Radio's future can be even better than its past. Making Waves, the new book by Mark Ramsey, can help any broadcaster navigate a world of endless competition. An action plan for the future plus expert advice from Seth Godin, Douglas Rushkoff, Joe Jaffe, and many more. Read the Introduction, the foreword by Peter Smyth, or buy it now on Amazon.
Remember when Sirius/XM was a technological advancement?
Sirius/XM continues to chug along, thanks in no small part to the rebirth of the auto market and the subscription trials that come along with so many new vehicles rolling off the showroom floor (that's a credit to their business model, not an insult).
But in the midst of this growth, Sirius/XM has lost something which has gone virtually unnoticed: Portable units.
Maybe these things never sold that well in the first place. I'm talking about the Stiletto 100 and the Stiletto 2. They were, after all, clunky and poorly designed alternatives to mp3 players - satellite radios with iPod-ish capabilities. But what these units did that no other Sirius units do is record not just songs but long segments of programming - it's the only way, for example, to record an entire episode of the Howard Stern Show for on-demand listening later (yes, I know you can jerry-rig your way to this on a laptop with some inexpensive software, but I'm talking about regular people with lives to live here).
The first such unit was released in 2006 (and, as an owner, I can tell you it hasn't aged well). The last came out in 2007 - the same year that gave birth to the iPhone - three iPhones ago now. And neither is currently available through Sirius/XM (although you can find one on Amazon for nearly $500 - a collectible, no doubt. Maybe it's signed by Mel?).
Obviously, Sirius is still in the portable game in one important respect: its smartphone app. But this app costs extra every month, has no recording (or even caching) capability whatsoever, and is completely 100% Howard Stern-free (that's like building a house and forgetting to build a door).
So in an era when the world is moving on-demand, an era when specific content is of greatest value when it can be consumed when and where I want it, a world where NPR programming is growing by leaps and bounds as they explore every possible manifestation of their content across multiple platforms, in that world: Sirius/XM removes this capability altogether.
While Sirius/XM once positioned itself as a technological advancement, nowadays it's advanced in the same way your grandpa is when you buy him a new shirt that looks exactly the same as the fifty shirts he already has.
I'm not arguing Sirius/XM should play in the gadget business - that world is vicious. I'm arguing that Sirius/XM should be providing its content in ways its subscribers prefer to access and use content.
Yesterday much attention was lavished on Steve Jobs and his announcement of a new and improved iPhone (still and, I would argue, forever lacking a radio receiver, HD or otherwise).
Fast Company noted at least one topic that was glaringly absent from Jobs' address: The much rumored idea of "iTunes in the cloud."
Not a peep about iTunes during Steve's speech, which may be a surprise to some who were expecting news about a move to cloud-based storage and content streaming (possibly using tech from Lala, the streaming music platform that Apple recently acquired). The only mention of iTunes is in the new iPhone's specs page on Apple.com, where it's noted the device needs "iTunes 9.2" whereas the current version is 9.1.1.
Will iTunes 9.2 have cloud elements? We don't know. It'll have to ship before the new iPhone 4 goes on sale on June 24th, so it has to happen soon. We suspect a cloud-based iTunes would be a big enough revelation that Jobs would mention it in a big event so it won't appear in June. But it may merit a special "Come Feel Music's Future in the Air" Apple-style special event later this year.
I think it's unlikely that Apple will slide this under the radar between now and late June. Indeed, it's much more likely that the liberation of your iTunes content from the hardware it's currently tethered to will constitute its own "in the Air" event later this year, as Fast Company suggests.
But make no mistake: This is coming.
And when it does come it will not only be easier to access this content, but it will be easier and cheaper to "rent" music (rather than "buy" it). While this capability is not new to the world, it will be new at Apple-sized scale and with Apple-sized distribution.
It will invite a change of habit in our relationship to music. It's a gamble, but I'd gamble on Apple if I were you.
And what will be the consequences for radio?
Well, radio will still be unmistakably more dynamic and "in the moment" than Apple's service, which will invariably be full-bodied but lifeless as Hell. That's assuming radio pursues an agenda of people behind and in front of its content and not content in the absence of people, of course.
Radio will also continue to be greater than the sum of its music-only parts.
And radio will still be the place for talk content, which will become ever more important to the industry's future with each passing year.
In their words, this creates "the first-ever end-to-end technology provider for the streaming marketplace", with content delivery, audience measurement, ad insertion and "real-time proof of performance."
That's the headline, but what's the significance?
I can sum that up in one word:
Online radio is a nascent industry, even when you bundle the pure-plays in with the streaming broadcasters. The problem with nascent industries is that they're not established - not with audiences or with advertisers.
If Apple proves anything it's not that cool products sell, it's that cool products that are part of systemic solutions to real consumer and advertiser problems sell and sell big.
An iPod is not just a gadget - it's part of a music discovery and delivery ecosystem that includes the music industry at one end and the consumer at the other. It is, in other words, a platform at scale.
Until now, online radio has generally lacked that. Sure, you can gain access to 50 million potential listeners through Pandora - but at any given time most of the listeners tuned in to online radio are not tuned in to Pandora - so what about them?
