The Health of Radio: By the Numbers

With what seems like increasing frequency, media-pundits are dropping rhetorical bombs riffing on the notion that radio is dying. This inevitably sets off a tizzy within the radio industry itself. But there are still strong signs of life, especially if one steps back and looks at the big picture.
Every quarter, the Federal Communications Commission issues a report on the number of licensed broadcast radio stations in the United States. The graph at right compiles the last 21 years of these reports (from 1992 to 2013).
These FCC reports are available here. I used the agency’s mid-year totals, released every June 30th, for year-to-year consistency. (2000 and 2007 are asterisked because there was no June 30th report archived for those years; these figures come from the FCC’s third quarter (September 30th) report.)
Although the oldest available report is from 1968, there are no archived totals covering 1971 to 1989. I started with 1992 because that’s the first year for which June 30th reports are available.
The numbers speak for themselves: more than 9,000 new radio stations took to the air over the last 21 years. This includes 1,923 new full-power commercial FM stations and 2,409 full-power noncommercial FM stations.
Only two classes of radio station exhibit any decline: AM and LPFM stations. On the AM side, there’s been a net loss of 237 AM stations (about 5%) over the last 21 years. Note that this has not been a consistently downward trend, either, with small upticks around the turn of the century, most likely due to the FCC’s expansion of the AM band in the 1990s.
Because the FCC’s broadcast station totals only count fully-licensed stations (not stations under construction), LPFM stations don’t appear on the books until 2005. The number of licensed LPFMs peaked at 864 in 2010 and has fallen to 797 this year (a decline of about 8%). With the coming of a new LPFM filing window this fall, there will be a surge in the number of these stations over the next few years.
What’s most remarkable is the growth of FM translator and booster stations. The majority of these stations are translators, and you can see how they exploded following the Great Translator Invasion a decade ago—nearly reaching numerical parity with commercial FM stations in the 2008-09 time frame. Although their numbers have dwindled (by about 100) since then, more than 1,000 new translator construction permits will be issued soon, so expect a positive swing in this trajectory as well.
It’s also quite illustrative of the extremely vibrant marketplace for FM translators that now exists. A cursory overview of just those transactions noted in Tom Taylor’s daily industry newsletter over the last month alone turns up some 20 translators that changed hands in 12 states for nearly $2 million—or an average of $99,914 per station. The actual sale price of stations ranged from $17,000 (for a 250-watt translator in Iowa) to $350,000 (for a 225-watt translator in Florida). Of the 17 transactions covering these translators, six of them were for more than $100,000, and all but five of them were for more than $50,000.
The fact that the net number of radio stations continues to rise—and in the case of FM translators, so much money is chasing so few watts—does seem to suggest that the demise of radio is grossly exaggerated. That said, it doesn’t mean that concerns about the medium’s future have no merit. In concrete terms, the inherent value of legacy radio broadcasting lies in the spectrum it occupies, and with a growing hunger for wireless broadband there is the possibility that in the future, radio might very well abdicate its exclusive patch of the airwaves.
In 2011, Radio World asked National Association of Broadcasters president Gordon Smith whether there was "any immediate threat" to the radio spectrum; he replied, "Not immediate, but if they can do it to your neighbor [broadcast TV], they can do it to you eventually." A straight-up cynic might see the growth of radio as claim-staking for this eventuality, but there’s still too much money to be made in the status quo…even if it may very well not be inherently sustainable.