That question was answered by Wells Fargo analyst Davis Hebert during his detailed economic presentation Wednesday morning at the Radio Show in Nashville. Hebert also said he expects radio to see a 1-2% increase in advertising revenue this year, and in 2017 he expects radio to give back about 1% because of fewer political dollars. So what do investors want? Here’s Hebert’s list.
Hebert says investors want to see more core revenue growth and do not want to see one company growing at the expense of another. They also want to see a new growth catalyst; he mentioned NextRadio and that it could be the catalyst the industry needs. Investors want to see radio produce better results from events, digital, and mobile. They want to see debt reduced, especially from radio’s two biggest companies, iHeartMedia and Cumulus. Investors are worried that millennials are spending more time consuming audio on their smartphones than listening to radio and want radio to define its place in the dashboard, especially as cars become more connected.
Radio Dominates The Growing Marketplace
A new report from Nielsen highlights how the growth of the way consumers take in their audio has been very good for the radio industry. In Nielsen’s latest State of The Media: Audio Today report, the ratings firm says radio continues to dominate the growing audio marketplace, with more than 268 million Americans tuning in on a weekly basis. The report also states radio is doing exceptionally well with Black and Hispanic audiences.
Nielsen says those two groups combined represent more than 73 million weekly listeners, and spend more time with radio each week than any other.
“Since 2012, AM/FM Black listenership grew by nearly a million people aged 12 and older. During that same time period, Hispanic radio audiences grew by more than two million people. Today, radio reaches 92% of Blacks and 97% of Hispanic audiences 18 and older on a weekly basis.”
When you dig into the specifics, Hispanics spend 12 hours and 50 minutes each week listening to the radio. That’s a 15-minute increase from last year. Their top music genre is Mexican Regional and they like to listen during the middle part of the day, as 70% of their tuning happens outside of the home.
Black radio users spend more than 13 hours each week tuned in to the radio, with Urban Adult Contemporary being the most listened-to format for this group. Additionally, their preferred time to engage with the medium is during the afternoon drive.
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