A Radio Renaissance Is Upon Us
The digital transformation of traditional radio will drive the next decade of innovation and growth for the broadcast and music industries.
The world of audio is quickly changing. For the first time, the time spent listening to streaming music and podcasts surpassed linear audio, which includes FM/AM, satellite radio, and online radio1. That’s no surprise. Over the past decade streaming music has exploded from virtually nothing to about 600M subscribers and $17.5B in annual revenue globally2. The shift to digital is partly driven by Gen Z, whose time spent listening to linear radio is only a third of older generations3. Fully on-demand, interactive music services, such as Spotify and Apple Music, have proven that listeners want personalized experiences that they can control.
But still, broadcast radio strongly persists with more than 80% of US adults tuning in each week4 and actually spending twice the time listening compared to streaming music5. Traditional linear radio has been one of the most proven and far reaching media formats in history. Even in our digital age, billions6 of listeners around the world still tune in for that unique, produced mix of personality, music, and local information. And as long as humans have ears, that’s not going to change.
However, the differences are striking when you compare the anticipated growth of the music and radio industries. Global music streaming subscription revenue is expected to grow from $12B today to $40B by 2030, with a CAGR of 8%7. The US broadcast radio industry is expected to grow from $15.8B in 2022 to $16.6B by 2027 with a CAGR of 0.9%8. One industry is growing, the other is not. And herein lies an extraordinary opportunity for both broadcasters and streaming services. Put another way, how does streaming continue its momentum and broadcast start growing again?
The answer, in large part, will come from the digital transformation of traditional linear radio. Combining the best of radio and the best of on demand is where this is going, and we’re already seeing signs. This quote from Daniel Ek, CEO of Spotify, makes the point.
“Both short and long term, we are always thinking about Spotify’s role within the larger ecosystem. While most [external] focus is on competition between streaming services, we continue to be focused on the billions of users who are listening to linear radio.”
You can see Spotify’s move into the radio space with its AI DJ and an array of other radio-like features, such as Your Daily Drive or Daylist. Apple Music, Amazon Music, Sonos, TuneIn, and others in the digital arena are also investing heavily in radio experiences because they know the format works.
But how does it work? How does traditional radio transition to digital? It has been an insurmountable challenge to port the analog nature of great radio to the internet. Scaling the best radio techniques, such as personality, narrative, local content with quality production has simply not been possible. DJs can record voice tracks for a few stations, but they can’t do it for hundreds, thousands, or even millions. There was no way to perfectly create, assemble and produce music and audio content with any kind of streaming-grade scale. Until now.
The Rise Of Artificial Intelligence For Radio
New technology that augments and amplifies human creativity is opening doors that didn’t exist until very recently. Advancements in generative AI and compute power are enabling new capabilities. Large language models, such as ChatGPT, and text-to-voice technology, such as ElevenLabs, have gotten to the point where the results sound indistinguishably human. This isn’t to say robot DJs will take over everything. Live human dialog is irreplaceable, and will likely remain that way for quite some time. However, radio is made up of lots of content that’s not off the cuff chatter, such as weather, news, traffic, sports scores, local info, music info, pre-recorded interviews, ads, and much more.
However, it’s going to take more than AI-generated content creation to bring about the next generation of radio. The content part of the equation is only half the battle. The other more challenging aspect is how all the music and audio content is actually put together and delivered. This is why we founded Super Hi-Fi six years ago.
To make great radio, the right music and audio elements must be selected, assembled, produced, and delivered to a sprawling and diverse set of end points and end users. It is a complex set of tasks that, historically, has taken lots of people, lots of time, and lots of money to make just one radio station. Super Hi-Fi has developed a series of tools and technologies that have automated almost all of the processes with exponential scale compared to traditional methods.
Radical Innovation For Radio
Like iPhone’s AppStore enables apps or Tesla’s SuperCharger network enables EV’s, Super Hi-Fi enables radio experiences. The Super Hi-Fi platform is an AI powered operating system that organizes the various audio components of the radio ecosystem to be assembled, produced, and distributed. The result enables radio broadcasters and digital media platforms to offer dynamic, localized, personalized, premium radio experiences of all kinds, at massive scale. We see this new capability reimagining and rebirthing radio as we know it.
For broadcasters, Super Hi-Fi’s capabilities mean a level of efficiency that cuts operational costs in half, or more. This allows more time and focus on producing better content. It also opens the door to innovative new products that work both over the air and the internet. This unlocks new, incremental revenue opportunities. It means broadcasters can start growing again. Broadcasters know radio better than anyone. They’re well positioned to utilize Super Hi-Fi to start leading again with pop culture and music discovery, to catapult the industry and to electrify their listeners in new ways.
Radio innovation won’t stop with the broadcasters and streamers. We’re going to see entirely new categories open up that drive incremental growth for the music industry. The SVOD players, such as Netflix, Disney+, or Paramount+, will be able to transform their great brands and stories into extraordinary music and audio experiences so their subscribers can listen when they’re not watching. Tapping their large built in audiences could drive enormous engagement and revenue growth. The gaming platforms, such as Epic Games or EA, could evolve their in-game looping playlists into dynamic, live-feeling experiences that bring the games to life in a whole new way. The automotive sector can now offer real-time personalized audio experiences that leverage vehicle data and retail music providers can deliver real time in-store messaging to drive sales. And that’s just scratching the surface.
A radio renaissance is upon us. The possibilities are endless when you consider the new found technical capabilities offered by the rise of AI. The companionship, community, and context that radio provides is a powerful and timeless formula that is making its way into the future. And it’s why Super Hi-Fi exists. It is our mission to help broadcasters and digital media platforms of all kinds build and scale premium radio experiences for a bigger better future that benefits everyone in the ecosystem.
Sources:
3 Edison Research / InsideRadio 1.19.2023
4 Pew Research / Nielsen 6.15.2023
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