Radio broadcaster Audacy says it is moving forward with plans to develop and launch a subscription-based streaming audio service within the next few years.
In a court filing this month, officials at Audacy confirmed the radio industry was suffering from “over-the-air listening erosion,” or a drop in audience for traditional AM and FM radio stations, as more consumers — particularly those who are younger and tech-savvy — gravitate toward digital platforms and mobile devices.
“While reach remains strong…consumption continues to fragment and shifts toward digital devices,” David Field, Audacy’s CEO, said in the filing.
The comments were outlined in an internal business plan outlining Audacy’s long-term strategy. The plan was released this month as part of Audacy’s Chapter 11 bankruptcy case, in which the broadcaster sought to eliminate all but $350 million in debt through restructuring.
In the filing, Audacy confirmed that its plans for a subscription-based audio product could bring as much as $20 million by 2027. The Desk was the first to report last year that Audacy was considering a premium audio platform that would bundle commercial-free radio streams and other content as part of a subscription offering.
“We believe that our on-platform personalized, interactive radio experience will allow us to further leverage and exploit Audacy’s unique spoken-word content advantage and increasingly earn more listening occasions and more time spent listening as users get more of what they want, when they want,” Field wrote in the business plan.
That spoken word content includes news programming produced by around a dozen Audacy-owned local radio stations, including those in New York City, Los Angeles, Philadelphia, Chicago, Dallas, Detroit and San Francisco. Audacy also produces live sports talk content for Paramount-owned CBS Sports Radio, and owns the podcast production companies Pineapple Street Media and Cadence13.
Audacy hopes its premium digital content offering can help offset losses in its core advertising business, which is largely reliant on traditional AM and FM inventory. By combining its spoken word content with a premium audio platform, Audacy hopes subscription revenue can help boost its streaming-related top line by nearly 2 percent and its digital platform margins to around 40 percent by 2027.
Formerly known as Entercom, Audacy’s debt load increased significantly after the company acquired the radio assets of CBS Corporation (now part of Paramount Global). The merger was seen as a way to stave off competition from premium audio experiences like Apple Music, Spotify and SiriusXM.
While many of those digital services are going through pains of their own, they pale in comparison to the traditional radio industry, which failed to fully realize the potential of digital and streaming platforms until it was too late.
