Radio InSights

Jeff Smulyan Got it Right

New media pundits have been telling us that radio is dead for nearly a decade now. The fact that radio is alive and well hasn’t seemed to deter them. They find no irony in the fact that radio survived NetRadio and Live365, MTV and Napstar, Satellite radio, and the ultimate insult, that iPods don’t have radios built in.

Radio is dead is new media’s Big Lie. Joseph Goebbels, Hitler’s propaganda expert described the Big Lie as the principle that when one lies, one should lie big, and stick to it. George Orwell added that one should, " forget any fact that has become inconvenient."

We have used this space many times to point out new media’s Big Lie and the inconvenient facts that the Big Lie ignore. In May we pointed out that no other audio medium comes close to terrestrial radio’s reach and impact. In July we reported the results of a JupiterResearch study that showed that radio was the top media source for new music, out-performing new media and even word of mouth.

A Rasmussen poll in September showed that more people prefer to listen to music on the radio than other sources such as MP3 players. 42% of participants preferred radio compared to only 5% who preferred streaming.

Arbitron’s first (and perhaps their last) satellite ratings study showed that most of satellite’s offerings wouldn’t even show up in a small market Arbitron because listening levels were too small to qualify. Howard who?

But facts don’t seem to slow down the pundits who are determined to dismiss radio and declare it near death. It’s understandable why we would hear the Big Lie from people outside of radio. New media types have a vested interest in trashing radio. The new media types of the 1950s were saying the same thing when television appeared. What is particularly galling is that too many people who work for radio stations believe the same thing. These people ostensibly depend on radio for their livelihood, and yet seem to delight in taking shots at radio.

Here's the shot Tom Asacker, a marketing guru, took at radio recently:

The following landed in my inbox last week in an email titled "NAB SmartBrief:" "Radio’s ‘challenge’ isn’t to retain its audience or remake its programming, but to convince marketers that the medium is still viable, according to Jeff Smulyan, Emmis chairman-CEO. ‘The challenge is the perception,’ Smulyan said during a conference call with analysts.

Really? I heard something similar from the CEO of General Motors a few months back. In essence he blamed his company’s fall on the uninformed, and misinformed, marketplace: "It’s the consumers, stupid!" Or maybe, it’s the stupid consumers. In any event, and with all due respect, if you believe that you need to "convince" your ignorant audience of the value of your offering, you simply don’t offer anything uniquely valuable. In this day and age, if you did, and people were interested, they’d figure it out.

As we said, this dismissive attitude towards radio isn’t new. It is just another cheap shot by someone who is deeply ignorant about the facts. The bigger problem is that Mark Ramsey, presumably a person who should know better, supports this viewpoint and reprinted the remarks in a blog that is directed at radio broadcasters.

Jeff Smulyan got it right. Tom Asacker and Mark Ramsey got it wrong. According to Arbitron, over 93% of New Yorkers consume radio on a weekly basis, with 67% of them consuming radio on a daily basis. They spend nearly twelve hours a week listening to radio. Can any other audio medium match that reach? Can any other audio medium match the amount of time people spend with radio? Study after study says no.

Mr. Asacker’s attempt to draw a parallel between Jeff Smulyan’s defense of radio and Rick Wagoner’s defense of General Motors just illustrates desperate punditry and confidence in the Big Lie. Ignore the facts, link radio to an industry that everyone knows is in deep trouble, and presto, you’re an expert on how to fix radio.

GM is in trouble because people stopped buying their cars. People don’t want Hummers anymore, but people continue to listen to radio despite iPods, streaming, satellite, and all the other distractions.

Asacker and the other self-appointed saviors of radio feel comfortable spouting off about radio’s decline because of what’s happening with other traditional media. Newspaper circulation is in the tank. It has been eroding at a 2% rate for years and is now falling at about 4% a year. Magazines are disappearing at an accelerating rate. Prime time viewership of the top five English language television networks is down nearly 7% this year alone.

With other traditional media in free-fall, and with so many new competitors, the average uninformed person would assume that radio is performing as badly. The facts suggest otherwise. According to Arbitron, radio cume is down about 4% over the past decade and there are methodological reasons to believe the real number is smaller.

A great deal has been made about the decline in TSL. Even the critics who concede that radio’s cume is holding will point to time spent with radio and say that the recent declines prove that listeners are abandoning radio. We have to keep in mind that the steepest declines in TSL happened before iPods and satellite radio. They coincided with Arbitron’s cost cutting efforts. Incomplete diaries that were once rejected began showing up in the sample, so some of the decline in TSL may be directly attributed to methodological issues.

