Archive for the ‘Future Radio Trends’ Category
At the 2012 Future of Radio Conference, we noted a number of “Helping Forces” — factors that will speed up the evolution of the high-tech dashboard — and “Hindering Forces” — those factors that will slow down that evolution. And one key hindering force we said to watch for is government regulation based on safety concerns. We speculated this regulation could come in the form of laws from Congress and/or safety regulations from the bureaucracy.
As noted on NBCNews.com recently in a story titled Safety Officials Say High-Tech Dashboards Can Be Too Distracting, our prediction is becoming reality right on cue. And it’s the bureaucrats leading the way… specifically, the US Department of Transportation’s National Highway Safety Administration.
The NHSA has issued a list of “suggestions” designed to curb driver distractions. Most items on the list involve disabling the driver’s ability to interact with the system while driving. The article goes on to suggest that consumers will hate these suggestions; setting up a really interesting challenge for designers of the Connected Car.
The implications for Radio: (a) anything that slows down the evolution of the Connected Car reduces competition for AQH in the car and gives Radio more time to determine its Connected Car strategy — as an industry Radio has done very little in this regard; (b) if the NHSA’s suggestions fall on deaf ears, Radio will continue to see a greater and greater challenge to its dominance of in-car entertainment — and in-car listening is estimated to represent as much as two-thirds of all AQH.
Every broadcaster has to look at these numbers. This did not exist five years ago in any significant numbers….32% of the population streams music today. The 16-24 numbers are huge but look at 35-54 year olds…33% steam and 23% of 55-64 year olds stream. Wow!!! Where will this be in five years and where will radio be? Mobile has just started to drive the growth.
Read this article from Audio4Cast:
Global Streaming Music Trends
Early stages of adoption of a new technology are often driven by young males, something that has been true of streaming audio, according to Mark Mulligan, former vp and research director at Jupiter/Forrester Research and now independent advisor to the music industry. Mulligan recently posted an analysis of streaming audio listening based on data from EMI’s Global Consumer Insight data, an 850,000 interview dataset.
54% of streaming music users are male and 46% are female globally, with more users in Norway, Spain, Sweden and France than anywhere else. On average, 32% of the population streams music, which is exactly the penetration of usage in the US. While streaming music reaches close to 50% of 16 to 24 year olds, it also reaches 33% of 35 to 54 year olds and 23% of 55 to 64 year olds.
Mulligan created a nifty infographic that provides an overview of his analysis:
For all those trying to figure out the future of radio and all those getting mired down in how to fix this digital challenge, Mark Ramsey has the best advice I’ve heard:
Don’t look to others to find your answers or inspiration, look inside yourself and those around you and ask, “How can I serve my users better? My listeners, my advertisers, my employees and even myself?”
You know your own capabilities and your market better than anyone. Start thinking “user experience” as much as how to make money doing it. The answers will come and users will pay for it. That’s what Steve Jobs did in the late 90′s when he came back from the dark years to resurrect Apple making it one of the most highly valued companies on the planet. Here is Mark’s blog:
Chasing the Unicorn
Last week Seth Godin penned another pearl:
The easiest way to sell yourself short is to compare your work to the competition. To say that you are 5% cheaper or have one or two features that stand out – this is a formula for slightly better mediocrity. The goal ought to be to compare yourself not to the best your peers or the competition has managed to get through a committee or down on paper, but to an unattainable, magical unicorn. Compared to that, how are you doing?
The problem with many radio broadcasters is that we tend to innovate – if we do so at all – by looking over our shoulder at the other guy (usually the other broadcaster, and usually a guy).
That’s too bad, because looking over your shoulder at people who are looking back at you over their shoulder leads to lots of sideways glances and a tendency to settle for what’s already being done rather than aspire to create new value for your consumers and advertisers.
I know when I do a research project for a broadcaster my interest is always creating something new – some new advantage, some new feature, some new way to say “we’re better today than we were yesterday,” new creations in tune with the wishes and dreams of the audience.
