If you have been following the current state of radio, you will know it’s not looking that great. Many have said that radio today is what TV will look like in a few years with major television studios going bankrupt just like radio groups such as iHeartRadio are doing now.
In the late 2000s, as music streaming services took off and MP3 players and smart phones became commonplace, the radio market started to shrink. To counter this loss of audience, radio station owners rushed to buy up other stations in an effort to get a bigger piece of a smaller pie.
This move led to massive amounts of debt for companies such as iHeartRadio, which forced them to file for bankruptcy.
TV networks are making the same moves radio did. As they see the number of subscribers shrinking, network owners are rushing to merge or buy other networks so they can have a bigger cut of a smaller pie.
Recently Discovery closed on a deal to buy Scripps, Disney is in the process of buying most of FOX, and CBS and Viacom are close to a deal to merge.
Yet as they do this many of these studios are reportedly willing to take on new debt to finish these deals, which leaves us to wonder if they could survive if the market continues to shrink.
There are some differences between radio and TV. Disney, for example, could withstand losses that iHeartMedia could not. Disney is diversified in a way radio is not; however, other groups such as Discovery and CBS are not as spread out and are more vulnerable to debt. It will be interesting to see what happens 10 years from now.
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