Radio, We Have A Problem

October 27, 2025

You may have missed this, but Tesla recently announced a new version – The Model 3. It will be the lowest priced Tesla vehicle available. It lists for $38,630. I guess “cheap” is a matter of perception.

But get this. The “cheapest” model does not have an AM/FM radio. Yes, you can pay more to add that option, but Tesla is eliminating terrestrial radio from its audio package in this model.

We know that the automobile industry has been deemphasizing AM/FM radio for years. The amount of audio entertainment options available on dashboard screens seems to increase with each new model year.

Radio, we have a problem.

We already know that in PPM markets a significant portion of every panel does NOT have a single radio in their home. If they are listening at that location, they are likely using a smart speaker.

Listening at work has also deteriorated. Not by actual use, necessarily, but by the rise of ear buds. As it stands today, NIELSEN is unable to capture any listening from ear buds. Yes, there is the mystic “headphone adjustment” but you won’t get that boost if someone is listening on ear buds or headphones.

It seems radio’s last stronghold is in the car. Yes, we have more competition in that space than ever, but the fact that we remain free is a powerful attraction.

The good news here is that in 2023, Tesla only had about a 4.2% share of the total automobile market. Their EV share dropped dramatically in the last year – from about 80% to around 38%. However, tech trends rarely work in reverse.

What can we do?

Continue to pressure the government and auto makers to make AM/FM radios a standard option in new cars.

More importantly, we – as an industry – must do a better job of selling the power of radio to the general market, especially on the lower end. Campaigns touting our benefits would help improve public perception.

That, and providing a more compelling product. Twenty-unit spot breaks are not a beneficial feature. Neither are passionless presentations. We can all acknowledge that radio’s monopoly on music has all but vanished. Yes, we do play in that space but we face the stiffest competition we have ever had.

How do we win and keep the hearts and minds of the population? Through emotion. Through entertainment. Through compassion. Through involvement.

Radio is – and has always been – about show business. We need to lean into that now more than ever before.

-Steve Allan, Programming Research Consultant

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