Dale Dudley, who has been in the radio business for 35 years, packs up after finishing “The Dudley and Bob Sideshow” podcast on Aug. 12. ‘There’s a numbers game in this industry,’ Dudley says. ‘The insecurity lights a fire under me. It makes me do things. I think radio will survive as long as executives in radio keep forward-thinking.’
By Robert Quigley
At 9:12 each weekday morning, radio hosts Dale Dudley, Bob Fonseca and Matt Bearden cut off the live broadcast microphones at KLBJ-FM in Austin. For listeners, the show goes on, though it’s a re-engineered “best of” show based on that morning’s earlier content. That allows the popular disc jockeys to spend the final hour of their shifts recording “The Dudley and Bob Sideshow,” a daily podcast available to paid subscribers.
The podcast, which those involved say brings in “some money,” serves two purposes: it gives the hosts a chance to be themselves without the watchful eye of the FCC, and it pushes the station a little deeper into the digital age.
Radio stations are navigating tumultuous waters thanks to the Internet, which is disrupting the industry’s business model and changing the way people consume audio. The $17 billion industry faces new competition, both for advertising dollars and people’s attention.
“I love the subscription podcast,” said Dudley, who has spent more than 27 of his 35 years in broadcast at KLBJ. “The fans are rabid. It’s an audience that wants to hear what you’re like in real life.”
Podcasting is just one way that Emmis Austin Radio, the parent company of KLBJ, is trying to take advantage of the digital world. Chase Rupe, the vice president of programming and operations at Emmis, said the business has to branch out if it’s to fight off the big streaming radio providers like Pandora, Spotify and Apple.
“The amount of competition that we’re up against – the choice that consumers have now has grown exponentially” in the eight years he has been with Emmis, Rupe said. “Every year that ticks by, there are more and more choices for audio for people to consume in different ways.”
Pandora, the most popular Internet radio company with more than 76 million active users and a 70 percent share of Internet radio in the United States, might be one of the larger threats to traditional broadcast stations, though Pandora itself doesn’t see it that way.
“I think it’s a big pie,” said Erika White, Pandora’s director of communications. “Most are pretty surprised to hear that radio advertising is projected to be $18 billion in 2017. As Pandora gets bigger, the pie also gets bigger. There’s still a ton of opportunity in terrestrial radio.”
However, broadcast industry revenue is slowing. Overall revenue was down in the first half of 2014, dropping by 1 percent compared to the first half of 2013, according to the Radio Advertising Bureau, which is the sales and marketing arm for the industry. It could have been worse. Spot advertising, which makes up about $14 billion of the $17 billion in industry revenue, was down 5 percent from 2013. Strong increases in revenue from digital (12 percent) and off-air sources such as events (13 percent) dampened the blow.
“Overall, advertising has held up fairly well,” Emmis’ Rupe said. “I wish we were in a double-digit growth business, but it’s not. The nontraditional revenue areas are growing faster than the traditional areas. Everyone perceives we have so much more competition and fragmentation, but we’re holding up.”
Stewart Vanderwilt, the general manager and director of KUT-Austin, the city’s public radio station, portrays the industry as “stable but precarious.” A whiteboard in his office contains notes from a brainstorming session about the station’s future. He waves at one line written on the board that says, “Next gen may not consume radio at all.”
“The primacy of radio is and will decline,” he said. “The fastest growth in audio consumption is streaming.”
Vanderwilt said the radio industry has to face it that young people prefer to get audio on demand through mobile apps, and something else might be on the horizon.
“We have 20 years to reach today’s 10-year-olds,” Vanderwilt said. His target audience is 30-year-olds. “I don’t see this as a cliff, but 20 years from now, it could be if we’re not firmly in the next big thing.”
Emmis, for its part, is trying to become a bigger part of the smartphone experience. Rupe is leading the charge to get FM receiver chips activated. He said every phone has an FM chip because European markets require them, but manufacturers and carriers don’t turn them on in the United States.
“It would give consumers all sorts of features like interactivity without using up data and with little drain on the battery,” Rupe said of the plan, which is called Next Radio. Sprint is offering the activated chips and software pre-installed on some Android phones. To get on more carriers and phones, Rupe said the industry has to band together to offer the uniform experience that the big players such as Apple demand. “Honestly, the biggest challenge is to get the other broadcasters to enhance it so it is a uniform experience.”
Despite what he calls a “rollercoaster” ride in the past decade of his career, Dudley, the KLBJ host, said he has dismissed the idea of getting out of the business.
“A few years ago, I was driving and listening to the radio, and the thought hit me: ‘I’m a broadcaster.’ It just hit me that that’s what I do. That’s what I do very well. That’s what I do whether I’m doing a 9-5 job or doing a podcast for 20 people.”
Chase Rupe, who has been with Emmis Austin Radio for eight years, says he has seen huge changes in the business. ‘Our focus in the past couple of years has been on content creation. How do we take our best on-air content and convert it into digital to try to get people to come back to the air. We have to make sure they are coming back to hear live radio as it is happening.”
KUT-Austin’s management knows the writing is on the wall. A whiteboard in director Stewart Vanderwilt’s office shows the results of a recent strategy session.
Stewart Vanderwilt says KUT’s strategy has to change. He said content currently skews 80 percent national and 20 percent local. He think those numbers are going to flip. ‘Our role of being an exclusive source of national and international news is being diminished. Right now, we have some exclusivity, but that will ultimately go away.’
KUT-Austin moved into the Belo Center for New Media on the University of Texas at Austin campus in 2012.