Moves that create scale in the online radio space will promote acceptance among audiocasters - broadcasters and pure-play, interest among consumers (because simpler solutions will propagate faster), and - perhaps most importantly - dollars from advertisers (because advertisers love "standards" and standards require scale).
Bigger, more efficient pipes are good news for this nascent industry. Scale is good for business and good for audiences, both. Somebody needs to make the market in order for there to be one.
And that leads to the next big question: How about some unique and compelling content to fill those pipes?
At the same time, publicity swirled about the radio industry's efforts to push for radio chips on mobile phones.
My belief is that neither of these things will have anything to do with the future of mobile radio.
First, the folks most likely to be affected by the AT&T price hike are a very small fraction of total users and it's hard to disagree that these folks should pay more than the rest of us. Further, these rules only apply to 3G usage - not to WiFi use - thus making the issue less relevant in many locations (especially work ones) where streaming content would be accessed.
My conclusion: It's a non-issue.
Second, that which we call "mobile radio" is unlikely to look (yes, I said "look") and sound like the kind of radio we get over our FM and AM receivers. To quote a phrase, the medium is the message, and the expression of radio on mobile devices has lots of possibilities which go well beyond simple audio - and certainly well beyond the banal and interruptive and untargeted spots audiences currently do their level best to avoid.
In other words, we do radio a disservice by limiting it to the form it's experienced in on your average $10 clock radio.
And that leads to my third point: Radio chips in mobile phones.
I don't care if you can produce survey data saying that consumers want this. Here's the secret about what consumers want: More. Of everything.
That is why "feature creep" is one of the banes of digital existence and anything but an assurance of popular success.
Pushing to get conventional radio on mobile devices means you see our challenge as "how do we spread our conventional medium to more gadgets?" That, I submit, is the wrong question.
The right question is: "How can we use the special advantages of more gadgets to further the goals of our brands, to better tackle the unserved jobs of advertisers and consumers, and to better link them for their benefit and ours?"
And don't even get me started on the utter lack of ratings validity when factoring in "radio" on mobile devices in a world where PPM can't hear what's on your earbuds.
So stop wishing that every mobile phone had a radio attached. It's distracting you from the larger opportunities.
If you get only what you wish for, you'll have to settle for what you deserve.
One of the reasons why ratings are less important than ever is because accountability - measuring what works - is more important than ever.
In an ideal world, you need both reach and accountability. You need stuff to be heard (and seen) by a broad audience - AND you need results for your advertisers. This, of course, is one of radio's great opportunities in the new - more accountable - world.
One of my great frustrations about radio is that we invest so much effort in being heard and so little in being effective for our clients.
Consider the all-too-common case where a station is in a multi-way tie for fifth place in the ratings ranker. How should the client choose? Relationships? Price? Yes. What other choice does she have?
What if you gave her another choice?
What if you could demonstrate that spending money on YOUR media asset would prove - and I mean PROVE - more effective for the client?
You can. There are lots of ways. And I'm going to show you one.
Consider the case of an auto dealer. Auto dealers spend lots of money on radio, as we all know.
What is the goal of an auto dealer in their marketing efforts? Well, it's to deal autos - to sell vehicles.Can you point to exactly how many vehicles your marketing effort helps your client sell?
No? Why not?
So I walked into one auto dealer, Toyota of Escondido, and produced the following video. Envision this as a part of the package sold by your station to its dealer partner in conjunction with an ad schedule - and driven by that schedule.
1. I establish who the dealer is and why it's worth visiting
2. We focus on one specific vehicle
3. We provide a promotional code worth $500 off the dealer's best price - good for the entire month, and trackable back to the producer, the radio station.
So now in our over-the-air campaign we invite interested listeners to this video on the station's website to get a deeper experience with our client and to get the discount code. No matter how they get the code or who uses the code, the credit flows to the station. The only folks who view the video will be those shopping for a new car. And your station has found and filtered them.
This constitutes partnering with the client for our mutual benefit. We are now interested not only in how much the client spends on the campaign but in how effective the campaign is in terms of how many cars move. How can we optimize the campaign? Is the client spending enough on the air? Is the creative right? What about the offer?
We have aligned our incentives with the client. We are on the same team.
Under this scenario, what the client is really paying for is the video, since that's where the rubber hits the proverbial road. The air spend is, technically, the value-add. If you are giving away the video, you're giving away the wrong piece of the campaign.
If you are a local media company in business to connect consumers with clients via your media assets then THIS is your business. Not the one where you display rankers and send out invoices no matter what happens at the cash register.
Wake up to the new world. It can be your proverbial oyster.
Interestingly, the agency for this dealer had a great reaction to this concept: Not only did he like it because it was "fresh," he also noted that it was "personal." And here's the thing I had never thought of until then: "Cars are sold person to person," he said. So the benefit of this video to the dealer isn't that it "makes him a star," it's that it makes him personal. It "samples" the car buying experience for the consumers and primes them to come into the showroom and experience it for themselves.
This isn't the only way to make radio accountable, of course. But it's one way.
What's YOUR way?
