Research Paper on "Future of Radio"

Research Paper 12 pages (4053 words) Sources: 15 Style: MLA

[EXCERPT] . . . .

Future of Radio

What is the future of radio? Does radio have a positive future with a wide-open list of possibilities, or are there stumbling blocks in front of radio's future? What are the technologies and other competing sources? What will it take for radio stations to convert to digital technologies, and why have they not done that to date? These and other issues will be discussed in this paper.

Current State of Radio Broadcasting

According to a report called "The State of the News Media" by the Pew Research Center, traditional AM and FM radio "still dominate the audio landscape" but there are "growing signals that raise questions about its future" (Olmstead, et al., 2011, p. 1). Olmstead reports that "large majorities of Americans continue to listen to AM/FM radio each week," in fact nine out of ten adults in the United States listen to AM/FM. That having been said, surveys show that "most Americans point to newer technologies" as having "more impact" on their lives, even though Americans spend less time with those new technologies (Olmstead, p. 1).

In the Pew Research Center survey, the results show that for the first time Americans say they are listening more to "online-only outlets like Pandora or Slacker Radio" than they do streaming content from existing AM/FM stations (Olmstead, p. 1). This could be of course because AM/FM stations that stream still play their commercials ad nausea, while Pandora and Slacker are commercial free.

Currently, HD Radio has "failed to take off," Olmstead continues. Just a small percentage of listeners listen to HD Radio, "or are even aware it exists," hence, fewer stations are investing in making that transition. While HD radio remained flat in the market, AM/FM revenues for 2010 rose 6% over 2009, Olmstead explains on page 1. The continuing growth of revenue for AM/FM radio could be threatened, Olmstead continues, if radio audiences continue to go to online alternatives like Pandora. That is because the revenue for AM/FM comes from advertising for the most part, and when ratings for stations fall flat, advertising money sinks as well.

National Public Radio (NPR) -- which Republicans in the House of Representative voted to kill earlier in 2011 -- "continues to be a growing source of news for many Americans," Olmstead writes (p. 2). The expansion for PBS / NPR is due to the fact that commercial radio is doing away with news outside the largest markets in the U.S., Olmstead relates. The NPR audience grew by 3% in 2010, to a total of 27.2 million weekly listeners.

While the percentage of Americans that read newspapers has dropped by 16 percentage points since 2000, Pew data shows that the percentage of Americans using AM/FM radio dropped just 3 percentage points in the same time frame (Olmstead, p. 2). Those statistics regarding listeners to AM/FM could be changing though due to the fact that early in 2011, Pew research shows that "fully 84% of Americans over age 12 report using a cellphone; and because cell phones are "almost as ubiquitous" as radios, in the future more powerful smartphones will be used as audio devices and that portends "a potential for… reducing AM/FM listening" (Olmstead, p. 3).

Another sign that AM/FM radio may take a dive in usage is the polling Pew did, which shows that 22% of those surveyed said AM/FM radio had a "big impact" on their lives, but 54% said cell phones had a big impact, 44% cited iPhones, 45% said BlackBerries and 49% said broadband Internet had a "big impact" on their lives (Olmstead, p. 4). Those that listen to online radio in their cars has "doubled" over the past two years, the survey reports. About 27% of Americans indicated that they were "very interested" in hearing Internet radio in their cars in 2010, and that was up from 10% who said the same thing in 2009; 6% of respondents said they were already using cell phones to hear Internet radio in their automobiles (Olmstead, p. 6).

The economics of AM/FM radio shows improvement today, the Pew survey reports. While the audience is shrinking some, total revenue for traditional radio rose 6% in 2010, to $17.3 billion, that is up from $16 billion in 2009. While some of that rise in revenue can be possibly attributed to the improving economy, the total advertising revenue for "all U.S. media was up 3% in 2010" and radio receipts were even better than 3%, Pew explains (Olmstead, p. 10). About a third of Americans told the Pew survey people that they receive "some news" through the radio, which is down from the 38% who said they got some news from the radio in 2008 and well down from the number (43%) who said the same thing in 2000 (Olmstead, p. 12).

What are the major threats to radio broadcasting? Public Radio: Political Target

There are a number of threats that challenge radio broadcasting in the United States today. One of those threats is political, and it comes from the conservative majority in the United States House of Representatives -- some representatives of the GOP are referred to as the "Tea Party" -- whose members apparently believe that Public Broadcasting is a tool of liberals and should be shut down. Public radio and television are under the umbrella of the Corporation for Public Broadcasting (CPB), and there are 900 public radio stations that do receive funds from the CPB. However, according to the CPB, every public radio station is locally owned and operated, and those stations "provide programs and services responsive to the needs of their communities" (CPB).

Congress has authorized that local public radio stations have "autonomy" -- that means the CPB cannot own any public radio stations, but can offer programming to stations, and those independent stations can choose which (if any) of the programs that the CPB offers to PBS, NPR, and Public Television programs like Sesame Street. The CPB points out that each station produces about 40% of its own programming. The local public radio stations have their own fundraising strategies to support their services, while the federal government provides about $28 million annually for CPB to providing programming to the 900 radio stations spread out around the country.

So why did the House of Representatives approve legislation for 2011 (on February 19) that "cut all financing for the Corporation for Public Broadcasting for the year 2013" which is the first time the House passed such legislation (Jensen, 2011). Author James Ledbetter explains that a TV and radio broadcasting system partially funded by "…Congressionally controlled money provides the ultimate hot-button issue, a grandstander's dream" (Ledbetter, 1999, p. 10). In 1995, when Republicans controlled the House, Congress "…held more hearings on the budget for PBS and NPR shows than it did on budgets for Medicaid and Medicare," entitlement programs with budgets more than 100 times the budgets for the CPB, Ledbetter explains.

Indeed, throughout the 42-year history of public broadcasting, the taxpayer subsidy has "…repeatedly been used as a club with which to clobber that very commitment," Ledbetter continues. "Like a dog that has learned to flinch at the mere pantomime of the master's lashing," public broadcasting leaders have learned to stay away from provocative subjects that could conceivably bring criticism (founded or unfounded) from conservative lawmakers. Colorado Congressman Doug Lamborn, a Republican, said the vote in the House on February 19 "reflects the will of the people" and that it is time to "…get our fiscal house in order" (Sullivan, 2011). Lamborn called the vote an "historic step"; there are "so many media outlets available to people we don't need a government-sponsored media anymore," Lamborn continued, alluding to commercial broadcasting entities (Sullivan).

Meanwhile, as to the most recent attempt by conservatives to slash funding for CPB, the U.S. Senate rebuked the vote in the House and so public broadcasting continues, for now at least. But that didn't stop Florida Governor Rick Scott from vetoing his state's $4.8 million appropriation for public broadcasting; that means that each of 13 PBS stations in Florida lose about $87,287 each, according to Elizabeth Jensen, writing in the Media Decoder in The New York Times.

What are the major threats to radio broadcasting? Strategic Challenges

Robert G. Picard is Director of Research at the Reuters Institute in the Department of Politics and International Relations at the University of Oxford, UK, and he is also editor of the Journal of Media Business Studies. In his 2009 article in The Media Business ("Radio Stations Face Significant Strategic Challenges") he asserts that the "wide availability of substitutable audio platforms" along with "lifestyle changes" are contributing to the decline of radio broadcasting audiences (Picard, 2009, p. 1). In particular, Picard views the digital revolution as posing the biggest threat to radio broadcasting.

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