Radio InSights

Is News/Talk Radio in Trouble?

How can this be?

How can it be that in the midst of a struggling economy and a critical Presidential election that News and News/Talk stations are losing listeners?

How can it be that a format thought to be the future of local radio, the format that offers the most irreplaceable product has the worst momentum of any major format? 

The latest Harker Research Format Momentum Analysis shows that large numbers of listeners have abandoned News and News/Talk radio over the past year, a trend that continues from last year.

As we explained in last year's analysis:

We determine momentum by looking at the stations that have been in a format for at least a year and see if each station is higher or lower than the previous year. 

If a majority of stations are higher than last year, the format has positive momentum. If the majority of stations are lower, the format has negative momentum.

Only 40% of News and News/Talk stations in PPM markets are ahead of where they were in 2011. The majority of stations have lost share in the past year.

To put that into perspective, the momentum of News and News/Talk is more negative than virtually every music format we track.

Our first level analysis combines News, News/Talk, and NPR stations, but the losses are across the board. When we look at the performance of each format, it doesn't look much better.

More troubling is the fact that these latest declines continue a trend we first noted last Fall.

In our 2011 analysis we found that 62% of News/Talk stations had lost share compared to 2010.Today 58% of News/Talk stations are lower than they were in 2011.

As bad as that looks, News stations are in worse shape than News/Talk stations. Three-quarters are lower than they were last year. (Keep in mind there are few pure News stations.)

Even NPR stations show little momentum. Only 43% are ahead of where they were a year ago.

Median shares also suggest weakness in the formats.

Median share is the "mid-pack" share of the format. Half the stations have a higher share, half a lower share.

Using median rather than average to assess the over-all performance of a format is more useful because it isn’t unduly influenced by stations that do much better than most other stations in the format. (Think of what stations like WTOP or WLW do to an average.)

NPR has a median share of 2.8, essentially unchanged from 2011. In contrast, News/Talk’s median has declined 3.3 to 3.0, a 9% decline. News has declined by a third, but again, there aren’t many all news stations.

The across-the-board declines raise all sorts of questions.

Critics will claim that the declines are a consequence of polarizing conservative talk, but how does one then explain NPR’s lack of gains?

If that were the case, wouldn’t NPR be a natural alternative? Shouldn’t NPR stations move in the opposite direction of conservative talk, not in lock-step?

As the economy struggles, and we move closer to the Presidential election, shouldn't the audience for News and News/Talk be growing, not declining?  

That's what we found in early 2008 going into the last Presidential election in our final diary-based analysis. It showed a format with strong positive momentum.

Well over half of News/Talk radio stations in the top 50 markets were ahead of their 2007 numbers. Of course that analysis was made when radio was measured using diaries.

Could there be something about the way PPM measures radio that’s behind the downward trend?

Consider that the formats with the greatest momentum in 2012 are Urban Contemporary and Urban AC. Urban gainers outnumber losers by nearly a 3:1 margin.

Spanish stations are on a roll, as well.

Share is a zero-sum game. For a format to grow, some other format has to lose. 

What does all this say about the future of News and News/Talk on the radio?

Now that Arbitron restricts the use of non-client ratings, we can no longer conduct thorough Format Momentum Analyses like this. It will become increasingly difficult to track formats and see what's going on.

It could not come at a worse time for News and News/Talk radio stations.

How's News-Talk Doing?

Of the many formats we track, analyzing News-Talk presents the greatest challenge.

News-Talk is slowly migrating to FM. While most News-Talk stations are still AM only, there are a growing number of FM stand-alones as well as AM-FM simulcasts.

This transition has the potential to impact ratings in unpredictable ways. An AM station that adds an FM simulcast may get a bounce just due to the initial novelty. Stations that migrate from AM to FM may temporarily lose listeners. 

Because these transitory changes may create misleading patterns, we’ve decided during this transition period when not all PPM markets have a full year of data to analyze AM Talk stations seperately from FM and simulcast stations.

We’ll first analyze AM stations. We’ll explore FM talk in a later post.

News-Talk has the distinction of being one of the worst performing format we’ve examined thus far. The median share for News-Talk is 3.1. This places the format next to last among the formats we’ve analyzed, just ahead of Alternative Rock.

