For Immediate Release

Wednesday, April 28, 2010

Contrary to popular theory, tradition (AM/FM) radio is beginning to figure out where the future lies. Its success rests with a new recipe of listening categories/devices. Its advantage is its massive, broad audience with which to leverage traffic to these new devices.

From Bridge Ratings' latest "Device Usage Study", it is clear that traditional radio has begun the process of building a new paradigm of time-spent-listening conceived of more than just its broadcast towers.

Of the 19 hours a week of total listening to terrestrial radio programming, 94% or 18 hours comes from its AM/FM listening and 6% or about one hour comes from simulcast listening via the Internet. There is insufficient data to indicate how much, if any, listening is derived from mobile devices at this time.

Therefore, terrestrial radio's composite listening can be viewed as a pyramid with its AM/FM listening at the base. In 2010, traditional radio's Average Quarter Hour Pyramid looks like this:

2012

In order for traditional radio's advertising model to sustain new technologies and swift changes in audience behavior, adoption of these new devices must not only continue, it must accelerate.

Continued distribution via the Internet is a must as well as through mobile devices such as smart phones and cell phones.

Internet Streaming

Traditional radio has done an acceptable job of furthering its listening through streams of its simulcasts. Not only should this continue but an effective strategy to escalate growth is to invest in the resources required to develop and distribute alternative brand channels that offer niche, customizable content as extensions of their primary brands.

Research has shown that brand variations or extensions on the streaming side will not cannibalize the main channel, but in fact it will attract additional listening from not only primary brand-centric fans but listeners who may have otherwise listened to the primary brand.

Mobile Distribution

Furthering terrestrial radio content distribution to the mobile space will enhance audience revenue potential. There are two tactical paths:

• Distribution of the primary terrestrial content. Limited growth.
• Creation and distribution of alternative streams established with mobile short-term listening in mind. These channels should be customizable either through interaction with the mobile interface or a web site accessed by the user as part of a set up.

Traditional radio's efforts in these areas will reflect positively on future audience growth which will offset attrition to AM/FM radio listening. Best efforts for this new recipe of audience can be seen in this 2012 projection of traditional radio's Average Quarter Hour Pyramid:

How to read: Of terrestrial radio's time-spent-listening of 19 hours per week in 2010, 94% or 18 hours comes from pure-terrestrial listening and 6% or about an hour is derived from streaming of AM/FM simulcasts.

Bridge Ratings projects that by 2012, if technology is aggressively pursued, terrestrial radio's aggregated time-spent-listening should increase to about 20 hours per week. Additional listening should be sourced from the addition of incremental growth in simulcast streaming of AM/FM stations via the Internet and mobile devices.

Time Spent Listening by Technology

Additional insight into audio consumption by technology has been revealed as part of Bridge Ratings' "Device Usage Study" released in April 2010.

While time devoted to pure-terrestrial radio listening is likely to continue to fall or moderate over the next few years, expansion onto new technology should recapture - and even add to - some of the lost time-spent.

The following graph reflects projected growth among the three currently available audio technologies.

Businesses craft strategies that reflect their unique portfolio of customer needs, internal resources, and partners.  When you think about it, business has always been about managing combinations of different building blocks.  As market conditions change, businesses pick up some new blocks, discard others, and rearrange the combinations.

The success or failure of all media companies over the foreseeable future rests on how well they arrange these building blocks.

Bridge Ratings is a ratings and research company based in Dallas, Texas with offices in Glendale, California. We are dedicated to providing on-going, immediate, reliable, useable and affordable media consumption analysis services. Our methodology is based on sound consumer research principles. We are in the business of tracking listeners - not listening.