There generally seem to be two approaches to presenting audio drama- a staged approach and a chorus approach.
A staged approach is exactly like a stage play, TV show or movie- the action is set within a particular environment and is about the events that occur at that place and time. An example of this would be two people sitting on a park bench talking. The listener would probably be able to hear the sounds of the park, might hear footsteps walking past, and could even hear the participants moving around. This would all be there to set a sense of place and time for the audience, and even without this sonic backdrop the characters themselves might make reference to the park and it’s surroundings as they talk, making it clear to the audience where and when these events take place.
A chorus approach is quite different, in the chorus approach the sense of time and place is fluid and sometimes even just plain ignored. There aren’t any scenes as the dialogue and story flow from one point to the next without focusing on a single time and place long enough to really set much of a stage. This is a form that’s unique to audio drama because it’s very difficult to do this in visual mediums like TV or movies- the best way to think of this is like a controlled dream where the listener is being pulled along on a roller-coaster of sound and events. An example of this would be a story told in the form of letters, news clips and pieces of dialogue, or perhaps a single narrator telling a personal tale with other voices chiming in during the parts when other characters enter the story. Time and place is of minimal importance- what’s important is the story itself.
Both approaches have their place- I use the staged approach almost exclusively for my own work because I tend to keep things very simple and structured. That said, I have heard some chorus work that was simply amazing (check out Mercury Theatre On the Air‘s Dracula for an example of this.) and often actually envy writers who can pull off the chorus approach well. To me it’s just not that easy since I tend to think in staged terms because of my long exposure to TV and movies. Maybe someday I’ll write some chorus stuff to try and see how I can make it work. Orson Welles made amazing use of the Chorus approach to bring huge stories down to simple 1-hour or less narratives, and perhaps it works best that way. Something to think about.