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Radio Waves October 08

Radio Waves October 08

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Published by: bitsymetcalf on Mar 10, 2009
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Radio continues to thrive despite the challenges of the digital age. How has Radio managed to succeed in anincreasingly competitive environment? Forover 100 years Radio has met numerous challenges and alwayssurvived by reinventing itself. From the Great Depression to theinvention of T.V. and the Walkman, Radioovercame new challenges. Today, 94% of Americans consume radio each week.Today’s many challenges from the digital frontier vary wildly, but Radio is again reinventing itself by exploringcompeting platforms and using them as another venue for the medium. Radio station websites are growingdramatically and the industry is exploring options in the cell phone audio field. Interest in HD Radio is also growingwhile Satellite Radio interest is declining.There is a considerable amount of consumer fatigue in the multiplatform digital world and consumers are beggingfor simplicity and familiarity to sort things out. Radio will always be available to help consumers multitask their waythrough the daunting digital world.
As the economy continues to flounder, Radio provides three important“F’s” to consumers –familiarity, friendship and free
. All factors are critical when people are struggling indifficult times.
ISSUE #13, October 2008
A KRG Newsletter >>
OUR MISSION: SEPARATE THE MEDIA INDUSTRY’S TRUTH FROM THE HYPE
RADIO IS GROWING
The latest RADAR data released proves thatRadio continues to grow its listener base withsteady yearly gains. This year, Radio grew by 3million listeners, its largest gain in five years.Over the last decade, Radio has averaged 2.5million new listeners each year.
Despite numerous digital alternatives,AM/FM Radio’s AQH remains steadyand strong.
Media usage isn’t a zero-sum game. New digitalmedia like Internet Radio, MP3/iPods andPodcasts supplement listeners’ AM/FM Radioconsumption, but donot to replace it
.
Radio’sAQH remains steady and stable despite thegrowth of digital media. In fact, Radio’s currentAQH is the same as it was six years ago.
Radio’s # of weekly cume listeners (in millions)Persons 12+ to AM/FM Radio
Source: RADAR 
202208209210213214217226223225228229230232235
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Radio’s # of weekly AQH listeners (in millions)Persons 12+ to AM/FM RadioSource: Veronis Suhler Stevenson tabulation of RADAR
24.424.127.127.827.6 27.527.2 27.127.1
1992 1997 2002 2003 2004 2005 2006 2007 2008
RADIO’s CUME is GROWINGAQH is STEADY & STABLE
 From the Editor:
Welcome to the October 2008 issue of RadioWaves.
THIS IS OUR FIRST ALL RADIOISSUE
 andthe entire newsletter is devoted to Radio. During these challenging economic times, marketers are carefully evaluating both emerging and traditional  media. RadioWaves is the optimum platform to put forth a menu ofRadio’s attributes and advantages.
RADIO: A THRIVING 21
st
CENTURY MEDIUM
 
Total Persons 12+Digital Audio Listeners*Total Persons 12+Digital Audio Listeners*
Time-Spent-Listening to AM/FMRadio per DAY
(in hours & minutes)
* Podcast, Satellite or Online Radio
The
totalpopulation
listensto AM/FM Radio for 
2 hours, 48minutes
per day
Digital audioconsumers
listento AM/FM Radiofo
2 hours, 45minutes
per day
The rapid growth of Internet Radio andother digital listening options has notsignificantly impacted AM/FM’slistening. Digital audio listeners listento AM/FM radio the same as the rest ofthe population.The average American spends 2 hoursand 48 minutes per week with AM/FMRadio, while heavy digital consumers(Internet, Podcasts, iPods) spend 2hours 45 minutes per week withAM/FM Radio – 
a virtually identical amount of listening from the consumers who generally assumed to spend less time with “old”media.
Sources: RADAR, RAB, Arbitron/Edison Research “The Infinite Dial”April 2008, JP Morgan April 2008, Deloitte & Touche, RAB/RADAR, Jacobs Media April 08, Sonoro Audio Study May 08, Paragon Media Strategies June 08
RADIO’S FUTURE REMAINS STRONG
THE YOUTH MARKET IS EMBRACING RADIO
Many think the youth market is adapting to new digital alternatives at the expense of Radio. However, accordingto a study by Paragon Media Strategies, 14 to 24 year-olds have a renewed interest in AM/FM Radio. Paragon’sresearch found that two-thirds of this age group currently listen to Radio the same or more than they did in recentyears. This figure has grown significantly in the last year.The number one reason 14 to 24 year-olds give forincreasing their Radio listening is its music choices and variety.
 
