Advertising is currently the main business model of broadcast radio, because it is the simplest one to implement.
Paid radio is less common and more recent: custom online music programs with Pandora, sports live coverage with Tunein Premium, high-quality jazz music with JazzRadio.com or premium podcasts with BoxSons. Some companies run a hybrid business model, such as satellite radio provider SiriusXM, by broadcasting ads to paying subscribers.
I distinguish four kinds of radio providers:
- publicly funded radio (NPR, Radio France, RTS, BBC…), with generally high-quality programs and few ads.
- private classic radio networks, ad-funded, with highest common denominator shows and mainstream musical styles.
- non-profit radios organizations, with minimal funds, doing sometimes high quality programs but for niche audiences.
- private pure players, ad-funded or with paying access, with innovative content.
As a listener, I want to choose to have ads, or to not have them and pay directly for the service. In addition to the ads themselves (see previous article about this), I am tired of the sometimes pathetic shows that are broadcast on private radios. They are not bad on purpose, they are tailored to target a segment of audience that maximizes the ads income. I want to hear more quality content. We need private radios for this, because public radio cannot tailor programs for all segment audiences and relying too much on non-profits is not sustainable.
Doing paid radio is hard, because the population is accustomed to listening to the radio for free, i.e. through ads and taxes. A study in 2014 showed that the vast majority of web users would not be willing to pay to browse the internet without advertisements.
However, web press proved that a transition from free to paid is possible, with more premium content and paywalls. Many musical services today encourage a subscription, e.g. Spotify and similar services. There are less and less technical hurdles to expand the usage of connected radio, as smartphones and mobile broadband have become a commodity, at least in Europe.
In my opinion, bringing more premium content and innovating in the way radio programs are built will enable radios to adopt a hybrid business model: free with ads, ad-free with a subscription. Such move could bring the industry back on a growth trajectory.
By making the advertisement business model less attractive, I hope Adblock Radio will be a catalyst for such innovation.
Edit after some reactions on r/radio:
I think I should have made a distinction between big private radio networks, and small, local radio networks. Local content has indeed great value and is a strength of radio as a media. Ads for local businesses are somewhat okay, as long as they are creative and interesting.
Unfortunately, in France, local radios rely a lot on ads from non-local businesses: malls, telcos, banking, insurance, cars… (e.g. Leclerc). Repetitively listening to those ads is painful, because of poor content and also the often higher perceived audio level.
People willing to pay for an ad-free experience register to Spotify and other streaming services. And they are millions to do that. Why can't it work for radio, in the age of broadband internet and ubiquitous cellphone carrier coverage?