Report: The Internet Is Hurting Radio's Star

When Pandora Internet Radio started in 2005, it was largely limited to computers that were tied to the Internet by a phone line or network cable.

Now, thanks to the proliferation of smart phones and high speed cellular data networks, you can stream music almost anywhere your cell phone, tablet or laptop has cell service or a wireless network connection.

According to a story by Nolan Hicks at mysanantonio.com, all of these advances are creating a headache for commercial broadcasters such as San Antonio-based CC Media Holdings Inc., which is laboring under a $20 billion debt load — a carryover from when it was taken private in a leveraged buyout. The broadcasting and outdoor advertising giant, which owns more than 800 radio stations, said last week it posted a $191 million loss in the fourth quarter of 2012.

While the percentage of the population that listens to radio has remained almost constant during the past decade, time spent listening to the radio consistently has declined by about 15 minutes a year for the past 20 years, said Larry Johnson, senior research consultant for Paragon Media Strategies.

He said the drop has been especially pronounced among younger listeners, who usually are among the early adapters of new technology and services — such as iPods and Pandora. However, he added, there's no clear way to see if those declines have been caused by listeners leaving radio for online streaming services.

A study by the Katz Radio Group provided by Johnson showed that listeners between the ages 18-34 listened to 15.25 hours of broadcast radio every week during spring 2011, while listeners between the ages 35-64 listened to 17.5 hours of radio every week.

In spring 2009, listeners between the ages of 18-34 were listening to almost 15.75 hours of radio a week.

The three largest radio companies in the U.S. — Clear Channel Communications, an arm of CC Media Holdings, Cumulus Media and CBS Radio — are trying to get a foothold in the rapidly growing terrain of online streaming. Still, representatives for CBS and Clear Channel were quick to point out that listening to online radio services accounted for only 6 percent of all the audio listened to.

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