But research is an investment, so many stations do without. Looking over our shoulders is easier, and always less surprising and inspiring – to us and our audiences alike.
Too many broadcasters can’t even imagine the Unicorn, let alone see fit to chase it.
Here’s to those who can and do.
This article by Ken Dardis was posted on AudioGraphics.com.
It’s a huge industry that has a lot of people with plenty to lose. So you expect a fight when bringing up data that suggests there appears to be a negative flow of interest surrounding broadcast radio.
Having been on the front lines of sorting this data out for over a dozen years, I’ll testify that there’s no love lost between those who try to keep the radio industry myth alive and those who are introducing the next generation of music/entertainment/information delivery.
Notice the last phrase in the preceding sentence is “music/entertainment/information delivery,” not the word “radio.” It’s because we are in a state of continuing change as to what constitutes “radio” and what consumers are pursuing.
There is a great article from The Plain Dealer posted at Cleveland.com.
Cleveland radio faces incursions by Pandora and others, as well as a still-ailing economy.”Having spent more than twenty years in this town’s radio industry, I feel safe saying (though it be a subjective statement) that there’s less quality content flowing over Cleveland Ohio’s airwaves.
One paragraph in this Plain Dealer story of a city carrying great weight in radio’s history states: “Keith Abrams, operations manager for Clear Channel locally, twice declined to comment for this story. Clear Channel’s corporate offices in San Antonio, Texas, also did not respond to a request for comment.” We all know that if things go well, people in positions of power rush to get behind the story and speak. If things are going not-so-well, we get this type of response.
Let’s not focus solely on what’s happening in my home town, though. Here’s some data supplied by 994 participants of Audio Graphics’ 55th survey of online radio listeners that suggests there’s more trouble coming around the bend. You can dwell on more data here. For this part of the discussion, I’m only going to bring up the answer to one survey question: “By this time next year, what do you see yourself listening to most?”
These are two graphics showing the preferences, according to age groups, as to whether people intend to spend more time with broadcast radio or internet radio by this time next year. Knowing that these respondents already listen to internet radio has a built-in bias, but this could also be interpreted as showing that these folks like what they hear online.
A phrase I’ve stated dozens of times is that the broadcast radio industry is not dead, and won’t die within our lifetime. Though, for anyone in it to assume its future is anything more than its past is foolhardy. They are not facing the realities stated in the comment section of that Plain Dealer article mentioned above.
People are not listening to “radio” anymore. They are listening to audio entertainment, be it talk or music based. What’s pushed out over the airwaves has diluted itself to a near equality with what’s being offered online in terms of programming. Also, online there is no element of “local” which cannot be found in a few seconds of searching. So the chant about delivering “local” content in the radio industry loses potency with each passing year.
Radio made its money being the sole occupier of audio entertainment on the dashboard. Now Detroit, Japan, Korea, and European auto manufacturers are redesigning that area of the vehicle. The monopoly is ending.
By this time next year the radio industry will be down another couple of notches on the public’s “must have” list, and at this stage of the slide there’s not much that major corporations can do. The warnings have been ignored far too long. The online competition has been honing itself. The naysayers are no longer saying nay, but being proven correct in their forecasts.
Online radio listeners are showing an interest in growing numbers. By this time next year look for advertisers to be showing increased interest, too.
Following the ears has always been the reason the radio industry had such a strong run. It’s just that the new breed of radio manager looked too closely at the expenses and knew too little about programming to keep radio fans from trying alternative sources of audio delivery.
And now it’s time to face fact:
Radio, as we knew it, is not coming back to its former days of glory. By this time next year, change will be much more evident – so say the listeners of online radio today.