A year ago News-Talk’s median share was 3.6. That translates into a 14% decline.

More telling is the high proportion of News-Talk stations that have lost ground over the past year. Of the 52 AM News-Talk stations in the format at least a year, 61.5% have declined.

That’s one of the steepest declines we’ve seen in any format.

As we mentioned in earlier format analyses, PPM is still relatively new. Seventeen additional News-Talk stations don’t yet have even one year’s worth of trends, so we have to be cautious about over-analyzing PPM trends this early in the game.

Perhaps News-Talk has reached a ratings inflection point. Perhaps the normal random bounces we see all bounced against the format.

Whatever is behind this trend, we’ll be watching News-Talk closely in the coming months.

What is a Listener Worth?

What is a listener worth?

Mel Karmazin recently compared Sirius to Pandora, bragging that Sirius makes a lot more money per subscriber than Pandora:

(Pandora) are able to generate $4.59 per year from their active users. By contrast, SiriusXM generated $141 in the year for each subscriber. I think that helps to demonstrate why we like our subscription business model.

Is this a valid way to compare Sirius to Pandora, or broadcast for that matter?

Karmazin used Pandora’s estimated active user base, but a more useful comparison is to look at Pandora’s weekly average sessions, nearly half a million in the latest reported month.

If we divide Pandora’s 2010 revenue by the service’s average sessions, it turns out that an active user is worth $467, over three times what Sirius makes from each subscriber.

So much for Karmazin’s subscription model, but how does that compare to the value of a broadcast listener?

Arbitron does not release national AQH estimates, and the current mix of PPM and diary markets makes calculating a national AQH number problematic. Nevertheless, we used Arbitron’s national RADAR estimates as a starting point.

We concluded that national full week AQH is more than four million AQH persons.

We know from the RAB that spot radio alone in 2010 totaled $14.2 billion.

This means the value of a broadcast radio listener nationally is conservatively $844, twice what a Pandora listener is worth.

Now that we have a national average, we can use this analysis to examine specific radio stations.

BIA-Kelsey recently reported 2010 station revenues for the nation’s top ten stations. If we divide the station’s revenues by their latest full week PPM AQH numbers, we can compare the stations to each other as well as the national average.

Across all top 10 stations, a listener is worth $809.44.

The graph lists the stations in order of revenue from highest on the left to the lowest on the right (click to enlarge). The height of each bar indicates how much revenue each listener generated for the station.

 

The horizontal line is drawn at the national $844 average.

What’s it all mean? First, Karmazin has made Sirius look good by making a misleading comparison.

Pandora makes considerably more per active user than he suggests, one-hundred times more using average sessions as the metric.

Karmazin didn’t bother to contrast Sirius with broadcast radio perhaps because he knew radio would look much better, six times better than Sirius.

Beyond these cross-platform issues, there is the question of the wide range of listener values even within the top ten stations.

Four stations fall below the estimated national average. Two are music, and two are news stations, all are New York stations.

Why are there so few music stations within the top 10 billers, and why do music stations within the top ten under-perform?

Commercial loads may have something to do with it, but these are full week numbers which should even things out a little better than Monday through Friday numbers would.

And why do a Washington, D.C. and Chicago station do so well compared to New York stations?

We’ll have much more to say in part two, but in the meantime, take a look at the graph and ponder the implications.

Then calculate what your listeners are worth.

Pew Distorts & Misleads to Torpedo Radio...Again.

 
Pew calls it the Project for Excellence in Journalism, but it is really anything but.

Excellence doesn’t come from patching together a journalistic quilt of conflicting and contradictory research to support a biased and agenda-ridden narrative.

Excellence doesn’t come from selectively choosing data that supports a predetermined narrative while burying data that doesn’t.

Here’s how Pew sees the state of radio (emphasis added):

Most people still listen to news, talk and music for at least a little while every week, and they do most of this listening through traditional broadcast, or "terrestrial," radio. Yet this is where the profit and revenue are under the most pressure. Many stations have left the air and some owners of multiple stations have entered bankruptcy.

Terrestrial broadcast radio continues to serve the greatest number of overall listeners....This dominance, though, is based on an old advertiser-supported model that is showing serious cracks, especially if trends that are accelerating in other sectors hit radio in a way they haven't yet.

