Radio Is Not Free: The Cost of Listening

Radio Is Not Free: The Cost of Listening

by Tracy Johnson

Virtually everything comes with a price and a value. That’s what drives every transaction. In fact, it drives he 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.

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 more than the 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. Starbucks actually does a better job recycling their fans than radio.

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 happily pay several times more than they would for coffee at 7-11. Why? Because they identify with the brand. Also, the coffee is better.

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 to their customer. Their market share grows even though their products are relatively expensive devices with high margins. There’s brand value that goes with owning an Apple product. And, their phones and computers really are terrific.

These examples are easy to understand.

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 a High 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).

And the price listeners pay for your “product” is 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.

They may punch the 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. Your competition isn’t just other radio stations, you know.

Keeping The Cost Of Listening Affordable

In a research project with Strategic Solutions Research, we explored what causes tune out. That’s another way of identifying what adds to the cost of listening.

Those six things are:

  • Not Getting Attention Quickly
  • Content That Has No Context
  • Slow Pacing
  • Not Enough Payoffs
  • Confusion
  • They Just Don’t Care.

Each of the six are detailed here in the Content Superhero project.

But there’s good news. You can reduce the cost of listening by providing more value. There are two solutions:

Lower Your Prices

Identify what is causing customers to leave, and stop doing it. This is the first choice of many programmers.

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 to tighten 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. But it doesn’t provide more value.

A more sustainable strategy is to objectively evaluate every detail of the radio station or show as a listener would. 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? Like Starbucks or Apple.

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?

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