April 8, 2020 by chrissynumero19
Analysis by Mika Mäkeläinen (journalist at the Finnish Broadcasting Company Yle)
What does the pandemic mean for radio stations? I haven’t seen any analysis anywhere yet, so I figured I’d try to gauge some possible outcomes and new strategies with a global view. The depth of changes will naturally depend on how long a lockdown continues. However, as long as there is no cure or vaccine against the new coronavirus, we will see more or less permanent lifestyle changes that will fundamentally alter the radio scene.
First of all, BBC-type broadcasters – government-owned but editorially independent public broadcasting companies – seem to be thriving, relatively speaking. Ratings are up, and demand for reliable independent journalism is insatiable. In the long run, their source of financing will however begin to dry, as governments are drowning in debt, and will face inevitable cutbacks. Media will lose, while public funds need to be diverted more to health care, and to providing a social safety net.
Commercial broadcasters are already in dire straits. Advertising revenue has nosedived, even though audience ratings have shot up. This situation will become unbearable in the long run. Practically all advertising revenue is based on consumer demand, and not just any demand, but (especially for local stations) mostly local service businesses. Much of that commercial activity has either stopped or has shrunk considerably, and whatever business remains, the companies have no money for marketing. Likewise, audiences have no money for other than bare necessities. We can expect a worldwide tsunami of bankruptcies in the commercial radio industry, unless alternative revenue sources come to rescue. More about that later.
There are some sectors in commercial radio that are especially hard hit. Think of for instance AM (mediumwave) radio in the U.S, which is one of the few countries where AM broadcasters still exist on a large scale. People listen to AM radio mostly on their way to and from work. Now, these audiences are falling simply because people are driving less. The audience segment with the most purchasing power is working remotely from home, and is no longer listening to AM radio. Also, unemployment is skyrocketing. The ongoing structural move from AM to FM will accelerate. Much of the AM radio scene, as we know it, will become a thing of the past sooner than expected – unless it can remake its business model.
One format will be particularly hard hit: sports. As major sports events and competitions are cancelled, there is nothing left to broadcast. Reruns, talk shows, and historic highlights can’t sustain the business for long. On the other hand, there is light at the end of the tunnel. If only sports activities in spectator sports resume, radio could actually boost its share of sports fans’ attention. If attending sports events in person is viewed as a health risk, listening to sports on the radio (or preferably watching it on TV) will become a more lucrative option.
The pandemic is forcing people around the world to conduct everything online instead of in person. What do they listen to when doubling their time spent online? Online radio, of course. If a broadcast station is not yet streaming online, it is high time to begin doing so immediately.
Dramatic crises call for rapid and serious investment in innovation. Business models have to follow changed consumer demands and behavior. Innovate or die. Stations need to broadcast on the platforms that their audience, or potential audience, is now using. As for reporting, they need to go to the places where their audience can no longer go. This is a rare opportunity for radio stations to offer audiences windows to the world that they can no longer experience themselves.
Even more importantly, the pandemic is a rare opportunity for a radio station to become the focal point of social interaction in its community. When people can no longer safely get together in person and meet in restaurants, hobby groups, churches, any form of social interaction, radio could become the shared living room of the community. To achieve this, radio has to be live and local. It is expensive, but it pays off.
On the most acute problem of falling revenue: This would be the time to at least experiment with crowdfunding. When disaster strikes, people listen to the radio. Audiences rely on broadcasters more than ever before, but they are no longer able to support the businesses that support the broadcasters. How about supporting an invaluable media service directly? Radio stations need to spell out explicitly what is bound to happen unless revenue streams pick up. Where direct public or private sponsorship is available, now is the time to make it happen.
If the service provided by a radio station is relevant, meaningful, and indispensable to the community, the community will act to defend and support it. If a radio station is nothing of the above, it deserves to become a thing of the past. If a particular media is a lifeline for its community, it will continue to prevail, and even emerge stronger once the crisis is over.
(In the spirit of sharing, I’m granting any online or offline publication a free-of-charge right to republish, translate or share this analysis as long as the original source is mentioned, and linked to, and I’m being informed about the publication.
Article by Mika Mäkeläinen, journalist at the Finnish Broadcasting Company Yle
Photo by Edwin Hooper on Unsplash