One has to gasp at the inaccuracies and misleading characterizations made in a mere two paragraphs.

This is simply an uninformed opinion based on nothing. It isn’t objective. It has nothing to do with excellence nor journalism nor even Pew’s own research.

The people behind this report appear convinced that radio is on the ropes, and they seem prepared to dismiss (or hide) any facts to the contrary. Radio’s imminent demise fits into a nice simple storyline, even if it is fictional.

A Pew study of news consumption last September produced this Inside Radio headline: Radio news hits lowest point in 20 years.

The story reproduced a Pew graph showing plunging radio news listenership. Unfortunately, Inside Radio appears to have relied on the Pew press release rather than studied the actual data.

The precise phrasing of a survey question is critically important. Small changes in a question can produce very different answers. For newspaper, the survey simply asked: Did you get a chance to read a daily newspaper yesterday, or not? The TV question was similar.

Simple and straightforward enough. Now take a look at the radio question:

About how much time, if any, did you spend listening to a radio news program or any news on the radio yesterday, or didn’t you happen to listen to the news on the radio yesterday?

Huh? What'd they say? Would you understand that question?

The radio question is long and confusing. By the end, it isn't clear what's being asked. It invites the participant to just say nope and be done with it.

Fortunately, Pew studies have included a different question that provides more straightforward insights into radio's role in informing Americans. The question is: Do you listen to news on the radio regularly, or not? Similar questions were asked of television and newspaper.

While Pew didn't see fit to graph the trend, we've created a graph showing radio, television, and newspaper over time.

Radio is down about 17% in 16 years, with the majority of losses in the 1990s. Since 2000, the losses have dropped by half. Television shows a similar pattern with the majority of losses occurring early in the polling. Newspaper losses are nearly twice radio’s.

Yes, radio is down, but the erosion is modest and similar to TV’s. But you wouldn’t know it from the report or press release.

Wonder why.

Perhaps showing radio holding its own against television and gaining on newspaper doesn’t fit Pew’s narrative. If the authors believe commercial radio is fast approaching the abyss, perhaps it is easier to just bury any evidence to the contrary.

Now Pew has produced a new report, The State of the News Media 2011. It once again uses a mash-up of factoids gathered from Nielsen, Arbitron, the Audit Bureau, NPR, and their own studies to weave a tale of traditional media in a tail-spin.

And once again Inside Radio dutifully reprinted their talking points without any critical analysis. 

In the way a picure tells a thousand stories, the Pew graph at left tells a thousand lies.

The only bar that goes up is the Internet. By comparison, traditional media looks in bad shape.

The problem is that the graph is mixing Pew’s news consumption data with Nielsen viewership and Arbitron listenership data.

The graph is worse than meaningless. It is a distortion of the worst kind.

Pew claims Internet usage for news is up over a year ago, but their own data says it is actually down (p137). They had to pick another starting point to make sure it looked like the Internet was growing.

If you take the change in Internet news consumption from July 2009 to July 2010, Internet actually declined 19%. Oops.

For radio (what they now call Audio) Pew’s graph shows radio declining 6%, but according to their own data, Radio was off compared to July 2009, but flat from December 2009 to July 2010.

As it turns out, by picking a different 2009 data set, you can show every medium moving up or down. Radio growth actually beat television between December and July! Oops, again.

But again, to admit to a less than clear-cut downward trend for traditional media, and a less than ballistic path for new-media would't fit the narrative. It seems, the graph has to fit the narrative, not the other way round.

The television numbers seem to be chosen arbitrarily, as well. Using Nielsen data, Pew concludes that cable news is down across the board. However, according to the Pew data (p138), Fox and MSNBC are as strong as they were last year.

But the notion that specific cable news channels might be losing while others gain audience adds nuance that compromises the over-arching theme of the assendancy of new-media. Simpler to paint a single brush stroke of cable news in trouble.

Of course, Pew couldn’t resist the temptation to take a shot at commercial radio by highlighting the growth of NPR:

NPR, by contrast (to commercial radio), has flourished as commercial all-news radio programming has become scarcer.

While Pew makes frequent use of footnotes to give weight to their claims, you won't find any support offered for the claim that all-news programming is scarcer, because it isn't true. The authors want to believe that commercial radio is abandoning news, even if it is untrue.

