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 every transaction. This dynamic drives the entire economy. Yet since consumers don’t pay cash for radio, it’s easy for broadcasters 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 far less. There’s a lot of profit in that cup of Joe. But the value delivered to customers is worth the ingredients. Otherwise, why would anyone keep paying for it? Yet customers line up in the morning, and many come back several times a day. That’s why I say Starbucks actually does a better job recycling their fans than radio.

Starbucks And Value

The Starbucks brand is wrapped in their environment. That includes 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 the principles and values on which their brand is built. All of these things represent value that cause coffee drinkers to pay several times more than they would for coffee at 7-11. Why? Because they identify with the brand. Also, the coffee is better.

Cost includes the price of the drink, of course. But there are added costs as well. 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 these barriers by offering advance ordering via their app and drive through services at some of their locations.

Similarly, an iPhone is valued by Apple’s customer, though competing brands offer smartphones with similar features at a much lower cost. Apple prospers because they deliver an experience. Their market share grows even though products are relatively expensive devices with high margins. There’s brand value that goes with owning an Apple product. Plus, their phones and computers really are terrific.

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

But what does that have to do with radio? Plenty. And it’s a good thing, especially for true radio personalities.

Does Cost Of Listening Drive Away Audience?

Radio is a different business model, of course. Money doesn’t change hands when a listening occasion takes place. But the price/value relationship still applies.

Each listener makes entertainment choices for specific reasons. It could be 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.

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

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And the price listeners pay for your “product” is their time. When shopping at your 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? It drives up the cost of listening. At some point, it gets expensive to listen.

When topics are unfocused or confusing, the cost increases. A song (or three) I don’t like makes it more expensive. Information that’s unimportant or irrelevant? Costly. Unfamiliar or 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 becomes too high, listeners leave.

Keeping The Cost Affordable

Listeners may punch 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 from any number of entertainment options.

It doesn’t matter where they go. It’s a lost quarter hour. Your competition isn’t just other radio 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 a little longer? They already like you. They’re already tuned in. Just hang onto them a couple more minutes.

This can have 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 is a fast way to reduce the cost of listening.

Each of the six are detailed here.

But there’s good news. Broadcasters can reduce the cost of listening by adding value.

There are two solutions.

Lower Prices

Identify what causes customers to leave and stop doing it.

Sometimes programmers combat a “too many commercials” complaint by adding commercial-free blocks of music. Or they stack stop sets into quarter hours with lower listening levels. Another typical tactic is tightening personality breaks to reduce talk.

These adjustments are like weekend sales at a retail store. Lowering prices with a tactic can be effective, to an extent. It may attract some shoppers seeking value in the short term. But it doesn’t provide more strategic value. As soon as the “sale” is over, customers go back to their favorite station.

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A more sustainable strategy is to objectively evaluate every detail of the radio station or show as a listener would. I call it Zero Based Programming. Get rid of all unnecessary clutter. You’ll be shocked at how much can be cleaned up. I outline details on how to conduct this analysis in a seminar on demand here.

You won’t be able to remove every negative, of course. Commercials are with us for awhile. But the more streamlined the station, the better the listener experience. Therefore, the station becomes more affordable by offering a better value proposition.

Increase Value

The other way to deliver a great listener experience is increasing benefits of the experience. With a list of the most important brand qualities in mind, what can be added to make your brand memorable, unique and irreplaceable?

How can you deliver this experience on the air in every break and extend value as a meaningful part of the audience’s lives on multiple platforms? That’s the challenge. To become an integral part of their life every day. A brand they can’t imagine living without.

Chances are, those things that are irreplaceable revolve around personality that can’t be duplicated.

And that’s the benefit of having high profile radio stars. Personalities can charge more for entertainment because it’s worth it.


When radio stations deliver more value than is expected, radio becomes a bargain.

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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