The battle for airwaves: How radio is fighting a losing battle against digital
The National Association of Broadcasters (NAB) is making a compelling case to the Federal Communications Commission (FCC) that the radio industry is in a losing battle against digital platforms. The argument is that the modern radio marketplace is vastly different from the one that existed when the current ownership rules were established, and that broadcasters are now competing for listeners and ad dollars against streaming services and tech giants, rather than just against each other.
In a recent filing with the FCC, the NAB argues that radio stations are operating on a "playing field fundamentally tilted against them" due to ownership restrictions and regulations that bind broadcasters while allowing largely unregulated tech and streaming companies to compete freely. The group urges the FCC to modernize local radio ownership caps to level the playing field.
One of the key arguments is that technological and market changes have significantly impacted the competitive position of ad-supported broadcasting. The NAB claims the FCC has "clung to the outmoded notion" that broadcast radio competes only against other radio stations, and that the recent decision to allow Nexstar to buy Tegna is a step in the right direction. The group argues that radio is now competing within a blended audio-video ecosystem where consumers move freely between different services, and that the FCC should take this into account in its report to Congress on competition.
The NAB supports its argument with industry data showing how rapidly listener behavior has shifted. According to the filing, 61% of all audio listening now occurs through digital devices, while only 28% happens through AM/FM receivers. This statistic is particularly interesting, as it highlights the shift in consumer habits and the growing dominance of digital platforms in the audio marketplace.
Connoisseur Media, another radio industry player, makes a similar argument in its own filing. The company, which owns roughly 190 stations, tells the FCC that the radio marketplace is not an island unto itself, but is instead in daily, direct competition with digital media. Connoisseur argues that the current local radio ownership rules are a "relic of another age" and should be repealed in their entirety.
The financial consequences for radio have been severe, according to the NAB. The number of AM stations has fallen by 480 since 2009, while commercial FM station totals have declined by nearly 200 since 2019. Total radio advertising revenue has fallen 30.1% since 2007, with most of the money flowing to companies like Google and Meta. This trend is particularly concerning, as it highlights the growing dominance of digital platforms in the advertising landscape and the erosion of radio's revenue base.
The FCC is required by federal law to consider all forms of competition every two years, including what comes from "new and emergent communications services" like the digital services that are impacting radio. The current proceeding could help the FCC tailor its pending quadrennial review of media ownership rules, and the NAB argues that the financial realities of the radio industry undermine the FCC's justification for maintaining strict radio ownership caps. Broadcasters need additional scale and investment flexibility if they are expected to compete in this new landscape.
In my opinion, the NAB's argument is a compelling one. The radio industry is facing a significant challenge in the face of digital disruption, and the FCC should take steps to level the playing field. The current ownership rules are no longer relevant in the modern marketplace, and the FCC should modernize them to reflect the realities of the digital age. The future of radio is at stake, and it's time for the FCC to take action.
One thing that immediately stands out is the growing dominance of digital platforms in the audio marketplace. The shift in listener behavior is particularly interesting, as it highlights the growing popularity of digital audio services and the declining relevance of traditional radio. This trend is likely to continue, and the FCC should take steps to ensure that radio remains a viable and competitive medium in the face of this disruption.
What many people don't realize is that the radio industry is not just competing against other radio stations, but also against a wide range of digital platforms that offer audio content. The FCC should recognize this and take steps to ensure that radio remains a competitive and innovative medium in the face of this competition. Personally, I think that the FCC should consider modernizing the ownership rules to reflect the realities of the digital age and ensure that radio remains a viable and competitive medium for years to come.
