FutureWire - futurism and emerging technology

Tuesday, March 22, 2005

Technology + Big Business = The Killing of FM Radio

People, it seems, have been complaining about commercial radio programming for as long as it's been around. Yet complaining about it is like complaining about the weather: everyone does it, but no one does anything about it.

That may be changing. In commenting on a recent Wall Street Journal piece on the upheavals in radio programming, Blogger Barry Ritholtz notes that MP3 players, satellite radio and the trend toward M&As in the radio business have degraded traditional FM radio and possibly driven away an entire generation of listeners. Ritholtz is particularly critical of the erosion of the listener-DJ relationship; in the past, he notes, listeners relied on DJs to expose them to new types of music, and play what they thought was the very best stuff. Now, with station consolidation, fewer choices and centrally-dictated playlists (what Ritholtz calls "McMusic"), music is too uniform and bland to be of much interest. Little wonder that Internet radio and P2P music sites are filling that void.

FM stations are fighting back by playing more music from more diverse sources, and playing fewer commercials. However, this may well come at a price to radio's bottom line, as ad revenues have leveled off since 2000. Radio may also have to temper its content to placate growing censorship calls from politicians seeking to impress the religious right, as well as other critics.

Ritholtz calls the blanding of FM radio the "Hamburger Helper Effect":

Consider the modus operandi of all consolidators: Purchase assets, eliminate redundant administrative functions, achieve economies of scale. Clearchannel did this – and more -- by firing local program managers, DJs, eliminating formats, and tightening playlists – all of which ultimately reduced the amount of varied music on the radio.

In effect, they lowered the overall quality and breadth of what they were playing. Equate this to a hamburger chain introducing meat extender. It will certainly lower costs, and increase profits – but only short term. Over time, the patrons of the restaurant simply will stop coming. Revenue slides, repeat customers go away, so the business tanks.

That’s FM radio today.

It's not a fun time to be in the FM radio biz. Today's DJs and programming directors are afraid or unable to push the envelope, yet they can't play it safe either. Perhaps FM radio will go the way of AM when FM came along after World War II; unable to compete with the sonically superior FM signals, AM stations gradually gave up music and switched to sports, news and talk formats. In other words, if you can't beat 'em, go off in a totally different direction.

Source: Long Tail