NEW YORK (TheStreet) -- Between mobile, television, online streaming audio and video, podcasts and now satellite radio, you might think that good, old-fashioned radio is dead. Well, you'd be wrong.
New poll results confirm that consumers still want their AM/FM radios, and that could mean new life for companies like Cumulus Media (CMLS) - Get Cumulus Media, Inc. Class A Report, Saga Communications (SGA) - Get Saga Communications, Inc. Class A Report, and Entercom Communications (ETM) - Get Entercom Communications Corp. Class A Report and other radio broadcasters.
A new poll by the firm IPSOS shows that while some consumers are demanding changes to the car's infotainment system, consumers still want AM/FM radio to remain the heart and soul of their car entertainment.
When 1,000 adults were sampled and asked about their car audio preferences, only 9% of consumers want to change the fundamental structure of the automobile news and entertainment structure with an app-based system. The vast majority, 91%, said they desire typical car radio, with 9% preferring an app-based system. Some 84% of respondents listen to AM/FM radio, while relatively new systems like Sirius/XM (SIRI) - Get Sirius XM Holdings, Inc. Report, Pandora (P) and Spotify came in at 22%, 18% and 7%, respectively. Finally, when asked about their preferences for entertainment options in their next car, four of five consumers chose AM/FM over CD players. Less than one in five want to depend on smartphones and other forms of audio entertainment to get their information.
Despite all the advances in electronic technologies that have transformed the automobile by increasing safety, reliability and convenience for the American consumer, the average consumer still wants a quality car, one that does not cost too much to get to destinations and one that has entertainment choices, including the AM/FM car radio. Over the decades, entertainment options have changed as new technology has become available.
Eight-track tapes have morphed into cassette decks, which were eventually abandoned in favor of CD players. Those CD players are now disappearing as consumers prefer satellite radio and integration with their Apple (AAPL) - Get Apple Inc. (AAPL) Report iPhones, Google (GOOG) - Get Alphabet Inc. Class C Report (GOOGL) - Get Alphabet Inc. Class A Report Android-powered smartphones, or, in some cases a Blackberryundefined smartphone as the preferred way to listen to music, talk radio, podcasts and even books while driving.
Even though many have practically written radio off, the number of radio listeners is staggering. Data from Edison Research and Arbitron show more Americans listen to AM/FM radio each week than use Facebook (FB) - Get Facebook, Inc. Class A Report. Nearly 60% of the population listens to the radio on a daily basis and nearly 85% of the American people report listening to the radio at least once a week. For those looking to sell products, the sheer size of the audience makes radio advertising one of the most effective ways to market goods and services.
When deciding what features to add and what to remove from their next models, automobile manufactures like General Motors (GM) - Get General Motors Company (GM) Report, Ford (F) - Get Ford Motor Company Report, and others may be contemplating replacing AM/FM radio with an app-driven system that would remove the consumer's ability to get local terrestrial radio in their cars. Given the new numbers, that could be a huge mistake.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.