Old cars saving radio, but it’s ???next in line’ for disruption

Radio businesses have not been hit as hard by digital disruption as traditional print and television for a simple reason – the cars ns drive are old.

The average registered vehicle in the country was made more than a decade ago, and this has made it difficult for radio listeners to switch to new digital formats, Citi analyst David Kaynes says.

While consumers can stop buying newspapers and switch to online formats, and televisions and accessories are regularly upgraded, people are slower to buy new cars.

The average age of all motor vehicles registered in was 10.1 years in January 2017, a figure that has remained stable for years, according to n Bureau of Statistics data.

For passenger vehicles – 75 per cent of all vehicles on the road – it was 9.8 years.

This means the average motor vehicle nationally is a 2007 model, built in the same year the first iPhone was released. More than a third of passenger vehicles were built before this.

Drivers in older cars “cannot access digital radio, or connect a smartphone to play alternative audio through the car’s stereo”, Mr Kaynes said in a research note.

About 70 per cent of weekday revenue for metro radio stations is generated from the breakfast and drive slots. !function(e,t,s,i){var n=”InfogramEmbeds”,o=e.getElementsByTagName(“script”),d=o[0],r=/^http:/.test(e.location)?”http:”:”https:”;if(/^\/{2}/.test(i)&&(i=r+i),window[n]&&window[n].initialized)window[n].process&&window[n].process();else if(!e.getElementById(s)){var a=e.createElement(“script”);a.async=1,a.id=s,a.src=i,d.parentNode.insertBefore(a,d)}}(document,0,”infogram-async”,”https://e.infogram老域名出售/js/dist/embed-loader-min.js”);

Yet this leaves the resilient medium ripe for future disruption.

“We suspect that radio is the next in line to be disrupted by online advertising, with rising take-up of streaming services as well as the proliferation of digital radio diluting the audience for radio,” Mr Kaynes said.

“While we don’t expect radio to show the rate of decline being seen in TV anytime soon, it’s worth recognising that this is a risk in the medium term.”

Another key risk was talent loss, he said, with rapid audience changes if on-air presenters switched stations, leading to “cost inflation for higher performing on-air teams”.

When radio personalities Kyle Sandilands and Jackie O moved from 2Day FM to Kiis FM in 2014, they took 60 per cent of their former station’s audience with them.

Another radio duo, Hamish Blake and Andy Lee, called it quits in December to focus on TV instead. As they were not moving to a competing station it was less of a concern though “it does mean the first ratings survey will be a major catalyst for the industry”, Mr Kaynes said.

Some advertising revenue currently being spent with radio and television was expected to be diverted to online and outdoor advertising by 2021.

Mr Kaynes said broadcast television was “unlikely to ever again see a meaningful uplift in share of the ad market” and pointed to a decline in advertising on linear TV, including free to air and pay, since 2010.

But the total spend on video advertising, including online spend, continued to grow.

He said broadcast viewing was in “rapid decline” as subscription services increased in popularity, with the television becoming “the device of choice for watching internet video, illegally downloaded video content, and for playing games”.

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