It used to be that January was synonymous with credit card shock – the month when all those extravagances from the month before come home to roost.
But these days with autopay options, many of us experience that sense of dread every 30 days, like clockwork, all year-round. That’s because increasingly, we’re paying more and more for the privilege of buying media content month in and month out.
Whether it’s your family, your kids, your parents, or just yourself, chances are your monthly content fees are on the rise. The “subscriber economy” can be insidious once you start totaling them up each month. At $5 or $10 a month, all those subscription fees add up, on top of bigger tariffs for cable or satellite TV.
Yes, more and more people are “cutting the cord,” but that hasn’t stopped aggregate fees from continuing to rise. In fact, projections are for the monthly tab for media to hit the $300 mark.
Media industry economists, PQ Media, indicate the average U.S. household spending on media continues to rise.
And when you start adding it up, subscription fees for content that might include Spotify, Netflix, SiriusXM, Amazon Prime, and other content services add up. And then there are the secondary services – Hulu, Pandora, Google Play Music, and others.
But that’s just music and video entertainment. News and sports junkies can also pay premium fees for content, streaming services, and other digital goodies.
When you think about it, public radio may be becoming yet another subscription service – but it continues to operate on the “honor system.” Sadly for most of these stations, a relatively small percentage of its listeners fork over money during pledge drives and fundraising events. Notably,”sustainer” giving – that is, a monthly fee charged to a credit card instead of a lump sum donation – is becoming more popular among public radio P1s and a gateway to financial stability.
Our Public Radio Techsurveys and other research we’ve conducted for stations show that young people, in particular, are more inclined to become “sustainers,” preferring smaller increments being extracted each month, rather than forking over a larger lump sum. At some point, public radio stations might start referring to these generous listeners as “subscribers,” a term that is more consistent with the language and lifestyles of Millennials and Gen Z consumers.
And public radio may be in even better position to justify support than it’s been in some time. In our most recent study, four in ten respondents who
are listening to more public radio in the past year say a main reason is “the need to support public radio now.”
But in order to charge even a few bucks a month, the content better be attractive enough to warrant paying for it. Public radio has proved its value proposition. So has Netflix, Spotify, HBO, and increasingly, SiriusXM.
Not everyone, however, can make that claim. YouTube announced last week it’s shifting its strategy away from premium music streaming and back to an ad-supported model.
According to Digital Media News’ Daniel Sanchez, a study by the International Federation of the Phonographic Industry (IFPI) indicated a primary reason why more than one-third of people don’t subscribe to streaming music services is because they can get it for free on YouTube.
So, as Google – YouTube’s parent – learned the hard way, YouTube is the last service consumers are going to pay for.
And that brings us to broadcast radio – a free service that is – for better or worse – ad-supported. Our Techsurveys show that a whopping six in ten respondents say a main reason they listen to AM and FM radio is because “It’s free.”
In a media world where subscription fees are increasingly the norm than the exception, broadcast radio’s “steel sword” is its ability to deliver a 24/7 product at no charge to consumers. It an edge broadcasters have they never use – in marketing, on-air positioning, or anywhere else.
Given the way our credit card media charges rack up every month, you have to wonder about the wisdom of letting listeners figure this asset out organically rather than aggressively promoting it as the “perk” that it is.
That said, something I think about a lot these days – especially as I listen to long, long commercial stopsets and increasingly hear listeners whine about them – is whether the right station in the right market at the right time could take a shot at an ad-free, listener-supported model and make it work.
Innovation isn’t just about techie stuff. Drawing up a different schematic for funding broadcast radio might even have more industry impact than discovering the next great podcast or designing that Alexa skill.
Maybe it takes the form of a Kickstarter campaign where for every x-thousand subscribers who commit, the station removes another minute of 
advertising every hour – until they’re all gone. And with the savings a station would derive from not having to subscribe to a ratings service…
…well, it’s a very different financial model.
Preposterous? Maybe, but only because it’s never been done. And perhaps it never would have worked in the old media economy where no one paid for content, except perhaps buying a book, subscribing to the local newspaper, or buying a magazine.
But that’s not the case now.
We pay to watch “Game of Thrones.”
We pay to watch other people play games on Twitch.
We pay to make workout playlists.
We pay to hear Howard Stern.
We pay for Fornite’s “Battle Pass.”
We pay to binge watch “Ozark.”
We pay for public radio.
We pay for services and content we value, that we can’t get anywhere else.
Would we pay for a commercial-free version of KROQ, Z100, KISW, WMMR, or KUPD – that wouldn’t have to program to diaries and meters?
Time to kickstart radio?
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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Take a look at “Sun Radio” in Austin, Texas. A “AAA” format, it runs two translators in Austin as well as a fulltime AM (1kw on 1490 in HD Stereo!). They also provide programming to various NCE FMs in Texas. They live off of donations, and seem to be very successful at it. A niche format may find that being donation based would be the best way to survive, if one can wrap one’s head around the idea of a non-profit operation.
Fred, I think it’s more a matter of broadcasteres rethinking the “givens,” and remimagine a business model that isn’t clumps of 30 and 60-second spots. Thanks for chiming in.
It works for podcasters, videocasters and the IDW
https://www.patreon.com/
That it does. Patreon is doing interesting things for podcasters – and helping them make a lot of money. Thanks, John.
Does the consumer think it’s worth it? Public media (Radio AND TV) thrive off of listener support. I’ve had the good fortune of working for both and I understand (somewhat) the Public “subscriber” model. I don’t know what it takes to run my local PBS station(s) but I know that on a one-day pledge drive last week we raised $120,000. That equates to raising $5000 average per hour. Does commercial radio do that? Granted, PBS radio can’t do constant pledge drives but stations like EMF ask for money all the time. Our pledge drives aren’t the most creative but we do try to make it fun-and let the listener know what we’re doing-and why. The other side is the “Superbowl” model of advertising. Put the BEST of the advertiser’s commercials on and let them do their revenue-creating magic. It would take creativity and planning-which offers the argument for “competition” to see who does a better job. Chuck Blore created fun exciting radio-which was followed by Bill Drake, Buzz Bennett, Jack McCoy, Paige Nienaber and a handful of others. Imagine a major radio steering itself into a direction where creativity entertainment and fun drive the stations success. (Even the commercials could be fun.)
Lots of good thinking here, Dave. Radio people are more well-rounded when they have a chance to work in both the commercial and public sectors. These days, streaming radio would probably be a solid addition, too. We’re learning there’s no monolithic model and that over time, there are multiple ways to be successful in the radio business. Appreciate the comment.
Seems like there is now room for lots of models, hybrids and experimentation. As commenters have pointed out, there are a handful of commercial stations (mostly niche) that rely on listener contributions.
While I (obviously) like the commercial advertising model, we also have the opportunity to explore other avenues of funding, as well as creative content, in podcasting, special events and multiple streams (like carrying high school sports from many schools rather than being forced to carry the “game of the week”). I view this as a very exciting and innovative time for “traditional” media and in particular, radio.
What we really need is a new crop of folks to help us navigate these unfamiliar seas. People who have NO preconceived notions of “how we do radio.”
Some of us broadcasters would welcome them with wide-open arms.
I’m thinkning so, too, Bruce. It is so easy to get caught up in convention when you’ve been running it the same way for SO long. Other models could be piloted to explore whether there’s a “there there.” Given the changing landscape, this would be a good use of time and money. Appreciate you chiming in.