Depending on who you ask, radio is either a dying industry or an unshakable cultural force.

You can probably guess which camp iHeartMedia Chairman-CEO Bob Pittman falls into. Tell him that you're writing about whether radio is relevant, and he'll ask a DJ to shout your name out on the air.
Pittman did this to me, with the assurance that "your phone will get flooded."

Not quite. The next day, I received two emails and three tweets from strangers in places such as Maryland and Florida. I got a Facebook message from a friend's daughter in New Jersey who heard my name uttered by Z100 host Elvis Duran while she was riding in an Uber. (She hadn't caught the context; I assured her I hadn't been arrested.) I also earned a Twitter follow from Duran himself, whose syndicated morning show is heard on 80 stations and who has 4.6 million weekly listeners.

Pittman's prank initially seemed to disprove his point. But radio continues to belie and defy many expectations. Thanks to its ubiquity, especially in cars, radio remains a medium with gobsmacking reach: 271 million Americans, or 93 percent of the country, tune in every week, according to Nielsen's Audio Today report.

At the same time, it's a medium fighting to keep cracks from widening. How its biggest players handle the next few years will be critical to its health.

Growth in the number of radio listeners was flat at about 1 percent a year from 2016 to 2017, according to eMarketer, while time spent with radio is in a slow-drip decline of 0.5 to 1 percent a year.

And while they're barely making a dent in radio's business, streaming services like Spotify and podcasters are sucking up the oxygen, drawing youthful listeners and advertiser attention. In fact, 6 percent of people age 18-34 surveyed in 2008 reported not owning a home radio; in 2018, that went up to 50 percent, according to Edison Research's Infinite Dial survey.

"Radio loves to talk about reach. I'll give them that—it generates massive, massive reach. Nothing reaches like radio. But we live in a world now where you get paid for engagement, not reach," says Larry Miller, a professor at New York University Steinhardt School of Music.

"Spotify is fresh. Netflix is interesting. Podcasts are cool. These are lean-forward experiences," says a consultant who asked not to be identified because he does work for the radio industry. "Radio is notoriously lean-back. Just give me what I expect whenever I'm in the car with a minimum of muss or fuss. Radio does that and does it well. But it's not what you're going to talk about at the gym."

Ad spending on terrestrial radio in the U.S. fell from $20.8 billion in 2006 to $17.6 billion last year, according to Zenith, which pegged radio's share of the total advertising pie at 8.9 percent, just above outdoor, newspaper and magazine ads. By comparison, TV and digital get more than four times the love: 35 percent of the total each. Meanwhile, overall internet spending soared from $11.1 billion in 2006 to $69.3 billion last year, Zenith says.

"Advertising on radio works, of course," says the consultant. "But so does advertising in all the new channels, in cases those new channels are ad-supported—and if they're not, then they're simply soaking up usage and stealing time spent listening from radio."

Pittman and his counterpart at the country's second-largest player, Entercom, say radio is robust and that it's become the Rodney Dangerfield of media because the industry fails to toot its own horn to advertisers.

"Radio has done a poor job of advocating for ourselves," says David Field, chairman-CEO of Entercom, which merged with CBS Radio last November. "There's an amazing, compelling story that has been lost and shame on us for not getting it out there."

"Radio is a tale of two cities. It has done fantastically well with the consumer and has benefited from technology, yet on the advertising side, it's the stepchild," says Pittman. "Part of it was self-inflicted, because we never went out and told radio's story."

While radio is not a growth story—with 93 percent reach, the medium is about as saturated as it gets—it's far from death.

"If I had to make a 10-year bet on radio going up, I would not," says Tom Webster, senior VP at Edison Research, an independent researcher. "But radio throws out an incredible amount of cash flow. It has a healthy balance sheet. A lot of the pallor over radio is because the two largest operators are in bankruptcy; it's not because people aren't listening."

Debt radio

When two of the top three radio broadcasters drowned themselves in debt, some experts say, it left them too strapped to innovate, invest in new technologies or build sophisticated tracking tools and data sets for advertisers. In fact, in three separate interviews, people used the word "self-inflicted" to describe radio's wounds.

The relevant part of that narrative goes back more than two decades, to the Telecommunications Act of 1996, which allowed ownership of more than one station in a market and spurred a buying frenzy.

"There was this wave of consolidation; the venture capitalists were trying to squeeze every ounce of profit out of everything," says Taylor Wood, senior partner and associate director of the national audio group at media-agency conglomerate GroupM. The result, he says, was that major radio companies tried to save money by nationally syndicating content.

"We saw lots of local content just disappear and what you were left with is a nationalized product that was not attracting an audience," he says. In Richmond, Virginia, where Wood worked in radio sales in 2009, he says they fired the local DJ and replaced him with none other than Duran, resulting in a 10 percent to 15 percent decline in audience over three years.