But Pew doesn't seem to be in search of the truth.

Ironically, Pew cites NPR’s internal data rather than their own Excellence in Journalism data. The graph at the left shows NPR listenership over time according to their polls.

Participants were asked whether they listen to NPR regularly, sometimes, hardly ever, or never. The numbers of listeners who answer regularly or sometimes has declined 23% since 1996.

In Pew’s report it claims that longer trends are not applicable due to changes in question wording, but the substantial word change took place in 1993. The only reason to ignore the trend from 1994 is the awkwardness of the direction.

For some reason, NPR’s decline just didn’t make it into the report that radio trades were provided.

At every opportunity Pew dismisses commercial radio and cheerleads for radio’s competitors. After having to acknowledge radio’s continued ratings success, Pew adds:

But the biggest change in radio listening maybe just ahead. We are on the brink of internet radio being widely available for the first time. Toyota is including Pandora in its multimedia systems in all models....

Of course, Clear Channel’s iHeartRadio will also be on Toyotas, but that fact would interfere with their narrative of imminent new-media domination.

Pew has actually been predicting broadcast radio’s demise since 2006, something we first wrote about in 2009. You have to give them credit, they are determined to prevent facts from dampening their dream. 

Radio's Digital Future Revealed

Want to see what radio’s digital future will look like? 

Would you like to look into the future to see what radio will become if broadcasters follow the advice of their harshest critics, the critics who say that radio is moving too slowly?

Look no further. The one organization that heard the digital herald calling most clearly was National Public Radio...I mean NPR. (They don’t want people using the R word when referring to them.)

NPR, under the leadership of NYTimes.com alumnus CEO Vivian Schiller, has pursued an aggressive agenda preparing for a digital future:

We are agnostic about whether somebody listens over broadcast or listens to the exact same radio stream on the Internet.

As younger generations are consuming content on their cellphones or on their iPhones or on their iPads or on their Android phones or whatever, we want to make sure that we're there. So it's very important for us to be on every platform.

So NPR is following the game-plan of those who declare that radio must move faster, lest it miss the digital revolution all together. Today, NPR listeners can find the same quality programming on pretty much every digital device they own.

Why the rush? Because Ms. Schiller thinks broadcast radio will be history in as little as five years:

In the next five to 10 years, Internet radio will take [the broadcast tower's] place, and there's no reason why we should be fearful about it. In fact we should embrace it, especially on mobile. Mobile is the second coming of radio. It has been a godsend for us, because mobile devices are so easy to take with you, and you can listen to any stream you want.

No commercial radio group has prepared for radio’s digital future like NPR, so looking at NPR’s progress is like looking into radio’s future. So what do we see?

NPR's Audience Insight & Research group recently analyzed hour by hour broadcast, web, and mobile audiences to see how the three audiences vary through the day. You can find their analysis on the NPR research web site.

We looked at three key hours, 7:00 a.m., 12:00 noon, and 5:00 p.m. We graphed the number of broadcast, web, and mobile listeners separately during the three hours.
 
Based on their data, a whole lot has to change in a short period of time if Ms. Schiller’s predictions are to come true.

NPR’s digital audience is a tiny fraction of the organization’s total audience.

Despite the availability of NPR on virtually every digital device whether it be computer, iPhone, Blackberry, iPad, Android, or almost any other, only 2-5% of NPR’s audience is listening to the digital product in mornings, midday, or afternoons.

To hear Ms. Schiller speak, one would think that the death of broadcast radio is right around the corner. Yet to match NPR’s broadcast audience, the organization’s digital audience has to grow well over 2,000%! Even Pandora isn’t growing that fast.

NPR has reached radio’s digital utopia with its programming available on every possible digital platform, yet 95% of NPR listenership is still broadcast. Maybe NPR is National Public Radio after all.

What does the slow adoption of digital platforms on the part of NPR listeners say about the digital future of broadcast?

If NPR’s affluent well-educated tech-savvy audience is still overwhelming analog after NPR’s tremendous investment in digital, what is the chance that commercial stations will soon see a significant migration of listeners to digital?

None, certainly not in the time frame Ms. Schiller is predicting.

In a recent post we wrote that people who most confidently predict the future rarely fully understand the present.

