Which Costs More: Music Or Talent?

The Randy Lane Company believes the future of radio is talent. Smart broadcasters have always invested in personality-based programming, but that will increase along with the cost of music streaming.

The fees for playing music on AM/FM are costly, but in music streaming more listeners equal more expense. SoundExchange charges .0018 cents for streaming each song and for each listener.

Never before has any broadcaster wished for fewer listeners, but today some music stations geo-block their stream to keep costs down. There are even stations that still do not stream at all.

But streaming is growing. The share of consumer listening time for terrestrial and satellite radio is around 25% while streaming leapt from 32% in 2015 to 41% in 2017.

If that trend continues, by 2023 the share of listening time for streaming would be 90%.

Allowing for my poor math skills, here is an estimate of what streaming music may cost a station in that scenario.

If your station averages 100 streaming listeners an hour and you play 12 songs an hour, 24 hours a day, your music cost is $18,869 per year.

Imagine that with smart phones, smart speakers and wi-fi cars your hourly audience grows to 1000. Your annual cost for music will be $188,698.

If your station grows to 10,000 hourly listeners, write a check to SoundExchange for $1,886,976. By the way, this does not include ASCAP/BMI fees.

Compared to a music show, morning drive hosts playing with little or no music like Bailey and Southside in Atlanta or The KVJ Show in West Palm Beach might actually save money while delivering huge ratings, revenue and growth through podcasting. There are many companies today taking advantage of personality-driven shows in afternoon drive as well. Of course, the content has to be exceptional.

Music programming on radio is not going away, but the same accountants who budgeted "reduced head counts" may soon be pushing to hire and develop more talent instead.

Thanks to Jason Goodman of Dick Broadcasting Company for help with this article.