If you missed the 2012 Future of Radio Conference, you missed one of the most comprehensive looks at how the Connected Car (and after-market enhancements) will affect terrestrial Radio in coming years. And you missed one of the real substantive, interactive conversations in which a station owner can participate. It’ll scare you. It’ll inspire you. It’ll get you excited to re-invent your business in creative new ways.
We had the chance to play with several of the latest automotive innovations, including the 2013 BMW 5 Series and the top-of-the-line Ford Escape with the full-blown Microsoft Sync system. We also took a look at two different after-market products. The Livio Radio device makes ANY car with a cigarette lighter a “connected car” that uses a mobile device with an Internet connection to deliver streaming and other content into the FM Radio in the car.
The term “Connected Car” is one of those buzz terms starting to get thrown around a lot. In short, it’s just about every vehicle these days. But that’s an over-simplification. Any car can be “connected.” But the term “Connected Car” mostly refers to the new generation of vehicles that have software-driven dashboard and entertainment systems, and which are ready to bring the world of web-based entertainment (streaming media, navigation and information data feeds, and a host of other new content) to drivers and passengers.
There is a distinct lack of quality research data sets to provide a good view of the impact Connected Cars are having on media consumption. This is mostly because everyone with a dog in the hunt (including the Radio industry) has its own data to tell its own story — good or bad. And none of them are trustworthy from the standpoint of methodology and scientific value. Some are flat-out misleading (on purpose).
And even if you can find it, the only good data offers a ”rear view mirror” look at what’s already happened. The pace of change here is so fast that it’s probably most useful to look at the potential future impacts and prepare strategically for those, rather than chase your tail trying to see what’s happening — by the time you see what you want to see, it’s too late.
Automakers are not helpful sources of good information, either. They all sense such a massive marketing edge in having the most “Connected” features that they’re all furiously developing things with Silicone Valley partners like Microsoft, Google, and others that everyone is running silent for fear of losing any technological edge or spilling the beans about something that could outsell the competition for even a short time. The most important thing you should probably know about Connected Cars is that they’re all software now — the hardware can take all the firmware upgrades it needs in the future to keep pace with whatever the “next big thing” may be…
Vehicles are now viewed by automakers as entertainment and technology platforms; not transportation. The transportation part is now a given; THAT you get there is far less important than HOW you get there… Think of web-enabled vehicles with their own apps, much like your smartphone. Think docking station for your smartphone, tablet, or laptop. And know that they envision completely separate strategies for driver and passenger (safety in the front, movie theatre in the back).
Connected Cars can now be smarter safety devices that pro-actively warn you via head’s-up displays. They are self-maintaining, and tell you what they need and when. They are smart appliances that can, theoretically, make your life simpler.
And before you start thinking it’ll take decades for this “connectedness” to proliferate throughout the install base of vehicles on the road, think again. Any car can be connected:
|Generation||Level of Connectivity||Barrier to “Complete Connectedness”|
|2013 Onward||First Generation that is “Fully Connected”||None|
|2010 – 2012||Slave Connectivity via USB, Phono, or Bluetooth Interface||Cable
|Pre-2010||No Digital Connection||After-Market Device
New vehicles rolling off the assembly line have NO barriers to connectedness. And those built within the last 3-4 years generally can be quite connected via USB, phono, or bluetooth connections with a smartphone or other mobile device with its own Internet connection. The dashboard in this instance is just sort of a speaker system and the smartphone does all the work.
But any vehicle older than that, without an auxiliary connection, at first glance might seem “unconnectible.” That is a serious miscalculation. Because just like in the old days when after-market manufacturers figured out how to retro-fit for cassette decks and CD players, they’ve already figured out how to — for less than $100 — make any car with an FM Radio a connected car. In fact, Livio Radio – the device we demonstrated at Future of Radio Conference — uses our very own FM frequencies and the car stereo to bypass terrestrial FM programming in place of whatever you’ve got on your mobile device.