The hyperventilating broadcast critics who tell radio that the sky will fall unless broadcasters abandon their analog ways need to first explain NPR’s overwhelmingly analog audience.

They need to explain why an organization that followed their advice and rapidly mobilized for a digital world is still primarily a group of FM radio stations.

Before declaring radio hopelessly out of touch by not rushing to embrace this brave new digital world, explain National Public Radio.

 

Radio's Mobile FM Chip: Careful What You Wish For

Radio should be careful for what it wishes for.

As excitement builds over the possibility that mobile phone makers will be required to add FM to their phones, it’s a good time to reflect on what an FM chip means.

Radio won’t will be able to hide behind the excuse of a decline in consumer access. Radio will be in the hands of almost everybody all day long.

That’s the good news.

The bad news is that we won’t be competing just against the station across the street. Radio won’t even be competing with services like Pandora or Rhapsody.

Radio will be directly competing for attention with all that the Internet can provide: Google, Facebook, YouTube, and all the other Internet behemoths.

In a sense, it's true today. Computer users can listen to streamed radio while doing other visually oriented tasks. Multitasking on a cellphone is less likely. Competing for shared attention on a computer will give way to more of a winner takes all battle on cellphones.

Is radio really ready for that battle?

If the goal is to turn today’s smartphone into tomorrow’s radio, the industry has a tough hill to climb. And before radio can climb that hill, it has to climb out of the hole it has dug for itself.

We’ll return to the question, but first look at new research from Nielsen that illustrates radio’s challenge.

The chart below shows the average minutes per hour a smartphone user spends doing various tasks (click to enlarge).   
  
  
Email takes up 25:00, nearly half (41.6%) of the hour. For all the capabilities of new app bedecked Internet enabled mobile phones, their greatest value remains the ability to read email.

Despite all the talk that social networks are making email obsolete, email actually takes up more of the hour today than it did in 2009.

Portals like Yahoo or AOL rank a very distant second at 7:00, 11.6% of the hour. Just seven minutes on the second most popular activity.

Half of the hour is consumed by email and accessing portals alone.

Checking social networks and blogs consumes 6:18, 10.5% of the hour.

Search ranks fourth at 4:12. News ranks fifth at 2:42. The remaining quarter-hour is shared by a wide range of tasks all taking two minutes or less.

Music manages to capture 1:54 of attention. Less than two minutes out of an hour, and that is an increase over last year!

The fact that smartphone users spend much of their time communicating through emails shouldn’t be too surprising. It has been true all along. Last year we wrote that even with smartphones, the primary value to the user is to communicate: 

Today we can now communicate via voice, text, email, and so on. A smart cell phone has expanded our means to communicate, but fundamentally it just continues to provide the valuable service Alexander Graham Bell's invention provided.

With so much of the hour devoted to personal communications, there will be a scramble for the left over minutes.

Robo-radio, voice tracking and tired programming isn’t going to persuade a listener to switch her cellphone from email to the radio. It isn’t going to be enough to stop her from checking her Facebook status.

Unique compelling programming is the only thing. Unfortunately, creating unique compelling programming is going to be expensive.

For an industry that puts greater emphasis on hitting this quarter’s numbers than investing in programming, it isn’t going to be easy.

Radio should be careful for what it wishes for. Winning the FM chip battle will be just one victory in a long costly war.

"The Death of Radio"

Here’s what one writer and observer of electronic media wrote about radio’s fate:

Everybody knows that radio is a dying medium. Nearly anyone who has a smattering of talent is deserting radio for the new medium.Throughout the nation radio lay apparently dying in the wake of new media’s irresistible onslaught. To many, the end of radio seems near.

Sound familiar?

These observations offered by Claude Hall, then Radio-TV editor of Billboard, were actually penned over 30 years ago about the fate of radio nearly 60 years ago. He was writing about the threat that radio faced from television in the early 1950s noting that many were writing off radio. Pundits back then declared that no one would listen to radio when they could watch TV.

Hall went on to explain why it didn't die:

The death of radio was somewhat exaggerated primarily because a few good radio people refused to roll over and play dead. Radio of the mid 1950s was made up of devotees who lived, ate, breathed, and slept radio.

