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Radio Gains Audience, Pushes ‘Buy from FM’ Initiative

The 14-24 demo is increasing its time spent listening to radio and decreasing time spent listening to iPods, according to a new study from Paragon Research.

Time spent listening to radio among 14- to 24-year-olds has increased by 11% this year, while time spent listening to iPods has slipped by 13%, per the study (via AdAge). The article points out that the study corresponds with the RAB’s annual RADAR report, which shows that AM/FM listeners increased by 3 million, to a total of 235 million weekly listeners, in 2008.

Radio’s continued growth can be attributed, in part, to the fact that it is more difficult in the MP3 space to come across new music. “As a result, that isolated programming effect does not allow you the serendipitous experience the way radio does,” says Jeff Haley, pres-CEO of the RAB, speaking about the Paragon study.

Despite the rise in listening, radio revenue has been flat to down in the past five years. Ad revenue was down 6.5% through the first two quarters of 2008, making the industry second only to newspapers in terms of decline. Newspapers slipped 7.4% during the same period.

The current financial crisis is continuing to keep radio revenue down, as two of the industry’s top advertisers, automotive and retail, are being hit hard.

But much of the problem stems from the fact that radio’s luster has been dulled in the minds of advertisers, radio execs believe. The seemingly widespread belief that radio is dated or has “lost its fastball” means radio doesn’t have much leverage, said John Hogan, president-CEO of Clear Channel, at an Advertising Week event in September. Jeff Smulyan, pres-CEO of Emmis Communications, agreed, saying, “We have a perception problem, not a consumption problem.”

To dispel that perception, and to combat the continuing threat from the MP3 space, radio has embarked on an initiative that hopes to tie radio listening in with the MP3 experience. “Buy from FM” is a push to make FM radio tuners available on every MP3 player and cell phone, so consumers can hear a song on the radio and purchase it directly from their device. FM’s first partner in song tagging is Microsoft’s Zune; the RAB and the National Association of Broadcasters are in “aggressive talks” with other carriers, Haley says. Zune has just 4%-5% of the market. Without Apple’s support, the “Buy from FM” initiative may be severly hampered.