Squawk Box: Talk Radio
Hit the “scan” button on your car radio and you’re just as likely to land on a station with a right-wing pundit lambasting health care reform as the latest Rihanna hit. Talk radio is thriving: About 3,500 American radio stations use that format today, up from about 1,750 in 2007 and just 500 in 1991. Political scientist Jeffrey M. Berry and sociologist Sarah Sobieraj, both of Tufts University, argue that the boom is more a matter of money talking than politics.
As with virtually all advertising-dependent media, the AM-FM, or “terrestrial,” radio industry has suffered from technological disruption and the harsh economic climate, Berry and Sobieraj write. The old methods of covering the bills aren’t working: Total radio revenues declined from $20 billion in 2000 to $14 billion in 2009.
Tuning in to some easy listening on the commute home was once commonplace, but drivers now relax to commercial-free playlists uploaded on their MP3 players and smartphones. Listener loyalty has been further eroded as big corporations have bought out mom-and-pop music stations and laid off local on-air personalities to consolidate costs. As audiences for radio music programs have dwindled, so too have the ad dollars music stations are able to command.
Talk radio defies this trend. Because it is highly topical, reflecting news of the day, its audience has not readily decamped to competitors such as podcasts. Radio listeners are relatively well educated and wealthy, and pay attention to what’s being broadcast to them—all plusses for advertisers.