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Insideradio.Com 800.275.2840 MORE NEWS» insideradio.com THE MOST TRUSTED NEWS IN RADIO WEDNESDAY, JUNE 3, 2015 Forecast: Online radio ad dollars to grow 8.6%. Modest growth are the watchwords for broadcast radio as it enters an era of unprecedented choice for consumers and advertisers. Over-the-air ad dollars are forecast to grow at a compound annual growth rate of 0.5% from 2014 through 2019, according to a new report from PwC. Online ad dollars for radio broadcasters will grow at a much faster 8.6% annual clip during the same period. Bundling broadcast and satellite radio together, PwC reports total U.S. radio revenue grew 3.4% between 2013 and 2014, the fastest growth since the market dips of 2009 and 2010. What PwC calls “the reawakening of advertiser confidence” brought a 2.6% increase in radio ad revenue in 2014 while the smaller satellite and online radio sectors enjoyed higher growth rates of 9.4% and 12.4%, respectively. Radio growth has been slowing steadily due to competition from online audio alternatives like Pandora, and YouTube, the report says, and that continued disruption will see the rate of growth continue to slow every year until 2019. With a projected 1.8% compound annual growth rate, total radio revenue (including satellite radio) will reach $22.63 billion by 2019, with satellite accounting for 20% of the total, up from 17% in 2014. “Internet radio continues to eat away at radio advertising dollars and the radio audience,” says Greg Boyer, PwC’s principle U.S. lead for entertainment. “Whenever there are more choices for consumers, the result will be a disruption in the traditional business models.” To grow, radio needs to innovate, Boyer says. Radio needs to ask, “How can we innovate around the customer experience and fortify the experience they have today,” he says. How PwC sees radio’s online conundrum. Aiming to be everywhere the consumer is, many broadcasters have made growing online listening a top priority. But a new PwC report hints at “an inherent tension” in broadcast radio’s online migration strategies. Here’s how PwC describes radio’s conundrum: The better it gets at moving more of its consumption online, the more those audiences become exposed to digital alternatives that offer less (or no) advertising, along with greater user flexibility and control. There’s also a different ad load expectation among some online listeners. According to Edison Research, 80% of weekly broadcast radio listeners describe advertising as “a fair price to pay for free programming”, but the rate falls to 75% of online listeners. Online audio consumers are accustomed to a “bewildering degree of choice” and substantially lower spotloads, the report states. But Greg Boyer, PwC’s principle U.S. lead for entertainment, says it’s not too late for broadcasters to seize the interactive opportunity awaiting online. “One thing radio can do is move much more aggressively to the internet space and convert the experience to digital,” he tells Inside Radio. “Radio should build a moat around their listener base and serve them well. Create a stickiness and loyalty among listeners and transition to a more digital experience.” To retain relevance in the digital era, traditional broadcasters will need to lean more on their unique NEWS@INSIDERADIO.COM | 800.275.2840 PG 1 NEWS insideradio.com WEDNESDAY, JUNE 3, 2015 assets, like live personalities and spoken-word programming, PwC says. “But streaming music services also recognize the importance of investing in spoken-word content of their own to broaden out their proposition,” the report says. Report: Half of all new vehicles sold this year to be internet-enabled. With 44% of all radio listening taking place behind the wheel, the car remains ground zero for radio listening. But the medium’s monopoly on in-car listening may be coming to an end. The GSMA, a trade group that represents mobile operators, expects 50% of all new vehicles sold this year to be internet-enabled with the number hitting 100% by 2025. That and growing satellite radio penetration will continue to put pressure on radio’s dominant position behind the wheel. “Automotive listening is still huge for radio, but internet radio and Wi-Fi accessibility will cause disruption,” PwC’s Greg Boyer tells Inside Radio. “But the radio industry has been very resilient, always finding a way to survive. Radio is very good at one-on-one interaction, which can’t be copied by pureplays.” Satellite radio, too, will face what PwC calls “intensifying pressure from online alternatives,” even as it grows its share of in-car listening. “As goes the health of the automotive market, so goes the health of satellite radio,” PwC says in its Entertainment & Media Outlook 2015-2019 report. Still, broadcast radio remains