content. There’s a variety of content from various publishers and there is a section for longer stories also available. The company itself was created by former NPR reporter Steve Henn. This app will work towards keeping people tuned in and stopping them from changing the dial. The content comes from a range of publishers, including Marketplace, the BBC, ESPN, Late Night with Seth Meyers, The Late Show with Stephen Colbert, Bloomberg and The Wall St. Journal. At the launch of the app, there was more than 2 million stories available. The company has definitely started to change how people are listening to music and with incorporating Amazon Echo it will enhance the listening habits of people into the platform and this can help take them into the future of radio.

In the future, a possible scenario for podcasts is that they eventually break out into their own lane of revenue by continuing to creating content that is personalized to their listeners. The future of podcasts will start to see that more and more people are leaning towards their type of content and public entities, like athletes, celebrities and politicians will feel more comfortable to sit down with them to talk about general topics. They will greatly effect curation of content for consumers and this will have a major effect on media at large. The big radio companies, like I Heart media, Cumulus Broadcasting, and Cox Media, will start to look into the possibility of hiring those who worked solely in podcasts to bring their audiences over to try and build around the talent they have acquired. This plan does not seem likely to work through the long run because of the possible independence that podcasters have become accustomed to. They will start to form networks from chains of podcasts that see a community for certain consumers and market the networks to advertisers who fall into their business model. This possibility of major podcast networks comes as a challenge to major radio organizations that usually gather viewers to gain clients who purchase advertising opportunities. If the podcasting networks are able to gain a great amount of corporate and local sponsorship they may be able to overtake major radio. The only downside to podcasts is that they cannot do some of the things that are normally done by major radio outlets. There is always the possibility that podcasts start to die off, like the recession of a K Wave which results in a general slowdown in economic activity.. The wave could become stagnant in the near future, with no progress coming to this potentially enormous media outlet. Podcasts currently seem to be on a rise but this is a 10-year-old form of media that could potentially end up faltering back into nonexistence. One major downside would be playing music by artists and musicians who are under contract by major record labels, the costs of having to pay for licensing from ASCAP and BMI would be staggering. Also they would need to be more organized and follow regulations that are sometimes in direct conflict with the creative process of those producing the podcast content.

The future of radio is truly amazing with possibilities of radio evolving into something we never could imagine today. To be able to switch towards a more personal outlet radio form would make more intimate connections with consumers. They would also be able to use the content created to develop strong ads that cater directly to what their listeners need and want. The technology and advancements in the craft from HD radio making the content clearer and possibly expanding the amount of stations would be a stellar improvement to the industry. The addition of podcasting to the realm of radio and the possibilities of what it can do for the field are somewhat scary but also fantastic — things we couldn’t have imagined for such a small idea like broadcasting your opinion on topics. The trends that radio will see are limitless to those who produce content for consumers who will continuously come back for more and more of it.