The transformation of USA RADIO by Larry Rosin from Edison Research @ Radio 2.0 Paris 2014

Larry Rosin, Co-founder and President

The Transformation

of USA Radio

In many ways, the best of times

• An explosion of options for the consumer

– AM/FM

– HD Radio– HD Radio

– Podcasts

– Internet Radio (especially Pandora)

– Satellite Radio

For American Commercial Radio, the worst of times

• Significant losses in listening

• Mass firings of staff

• Flat (at best) revenues• Flat (at best) revenues

• Uninspired content largely targeted to the

lowest education segments of America

Within AM/FM – the ‘non-commercial tier’ is healthy

• “Public Radio” has done a tremendous

job of ‘stealing’ the college educated

listener from commercial radiolistener from commercial radio

– But Public Radio has stopped growing as

these same people move to new

technologies

Within AM/FM – the ‘non-commercial tier’ is healthy

• “Christian Radio thrives in non-

commercial radio

– And at times, in commercial radio

The modern history of American Radio starts with this guy:

Timeline:

• 1996 – President Clinton signs the “Cable Bill”

removing nearly all restrictions on radio station

ownership

• 1997-2001 Hundreds of sellers turn consolidators into

huge new national radio station businesses, funded by

massive debt– Clear Channel

– CBS

– Cumulus

– Others

Timeline:

• 2000-2007

– Defying all predictions for growth which were the basis of the

consolidators’ financial plans – radio ‘flatlines’ in revenues

• Was it because of the consolidation?• Was it because of the consolidation?– Many believe this to be the case

– Less inspiring programming

• Note – Public Radio grew massively during this period

– Less competition

– Increases in commercial time per hour

– Huge pullback in resources

Timeline:

• 2008-2009

– Financial crisis hits

– Radio revenues drop 35% nationally over these two years

– Bankruptcies and more consolidation– Bankruptcies and more consolidation

• 2010-Today

– Commercial AM/FM struggling to regain any of the lost

revenues

– Note: Radio continues to have ‘reach’ – declines are in TSL

• And a whole parallel movement happens

Spring Quarter 1980-2012

Broadcast Radio in a long term decline

16,2%

16,8%

17,9%18,2%

18,0%

18,0%

17,6%

17,7%

17,4%

17,7%

17,5%

17,3%

17,2%

17,2%

16,9%

16,7%

16,5%

16,3%

16,1%

15,7%15,1%

16,0%

17,0%

18,0%

19,0%

20,0%

AM/FM Listening

16,2%16,5%

16,1%

15,3%

15,1%

14,9%

14,6%

14,4%

14,2%

14,0%

13,8%

13,2%

11,7% 11,2%10,8%

10,4%9,9%

9,0%

10,0%

11,0%

12,0%

13,0%

14,0%

15,0%

16,0%

What has caused this diminishment in AM/FM listening?

• A parallel growth in alternative options

– Online Radio

– Satellite Radio– Satellite Radio

– Podcasts

34%

39%

45%47%

% Who Have Listened to Online Radio in Last Month Estimated124 Million

Monthly Online Radio Audience

Approaching Half of Americans

© 2014 Edison Research and Triton Digital

17% 16% 15%

21% 20% 21%

27% 27%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Online Radio = Listening to AM/FM radio stations online and/or listening to streamed audio content available only on the Internet

Base: Total Population 12+

75%

50%

Three-Quarters of 12-24s and Half of

25-54s Listen to Online Radio Monthly

% By Age Group Who Have Listened to Online Radio in Last Month

© 2014 Edison Research and Triton Digital

21%

12-24 25-54 55+

Online Radio = Listening to AM/FM radio stations online and/or listening to streamed audio content available only on the Internet

29%33%

36%

Online Radio Reaches Estimated 94 Million Weekly

% Who Have Listened to Online Radio in Last Week

Estimated 94 Million

© 2014 Edison Research and Triton Digital

8% 8% 8%12% 12% 13%

17% 17%22%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Base: Total Population 12+

Online Radio = Listening to AM/FM radio stations online and/or listening to streamed audio content available only on the Internet

64%

Just Under Two-Thirds of 12-24s Listen to Online Radio Weekly; More Than

One in Three Age 25-54

% By Age Group Who Have Listened to Online Radio in Last Week

© 2014 Edison Research and Triton Digital

37%

13%

12-24 25-54 55+

Online Radio = Listening to AM/FM radio stations online and/or listening to streamed audio content available only on the Internet

8:029:17 9:46

11:5613:19

Average Time Spent per Week With All Sources of Online Radio

(Hours:Minutes)

