Radio Is Not Free: The Cost of Listening

Radio Is Not Free: The Cost of Listening

by Tracy Johnson

Nearly everything in life is a value exchange. There is a price and a value. Value drives transactions. This dynamic drives the economy. Yet since consumers don’t pay cash for radio, it’s easy to assume that radio is free. It’s not. Radio has a cost of listening. And on some stations, it’s expensive.

Starbucks charges $4 for a cup of coffee. Their cost of materials is minimal. There’s a lot of profit in a cup of Joe. But the value delivered is worth the ingredients. Otherwise, why would anyone pay for it? That’s why I say Starbucks actually does a better job recycling their fans than radio.

Understanding Value

The Starbucks brand is wrapped in environment, including the stores in which they serve coffee. Part of it is the convenience of being on nearly every corner.  They have a commitment to serving the community. It includes principles and values on which their brand is built. Together, it represents value that causes coffee drinkers to pay several times more than they would at 7-11. Why? They identify with the brand. Also, the coffee is better.

Cost includes the price of the drink, of course. But there are other costs. How long does it take to get the coffee? How long (and how annoying) is the queue? And how about the hassle of parking? Starbucks invests in removing or reducing barriers by offering advance ordering via their app and drive through services at some locations.

Similarly, Apple customers value their devices, though competing brands offer smartphones with similar features at a lower cost. Apple prospers because they deliver an experience. Market share grows even though products are relatively expensive devices with high margins. There’s brand value in owning Apple products. Plus, their phones and computers really are terrific.

Commerce takes place when perceived value of a product or service is equal to or greater than cost.

But what does that have to do with radio? Plenty.

Does Cost Of Listening Drive Away Audience?

Radio is a different business model, of course. Money doesn’t change hands when listening occasions take place.

But the price/value relationship applies.

Each listener makes entertainment choices for specific reasons. Maybe it’s to hear a favorite song, find out what’s happening in town, win a contest, get a laugh or simply find a station to match a mood.

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Delivering an experience that meets desire is what a radio brand is worth. The greater the value, the more a customer (listener) will pay (or tolerate).

And the price listeners pay for your “product” is time. When shopping at a station, the longer it takes to realize value, the greater the cost of listening.

Too many commercials (and poorly produced commercials) add to the cost of listening. The same goes for¬†directionless, pointless talk. A contest comes on that’s hard to play or they think they can’t win? The cost of listening increases.

At some point, it gets expensive.

When topics are unfocused or confusing, cost increases and value is lower. A song (or three) I don’t like makes it more expensive. Irrelevant information? Costly.

Uninspiring ¬†personalities and another 7 minute stop set make it so I’m not sure I want to pay the price of staying tuned in.

When the cost is too high, listeners leave.

Keeping The Cost Affordable

Listeners push the scan button to find another radio show or turn to satellite radio or a personal device. They may turn on Spotify or Apple Music, or go to a podcast. Some escape to YouTube, interact with social media, play a video game, turn on a movie or choose any number of options.

It doesn’t matter where they go. It’s still a lost quarter hour. Radio’s competition isn’t just other stations, you know.

In a research project with Strategic Solutions Research, we explored the causes of listener tune out. All of the conclusions are compiled in the Content Superhero ebook here.

Doesn’t it makes sense that the best way to get more quarter-hour credit is convincing existing listeners to stay longer? They already like you. They’re already tuned in. Just hang onto them a few more minutes.

This has a dramatic ratings impact. In fact, it’s the most important ingredient of my Double Your Ratings strategy.

Finding and relieving what causes tune out reduces the cost of listening.

But it’s impossible to remove every negative. Commercials are with us for awhile. Therefore, the station becomes more affordable by offering a better value proposition.

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Increase Value

Adding value is a sustainable way to retain listeners.

What can be added to make your radio brand memorable, unique and irreplaceable?

Personalities that deliver a great experience in every break extend value as a meaningful part of the audience’s lives. That’s a challenge.

That’s the benefit of having high profile radio stars. Stations can charge more for personality entertainment because it’s worth it.


Radio stations delivering more value than is expected is a bargain.

Are you ready to develop on-air superstars that add long-term value to the listener experience? Great! That’s what we do. Find out more about our services here.

How are you connecting to the audience emotionally to deliver an experience greater than the ingredients of your product?

Why Radio Is Losing Credibility

This Commercial-Free Strategy Actually Works

The Fastest Way To Reduce Ratings is Avoiding Tune Out

Avoiding Tune Out 101 Seminar on Demand

The 6 Biggest Causes of Listener Tune Out

Every Break Matters: Maybe Your Radio Show Should Start Earlier!

The Power of Attention: Why Other Stations Are NOT Your Real Competition

The High Risk Zone of Every Radio Break

It’s All About the Hook Seminar on Demand

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