Deloitte: Radio's Future Looks Solid

Deloitte Global predicts that global radio revenue—which includes advertising, subscription fees, and public license fees from digital and analog AM/FM broadcast, satellite radio, and internet streams of AM/FM radio—will reach $40 billion in 2019, a 1 percent increase over 2018. Further, radio’s reach is expected to remain vast, with more than 85 percent of the adult population in the developed world listening at least weekly, the same proportion as in 2018.

Deloitte Global predicts that adults around the world will listen to an average of 90 minutes of radio a day, about the same amount as in 2018. Unlike some other forms of traditional media, radio is expected to continue to perform relatively well with younger demographics. In the United States, for example, more than 90 percent of 18- to 34-year-olds are expected to listen at least weekly in 2019, for an average of more than 80 minutes a day. In contrast, TV viewing among 18- to 34-year-olds in the United States is falling at three times the rate of radio listening.

Advertisers, meanwhile, continue to direct ad dollars to radio because of its audience demographics.

As for where consumers tune in, approximately 90 percent of U.S. and Canadian radio listeners across all age groups listen while in the car, according to Deloitte Global. Yet consumers are also listening in other places: About half of Americans and Canadians ages 25 to 75 tune in to live radio while at home. A nontrivial proportion are also listening at work, with the percentage highest among 18- to 24-year-olds—at 30 percent—and declining to roughly half that (16 percent) for those ages 55 to 75 years.

Why do consumers listen to radio? Deloitte Global’s research suggests there is no single, powerful, universal reason. In the United States and Canada, 36 percent of the 18- to 34-year-old audience listen to discover new music, while only half that proportion (19 percent) of 55- to 75-year-olds do. For some demographics, more than half of radio listeners say the main reasons they tune in are the facts that radio is live, free, and easy to enjoy in the car.

In a world where digital changes everything, radio may be the exception. In the realm of traditional media, print newspapers are locked in an ongoing struggle for profits—and, in some cases, their very existence. And although TV ad revenues continue to grow, at least a little, the decline in minutes of TV watching by young people suggests that TV is likely to face challenges ahead. The prospects for radio look brighter. In 2017, radio attracted about 6 percent of global ad spending (about 9 percent in North America), and in 2019, it will likely be around 6 percent again—numbers that indicate advertisers know radio campaigns can be an effective part of the overall media mix. With revenue expected to remain steady and consumers still tuning in, the future of radio looks solid.