Automakers now view vehicles as mobile entertainment platforms that create residual revenue streams. It started with On Star and satellite radio, and now it is extending into navigational data, Internet access, and a host of streaming media options. Microsoft, Google, Intel, and Cisco are all forging relationships with automakers because vehicles are seen as the next big technology boom. AM/FM Radio is now a software function that no longer commands its own real estate on the dashboard. And it has been lumped together with a host of other options in one consolidated device that interacts via a screen interface — no tuner and volume knobs anymore. The CD player will disappear from all 2013 models, and Terrestrial Radio is NOWHERE on the R&D priority list for automakers.
Consumers have stuck with Radio so far. And don’t seem excited about ANOTHER bill for Internet in the car. But supply-siders are taking a “build it and they will come” approach (much like they did with satellite radio). Consumers HAVE shown quite a bit of excitement about replacing in-car CD listening with streaming media from a smartphone — and that is primarily where in-car media consumption has changed so far. Consumers have also reported finding most of the new dashboard systems confusing; common sense, but a short-term issue.
In the Future of Radio presentation we attempted to provide an overview of HELPING and HINDERING forces. We defined Helping Forces as bad for Radio (because they can speed up the evolution), and Hindering Forces as good for Radio (because they will slow down this evolution).
Helping Forces: Automakers see ”connectedness” as a competitive advantage to exploit. This will cause them to deploy these technologies faster and faster, and advance them until consumers see them as commodity. Pandora is pouring millions into co-op ad campaigns and essentially buying its way into dashboards, paying automakers to include Pandora-readiness into the software systems of the vehicle. Imagine if Radio had done this with HD… Radio’s loss of dashboard real estate is another negative. Dedicated volume and tuning knobs and AM/FM displays are gone; never to return.
Hindering Forces: A few factors are working in Radio’s favor. Consumers still like Radio’s curation of content. Most early adopters of Connected Car technology were never heavy Radio listeners to begin with; opting to curate their own music content with CDs or iPod. Government regulation is also going to be a hot spot that could slow the advance of these technologies. Safety is a huge concern; the more a driver is distracted by these technologies, the more likely accidents become. Lobbying is already heavy, and politicians will sense blood in the water and an easy target with populist support. Consumers are also resisting another Internet invoice every month; most have 2+ already, and the idea of another is hard to stomach. But watch for bundling of Internet connections (home, car, mobile devices (smartphone, tablet, etc.)… Another potential hindering force is mobile bandwidth. While the technologies APPEAR to be there to solve this issue, the question remains who will deploy these technologies, how fast. And, again, there are conflicting data sets that make it hard to peg.
Regarding the issue of mobile data capacity, consider that the number of tablet users DOUBLED on Christmas Day, and it is projected that more tablets will be in use by 2016 than PCs and laptops. Mobile network demand is growing exponentially. Yesterday you were one (1) mobile connection — your phone. Today, you are 3-4 mobile connections (smartphone is two connections by itself, plus mobile broadband, your tablet, etc.). Demand is growing like crazy, but supply is NOT. 4G roll-outs have been slow at best, and only recently has a standard seemed apparent. Why else would AT&T be throttling if they didn’t have to consider ways to slow demand growth?
Short-run solutions like putting FM chips in smartphones could be very good for Radio.
So what are the best strategic reactions for Radio?
Dashboard real estate is gone and never coming back. So the content must be worth finding.
Heavy streamers also tend to be heavy Radio listeners. And Radio’s strength with heavy streamers is its non-music content. They cherry-pick morning shows and other personality-driven content as well as information content like weather, news, and sports.
You might ask, “What is the Radio industry doing about all of this?” My answer would be an overwhelming, “Not NEARLY enough!” However, to be fair, NAB Labs is engaged in a development project with Emmis Interactive, iBiquity, Intel, and BIA/Kelsey that integrates HD technology into smartphones, and uses the encoded HD signal to display enhanced, user-friendly information like artist/title and album art AND create an interaction environment that includes social media and other Web 2.0 features. It remains to be seen whether it can gain any traction, and NAB doesn’t appear to see it as mission-critical. In fact, NAB appears to be working hard to protect status-quo — all at a time when status-quo is about as bad a strategy as could possibly be imagined.