the dominant audio medium on the road. In April 2014, 86% of American car owners listened to broadcast radio in the car at least monthly, compared with 17% for satellite radio and 14% for online. “Radio has a more stable consistent experience, because of the in-car listening patterns,” Boyer says. Just-launched DGital Media snaps up WYD Media Ad Sales. A new spoken word audio player is snapping up an ad sales firm to help monetize its multi-platform push into talk programming. Startup DGital Media has acquired New York-based WYD Media Ad Sales, which specializes in spoken word ad sales. DGital Media launched last week, led by David Landau and Spencer Brown, the former co-CEOs of Dial Global/Westwood One, in a partnership with venture capitalist Michael Rolnick. Under a deal announced Tuesday, WYD Media founder Ron Hartenbaum will become DGital Media managing director and WYD’s John Murphy will join as president. Brown says the WYD acquisition will give his fledgling company the ability to build and monetize audio content on broadcast, satellite and online platforms. Hartenbaum says the sale of WYD will allow it to broaden its client roster and ad sales menu. WYD’s current offerings include Fox News Radio, Thom Hartmann, Michael Smerconish, Ed Schultz and Stephanie Miller, among others. “While some believe radio and audio are in their sunset phase, we continue to believe in the power of spoken word programming, in podcasts, streaming and radio,” Landau tells Inside Radio. “The audio pie is growing, not shrinking.” In addition to a New York-based ad sales team, the acquisition brings sales offices in Detroit and Los Angeles, along with distribution, research, analytics and accounting capabilities. DGital Media’s first venture, announced last week, will be the Re/code Radio network which will feature a portfolio of programs starting with Re/code Decode, to be hosted by noted technology journalist Kara Swisher and slated to go live this month. Entravision chases ‘a new style of paparazzi radio’ into nine new markets. Entravision is chasing what it calls “a new style of paparazzi radio.” “LM Show.com,” the Hispanic broadcaster’s afternoon celebrity and entertainment news program, has added nine new markets: Denver; El Centro, CA–Yuma, AZ; Modesto, Palm Springs and Sacramento, CA; El Paso and McAllen, TX; Phoenix; and Las Vegas. Eight of the nine new affiliates are Entravision-owned Spanish adult hits “Jose FM” outlets. The ninth is Las Vegas Spanish CHR “Super Estrella 92.7” KRRN. The company is so bullish on the nine month- old show that it has added it to just launched “Super Estrella” stations in Denver and Modesto. Formerly known as “LA’s Mananitas,” the show debuted in September 2014 on L.A. Spanish CHR “Super Estrella 107.1” KSSE. Hosted by Francisco “Paco” Galvez, “Naranjito” Jorge Velasquez, Hyacinth Itzel and Juan Manuel Navarro, Entravision says the afternoon show delivers celebrity gossip and breaking entertainment news for Latinos. “Entravision is proud to have pioneered a new style of paparazzi radio with ‘LM Show.com’ that has proven successful with Latino listeners,” COO Jeff Liberman said in a statement. Liberman calls the show’s expansion to nine new markets across five states “a testament to our dedication to unique and innovative programing and our position as a trusted source of news and entertainment for Latinos.” NEWS@INSIDERADIO.COM | 800.275.2840 PG 2 NEWS insideradio.com WEDNESDAY, JUNE 3, 2015 RTDNA Survey: Radio news profitability declines. Last year marked another strong year for the TV news business, according to the latest RTDNA/Hofstra University Annual Survey. More than 60% of TV newsrooms reported that they made a profit on local news in 2014. But the percentage wasn’t as rosy at radio newsrooms. Just 13% of radio news directors and general managers taking the Radio Television Digital News Association’s annual newsroom survey report their station made a profit on news last year. That’s down from nearly 25% in 2000. There were no consistent patterns this year on which radio stations made a profit on news, according to Bob Papper, the Hofstra University emeritus professor of journalism who conducted the survey. “The only thing I can report this year is that stations in the West were way less likely to report making a profit on news,” he says. Papper concedes that results vary from year to year depending on how many news and news/talk stations return the survey. For a second year in a row, the survey found the average radio station revenue from news was 9.7% with a median percentage of just 5%. The average was down from last year’s 21%, but the median was up from last year’s 2%. Radio website profitability dropped by half this year from last – down from 15.4% to 8.1%.
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