(By Mike McVay) Last week news broke that, according to a study by the research firm MoffetNathanson, radio revenues will rebound in 2021 by 12%. That is truly a positive sign, and significantly better than seeing the 25% loss in radio revenues from 2019-2020, driven by the pandemic. It isn’t the significant rebound that many of us expected or hoped to see. Up is up and down is down, and given the devastation to the global economy because of the pandemic, anything that stops the bleeding is a positive.
Overall ad revenue, for media, will be up 24.7%, 2021 vs 2019. That number is buoyed by a huge 59.6% increase for Digital advertising. Radio will be down 16%, 2021 vs 2019. We’re in the same space as outdoor, magazines and newspapers. What should concern us even more is that the study shows radio on a continual revenue slide in 2022, 2023, 2024 and 2025; which is as far forward as they projected. Losing 5% in 2022, 3% in 2023, 3% in 2024 and 3% in 2025. The losses are estimated. Meaning they could be greater or lesser.
These numbers should serve as a wake-up call. The revenue erosion that’s predicted for radio doesn’t have to be ‘fait accompli’. We can stop the erosion of revenue, but we have to do this soon, and we have to realize that a turnaround won’t happen quickly. Changing habits is hard enough. Failing someone’s expectations and bringing them back as regular consumers is even harder.
My advocacy is multifold. Our focus should be to run several streams at once.
- Improve the listening experience; Content, Commercial load, Production and Technical.
- Deliver content on every platform that is used for entertainment by your target audience.
- Connect to the community that you serve and be visible in the community that you serve.
- Sell your advertisers product/service/experience and stop selling “spots.” When you get results for your advertisers, you’ll get results for yourself.
- One of the most important steps is to do research with your current and potential audience base and research with your current and potential advertiser base.
- Entertain the audience at a higher level.
- Inform the audience credibly and at a higher level.
- Market and promote the product; once the product is ready to be promoted.
- Have patience.
Radio, that word that describes audio no matter where you hear an over-the-air station, has amazingly large distribution. We’ve spent slightly more than 100 years making radio a part of everyday life, only to allow it to begin a slow audience decline and a rapid revenue decline. We need to improve the content that we deliver.
We need to do a better job of satisfying advertisers. We need to promote the benefits of radio to the advertiser and the audience. Radio still moves product, makes music a hit, is the “turn-to” that you can depend on in a crisis … for now. It isn’t our birthright to have an audience or advertisers. It’s hard work to attract them. Apparently, it’s even harder to keep them.
This is still a good business. I believe in the power of radio and the audio we deliver to multiple platforms. We don’t have to accept that radio is an eroding business, but we have to take action, before we can stem the erosion that we’re seeing. How far do we have to fall before we make the painful decisions necessary to stop our audience and revenue losses? We can stop this … but it means change.
Mike McVay is President of McVay Media and can be reached at [email protected]