Timing is everything.
On Wednesday, I presented Techsurvey 2023 to our more than 400 stakeholders. As usual, the findings were comprehensive, covering a wide range of issues, technologies, and emotions surrounding radio and other media. It included an important phenomenon we’ve been tracking for years:
Media subscriptions
The concept, of course, has been around forever: paying a monthly fee for goods or services. That’s how newspapers and magazines were purchased from their very beginnings.
And what Baby Boomer wasn’t a member in not-so-good-standing of the Columbia Record Club where they gave you your choice of a dozen albums for the insane price of $1 or even 1¢? Then for the next 12 months you had to purchase a whole bunch of new albums at their full retail price (or higher). And if you didn’t respond in time, they sent you their “album of the month” anyway – and charged you full price.
To beat Columbia House at their own game, the trick was to get that initial mother lode of vinyl for virtually nothing, and then weasel out of the commitment by any means possible – moving, ignoring their reminders and later, their threats, or hoping they’d somehow just go away.
We’ve come a long way since then in the subscription economy. But it turns out growing numbers of consumers are fed up with the mounting costs of subscription fees, and the difficulty they often have cancelling existing deals.
Two of my dearest friends in the business – Bob Bellini and Sky Daniels – sent me the same Wall Street Journal story within minutes of one another. In “People Are Sick and Tired of All Their Subscriptions” (appropriately behind a pay wall), we learn that a number of video streaming services – including Netflix, Hulu, and HBO Max – suffered cancellations that were up 49% last year. Yes, you read that right.
That shocking finding coincides nicely with a key Techsurvey 2023 question – responses to this agree/disagree statement:
“I am concerned about the growing number of subscription fees I’m paying for media content”
Since COVID, numbers of the financially squeezed by subs are steadily on the rise. In our new study, nearly seven in ten respondents agree. Four in ten agree strongly.
The pain is being felt across demographic and socioeconomic groups, as well as listeners to a wide variety of radio formats and stations.
In this year’s new Techsurvey, we also come to find out about one-third (32%) of the sample have cancelled a paid media subscription in the past year, especially Millennials and Gen Z’s who may be feeling the pinch more than their parents and grandparents.
The WSJ story is a reminder that consumers haven’t just had it up to here with media subscriptions. It focuses on a wide variety of monthly fee merchants, including doggie treats, health club memberships, food clubs and others that collectively are adding up to big bucks each and every month.
And it appears to be a growing trend. Rocket Money reports that for the second straight quarter, cancellations now outnumber new subscriptions for digital memberships. And that hits home for radio broadcasters and media organizations that have mostly sat on the subscription sidelines.
There are some exceptions, notably Bauer Media in Europe, experimenting with monthly payments in exchange for commercial-free programming and song skips. I wrote about Bauer’s grand plans last year when I interviewed their digital guru, Tobias Nielsen.
We tried a similar question in our new Techsurvey, investigating whether there’s much interest in a similar model here in North America. The findings, however, were unimpressive.
But radio owners, managers, and programmers might take solace in another Techsurvey trend – the rising percentage of respondents who appreciate the fact that broadcast radio is a free service. The response has been a choice in our “Why Radio?” question series for years now. In 2023, it’s the #2 most important reason why consumers listen to broadcast radio (behind “radio is easiest to listen to in the car”).
An all-time high of 64% of respondents are in lock-step that carrying no fees is a main driver for radio listening. And as the demographic breakouts clearly show, the younger the listener, the greater the likelihood “it’s free” is perceived to be a key benefit for broadcast radio.
A number of Jacobs clients and Techsurvey stakeholders have found ways to work radio’s “free” attribute into positioning statements, promos, and host breaks. Everyone likes to get a great deal. Getting “comped” for your radio listening looks pretty good after a consumer peruses their credit card statements each month to see what they’re really paying for all that content.
Naysayers will no doubt remind us about the hidden costs of broadcast radio, notably copious amounts of commercials heard on the majority of stations on the air. And while they are annoyances and tune-outs, they’re a far cry from receiving a monthly statement requiring you pay for the media content you enjoy.
Radio being free is a great deal. Even better then 12 albums for a cent.
Jacobs Media has consistently walked the walk in the digital space, providing insights and guidance through its well-read national Techsurveys.
In 2008, jacapps was launched - a mobile apps company that has designed and built more than 1,300 apps for both the Apple and Android platforms. In 2013, the DASH Conference was created - a mashup of radio and automotive, designed to foster better understanding of the "connected car" and its impact.
Along with providing the creative and intellectual direction for the company, Fred consults many of Jacobs Media's commercial and public radio clients, in addition to media brands looking to thrive in the rapidly changing tech environment.
Fred was inducted into the Radio Hall of Fame in 2018.
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When there was a small handful of services that had everything, it was great. You could subscribe to two or three services and get what you wanted. But in the last five years or so, there’s been a land rush of streaming services each wanting to stream their own content. And of course, people rushed to subscribe to them all not wanting to miss anything.
I think we are seeing the reaction to all that with people now coming to the same conclusion. They are choosing what they want and dropping the rest.
Personally, I’m not subscribing to 10 different services. At most I’ll pick the four I want that has what I want and that’s it. I’ll occasionally change them up, but for the most part my limit is four.
I would imagine a number of subscribers are discovering there’s “57 channels (And Nothing’s On)”. Or, alternatively, there’s plenty on-but the resumption of “normal life” cuts down coach potato time.
In the post pandemic world, things are definitely channging.
Subscription fatigue is a real thing, beyond question. Consumers will discriminate, and that’s a good thing–the market in operation. But let’s not forget the upside of subscriptions: I can receive what I want without the continual hassle of paying each time I get that magazine or stream. And I can support public radio and other causes dear to my heart without having to reinvent my donation every month. To my mind it’s an unalloyed good.
As to radio’s being free, go for it. Plenty of folks value the free over their annoyance at irrelevant/annoying commercials. That is their right, and smart radio management won’t hesitate to remind them of radio’s comparative advantage on that front.
Great points about radio but we have to distinguish across “media” subscriptions. Audio and music streaming subscriptions (SXM, Spotify et.al.) have very low churn rates. Most subs use them daily and consider them to be a very good value. Research also shows many saying these audio subs “would be the last thing I cancel”, which is much better than how SVOD services score. I can watch my 10 episodes of Poker Face and be done with Peacock, or binge Ted Lasso and cancel Apple+. Music streaming is engrained in many subscribers daily ritual, as is AM/FM for many of its listeners.
There are no digital copyright laws in third world countries like Costa Rica, my home for more than a decade. I get everything within a couple days of the premiere airing in the states FOR FREE. My TV streaming service costs $12 a month and includes all US, including MLB, NFL, NBA, every pay service, and 14 other Central and South American countries, over 250 channels in all. Top that!
To somewhat add to (and perhaps combine) a couple of the previous comments, there’s a lot more overlap among the various leading audio services than among the video counterparts. Not only is that a big reason why many of them have felt the need to use, e.g., podcasts and audiobooks as a content differentiator, but it also helps explain a lot of the new features that they launch (even though, of course, many don’t prove to be successful).
LOL! That WSJ article wanted me to subscribe so that I could read the entire article. Ouch!
This has me thinking about public radio monthly sustaining contributors. I wonder how this phenomenon will impact those donors.
The average public-radio sustainer is a thinking person who has decided that public radio should be supported. I don’t see them changing their minds because of subscription fatigue elsewhere. Demographic shifts over the years may affect this–as subscribers die off, will younger subscribers appear? That’s the real crapshoot.