We keep listening as radio evolves

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I own three times as many radios as TVs. I listen to radio daily but can go a day or two without looking at a TV. Thanks to the Wi-Fi network in my house, I can listen to streaming radio stations from Turkey or France while I cook dinner. My listening habits are eclectic: music, talk, news. Before Howard Stern left terrestrial radio, I used to switch between him and National Public Radio.

I love radio-or, more generically, audio. And that's not just because I've been on air myself many times or because of family history (my mom, Janice, was the host of a weekly radio show in suburban Philadelphia for an impressive 17 years).

"Radio is the theater of the mind; television is the theater of the mindless," said Steve Allen, decades before the current crop of reality TV shows. Audio continues to work for audiences and advertisers alike. Read columnist Paul Gillin's "New Channels" column on the facing page in which he advocates podcasts for b-to-b marketers.

On March 1, in fact, BtoB will debut its own podcast, a biweekly show called Talking Tech, featuring 10-minute audio interviews with technology marketers and other experts.

Podcasting, satellite radio and the flow of ad dollars to the Web are among the pressures affecting radio today. Radio advertising was essentially flat last year compared with 2004, according to the Radio Advertising Bureau. Combined spot and nonspot radio ad spending totaled $21.50 billion last year, compared with $21.40 billion in 2004. Network revenue dropped to $1 billion, from $1.50 billion. One reason for the lackluster results is that 14% of the radio industry's billings come from the automotive industry, whose advertising spending is in flux as Detroit shifts more of its ad dollars to the Web.

Reporter Matthew Schwartz's page 1 story in this issue takes a close listen to the changing sound of radio as an advertising medium. The story offers a detailed look at the current state of satellite radio providers and at the looming battle between this medium and so-called HD radio, a high-definition terrestrial radio technology with more channels and better sound. There are currently 700 HD radio stations in the U.S., a number that is expected to nearly double by the end of the year.

Meanwhile, plain, old-fashioned radio still has legs, according to b-to-b agency executives. "Where we've used [radio], it's been particularly effective," said Rick Segal, CEO of HSR Business to Business, who said he tends to use it for local, rather than national, advertising.

About subscription-based satellite radio, Segal had this to say: "The subscription stuff is the monster under the bed. If people really move toward paying for content, that's paradigmatic shift." But this, he noted, was the same promise in the early days of cable TV, a medium that now has plenty of advertising support. "I have a hard time believing the satellite guys, in the end, will be able to resist the financial temptation to sell those audiences, to introduce advertisers," he said.

I think Segal is right. B-to-b advertising already accounts for 15% of XM satellite radio's overall ad revenue, according to company executives.

Ellis Booker is editor of BtoB and BtoB's Media Business. He can be reached at [email protected]

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