From the Desk of Dave Van Dyke... July 2006


Dear Radio Executive:

The Long View

If you've been aware of Bridge Ratings for more than a few months, you're aware of the fact that the company tracks listening behavior of listeners to terrestrial radio. The behaviors we trend are related to both their time spent with traditional radio and radio's assortment of new digital competitors.

Perhaps due to your busy schedule, however, you don't have the chance to check back to this web site frequently enough to see the 'big' picture or the "long view" of the radio industry as we've been calling it.

Here at Bridge Ratings, you may have noticed we're very fond of graphs - nice colorful graphs and we tend try to show trends in easily comprehended graphs and tables. Over the last three years trends in two areas of behavior in particular are worth reviewing.

Internally, we track and trend the news media's coverage of the radio industry specifically with relevance to the radio industry's "problems" as defined by journalists and Wall Streeters whose views of the industry are so myopic they generally tend to dismiss the big picture.

This chart measures the percentage of media stories which paint a positive slant on the industry, especially when the stories involve mention of some form of digital media and the industry's ability to retain audience. As you can see, positive coverage for the industry has become difficult to come by especially in the last year.

However, the "long view" would represent a different perspective. It's like anything else in life that requires time to determine true patterns. When looking at the heavy positive marketing digital media options such as satellite radio, Internet radio and MP3 use, its impact on traditional radio in a given month or even quarter can be deceptive. There is likely some truth to the short-term dips in time-spent-listening that radio experienced initially and certainly the cumulative effect of these media must have caused some deterioration in time spent with conventional radio.

But over time, things change. Satellite radio has been experiencing more of a combination of good and bad news in recent months and this month, Bridge Ratings' analysis of the satellite sector shows a slowing in interest and retail sales - conservatively estimating an 8% reduction in ordinal total 2006 retail sales. There have been other issues that subscribe to this theory that the satellite radio picture may not be as rosie as originally reported even six months ago.

Our studies show that after a period of time, digital fatigue can set in with most demographic groups and time spent listening to conventional radio returns to near normal levels and are likely to reduce once again as content shifts occur in each medium. This is more likely the norm of behavior for the foreseeable future. The fact that people have so many choices doesn't mean their behaviors are forever cemented. Listening is turning out to be a fluid behavior - one that over time shows that traditional radio may not be suffering as much as journalists and Wall Street would have us believe.

The fallout from poor or short-term reporting can be very damaging. Radio management itself fell victim to believing much of this press and responding (or not responding) to it may have implications unknown for quarters or years. The rush to HD may be one of those responses and the radio industry jury still seems to be out on this. Studies have shown the marketing challenge associated with getting HD radio launched and in people's homes and cars may be more daunting than believed. Bridge Ratings' projects only 9 million potential listeners by 2010.

So, keep the "long view" in mind - it's more far-reaching than the "big picture". The "long view" is more mobile - the "big picture" can be very static but can change periodically. The "long view" allows you to gather your thoughts and prepare for the future while the "big picture" gives you some sense of how you fit in.

The "long view" should give you peace of mind which is critical as you maneuver yourself and your business through these often difficult to navigate times.

Your feedback is vital to our company's on-going success. I look forward to hearing from you.


Dave Van Dyke



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