Growing Technology Gap Could Affect the Profitablity of Some Radio Stations

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New study shows a significant gap between group-owned and stand-alone radio stations as they deploy revenue generating technologies

With the exception of streaming, stand-alone stations are falling behind group owned stations in using revenue generating technologies that require capital investment. Group owned stations are pulling ahead by a ratio of about 2:1

An independent study sponsored by Wheatstone Corporation shows the radio industry evolving into technology ‘haves’ and ‘have nots’ based on their ownership structure. The study showed facilities with the financial backing of a station group deploying new revenue generating technologies at about twice the frequency of stand-alone radio stations.

Wheatstone Vice President Andrew Calvanese said, “This study comes to the radio industry at a critical time. As traditional ad revenue has declined, radio organizations are experimenting with new technologies that will add revenue by enabling them to deliver programming through a variety of new channels.”

Of the 10 revenue generating technologies the study measured, streaming a station’s radio signal over the Internet was seen as having the most potential. Having a website that interacts with listeners was second, while streaming multiple channels of programming was third.

When respondents were asked which of the 10 technologies their radio organizations are now deploying, streaming was the top pick by far. For six other technologies (listed below), each requiring capital investment, respondents reported group owned stations as implementing them at a substantially higher rate than stand-alone stations:

  • Having a website that delivers video: Group owned, 43.1%; stand-alone, 26.8%
  • Promoting stations with a mobile phone app: Group owned, 43.1%; stand-alone, 22.8%
  • Streaming multiple channels: Group owned, 38.5%; stand-alone, 20.3%
  • Broadcasting in HD Radio: Group owned, 36.9%; stand-alone, 19.5%
  • Websites that create musical discovery: Group owned, 27.7%; stand-alone, 17.9%
  • Broadcasting multiple HD Radio channels: Group owned, 26.2%; stand-alone, 10.6%

For the remaining three technologies, which do not require capital investment (using social media to win more listeners, creating a website that interacts with listeners, and creating podcasts) responses for stand-alone and group-owned stations were comparable.

With the exception of streaming, stand-alone stations are falling behind group-owned stations in using revenue generating technologies that require capital investment. Group-owned stations are pulling ahead by a ratio of about 2:1. Long term, as revenue builds from these new technologies, stand-alone stations could find themselves challenged to compete economically.

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Scott Johnson
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