Weekly Online Radio Listeners Report

More Time Spent Listening Every Year

© 2014 Edison Research and Triton Digital

6:13 6:318:02

2008 2009 2010 2011 2012 2013 2014

Base: Weekly Online Radio Listeners

Online Radio = Listening to AM/FM radio stations online and/or listening to streamed audio content available only on the Internet

21%

26%

% of Cell Phone Owners Who Have Ever Listened to Online Radio in a Car by

Listening to the Stream From a Cell Phone Connected to a Car Audio System

Online Radio Listening in a Car Via

Cell Phone Continues Steady Increase to 26%

© 2014 Edison Research and Triton Digital

6%

11%

17%21%

2010 2011 2012 2013 2014

Base: Own a Cell Phone

Online Radio = Listening to AM/FM radio stations online and/or listening to streamed audio content available only on the Internet

What is causing these leaps in Online Radio Listening?

% Aware of…

28%

40%

47%

48%

70%

Spotify

Rhapsody

iTunes Radio

iHeartRadio

Pandora

Many brands of Online Radio with

Pandora the overwhelming leader

© 2014 Edison Research and Triton Digital

Base: Total Population 12+

3%

5%

5%

8%

10%

14%

14%

24%

28%

Stitcher

Songza

Rdio

Last.fm

TuneIn Radio

Radio.com

Slacker

Google Play All Access

Spotify

Nearly 1/3rd of Americans listen to Pandora

8%

9%

31%

iTunes Radio

iHeartRadio

Pandora

% Age 12+ Who Listened in Last Month to…

© 2014 Edison Research and Triton Digital

2%

2%

2%

3%

6%

TuneIn Radio

Slacker

Rhapsody

Google Play All Access

Spotify

Brands lower than 2% Age 12+ not shown

Percent by Age Group Who Listened in Last Month to…

55%

Age 12-24

Age 25-54

© 2014 Edison Research and Triton Digital

11%

33%Pandora Age 25-54

Age 55+

Brands lower than 6% Age 12+ not shown

“Do you currently subscribe to any services from Sirius XM?”

About one-in-seven American Households

subscribes to Satellite Radio

Yes15%

No85%

% of 12+ population with a smartphone

More than three-quarters of 18-34s have a smartphone

54%

66% 64%

54%60%

75% 74%

69% 2012 2013

54% 54%

41%

27%

11%

51%

34%

17%

12-17 18-24 25-34 35-44 45-54 55-64 65+

% of smartphone owners who have downloaded app

Nearly half of smartphone owners have downloaded Pandora

9%

15%

47%

AM/FM Station App

iHeartRadio

Pandora

2%

3%

4%

5%

6%

9%

Radio.com App

SiriusXM

Songza

Aha Radio

Spotify

AM/FM Station App

“Which one of these are you most likely to use first thing in the morning?”

But it is not just alternative forms of ‘Radio’ that are

squeezing down AM/FM listening

Radio30%

Television39%

Internet23%

Newspaper8%

SiriusXM7.7%

Internet Radio/Music (Pandora, Spotify, etc.)

11.6%

Owned Music (CDs, Digital music files, etc.)

20.3%Share of EarAmericans’ Share of Time Spent Listening to Audio Sources

May 2014

AM/FM Radio52.1%

Source: Edison Research. Americans spend an average of 4 hours and 5 minutes each day consuming audio. This graph represents the share of time spent with each. Based on a nationally representative sample of 2,096 Americans ages 13+ who completed a 24-hour audio listening diary, May 2014. For more information contact info@edisonresearch.com

Podcasts1.7%

Other1.5%

TV Music Channels(e.g. Music Choice)

5.2%

Bear in mind

• Every item I have showed would look much more

dramatic if I isolate 12-34 year olds

• Especially the loss in AM/FM listening

Items to consider:

• Avoid the defensive posture

– American Radio is constantly using the word ‘still’ in its

argument:

• We ‘still’ have cume• We ‘still’ have cume

• We ‘still’ dominate the car

• Innovate in every way you can

– Part of what we have been seeing out here is entrepreneurs

exploiting American Radio’s inability to innovate because they

have to pay the bankers

Keep in mind

• Your new friend Larry knows pretty much everyone in

American Radio and many in the streaming space

• I’ll be happy to continue to make introductions to

anyone you want

IV Rencontres RADIO 2.0 Paris

‘Les nouvelles frontières de la radio 2.0’

IV Rencontres RADIO 2.0 Paris

‘Les nouvelles frontières de la radio 2.0’

13 Oct. 2014 13 Oct. 2014 @ @ Radio France Radio France 13 Oct. 2014 13 Oct. 2014 @ @ Radio France Radio France

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