Four Questions For Radio
As we put the holidays in our rear-view mirror and begin to settle in for what’s ahead for 2016 (and beyond), Paul and I have been thinking long and hard about some bigger-than-life questions about radio and what’s next for the industry.
From our journey to CES earlier this month to a series of calls and meetings with radio CEOs, as well as other players in the media space, conversations frequently revolve around some deep questions about media, entertainment, and the changing mindset of the consumer. On top of that, we have been involved in numerous consumer interviews covering the gamut of technology and media.
In another January from years past, our questions might have revolved around the number of diaries in a market, ways in which to position against music marathons, and the most effective amount of cash to give away. Those days are gone. In retrospect, those were quaint, simpler times for radio – even if we didn’t think so at the time.
So, here are four questions for the new year, with some color commentary from Paul and me. Hopefully, as an industry, radio will have the courage and tenacity to face them head-on, with research, resources, investment, thought, and wisdom.
1. What is radio? Might as well start with the big one. This is a good question because “radio” is a device – something embedded in your dashboard or the alarm clock on the nightstand next to your bed. We are in the audio business (or maybe the media business), as our definition of “radio” continues to evolve and be shaped by many of the brands around us.
And the forms in which “radio” have traditionally taken are being reshaped as well. That’s because “radio” can now be consumed as long-form programming on the air or online, or in small, on-demand bites such as podcasts, via video, on smartphones or smart TVs, or in third party distribution channels like iHeartRadio or TuneIn.
The tricky thing about these other “radio forms” like streams, podcasts, blogs, and videos is that broadcasters are still having problems deriving serious revenue and profits from them. None of these other distribution models is proven to be a valid moneymaker, thus creating an uncomfortable reluctance among broadcasters who intellectually know they need to embrace these digital pathways, but have emotional challenges when it comes to running headlong into these brave new worlds because they are slow to mature and pay off.
The truth is that consumers don’t care. They’re the ones who are truly platform agnostic. Got a new smartphone for Christmas? Then their hometown station better be there or maybe they won’t be. Just signed a lease on a new car? Then their P1 morning team has a new challenge, cutting through the newly found options provided by SiriusXM, Apple CarPlay, and that hard drive full of party songs.
Consumers are discovering new gadgets, distribution paths, and platforms. It’s up to the radio broadcasting industry to accept that new given, redefine its business model, and adjust to a fluid, ever-changing, uncertain future.
2. What are ratings? Radio has a growing measurement problem, because as more listeners access content outside of the comfortable, familiar terrestrial boundary lines, the analytics splinter has become more difficult to package, market, and sell. The current path that radio is on reveals an audience that is moving to platforms and gadgets that broadcasters cannot easily measure or monetize.
The industry awaits Nielsen’s SDK so at least mobile and online streams can begin to generate ratings, and hopefully the dollars that will follow. But what about podcasts, an area in which we expect to see growth in the coming years? As TV has flailed away at DVRs, radio will have to come to grips with an audience that increasingly enjoys time-shifting and on-demand usage.
Matt O’Grady from Nielsen said it best: “You can’t monetize what you can’t measure.” He’s right, of course, and audiences (especially younger ones) are gravitating to consuming stations and personalities in places that represent net financial losses. Last week, a listener in a focus group told us how they religiously listen to our client station for hours each day. When we asked about the device she listens on, she told us, “TuneIn.” Why? Because she doesn’t have a radio at work and didn’t know her favorite station has an app.
And concurrently, radio revenue is flat while digital revenue continues to grow. So the audience is moving in a trajectory advertisers say they want, but broadcasters can’t adequately measure or market it. Ouch.
3. What is content? As we’ve recently written, content may in fact be king, but distribution is queen. We have been trained to think that we create a 24 hour continuous stream of programming, delivered via a transmitter and tower to a receiver. But technology has changed all of that, as listeners now access content on mobile phones, tablets, and other devices. And along with these new platforms come podcasts and on-demand content, allowing the audience to listen to only those parts of a program they want to hear, when they want to hear it, and on the device they prefer (or that’s handy).
As we have seen with the success of Serial, Jerry Seinfeld’s Comedians In Cars Getting Coffee, and other podcasting efforts from the likes of Marc Maron and Adam Carolla, content can take many forms, and it doesn’t have to be a four-hour radio show. It can be a 6-part series or a 20-minute segment. It can be a celebrity interview or it can be a cooking show from a morning DJ famous for playing death metal. It can be videos produced by a station embedded in their mobile app, their web site, their Facebook page, and on a smart TV app.
In the not-too-distant future, will there still be a traditional “morning drive” or will time be permanently shifted so consumers can catch a “show” anytime or anywhere they like, in its original long form or in smaller chunks and segments? Will “shows” themselves actually end or will they continue to live online? And how do video, photos, social media, and tools like Periscope change the nature of how we think of shows and personalities?
The dimensions of content and distribution have changed. Our thinking has to as well.
4. What is in-car entertainment? Up until the past few years, radio has had an entitlement in cars. Or call it a monopoly. Aside from the CD slot, it was always just about hometown AM and FM radio stations. Life was good. …
… read on at jacobsmediablog.com
Originally posted by Fred Jacobs at jacoBLOG
27th January 2016