Can Radio Survive Advertising Downturn?

Can radio survive the downturn in ad revenues brought on by COVID-19?

Of course, it can, writes Richard Wagoner for The L-A Daily News

He believes radio itself will survive no matter what. It is free and easily received on an instrument found in more homes and cars than any other. And when it successfully serves the local community, it cannot be duplicated.

He states: the better question is, can radio in its current form survive the downturn in revenues brought on by COVID-19? I’d say no. And InsideMusicRadio’s Jerry Del Colliano agrees.

The problem is that the promised efficiencies of large companies owning many radio stations never offset the massive debt that these companies took on in the name of becoming large. Note the goal was not to become better, just large. They wanted to dominate. To control the market. It was a “sure thing” gamble … that they lost. Instead, they undermined their own successful business model that relied on serving the local audience with top-notch programming.

Indeed, when things hit the fan, they responded by cutting talent. The companies then undercut their own advertising rates in an attempt to attract more advertisers, cheapening their own worth. This required more ads to make up the shortfall, cheapening that worth even more.

Del Colliano says in his April 20 column that “the coronavirus and ensuing economic recession has ripped into the fundamentals of the radio industry,” that radio advertising may be down as much as 65% for the second quarter of this year, and that the drop “is expected to continue through 2020.” Maybe 2021. “There will be some casualties,” he says bluntly.