How COVID-19 Has Affected the Radio Industry
Whenever I was in the car as a child, the radio was always on. Whether it was sports talk on WFAN660, classic rock on Q104.3, or hit music on Z100, I spent hours listening to the radio while I was commuting to school or different activities and going on road trips for family vacations. I would imagine that many Americans have had similar experiences to my own. Radio has been a staple of American culture ever since it was introduced in the early twentieth century.[1] For decades, Americans of all ages have turned to radio for music, news, and entertainment. Radio has also been an important part of American history, as it was a vital medium for communicating information during the Great Depression and World War II.[2] The recent COVID-19 pandemic has presented unique challenges and uncertainty to this American institution. During the pandemic, the radio industry has remained resilient and popular, but still has experienced its fair share of economic issues.
As the pandemic forced millions of Americans to work and study from home, the number of drivers on America’s road declined dramatically.[3] With millions no longer commuting to work or school, some assumed that radio listenership would fall dramatically.[4] However, statistics establish that radio stayed as popular as ever and perhaps even became more popular.[5] Early studies show that many Americans continued to listen to radio during the pandemic because it offered them a sense of normalcy and an escape from the depressing silence that many experienced working from home.[6] But despite stable listenership within the radio industry as a whole, not all stations were immune to hardships brought on by the pandemic. In fact, the pandemic created massive issues for some radio stations. For example, sports talk radio stations had little to nothing to discuss as all the major sports leagues suspended play due to the virus.[7] The pandemic also impacted some popular news stations that had plenty of new content covering the COVID-19 pandemic, such as NPR.[8] Many stations searched for new and intuitive ways to boast listenership, such as launching a streaming service.[9] Overall, listenership did not decline dramatically like some predicted due to COVID-19, but the industry was not immune to pandemic-related economic setbacks.
Throughout the pandemic, radio advertising fell as advertising budgets were cut to save money to address business issues related to the pandemic.[10] Furthermore, the average advertising rates for U.S. radio networks fell as a whole over the course of 2020.[11] This decline in advertising resulted in layoffs within the radio industry.[12] The pandemic and declining advertising revenue also impacted stock prices of radio companies. For example, Sirius XM Radio stock shares fell 10.9% in 2020 due in large part to the pandemic.[13] Similarly, Entercom Communications Corporation, which owns more than 230 radio stations nationwide,[14] saw its stock price fall below one dollar in April of 2020.[15] This was far below the six dollar price tag that its stock featured in April of 2019.[16]
Fortunately, the radio industry does not seem to be finished yet. There is some optimism that radio advertising will increase in 2021,[17] and there is hope that the radio industry might bounce back revenue-wise. This optimism is reflected in the stock market as both Sirius XM Radio[18]and Entercom Communications Corporation[19] have seen their stock prices increase recently. The pandemic has proven that even though the radio industry faced financial struggles, there was still a clear demand for it. Hopefully, the radio industry will continue to stay strong, and radio will remain a part of American culture for years to come.
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