How do we take the facts (even the bad ones), and mold a strategy that makes sense for the future? How do we adapt? How do we stay relevant and use these circumstances to our benefit?
First of all, Connected Car technology has the ability to make our Radio Stations MUCH more interactive. Mobile apps and mobile web can allow listeners to interact more from the car — vote, comment, call, LIKE, FOLLOW, and generally participate in everything from contests to discussion. And knowing more about where listeners are puts you into the SoLoMo game.
Connected Car technology allows you to integrate multi-media delivered via the mobile device with what’s happening on the air. For example, spots can have synced digital components with bounce-backs or BUY NOW functionality. Weather, traffic, news, and promotions can all have multi-media components. See the traffic map, check the RADAR, see photos and video that take you deeper into news stories, sign up to play contests…
Most listeners still like Radio’s curation of music content. But for those listeners that want to curate the music more on their own, you can stream a branded version of a Pandora-like environment that gives the listener total control of the music content, but retains your brand and advertising. You can even allow the listener to decide on the frequency of content like weather, news, traffic, and other elements.
It may sound crazy but you should probably consider offering tech support to help listeners find you in their new-fangled dashboard entertainment systems. The demonstration we showed at Future of Radio Conference demonstrated just how complicated it can be to find Radio in the dashboard, select a Radio Station, and especially remember it for next time. Believe it or not, tech support may be in our futures! And for certain we can envision step-by-step on-line instructions for how to tune the Radio Station in various system types (Ford Sync, Toyota Entune, etc.)…
Recognize that in 2-3 years it may actually be EASIER for a listener to stream your Station than tune the terrestrial signal in the car. As the quality of receivers continues to degrade and the maze of menus complicates what used to be a push-button on the dash, this idea isn’t too far-fetched. And if you have listeners over 40, EXPECT this to be a problem VERY SOON.
Because of safety concerns, be looking for ways listeners can interact with the Station in a hands-free way. For example, CTunes Network, which we demonstrated at Future of Radio Conference, and which many of our Radio owners loved.
Lastly, if you missed the Future of Radio Conference and our demonstration of the latest dashboard technology from BMW and Ford, do yourself a huge favor and go on an expedition to several different auto showrooms to try these things out. You’ll be astonished at what the systems are capable of doing, and it’ll fill your mind with possibilities.
The Connected Car CAN work to your advantage. It is, one the one hand, a very bad omen for those who plan to keep doing the same things over and over again and expect a similar result. But it is a path from terrestrial to digital delivery if you choose to make it that, and if you invest in ways to leverage the evolution of the automobile into better results for your advertisers and a more friendly environment for your listeners.
At this year’s Future of Radio Conference in March, Omry Farajun presented “Managing Your Internet Radio Experience in the Connected Car.”
Click this link to download his presentation which examines the evolution of the connected car, and the issues with monetizing it.
This latest data from Edison Research will have a significant impact on the Scenario Model we’ve been tracking driving future predictions toward what our participants have describe as “doomsday” or “wheel spinning” if Broadcasters don’t heed the warning signs and move to a multiplatform digital strategy. This is radio’s opportunity to win or lose depending on how they react to these changes in the listening behaviors of radio’s customers.
As we discussed in last week’s conference on the Future of Radio Conference in Hilton Head, SC, radio operators still own a significant music brand with their listeners but it is time to act by providing those customers with a 2-way music experience branded with the station’s name.
Radio ad revenue “to decline 1% to 2% annually”, says Fitch Ratings.
Fitch does see upside for radio in digital, and its “decline-modestly” forecast doesn’t apply to digital. Here’s the Fitch Ratings executive summary, verbatim –
• “Reduced time spent listening will be partially offset by modest pricing growth. Advertiser demand will remain, given the large core audience, the medium’s local reach, its targeted nature, and its low cost.
