NAB: Will Radio Send an SOS?

The radio industry will gather in Austin, Texas this week for the annual NAB radio conference. The radio business is in deep weeds right now. Listenership is down. Revenues are off. The audience is trending older and young people aren't listening. The future's looking grim.

What's broken? It's not that people don't like audio programming anymore. It's that the audience has changed in ways that radio does not understand. People don't consume media the way they did 5 years ago. Want to see the future of media consumption? Look at your TiVo. Look at YouTube. People want a user-controllable experience. They want media to be on-demand, in discrete single microchunks, sharable and re-usable as they wish. They need fresh content. They find out about new programming from their friends. They're quick to try something new, but quick to drop it if it doesn't fit their needs.

What's radio's answer to this? Mostly denial. David Rehr, head of the NAB, will inevitably give another one of his "it's not so bad" speeches in Austin this week. Enormous sums of money have been spent on the awkwardly-named "HD Radio" initiative (HD stands for "Hybrid Digital," not High Definition). HD Radio is a way of cramming more stations into the existing radio spectrum. More stations don't address the problem of the changing consumption habits of the audience. NAB is trying to get cell phone manufacturers to put FM radios into cell phones. As if the problem is a lack of radios.

So is radio going the way of the dinosaurs? Not yet. The industry need to realize that they're in the content business, not the broadcasting business. They need to understand that their primary competitive asset is the people who use their voices and minds to influence, entertain, and educate -- not the transmitters, towers and FCC licenses for which they paid so dearly. They need to embrace their local footprint and knowledge as a competitive advantage over internet radio and other sources of audience fragmentation.

Fundamentally, the distribution channel must change from a centrally-controlled broadcast model to a narrowcast model, where the consumer has more control. Radio can embrace new technologies. They need to understand how listeners consume the media.

Programming will change. Talk, news, and sports will become more dominant. Music radio can't just be music; iPods do that just fine. Music radio will need personality. They're in the audio content business -- it should not matter how that audio is distributed.

Revenue models will change. Advertisers too have a different set of expectations in the internet age. New technologies like podcasting, internet streaming, and cell-phone narrowcasting must be embraced as equal distribution channels to the broadcast channel.

The radio industry has a brief window of time standing open right now. I estimate it's about 36 months. They will either embrace change and understand what they are, or they will settle into the dustbin of industries that have failed to adapt to the changing needs of the audience. The time is now.

Erik SchwartzFoneShow, NAB, radio