Hall made the point that while television was busy adapting radio programming to TV, radio people were busy reinventing radio.

Television had taken Red Skelton, the Lone Ranger, and Fibber McGee and Molly, but innovators were busy devising new better formats to replace them. Gordon McLendon, Todd Storz, Bill Stewart, Chuck Blore and countless others help reinvent radio creating Top 40, Beautiful Music, All News, and other formats in the years following television’s debut.

Faced with a new-media threat, radio understood that winning was all about product. Deliver an exciting, dramatic, and entertaining product, and nothing can beat local radio. Hall noted even in 1977 that radio was forced to make constant adjustments almost on a day to day basis, but that radio was up to the task:

As a direct result of the dynamic, energetic people in it, radio, as a medium, seems to be totally regenerating.

The key to local radio’s continued strength is innovation. And the key to innovation is enlisting the help of people who do not accept the status quo, and do not accept the inevitability of radio’s demise.

Product innovation made radio successful. Product innovation saved radio in the 1950s. It will save local radio today-provided industry leaders understand that product innovation, not technology, will make the difference. People don’t listen to apps.

Humpty Dumpty, the Mad Hatter, and Localism (Part 1)

"When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean -- neither more nor less."

"The question is," said Alice, "whether you can make words mean so many different things."

We were reminded of this conversation between Alice and Humpty Dumpty while reading a recent blog post entitled What does "Being Local" mean, anyway?

Though not penned by Lewis Caroll, the post could very well have been spoken at the Mad Hatter’s tea party:

What does "local" mean when everything local is available from everything which is not?...There is no longer any such thing as "local" as we traditionally use the term....The definition of "local" is both expanding and shrinking at the same time.

Pure pundit gibberish.

We don’t dispute the importance of localism. Radio’s localism is its key to success in the digital age. Failure to exploit radio’s greatest strength could severely imperil radio’s resurgence. The trend within some radio groups to systematically eliminate localism by programming at the national level troubles us. The post, however, completely misses the point.

So let us pull up a chair to explore the madness that this Hatter has brought to the party.

Let’s begin with the word Local. New media pundits love to proclaim with great gravitas that digital changes everything–even the English language. They like to co-opt words and redefine them to suit their new world view. It might have worked for Humpty Dumpty, but not here.

The English word local comes from the Latin word locus meaning place. Local refers to or pertains to a particular place here or close-by.

A local landmark, a local crime, a local neighborhood. These things refer to something physically nearby. But local doesn’t have to be physical. Local history and tradition are not physical, but they are linked to here because they happened here.

That’s what local has always meant. The Internet has not, nor can it change what being local means.

As a child growing up on the west coast I would stay up late at night to listen to WABC. The fact that I can now listen to a stream of WABC hasn’t moved New York any closer.

The delivery mechanism has changed. That’s all. The Internet has not changed what local means. Local means here.

But this is how Internet punditry works. Today EVERYTHING is changing. EVERYTHING is going to be different. Even the very meaning of a word like local will be transformed by iPads, Pandora, and the Internet.

Don’t believe it.

A local newspaper, local television station, or local radio station might report on a local news story. The story is local, but so is the source of the news. It is the source--where it came from, that matters. That is why local radio has a tremendous advantage over national audio sources--if it does not abandon this key strength.

Last year AOL bought Patch and Going, two companies that they say operate in the local space. In addition to repurposing old words, new media love to invent new words and phrases. It isn’t clear why we needed a phrase like local space, but AOL gave it to us.

AOL too seems to have slipped through the Looking Glass because here’s how AOL announced the acquisitions:

AOL today announced two acquisitions in the local space: Patch Media, a local news and information platform aimed at serving local towns and communities and Going, a local platform for people to discover and share information about things to do in a number of leading cities across the country. Both Patch and Going offer local experiences, content and self-service applications for consumers and advertisers.

This is how Tim Armstrong, AOL’s Chairman and CEO explained the acquisition:

Local remains one of the most disaggregated experiences on the Web today -- there's a lot of information out there but simply no way for consumers to find it quickly and easily. It's a space that's prime for innovation and an area where AOL has a significant audience and a valuable mapping service in MapQuest.