No studies have shown a direct link between new media adoption and a decline in radio listening. None. In contrast, studies have shown that computer use negatively impacts television usage, not radio usage. And consider this. From 1977 to 2007, the final year New York was measured with diaries, TSL declined five quarter-hours, just a little over an hour. Think about all that has happened in 30 years and yet listeners continue to consume radio at roughly the same rate as when Jimmy Carter was President.

With newspapers and television in steep declines, it might seem reasonable to assume that radio is in a similar situation. With satellite, iPods, streaming, and the like it might seem reasonable to assume that radio usage is dropping. But the facts say otherwise. Listeners still believe in radio.

Jeff Smulyan got it right–or maybe half right. We have a perception problem. Not with listeners, but with the buying community. Unfortunately, radio itself has created the perception problem. We have conveyed a lack of confidence in the product through our lack of pricing integrity. We’ve acted like radio is in trouble and debased the product in the eyes of buyers. Now we are paying the price.

Is Radio Really Losing the College Grad?

Radio is suffering from a serious inferiority complex fueled by a nearly continuous barrage of punditry proclaiming the death of radio. Our self-loathing has reached such a point that today anyone, regardless of the paucity of hard evidence, can rail against radio’s sins and broadcasters will simply lower their heads in shame.

Bad news about radio gets uncritically reported, any factoid that seems to supports radio’s imminent demise accepted as fact. With such fatalism pervading radio, we were not surprised but disappointed that no one rose to the defense of radio when a story penned by Larry Rosin appeared suggesting that college educated people had abandoned radio (Has Radio Lost The College Grads?, Radio & Records, May 30).

According to the author:

College grads listen to five-and-one-half fewer hours of radio per week, on average, than those who have not attained a college degree. The significance of these numbers simply cannot be overstated. What this means is that if you combine the differential in total weekly listening with the fact that quite a lot of listening among college grads is going to public radio, you see that the difference in listening to commercial radio is enormous. Simply stated, college grads are now accounting for only a small minority of total commercial radio listening. Programming available from commercial radio is just not appealing enough to college grads. Has our programming simply chased college grads away from the dial?

We can look at listenership in many ways. We can break out listening by age, sex, race, employment, education, household income, and so on. We can theoretically break out listening in more than 62,000 ways! When we focus on a single break-out like education, there is a good chance that we will miss an even more fundamental relationship between demographics and listening patterns. Such is the case when we look solely at education.

The assertion is that there is a relationship between education and TSL such that more educated people listen less to commercial radio ignores some well understood relationships between demographics and TSL. First, we know that African-Americans and Hispanics have considerably higher TSL than non-ethnic listeners. We know that African-Americans and Hispanics make up a higher proportion of high school rather than college educated listeners. That means if we look at TSL by education and do not control for race, TSL is going to be lower for college grads. If we dig into Maximi$er, we find all sorts of interesting things like college educated African-Americans listen to more radio than high school educated non-ethnic listeners.

The first step to test the theory that, "programming available from commercial radio is just not appealing enough to college grads" is to control for race. In other words, we have to compare non-ethnic college grads to non-ethnic high school grads. The second thing we have to control for employment. Anyone familiar with listening patterns knows that employed listeners have higher TSL than those who are unemployed. Our analysis of the top 10 diary measured markets shows that the employed college educated listen around 20 hours while the unemployed college educated listen about 16 hours. Since Arbitron’s average TSL is about 20 hours, the below average listening for the college educated is driven by the unemployed.

When college educated listeners have jobs they listen more to commercial radio. It is the unemployed college educated person who listens less. Does that mean unemployed college educated people want better programming than employed college educated? That is highly unlikely. So it is equally unlikely that our programming is chasing college educated listeners away. And remember, these numbers include ethnic listeners.

We also have to question the use of TSL numbers to prove that, "college grads are now accounting for only a small minority of total commercial radio listening." To determine the accuracy of that statement, we need to look at quarter-hour persons, not TSL.

Since San Francisco numbers were used to illustrate the impact of public radio on commercial listening, let’s look more closely at the market. In San Francisco, of the roughly 400,000 A25-54 quarter-hours of listening each week, three-quarters of them come from those with a college education. Only 27% of listening comes from those with a high school education. Three-quarters sound like a lot more than a "small minority." The Bay area is a highly educated market, but even in blue-collar towns, a large if not majority of quarter-hours come from the highly educated. And what about the suggestion that most college educated listening in San Francisco goes to KQED? Only about one in ten college grad quarter-hours go to the station, and public radio in most markets reaches a fraction of the audience that KQED attracts. So it is false that a majority of quarter-hours come from high school educated listeners and it is false that "a lot" of college educated listeners choose NPR over commercial radio.

