Just How Important is Radio?

First off, in case you haven’t heard, the CRTC granted a license to Rock 95 Broadcasting, allowing it to launch a new radio station in Toronto at 88.1 FM. The license is for an English-language music format with a focus on independent and emerging Canadian artists. 40% of the music on the new station will be Canadian, of which at least 60% will be from emerging artists. The official website is here.

Now, to business…

I’m often asked “Is radio still really important in breaking bands?” and my answer is always a resounding “Yes.” Now, you’d naturally assume that I would say yes, given my line of work, but it’s important to note that my response comes from much more than casual observations — at the bottom of this note I’ve included a recent article from USA Today which reaffirms the matter. It’s based on a survey done by Nielsen (who owns BDS) and points to any number of trends among the general public and their current music listening and buying habits.

When talking about breaking artists and general mass appeal, it’s easy to say that you can’t create a superstar act without radio. We all know that radio drives the sales (and general popularity) of top-tier acts like Taylor Swift, Maroon 5, Katy Perry, etc.

But it’s how a hit changes the game for rookie and sophomore acts that really illustrates the importance of radio airplay. If you take two artists on their second record with a similar touring history and fanbase and then give one of them a Top-10 single at radio, the results are undeniable. Everyone in the music industry will bet on the band with the hit single. Why? Because not only does airplay drive single sales, it drives touring, sync, merch, and every other aspect of revenue generation. There’s even an added bonus of the royalties paid out by radio for airplay, which according to SOCAN were $1.36 per BDS spin last quarter. “We Are Young” has earned the band fun. $89,743.68 from that source, in Canada alone.

As insiders we often forget what the average day of our typical consumer consists of. They’re definitely not sitting around pondering the 4th-Quarter release schedule or arguing about which CMW hotel was better, Harbour Castle or Royal York. It’s a life that doesn’t revolve around music, but is certainly enhanced by it. And simply put — outside of a small percentage — consumers just don’t care enough to scour the internet for what’s next. They want a trusted source to feed it to them and there are few more trusted sources than broadcast radio, dating all the way back to CINW Montréal which started out on December 1, 1919 under the calls XWA (for “Experimental Wireless Apparatus.”) In the aforementioned Nielsen survey, 43% of respondents said that they discover music most often through radio, 13% via friends and 8% from YouTube. Now, good for YouTube for grabbing such a big piece of the market so quickly, but I’d like to know just how many of those new songs were discovered by someone typing partial lyrics into a search engine. Where did they get those partial lyrics from? Well, chances are, it was all they could remember from when they heard the song on the radio that afternoon.

What about gadgets? For better (or worse), people aren’t wandering the streets with boom-boxes like it’s a 1980’s rap video.  They have smartphones, and among smartphone owners, 53% have music player apps, 44% have radio apps and 28% have music store apps. Think about that for a second — in 2012, 44% of people carry a radio with them at all times. Not only that, but 28% of them bring along a record store! Talk about convenience in music shopping!

It’s no secret that the music landscape has changed irreversibly in the last decade, and it’s probably a very safe bet to say it’ll continue to evolve, but just as it was in the 60’s, 70’s, 80’s and 90’s, radio will continue to be the single biggest hit-maker on the planet.

Here is a link to the USA Today piece if you care to dig deeper on the topic.

And while we’re at it, who’s booked their rooms at The Marriott for this year??? See you in March.

Let me know if you have any questions or comments.