Going forward, local will be a core area of focus and investment for AOL. The acquisitions of Patch and Going will help us build out our local network further with excellent local services that enable people to stay better informed about what's going on in their neighborhood.

AOL believes localism is one of the most disaggregated experiences and most promising white space on the Internet. Talk about gibberish.

New media people always think they can do something better than local media.

In an internal memo to AOL staff, the company declared that it wanted to be the global and local leader in sourcing, creating, producing and delivering high quality content. And how are they going to achieve this level of quality with local content? They are going to hire a bunch of journalism grads.

This is how a national company is going to conquer the Internet white space of localism--with grad students.

AOL will invest a tremendous amount of money in these companies, and they will fail.

Patch and Going will fail because while Internet companies are marvels at developing delivery systems, they are dreadful creators of content. They can develop generic music products, but beyond creating digital jukeboxes, Internet companies function solely as parasites aggregators of traditional media.

No, despite the ramblings of new media Mad Hatters, digital media and the Internet are not going to conquer or even redefine the meaning of localism. People have been using national sources to learn about local things for a long time. People may use weather.com or Google News, but that does not make either source local.

In part 2 we’ll explain why radio does not compete with Internet companies in localism. It competes with local newspaper and local television. And unless it understands this and starts to respond, it will find itself losing even more ground to these two media.

Radio Credibility Up and Other Good News

There’s been a spate of upbeat news stories about radio lately. If you haven’t heard, it is probably because New-Media pundits write all the headlines, and an upbeat tone regarding radio does not jive with their world view.

First there was the Wall Street Journal story about how radio stations are paying more attention to listeners. Yes, it was simplistic and misguided, but it has been a while since anybody did a radio programming story without a “radio is dying” angle.

Then there was the Apple announcement that the new iPod Nano would have an FM tuner. Then we had the roll-out of Microsoft’s Zunewith an HD tuner.

We noted recently here that several radio stocks are trending upwards. Somebody thinks radio stocks at these prices are a good investment. That and Larry Wilson’s purchase of the CBS Portland properties has created murmurs about money starting to flow back into radio. Read our observation here.

Nielsen released ratings showing that young demos were actually listening to radio at levels considerably higher than Arbitron’s flawed method suggested. Furthermore, it turned out that technically savvy people were actually listening to more radio than theirless techy friends. We wrote about that here.

The latest upbeat story may be the most dramatic evidence that radio is healthy and growing. A just released ARAnet study (PDF here) on news usage was headlined, Americans Increase Use of Online and Radio News Sources. Newspapers and television were relegated to the second line. How long has it been since radio shared top billing with online?

The study looked at usage and credibility of seven news sources. Television was first, while radio and newspaper are tied for second. Read that sentence again so that it sinks in. When it comes to use and credibility, radio is tied with newspaper for news.

Online was fourth. Significantly, compared to the last study, newspaper was down while both radio and online were up. Keep those rankings in mind as we look at how the study results were reported.

To illustrate the New-Media bias radio battles, check out the MediaPost story on the study here. Headlined Changing Times: Online Trumps Newspapers, this is the lead paragraph:

A new survey on media usage from the Opinion Research Corporation confirms what newspaper publishers have long feared: Americans are abandoning print daily newspapers for information in favor of online news.

The study does not say that. Television and newspaper are down. Radio and Online are up. It would be just as accurate to write: Americans are abandoning newspapers for radio. But that does not fit the world view of new-media pundits.

The study’s authors gave the headline to both online as well as radio’s growth, but in reporting the results, MediaPost buried details on radio’s growth in the fourth paragraph.

However, even MediaPost couldn’t completely ignore radio's growth story in the findings. They begrudgingly gave some credit to radio noting:

The OPC (study) also found a slightly smaller decrease in the number of people turning to TV news. However, there were also some unexpected gains for traditional media, including a greater reliance on radio for news and information.

Keep in mind that radio was the only traditional medium that grew, but writing the words growth and radio in the same sentence sticks in the craw of new-media pundits. The solution as we illustrated in the past here, is to qualify any positive news about radio, so the author added the word unexpected as if to hint that maybe it isn’t true.

All in all, a pretty good couple of weeks for radio. As the negative slant of the MediaPost article illustrates, there is still a lot of work to be done before radio’s Chicken Littles give up, but things are moving in the right direction.