These are well known facts about radio. The majority of quarter-hour persons come from college educated people, just the opposite of what the author asserted. Employed people listen to more radio than unemployed people because a higher proportion of college educated people are employed. According to the Bureau of Labor Statistics, the unemployment rate ranges from 7.8% for those lacking a high school diploma to 2.1% of those with a Bachelor degree. Employed high school graduates may listen to slightly more radio than college educated listeners, but fewer high school graduates work.

So the assertion, "college grads are now accounting for only a small minority of total commercial radio listening" is simply demonstrably wrong. College educated people apparently find plenty to listen to on the commercial band because they contribute the majority of quarter-hours.

What about the assertion that college educated listeners are abandoning commercial radio? Our studies have found no evidence that college educated listeners are leaving in higher numbers than less educated listeners. In comparing declines in various cells, we find no relationship between education and declines in TSL. None.

Is commercial radio becoming the medium of the uneducated? Clearly not. Is commercial radio chasing away college grads? Clearly not. And at a time when radio is taking one body blow after another, broadcasters should take issue with any assertion that radio is in decline.

This originally appeared in the August 1st issue of Radio & Records

Another Threat to PPM

Our sister blog, PPM InSights, has a lengthy post regarding a potential competitor to Arbitron using cellphones to measure media usage. Read it here. 

Quoting from The Wall Street Journal:

A small media research company called Integrated Media Measurement is trying a new technology that measures consumers' exposure to the audio in ads on television, radio, computers, mobile phones, DVDs and inside a movie theatre -- using a consumer's cellphone. IMMI embeds its software into the cellphones of the company's 4,900 panelists. IMMI isn't the first company to attempt this kind of measurement, but past efforts were stymied by the costs of creating a large-scale panel. IMMI's use of cellphones means that consumers don't have to labor over diaries or push buttons. "I'm convinced the handset will be the way we will measure media going forward," says Alan Wurtzel, president of research at NBC.

Holding Arbitron Hostage

The New Jersey and New York lawsuits against Arbitron demonstrate how far elected officials are willing to go to pander to their constituencies. Emboldened by the rabid attacks of the PPM Coalition and others, the two Attorneys General have drummed up charges that would have made members of the Spanish Inquisition proud.

Despite their claimed interest in accurate ratings, the PPM Coalition’s efforts to introduce race into the debate over PPM makes it clear that they are not interested in accurate radio ratings. Their goal is a ratings service that benefits their own radio stations, even if it compromises the integrity of the ratings.

As Harker Research has frequently noted, PPM is far from perfect. There remain serious methodological flaws that impact the accuracy of PPM ratings. However, PPM offers radio a potentially  more accurate measure of radio listening. The diary methodology has benefitted ethnic stations at the expense of general market stations for many years. Ethnic stations attract listeners who feel an obligation to write down ethnic stations. This creates significantly higher TSL for ethnic stations resulting in large shares on relatively small cume bases.

The paradigm changes radically with PPM. With PPM, listeners can demonstrate station solidarity only by actually listening to their stations. They cannot reward their favorite stations as they did by filling diaries with inflated listening.

We disagree with those who say that criticizing Arbitron’s roll-out of PPM hurts radio. We believe that broadcasters have an obligation to hold Arbitron’s feet to the fire and demand that they address the flaws as quickly as possible. This process can only be hampered by politically motivated lawsuits and the narrow-minded constituencies that spawn them.

Radio Still #1 Among Music Listeners

We've noted in the past that bad news about radio seems to make headlines while good news is ignored or barely noted. Back in June we mentioned a Jupiter study that found that radio is the number one source for new music. Read it here.The latest example is the results of a Rasmussen Report that shows that radio remains the most used source of music. Inside Radio did publish a brief summary on September 9th, but other than that, it has received very little coverage.

Not only was radio number one, it wasn't even close. 42% of the 1,830 music listeners reported using the radio most often to listen to music. CD players were number two at 25%, and MP3 players were third at 14%. This ranking is consistent with other studies that show the vital role that radio plays in a music listener's life.

Only 9% of the participants listen to satellite radio, 69% have rarely or never downloaded a song, and 90% do not subscribe to a service like Rhapsody.

The new media people want us to believe that radio is dead and that everyone carries an iPod and listens to streaming music and satellite radio. Survey after survey proves otherwise. When is radio going to tell our side of the story?