Youth market listening is changing
AM/FMRadiotime-spentUP 11%
 
AM/FMRadiotime-spentUP 11%
Annual Change in time-spent-listening by 14-24 year olds 
Paragon Media Strategies, 2008
iPod/MP3 time-spent DOWN 13% 
 
iPod/MP3 time-spent DOWN 13% 
DIGITAL CONSUMERS’LISTENINGISTHE SAME FOR AM/FM RADIO
While young people are the same lifegroup that forma large part of the growing Internet Radio audience,the vast majority say web Radio options have notcaused their broadcast Radio listening to shrink.Instead, their iPod/MP3 listening is shrinking.According to Paragon’s research, 14 to 24 year-oldsincreased their AM/FM Radio time-spent-listening by11% this year, while their iPod listening declined13%.iPod fatigue is already known to impact adults who have little time to maintain these personalized programmableentertainment devices. Apparently the youth market is also now shunning the money, time and effort it takes tokeep these devices fresh. Since most 14 to 24 year-olds iPod owners have fewer than 400 songs on their iPod,it’s no surprise that after some time of iPod ownership, these listeners perceive Radio as being fresh with newmusic once again.
RADIO LISTENING HAS NOT BEEN IMPACTED BY DIGITAL PLATFORMS
AM/FM Radio is thriving despite the growth of digital platforms:84% of all consumers expect to listen to the same or more Radio in the next five years.Among those under 25 years old, Radio usage is stable.Deloitte recently surveyed America’s youth, the most tech-savvy and digital of all age groups and, even amongthis Millennial generation, Radio usage is stable and TV usage is up. Newspaper usage is the only form of “old”media that has declined among this younger demographic.
 
RADIO: AMERICA’S #2 LEISURE ACTIVITY
Radio is a fixture of everyday American life. According to a recent AMS study, two-thirds of Americans listen toradio at least once a day (that’s up 5% from last year) and 80% say they usually listen in the car (up 10% fromlast year). The vast majority of Americans listen to the Radio as much as, if not more, than they did last year.The most recent Veronis Suhler Stevens annual Communications Industry Forecast confirmed these findings.The study noted that Americans spent over 60 leisure hours per week with personal entertainment that includemedia, music, reading and electronics.Radio occupies one-quarter of this leisure time,second only to Cable TV,exceeding Broadcast TV by nearly three hours a week. As one of the big three media and leisure activities,Radio occupies 60% more time than the combined total spent with newspapers, magazines and the Internet.Has American’s time-spent with Radio declined during this era of increasing digital offerings? The VeronisSuhler forecast says that, like all traditional media sources, Radio time-spent has declined. But it dropped byless than six percent in the last five years. Meanwhile, Broadcast TV and newspapers are dropping at doublethat rate, as each segment has declined by 12% since 2002.
02468101214161820
2002200320042005200620072008
* Recorded Music, Newspaper and Magazine categories do not include those downloaded or viewed on the internet –those are included in “Internet” category** Home Video includes VHS & DVD’s only. PPV & VOD are includedin Cable; DVR viewing is included in appropriate TV category. Cable includes satellite.
Source: Veronis Suhler Stevens Communication Industry Forecast 2008, AMS Study August 2008
Veronis Suhler Stevenson Communication Industry Forecast
America’s Leisure Time Spent trends2002-2008
Hours per person per week 
CableTV
RADIO
BroadcastTVInternetNews-papersRecordedMusic*MagazinesBooksVideoGamesHomeVideo**
 R a d i o  i s  # 2
   H  o  u  r  s  p  e  r  p  e  r  s  o  n  p  e  r  w  e  e   k
RADIO: PART OF THE FABRIC OF AMERICAN LIFE
RADIO: THE #1 WAY TO REACH CONSUMERS AT WORK
Americans spend 60% of their waking hours at work, more than ever before. For marketers, reaching potentialconsumers at work is more important than ever. More consumers are multitasking during the workday. Thegovernment’s recent “Time Use” study says that 1 in 5 American workers shop at lunchtime and 1 in 4 shopon their way home from work. More hours working, coupled with the increased price of gas, makes runningerrands during and after work more costly for the consumer, but more valuable to the marketer. Reachingconsumers while at work, when they are close to the point-of-purchase, is critical.Radio provides a significant opportunity to deliver the Americanworkforce to marketers. New Arbitron PPMdata suggests that AQH listening to Radio is higher among working people than non-working persons. Insome PPM markets, radio listening for working people is almost 84% higher. The legendary Erwin Ephronrecently said, “Radio has the best attentiveness package of any medium.” In addition to conscious awareness(i.e., listening), radio also delivers low involvement awareness(i.e., hearing) that can’t be shut off. In otherwords, eyes can close but ears cannot. Clark Gable famously learned his movie roles by having them read tohim while asleep. This worked because the human brain processes everything that the ears hear. This alsomeans that people who hear the Radio while multitasking like driving from work to the store; sitting a workmaking a list of lunchtime errands --process the relevant messages they receive through their ears.
 Big Research Oct’08, U.S. Bureau of Labor Statistics 2007, Ephron on Media Sep08

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