• “Internet radio streaming services will continue to grow audiences, particularly via increased mobile penetration. However, Fitch sees significant hurdles to these services obtaining the size, scale, and subscription or advertising dollars necessary to present a severe threat to terrestrial radio.
• “Digital initiatives by terrestrial broadcasters, although in early stages, could provide an opportunity to capture a sizeable portion of digital listening over the next few years. Whether this will translate into incremental revenue will depend on advertising demand and pricing.
• “Terrestrial broadcasters’ established, high-margin businesses will allow them to fund digital initiatives and provide room to absorb near-term revenue declines before any digital revenue becomes material. However, in the event of ongoing top-line pressures without a meaningful digital offset, lenders to radio broadcasters could be increasingly exposed to risks of more aggressive financial policies as companies attempt to boost their equity to the detriment of bondholders.” Finally, in its full report, Fitch deals with “other risks and opportunities for terrestrial broadcasters, including performance royalties, station formats, HD radio, satellite radio, in-car listening, and market and distressed valuations.”
Media analyst predicts continued steady growth for local radio, TV in 2012
BIA/Kelsey says today that local radio 2011 online revenue was up more than 15%, to $439 million (for comparison, local television’s online revenues grew even more). And they’re predicting “a steady year of online growth” for local radio and television alike.
The data will appear in BIA/Kelsey’s new Investing In Television and Investing In Radio publications. BIA/Kelsey credits local media’s “assets” (“from valuable local content, to cross-promotional opportunities between on and off-air, and a trained sales staff that understands the local market and the advertiser community”) which enable stations to “expand their position in their local markets from solely an over-the-air media source to a local media company that can provide access to local audiences in different, effective ways for their advertiser clients.”
This was posted yesterday in Rain, Kurt Hanson’s online magazine. The march is on to a multiplatform world by both advertisers and listeners. We’ll be talking about the implications of this at our Future of Radio Conference March 14-16 in Hilton Head.
Revenue growth outpaced web music audience gains last year, study finds
For years, Internet radio and web music services have been growing their audiences but complained that revenues weren’t keeping up. That all changed last year, says AccuStream Research, when for the first time revenue growth outpaced listening hour increases. Moreover, the research firm expects that growth will “continue unabated in 2012.”
AccuStream’s report (“Internet Music Radio and Track Play Growth 2012-2014: Listening and Monetization Analysis”) found that listening hours for “Internet music radio and track play” (presumably including services like Spotify and Rhapsody) grew 50.5% in 2011, reaching more than 1.3 billion hours monthly.
Meanwhile, mobile listening exploded: it grew 222% in 2011, according to AccuStream, and now accounts for 41% of hours streamed monthly. In 2012 70% of Pandora’s listening is “non-PC,” says the report, as is 50% of Slacker’s audience.
Increases in monetization (including ad and subscription revenue) outpaced listening hour growth, with an advance of 64.6% in 2011. The study reports the industry generated more than $293 million in gross media spending (audio, video, display) and another $171 million in subscription revenue.
In late October 2011 SNL Kagan forecast that Internet-only radio stations would generate $293 million in revenues in 2011. That same study predicted AM/FM digital revenues would reach $713 million in 2011. Audio4Cast has more on SNL Kagan’s predictions here.
AccuStream expects the market to increase 78% in 2012, reaching 6.2 billion avails per month (“driven in part by Pandora’s increasing focus on the in-stream audio format”). Audio fill rates will reach 60% this year, says AccuStream, with an eCPM (average equivalent CPM) of $6.80.
“Combined with an in-house sales force selling into top local DMAs where terrestrial broadcast radio advertising has historically been bought,” writes AccuStream, “the audio format is moving to the forefront of the programmer’s monetization initiatives.”
You can find AccuStream Research’s press release here.