How's your summer going?
Mine was going pretty well, thank you. Well, it was…until yesterday,
That's when I received an onslaught of emails from several industry friends, colleagues, and JacoBLOG readers. These communiques persuaded me to shelf the post I had scheduled for today. Instead you get this one.
The first story was emailed to me Monday from a publication called The Drive. The title doesn't mince words:
“Automakers Are Starting to Drop AM Radio in New Cars. Here's Why”
Written by James Gilboy, the story touches on a disturbing trend I've written about in this blog – that electric vehicle makers have moved away from AM radio.
But it's not across the board. Some of you recall BMW eliminating AM from some of its models a few years ago. And more recently, Tesla has been leading the charge.
And yet, it's a fact that Ford will continue to include AM radio in the dashboard package on their all-new F150 Lightning EV trucks. How are they getting around the so-called “interference problems?”
By installing a whip antenna (pictured, yellow arrow) on these cool new vehicles. Some believe Elon Musk and other car makers aren't keen about the aesthetics of these old school antennas, instead opting to deep-six AM radio altogether.
But Gilboy goes a step further in explaining why some EV automakers are retaining AM while others can't drive away fast enough away from it:
“We contacted all three of Detroit's giants for why they continue to include AM radios when some European makes have phased them out, but the answer establishes itself across those very same lines.
“AM radio has fallen out of favor in Europe, with Radio Info reporting in 2015 that stations were shutting down en masse from France to the Netherlands and Russia. The frequency has largely been superseded by the DAB format, which is a more advanced form of radio broadcasting with better audio quality and choice of stations.
“AM radio stations and their listeners are all but gone in Europe, so European carmakers may not need to include technology that many of its customers can't use.”
AM radio has lost its luster here in the States, too. In Techsurvey 2002, we ask those in the market for a new vehicle in this calendar year to check off the media features they find most important in their next car. This year, FM was edged out by Bluetooth for the first time ever. AM, however, is well down the list of key priorities, deemed important by only one in three.
Still, when you're in an industry that sells roughly 17 million new vehicles each year in the U.S., that would come to a lot of pissed off AM radio fans. Hence, vehicles made by GM, Ford, and Chrysler are likely to still receive WGN, WABC, and KOA. At least, for now.
But it's a bad sign when EVs from Audi, BMW, Porsche, Volvo, and Tesla are rolling out of dealerships – sans AM radios. As Gilboy notes, however, “even some hybrids are abandoning (AM radio) technology.”
If you're a broadcaster with AM stations that still matter in your portfolio – strong brands with heritage that throw off revenue – the writing that's already been on the wall is being etched in stone.
And owners of FM have no business being smug that these moves are being made on AM. This is an anti-broadcast radio trend, make no mistake about it.
And that leads us into the second story.
Just after noon yesterday, a number of you sent me this subtle graphic – an ad from our friends at SiriusXM, sent via email and served on Facebook.
No bones about it – it's always been highly competitive – especially in the eyes of the sat rad companies and those who have worked for them over the years. Shockingly, however, I've heard many, many broadcasters write them off and dismiss them over the years, despite their many attractive features and aggressive programming forays.
Howard Stern may be the most high profile of broadcast radio people who defected to Sirius and XM. But behind the scenes, many of the programming people and personalities working for SXM first made their names in radio on the AM and FM bands.
You may remember some of the early ads:
“There's AM, there's FM…and there's XM.”
Very smart and clever – a way to differentiate what was then a new product on the market: subscription radio, something that had not been done before.
Fast-forward a couple decades and we're living in a different audio world now. SiriusXM is now one company (don't get me going on how that marriage was sanctioned), and is one of many audio options, alongside streaming, podcasts, and of course, broadcast radio.
Techsurvey 2022 shows that roughly one in four of our respondents – mostly core radio listeners, as you know – subscribe to SXM – or are getting in gratis when they bought or leased their vehicle.
But the deeper dive reveals that when customers buy a new “connected car” with an infotainment system such as Ford SYNC® or Audi connect®, they end up listening to less broadcast radio and more SXM. We think a big reason for that is the similar experiences offered by both – scanning, presets, and overall sound. SiriusXM channels are most similar to terrestrial stations – by design.
And my least favorite slide in Techsurvey – the one that asks satellite radio subscribers how their AM/FM listening has changed since they acquired SXM:
It's substantial. Nearly half (45%) of satellite radio subscribers spend a little/a lot less with AM/FM radio as a result. That little “bug” on the right shows a net loss of 36% when all is said and done. That should tell you all you need to know about which of radio's competitors is a clear and present danger.
And so here we are – an old school industry whose best days came in the era of VCRs and dial-up Internet. Today, radio broadcasters are surrounded on all sides by new technologies like on-demand, streaming, podcasts, and whatever's next. (Are we likely to listen to radio in the metaverse? No.)
This direct attack by SXM will likely not be parried or countered by any of the players in the radio broadcasting business. The NAB and RAB have its collective hands full, and most broadcasting groups aren't exactly on the same page.
As I've talked ad nauseum in this space, the last thing today's owners of radio stations do is speak with one voice. Instead, each is pursuing their own game plans, operating more like separate fiefdoms rather than as a unified force with a great deal at stake.
SiriusXM, Spotify, and most of radio's new media competitors are single, self-contained entities, able to crank out strategic marketing campaigns like the one that graced so many of our in-boxes and social pages yesterday.
Sadly, many of you don't know the full extent of SXM's challenge because you lack the research and resources necessary to fight the good fight. This is another reason why we will continue to focus our efforts at Jacobs Media on providing radio broadcasters with data broken down by format for your individual stations in your home markets.
This year, we introduced a new series of questions that takes a deeper dive into the SXM channels format fans go to most when they switch away from your music stations. We will continue to trend this data, as well as provide positioning and marketing responses and solutions.
Yet, it still comes down to the industry captains putting aside their differences to create a task force that tackles this new competitive environment. We need sessions at upcoming conventions that address these competitive salvos, and provide actionable ways in which stations can fight back.
Radio also needs to think about its two most important constituencies – advertisers and audience – both of whom are susceptible to a strong marketing message.
Meantime, I'm going to take a chill pill, reapply some sunblock, and order another of those tasty umbrella drinks. After all, I must have a little PTO coming, and at Jacobs Media, it's use it or lose it.
The old me would've been bent out of shape by this latest SXM assault, firing back with some sharp-tongued vitriol of my own. But that was the old me. Now, I'm living my best life, taking things in stride, keeping my powder dry. When they go low, I go high – right for the jugular.
Thanks to Steve Schram, Scott Jameson, Ken West, and Marty Bender.
- An Open (News)Letter To Radio - December 6, 2023
- The Case For Handcrafted Radio - December 5, 2023
- Is It Time For The Music Industry To Write Radio A “Dear Genre” Letter? - December 4, 2023