Paying down what they owe—industry leader iHeart alone was burdened with $20 billion of debt, which it sliced in half last month as it filed for Chapter 11, and the No. 3 player, Cumulus, is also under bankruptcy protection—has cost the radio giants, says Wood, during a time when streaming was breaking into the market. "iHeart should have been the first Pandora," he says. "But they were saddled with debt, so they let a startup take the risk."

Cumulus declined to comment for this story.

The radio-is-on-life-support narrative frustrates Field, who went so far as to publish an open letter on Entercom's website March 19 referencing its rivals' bankruptcies. He wrote, "iHeart and Cumulus went bankrupt because years ago prior management teams made ill-advised decisions to place too much debt on their companies. Period, full stop. The bankruptcies have nothing to do with radio."

Veteran DJ Scott Shannon, who co-hosts morning's "The Big Show" on Entercom's CBS 101.1 FM with Patty Steele, explains it this way: "There was a lot of negativity over those bankruptcies, but that wasn't because of the product, but because of—"

"Overzealous investment," says Steele, finishing his sentence.

"Overzealous investment," he agrees. "They would borrow the money and it was like they forgot they had to pay it back."

Pittman, whose company now owns 849 stations in 150 markets, agrees the company was overleveraged. "In those days, you could put so much debt on a company it would make your hair turn white," he says. But Pittman, an MTV co-founder who joined iHeart in 2011, insists that's no reflection on radio's viability.

"This is not a company like Toys R Us whose business is failing. Our operating business is quite good," he says. "This is a company that has had 18 straight quarters of year-over-year revenue growth. It was a very good business with a very bad capital structure." He says his company's advertising growth is trending in the lower single digits, adding, "I don't think TV can make that claim." (He's right: Zenith says TV posted less than single-digit growth last year.)

Dashboard lights

When Pittman evangelizes about radio, you can almost hear the DJ he once was at WCHJ in Brookhaven, Mississippi, a job he says he took to pay for flying lessons. He fires off eyebrow-raising stats: Citing Nielsen, he says radio reached 95 percent of teens in 2016, the same percentage as in 2003. (Nielsen was unable to confirm the 2003 number, but said that 94 percent of teens are reached monthly by radio this year, down from 95 percent in 2016.) Gen Zers spend 1 hour and eight minutes a day with radio, millennials spend 1 hour and 37 minutes and Gen Xers 2 hours, per Nielsen. Consumers spend 86 minutes a day listening to broadcast radio, more than twice as much as with all social media, says Pittman, citing eMarketer.

A closer look at that last stat, however, shows that while consumers do indeed spend 86 minutes a day with radio, that's declining. The figure was 86.5 minutes in 2016, eMarketer says, which projects it will fall to 84.96 minutes in 2019. Time spent with social, meanwhile, will grow from 45.58 minutes in 2016 to 56.46 minutes in 2019, eMarketer forecasts.

Entercom is armed with some seemingly counterintuitive stats too: It says radio listenership is growing among 18-to-34-year-olds, to the tune of 600,000 people per year, according to Nielsen. (Nielsen says that while there was weekly reach growth in that listener demographic between 2016 and 2017, it has declined somewhat, from 67.8 million in 2017 to 66.7 million in 2018.) Entercom also points to the Share of Ear study out from Edison Research, which found that 54 percent of time in cars bought between 2015 and 2017 was spent listening to AM/FM radio, compared with just 4.2 percent spent listening to in-car streaming. (During the company's study of people during a 35-minute commute, listeners changed the station 22 times. "Try that on your phone while driving," says Webster, the Edison Research executive.)

Entercom also claims, and Nielsen confirms, that 49 percent of people discover new music on the radio versus online music services (27 percent).

"I have a few good friends who use the radio all the time," says Zachary Keuerleber, a 21-year-old engineering major at SUNY Binghamton. "They don't feel like a playlist is imposed on them. They use it to find new mixes—they think it's better than Pandora or Spotify." But Keuerleber doesn't listen to radio much himself. "I have Bluetooth that automatically connects to my Spotify," he says. "If I'm listening, it's because my cellphone is broken."

"I only listen to radio when I'm driving in my car," says Kimberly Marsden, 22, a graduate student at Marist College in Poughkeepsie, New York. "My car is from 1995, and I have a cassette player, so I don't have any other option." Marsden, who also has a Spotify account, pretty much proves radio's reach argument. "Radio is like vanilla ice cream," she says. "It's consistent. It's there. You know it's reliable, that you will eventually like it, but it might not be your first pick."

The challenge for radio is to make sure it's that first pick.

"We are at a very important point in the history of audio and radio, and how we move from here will define the future and where we go," says GroupM's Wood. With companies emerging from bankruptcy, "hopefully they will start investing."

