Radio is under attack when it comes to listening to it in automobiles. AM is no longer offered in electric vehicles and many manufacturers are considering eliminating it altogether to allow for more profitable concepts. What will this do to billboards? That’s the focus of this Billboard Mastery Podcast.
Episode 75: How The Death Of Radio Will Help Billboard Investments Immensely Transcript
In the movie, "Goldfinger", an old James Bond classic from the 1960s, the archenemy of James Bond and of society called Goldfinger, his plan is to destroy the world's gold supply, because that will make the value of his gold go much, much higher. And the same thing is happening right now regarding Billboards and radio. This is Frank Rolfe the Billboard Mastery Podcast. There's some things going on out in the radio world which may result in greater Billboard values going forward. The first is that you cannot have AM radio in electric cars. Tesla, for example, does not have the option of AM radio, and that's simply because electric cars create electromagnetic signals which disrupt the ability for the car to receive AM radio stations. So AM radio is already on the way out, as more cars are retrofitted into electric-powered rather than gas-powered, you're gonna see AM as becoming less and less of an option on automobile radios. But at the same time many car manufacturers are now even questioning offering FM radio in cars, simply because they're noticing that so many car buyers opt for Sirius Satellite and are willing to pay that subscription of $20 a month or so and not use radio at all. And it's making the car manufacturers wonder if there's a way they can have a perpetual stream of income, by offering their own similar service.
So rather than have AM or FM radio in the car, it would come retrofitted with some kind of service from Ford or from Chevrolet, where they would have various content that you pay a monthly subscription for, which might include Sirius Satellite. So what we really have is an all-out assault on radio in cars. Now you might say, "Well, but there's still radio you could have in your house, you could have radio in your workplace." Well, unfortunately for radio manufacturers, most of the radio audience in America is in cars, think about when you listen to the radio, I know myself I only listen to the radio while I am driving, when I'm at home I never listen to the radio. And most Americans share that thought, they simply only use radio while they're driving. So if they eliminate AM radio from cars over time, and if they eliminate both AM and FM radio then what's going to happen? Well, advertisers are going to leave, exit that space. I remember years ago when they first brought out the internet and the disruption it had to all of the other forms of advertising. When I first got in the Billboard business, basically the pyramid of what you wanted to be in media was, you wanted to be in television, and newspaper, and radio. And way, way down the line, were Billboards.
We were just the poor, weak cousin to that ever-strong newspaper, television, and radio audience. And then what happened? Well, the internet stepped in, as did the advent of streaming and before that blockbuster video and others, and people just stopped watching television. Today, television is under attack constantly from everything from Netflix to you name it. Newspapers, destroyed by the internet, who even subscribes to newspapers today? The answer is virtually nobody, statistically, I know I don't, I used to subscribe to several newspapers back in the day, I took the local paper and the Wall Street Journal. Today I don't take any newspaper, if I want to know the news, I simply go to msn.com, and I see it right on my computer real time without waiting for someone to have to write it and print it and deliver it. Of course, by then, the news is old, Newspapers always were old, they were always delivering news that was at least one day behind, to a newspaper, ruined. And now you have radio that's on the same path to destruction. So what's it all mean? Well, Billboards have always gone in a manner where since they are like the least thought of form of advertising, they have relied on the destruction of the competition to make them go up in value.
When the internet first came out and ruined newspaper and ruined television, who saw a boom from that? Billboard advertisers, because we weren't having to compete with ad dollars going into those other media options. You're gonna see the same thing now with the end of radio, people will look around at the options that they have and Billboards now will come more to the top. Don't forget that Billboards offer some things that no other form of media can offer, mainly the point of purchase nature. If you're driving down the highway, and you're coming up on a McDonald's that exit number 43, the only way an advertiser can reach that audience to say, "Exit now, here's my McDonald's, exit here at 43" is with a billboard, we have a very unique position in all of advertising. But at the same time, we're used by many advertisers just to generically advertise products and goods and services. And again, when you take out of the mix, competition for those dollars, those ad dollars from advertisers, then Billboards clearly are going to benefit. The bottom line is the world we live in today moves quickly, there's all kinds of changes to the status quo. I never dreamed that radio would ultimately be in the crosshairs of a change so dramatic that it might be eliminated, but it looks like that's what's happening. And that's good news for Billboards. This is Frank Rolfe, the Billboard Mastery Podcast. Hope you enjoyed this. Talk to you again soon.