Would it be simpler to just run the code on the air? Sure. But that leads to an interruptive world where every spot has codes and per-inquiry phone numbers attached - and to the average listener that's spam. After all, people who buy cars do LOTS of research online. The video is aimed at them in the place they want to do research. Although it includes a discount code, it's a richer experience than that code alone.
By the way, if you're in the market for a new Toyota car or truck, stop into Toyota of Escondido in June, 2010 - because that code is 100% real and you can save yourself 500 bucks more off my promotion than you can if you respond to anybody else's advertising but mine.
And I can count my responses. Can you count yours?
We are so motivated to achieve ratings, we are completely ignorant of the need to grow fans.
Is radio in the business of growing fans - or even of growing revenue? No. Radio is, sadly, in the business of growing "ratings."
Have you ever met a "rating"? Me neither.
But I sure have met a lot of fans - or folks who could be fans. What about them?
This video makes my point.
To be clear, this is not a condemnation of the people who create ratings. Those people at Arbitron are giving radio what it's asking for. They are good people doing the best job they can - I really believe that.
The AOL brand barely appears on any of these sites, an approach AOL executives confidently compare to Disney's unbranded ownership of ABC, ESPN and Miramax. The idea is to let each of the smaller, targeted brands create its own relationship with consumers.
That last paragraph is important.
In other words, AOL is using its vast power as a destination (it's still one of the Web's top ten destinations) to nurture worthy content destinations and cross-pollinate between them. They are not trying to promote the mother brand - they're trying to enrich the mother brand's assets.
And what to do about competing for ad dollars in an endless ocean of online avails?
The business of online advertising is a tough one, as newspaper owners have learned in the past decade. Margins are thinner online than in print, where scarcity of ad space allowed for much higher rates. The Internet offers infinite space and endless content, driving down ad rates.
AOL thinks it has a solution. Rather than just creating news sites that cover the story of the day, it is using Internet usage data to create content on subjects people are searching for. If news about the latest "American Idol" castoff is pulling in lots of users, AOL's sites will create more content about it. The more pages AOL creates, the more pages users see, and the more ads it can sell.
Matching content to the interests of audiences.
Sounds like a good idea to me.
Maybe broadcasters should focus less on using their digital assets to pimp their over-the-air brands and focus more on delivering content of interest and value to audiences that are already online searching for that content.
One of radio's great problems is its inherently parochial nature.
We rightly celebrate increases in revenue year-over-year without necessarily recognizing that this growth does not happen in an otherwise static environment. And it is these very transformative changes which are making today's "100-Arbitron-share world" less relevant by the day.
The bigger picture is where the advertiser plans to spend their money, regardless of the media involved.
Nearly 40% of ad agencies believe it will be at least five years before they anticipate spending more on digital media than traditional media including broadcast and print. However, just as TV ad share continues to decline, traditional print advertising appears to be declining even further. Nearly two-thirds of respondents say their clients are less focused on print than they were a year ago. Not one agency polled feels it will increase print ad buys.
The most interesting thing about this excerpt is that it acknowledges the belief by a plurality of agencies that digital spending will exceed traditional media spending in as few as five years.
And what medium is currently advertisers' favorite? TV - at 42%. Radio stations saw a slight increase from the previous quarter with 16.4% of agencies pointing to radio as their top advertising choice.
Meanwhile, 32.1% of the agencies say that their clients' focus on spot radio will be less than it was a year ago.
And one "buried lead" sentence that, in a few words, spells out the core of the opportunity for big media, radio and otherwise: "Our survey taps into the perception that digital has its limitations in reach and effectiveness and must still be used with traditional media like TV."
In other words, it's not about radio - and it's not about digital - it's about effectiveness, not platforms.
Are you thinking about effectiveness? Or ratings points?
Everybody wants to know what's next for radio, and the answer is...
More than one radio "industry."
There will be the folks who see the world through the lens of 1999. These are the people who see nothing but Arbitron's 100-share world in all its tenuous splendor. All good things will come in over-the-air buys to this crowd. These are the traditionalists. The folks who drive with a great view out the rear view mirror.
There will be the broadcasters who see digital as non-traditional revenue and are content (relatively speaking) to deliver two to six percent of their bottom line in digital dollars. These are the dabblers, the "show me the moneys." Maybe one day that percentage will rise to, say, 10%. Wouldn't that be great?
Then there will be broadcasters who view digital trends as transformational opportunities. These are the people who plan on growing their business by growing their digital business(es). They will structure for this world (a big issue - don't kid yourself), plan for this world, budget for this world, and move to make this world real. It will not land in their laps, they will have to work for it. These are the innovators. They will shake the definitions of "radio" as they leverage their strengths in an era when consumers and advertisers can be connected much more effectively and efficiently than ever before.
It will be absurd to call this one industry because the three groups will have little in common but that fraction of their revenue which continues to come from traditional sources and go to traditional spots.
They will not laugh at the same jokes (except for HD radio jokes), read the same books, or learn things at the same conferences. They will not provide the same services or profit from the same product lines.
What I'm suggesting to you is that "radio" as one industry is no more.
The radio industry is dead. Long live the radio "industries."