Measuring up

Pittman admits there was a fractured relationship with Madison Avenue. "Historically, the radio industry just dealt with radio buyers at the agencies and they waited for money to come down from the planning group to be available and then we all fought over the money and our share. That worked well as long as everyone was spending 5 or 10 percent more in radio every year," says Pittman. "But we didn't have the relationship with planners; we didn't have many relationships with the strategists or the investment people. And when [agencies] said, 'Gee, I have to find some money for digital, where do I get it from?' the only group they didn't have a relationship with were radio people."

Big Radio says the medium is repairing that by offering more real-time data to advertisers, targeting beyond demographics to locate narrow segments like auto intenders, setting up metrics dashboards to offer buyers more accountability and offering programmatic buying options.

"TV today is about three times the CPM of radio, so why are we selling ourselves so cheaply?" asks Pittman. "That's a matter of we have to get the data out, and make it readily available and in a form advertisers really want, not in the manner we want to give it to them. They don't want to receive faxes, they don't want a spreadsheet, they want a dashboard, so we built these products and are beginning to roll them out."

Taylor, however, says when buying national radio it can still take 30 to 90 days to receive local station confirmation that an ad has run—a lifetime compared with digital. "Unless [radio] can fix the accountability side of things and the real-time reporting, it's a bigger issue than ease of purchasing," he says.

"A lot of questions we get [from clients] are about accountability and ROI: 'Can you tell me when a spot ran? I'm getting real-time reporting from my digital campaigns—can I get real-time reporting from radio?' " says Taylor. "A lot of this goes back to the lack of investment. You couple that with the programming and you have the perfect self-inflicted wound. Layer on the additional pressures from streaming and podcasting, and we do have what can be perceived as a dire picture."

"The issue, frankly, is not that these other audio media are encroaching on radio's traditional ad turf," says the consultant. "The issue is that everything is. Video games, digital, Netflix, you name it. It's a battle for attention and radio is so big that it can only shrink at the edges while these new platforms grow."

The rabble-rouser

Radio can get very defensive, and few people know that as well as NYU Steinhardt's Miller. He is pretty much persona non grata among Big Radio for a report he put out last summer that said listenership was declining among young people and connected cars presented a threat. After Variety covered his findings in an article, the National Association of Broadcasters and Nielsen fired back a double-barreled retort, calling it a "silly" study, rebutting key points and noting that the report was funded by SoundExchange, a group lobbying for a "performance tax" in the form of royalties to music labels.

Miller, a former radio executive who worked with Shannon in the '80s at Z100, says it's true SoundExchange bankrolled the study and that he's a longtime proponent of paying artists for public performances on terrestrial radio—but that this doesn't change the facts.

Miller believes that the radio industry is spending too much time in denial and not enough time building for the future. "Radio listening is in decline. Cumulative radio listening and time spent listening is in decline. Radio audiences are aging, notwithstanding what our friends at NAB and Nielsen and Cumulus and iHeart might have to say about radio's future."

"I stand by my data and they stand by their data and they say that listening among young people is rock-solid as ever, but my question then is, where is all this listening coming from that is driven by Spotify, Apple Music, Pandora and literally every other digital audio delivery service on the planet?" asks Miller.

But despite all that, Miller doesn't think radio is dying. In fact, he's rooting for it to thrive by investing in content built for digital distribution channels rather than repurposing a morning show as a podcast. "The future is in their own hands," he says.

Radio renaissance?

Paul Verna, principal analyst at eMarketer, says, "Radio is not falling off a cliff by any stretch, and that's not something we see changing anytime soon despite all of the swirl around digital streaming." In fact, he believes it's unlikely that radio's reach will fall below 80 percent within the next five years.

Field sees only upside, calling radio an "undiscovered story that is reemerging" and noting that Entercom is preparing for the future with new formats, such as alternative music tailored to younger audiences; investing in podcaster Cadence 13; ramping up social to engage audiences; and creating more live musical events. Entercom's point of difference with iHeart is that its 235 stations in 48 local markets are all locally programmed. The company also has a strong niche in sports and talk radio, formats that draw audiences eager to hear more about the home team or their local politicians. Entercom has a real-time analytics platform. And it's aiming to improve the listener experience, trimming commercial loads by 5 percent to allow for more DJ chatter and more music.

Field, who says the company is now seeing about a 2 percent annual increase in advertising revenue, points to Procter & Gamble as a sign of a coming renaissance for radio. P&G spent $6.7 million on radio in the first half of 2017, according to Kantar Media, a more than a sixfold increase from the same period in 2016. It's only a seven-figure outlay for a company with nine- and 10-figure budgets, but it represents a sign of interest from a marketer that hasn't paid much attention to radio since TV came around in the 1950s.

P&G is seeing value in radio these days, Chief Brand Officer Marc Pritchard said in a recent interview. But he described the interest more broadly as "audio," in which he included Pandora, Spotify and iHeart. Said Pritchard: "When people say 'blank—insert the medium here—is dead,' it's just not true." 

--Contributing: Jack Neff