Bob McCurdy

Bob McCurdy, President, Katz Marketing Solutions

Eight years may sound like a long way off, but in terms of media usage and habits, as well as technology adoption, it’s not. So we’ll try to keep our predictions for radio realistic and out of the science fiction realm.

Changes in media habits tend to evolve as usage filters down from the innovators and early adopters to the early and late majority. It’s also important to keep in mind that even when new technology does filter down, the usage by the early and late majority tends to differ from the innovators and early adopters. That means it’s risky to project future technology usage of any kind based upon the usage of innovators and early adopters.

A review of the previous eight years might prove helpful in making prognostications for the next eight years. Four highly respected media studies conducted from 2004-2012, confirm that radio listening in the U.S. remained remarkably consistent despite an explosion of digital audio alternatives. The Nielsen-funded How U.S. Adults Use Radio and Other Forms of Audio in 2009 and the Media Behavior Institute’s syndicated 2012 USA TouchPoints data, showed remarkably similar listening levels to Ball State’s Middletown studies conducted in 2004 and 2005 despite:

  • The continued penetration of smartphones/iPhones
  • The growth in popularity of online audio: Pandora, Slacker, Last.FM, Rhapsody, Spotify and others
  • The increased popularity of podcasting
  • The saturation of high-speed Internet
  • The continued strong sales of MP3’s

Recently, two developments have generated a significant amount of conjecture and dialogue within the ad industry. The first is in-car telematics penetration, which many think will mortally damage listening to AM/FM. While it will continue to infiltrate the automobile in the years to come, we view in-car telematics as an overall positive development for AM/FM and audio, as listening to additional in-car audio options need not come at the expense of AM/FM. The 2008 Nielsen audio study and the 2012 USA TouchPoints data referenced above concluded that audio is being consumed 60% of the time in the car, leaving ample time for audio listening to actually expand. Plus by 2020, only 30-35% of all autos on the U.S. roads will have Bluetooth or Wi-Fi access.

The second development is the continued penetration and popularity of smartphones, which is fast approaching 50% but will likely grow to 90+% by 2020. Currently, anywhere between 12-20% of people use a smartphone to listen to online radio stations. In light of the difference in habits between the early adopters and innovators, and the rest of the population, as well as the small percentage of smartphone owners currently using their phone to listen to internet radio, it’s difficult to conclude that continued smartphone penetration will meaningfully impact listening to AM/FM. Data from close to a dozen studies in the past year, points to this listening being largely supplemental.

It is also important to note, when trying to project the future of AM/FM listening in a saturated digitized environment, that AM/FM remains the dominant audio choice in both the home and office where digital audio options currently abound. Why? Because content is king and AM/FM content remains the most popular by far, even as the method of delivery will surely morph in the years to come.


To maintain and grow radio’s effectiveness and reach for the year 2020, the industry needs to focus on several specific areas:


Looking ahead, Shazam-like technology, which is currently being evaluated by the radio industry, will likely enhance radio’s accountability, enabling radio to close the “performance” loop while significantly increasing the industry’s accountability. Advertisers will be capable of transmitting additional “bonus” programming, coupons, video and other messaging to smartphones while providing advertisers with key performance metrics.

And due to growth in registration data and a growing online audience, AM/FM broadcasters will compete in two new pools of revenue—mobile and display.

Broadcasters will invest heavily in research to quantify the synergy that exists between all of their media assets. AM/FM broadcasters can integrate 13 different communication channels into one cohesive marketing effort on behalf of an advertiser. Broadcasters will also aggressively partner with various advertisers to quantify and demonstrate the impact of radio not only as a call-to-action medium but a branding medium as well.

To quantify AM/FM’s impact, Beacon technology tied to PPM is currently being developed and tested by Arbitron. Audio Beacons will begin to be deployed locally and nationally throughout retail locations and automotive dealerships, enabling radio to empirically demonstrate its impact on increased foot traffic and sales.

On Air

Radio personalities will become increasingly important and form the foundation of many stations throughout the day, as broadcasters leverage one of the key differentiators from the online music options—compelling talent. There will be an enhanced effort by broadcasters to nurture and develop this talent over the next eight years. The role of the personality as a trusted companion, guide, educator and entertainer will take on increased importance as radio personalities accompany and assist listeners navigating through their increasingly complex daily lives. In a digital world, this one-to-one personal connection will become even more significant.

AM/FM Talk radio options will begin to proliferate, focusing on both local, national and niche formats. We’re seeing the beginnings of this with the migration of News and Sports formats to FM. Narrowcasting will become more widespread with the audiences of certain stations/channels/programs resembling those online—smaller and more targeted. These talk options will also likely contribute to a rise in the popularity of podcasting as podcast content accessibility and quality increases.

AM/FM commercial loads will likely decrease with shorter length units becoming the norm as advertisers increasingly realize that in this ADD world, well-produced and creatively-placed :30’s and :15’s carry as much impact as :60’s.


Stations and personalities will continue to enhance and expand their influential social footprint, with the radio industry empirically quantifying the influence of both. This will confirm that radio’s ability to influence word-of-mouth is actually more powerful than “social” media.

In terms of online audio options, radio is in the first inning of a nine inning game. Apple is currently casting a large shadow over the online audio landscape with other major technology companies such as Google on the sidelines. Anything can happen, especially in light of the current music licensing battle. If the licensing battle is resolved, the number of online music alternatives will likely proliferate and further fractionalize the streaming audio space. AM/FM broadcasters will continue to refine their offerings and competitiveness in this space. And this continued fractionalization over the next eight years will result in AM/FM remaining the only mass reach audio option available to advertisers.

Within the next eight years, a new audio option will likely be offered by broadcasters:  a hybrid of AM/FM’s current programming combined with a customized option. Listeners will be capable of modularly creating their own radio “station,” choosing the playlist and even personalities (from different markets), while selecting the features they want to retain to create a personal, customized “radio my way” listening experience.

Also, the aggregation of AM/FM signals will continue in apps such as iHeartRadio and Tune-in ensuring that AM/FM content is everywhere the listener is.


AM/FM broadcasters will begin to leverage their onsite, feet-on-the-street capabilities, which  is unique to radio among all media. Broadcasters will begin to bolster their ability to execute complex, local, multi-market event, “experiential” and “sampling” programs, enabling advertisers to have consumers directly interact with their product. Moving forward, this will be a key strategic differentiator between radio and other media alternatives.

What the AM/FM and audio landscape looks like in the future will not be a linear projection of what’s occurring today. Media consumption is impacted by three things:  discretionary time, affluence and ease of use. As the youth of today mature, obtain careers, families and mortgages, their media use and tastes will likely change. What former ‘60s hippie would ever have thought they’d have Sinatra on their iPod and the Wall Street Journal in their hands?

While it’s impossible to predict with 100% accuracy what radio will look like eight years from now, we can assure you that what’s written above will likely prove more accurate than this man’s prediction:

“I think there’s a world market for about five computers.”
Thomas J. Watson, chairman of the board of IBM, 1943.