The remarkable resilience of old-fashioned radio in the US

One of the byproducts of Americans’ ongoing love affair with the automobile is the enduring strength of their relationship with radio -- especially the old-fashioned terrestrial (AM/FM) kind.

While the number of Americans that listen to some AM/FM radio has shrunk marginally over the past decade, it has also remained firmly above the 90% threshold -- an astonishing level of penetration when you consider the number of alternatives (MP3s, streaming music services, satellite radio) that have emerged over that period.

And old fashioned radio continues to trounce the most comparable of those -- satellite radio and Internet radio -- in terms of its share of listening hours. Business wise, it’s a similar story.

According to analysis by Macquarie Capital, terrestrial radio’s share of the advertising market since 2011 has remained fairly stable at about 10%, in contrast to the sharp falls experienced by other legacy media segments like newspapers and magazines. It’s arguably best explained by the fact that most listening takes place in the car, where old fashioned AM/FM radio still reigns supreme. 44% of all radio listening takes place in the car, where terrestrial radio has an 80% share, according to Macquarie.