There was lots of buzz late last week about an NPD Group study that revealed not only that Internet radio and on-demand music services are growing, but that some of it these increases appear to be coming at broadcast radio’s expense.
Overall, listening to Internet radio has climbed 27% year to year, and while AM/FM radio only dropped 4%, you can see the trajectory. It is amplified by the Pandora piece of the equation.
Those who use Pandora are spending less time with broadcast radio (and other music media). But it’s radio that’s our focal point here, and Pandora listeners show a 10 percentage point drop in their use of AM/FM radio (the green line).
And that brings us to our game changer – or in this case, our “lane changer” – the car. Our Detroit based roots have served us well in the past few years. Not only was the automotive industry a focal point of the Presidential election last week, it is also at the epicenter of the conversation about media and entertainment usage.
Techsurvey8 showed that a majority of our massive respondent base does the lion’s share of their broadcast radio listening while on the road. Consider that more than a third of Pandora users listen to that brand while driving, and as NPD notes, “either connecting through an in-car appliance or listening via car stereo-connected smartphones or other personal listening devices.” A narrative is unfolding.
This data shows that Pandora, as well as other media competition, creates ongoing challenges for broadcasters. And the added pressure of the connected car reveals a new technological wrinkle. The leaders of the radio industry need to work together to directly address these developments as consumer behavior and automotive platforms change.
So often, radio stations – and their parent companies – get so myopic in their approach that they only see the competition as Z98, the Bear, and Hot 101.9. While stations in town are the obvious competition, not taking studies like the NPD report seriously is a strategic mistake that is already beginning to take its toll on AM/FM listening.
But if you aren’t sitting in the corner office, what can you do about it? How can you put together a plan that addresses what is clearly the next big piece of the media pie on a local level that can help your station and your staff?
Permit me to give you my action steps. Hopefully, they’re not too gratuitous and I encourage you to add, modify, or suggest others:
- Join me in Annapolis in December. I’ll be participating in a great session at the Arbitron Client Conference, along with Valerie Shuman, VP of Industry Programs for the Connected Vehicle Trade Association. I’ll have amazing video from some of the top execs at Ford, Toyota, Cadillac, and other auto industry leaders discussing their visions for the “digital dashboard” and what it means to radio. Register here.
- Address your stream – especially its quality. Regular readers of this blog are all too familiar with our position here, but as more and more consumers are able to connect smartphones , mp3 players, and other devices to cars, the need for a competitive stream has never been greater. Remember all the time, attention, and money your station and your engineers have paid for audio processing with the purchase and use of Optimods, limiters, compressors, and other “sound sweeteners” taking up space in your rack room? It’s time to take that same approach to your stream.
- Put your PD (or Brand Manager) in charge of the stream. It’s time they started monitoring the stream as a regular part of their jobs. Incentives should be discussed as well.
- Consider basic usability studies – company-wide. These are not difficult to do and a small expense can translate to dollars saved and important lessons learned about the CX – or Consumer Experience. We can help you every step of the way here, having conducted them for websites and smartphones. Drop me an email.
- Get a mobile strategy. Simply put, you need to be on more than a directory with hundreds of stations. Your radio brand needs its own app in order to compete in this space – especially the one on four wheels. If you haven’t investigated why apps matter and how to design one, it may sound gratuitous, but my brother Paul can walk you through every step and simplify the process. You should talk to him.
Sign up for Techsurvey9. Our breakthrough studies have shown the way for the past eight years, providing one-of-a-kind data about smartphones, Pandora, streaming and other key areas of investigation long before these topics were being written about in the trades or being discussed in boardrooms. And these aren’t national studies of “typical Americans.” This is your audience. Fielding early in 2013, Techsurvey9 will dig even deeper into the Pandora issue, reveal and trend more about the connected car, and map out solutions that will benefit all broadcasters. A few hundred dollars and your database are all you need. But even if budgets are tight, you can participate at no charge. For information and to sign up, click here.
Let’s stop reading these articles and wringing our hands, and start taking action as an industry. As broadcast companies that are still in a position to meld our legacy strengths with innovative platforms that will keep our content relevant and accessible, radio has a great opportunity to be important to consumers for years to come.
Radio needs a strategy. We’re here to help.
Jacobs Media has consistently walked the walk in the digital space, providing insights and guidance through its well-read national Techsurveys.
In 2008, jacapps was launched - a mobile apps company that has designed and built more than 1,300 apps for both the Apple and Android platforms. In 2013, the DASH Conference was created - a mashup of radio and automotive, designed to foster better understanding of the "connected car" and its impact.
Along with providing the creative and intellectual direction for the company, Fred consults many of Jacobs Media's commercial and public radio clients, in addition to media brands looking to thrive in the rapidly changing tech environment.
Fred was inducted into the Radio Hall of Fame in 2018.
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Hmmm. Good ideas – all of them. But off point as strategies to counter Pandora and other on demand and/or personalized streams. Why would anyone with a car radio even bother to use expensive data (from their metered plans) to listen to a station’s stream? The stream, while necessary, is nothing close to sufficient in competing with the Pandoras of the world. It’s like jumping on the couch to reach for the stars.
Forget the d*mn streams – they don’t really matter. They don’t generate much listening and never will. And apps are a great thing to offer – but thinking that they are the antidote to Pandora is, well, out of touch.
Radio has done an AMAZING job of keeping its audience in the face of an onslaught of competition. To only be off by 4% is phenomenal. But assuming that polishing something that costs money to access which listeners can easily get for free as a counter strategy is misguided IMO. Apps are a great idea for radio stations – but they won’t have much impact in staving off Pandora.
And it’s dishonest to lump it all together as part of a coordinated strategy. Shut all the streams down (which I don’t’ recommend BTW) and there will be no noticeable difference in Arbitron – EVER! Offer a better version of Pandora? Now that would show up.
Of course, there’s that pesky royalty issue…………..
I guess I won’t see you in Annapolis. Seriously, thanks for the criticism – yours are all fair points. My POV on this was from the standpoint of managers who aren’t in charge of radio’s bigger issues. So while none of these steps will change the world, they might help better prepare local broadcasters for the changing world around them. As for the mobile apps & streams comments, it IS of critical importance to offer up a competitive stream – whether users in fact go to them while driving OR while working out, commuting, and doing all those things one used to do with a Walkman. The protability issue is still of importance. I agree that a 4% decrease isn’t the end of the world, but the steeper drop for broadcast radio listening among Pandora users is a concern, don’t you think? Thanks again, Bob, for starting up a conversation.
Fred,
With all due respect,I don’t believe this battle for consumers will be won or lost by the delivery system. This is about content. FM/AM Radio will be a strong medium in the years ahead by providing exclusive, relevant, exciting, interesting and amazing content.We have got to start discovering and cultivating personalities and programs immediately otherwise we’ll be doomed to fight a losing battle of a “better mix of music”.
Great comments, Bob, and I think it does come back to the product that’s coming out of the speakers. But I am concerned about how little attention is being paid to the delivery system. The consumer is more fickle than ever. If it doesn’t work and sound good the first time, she’s outta here. Thanks for chiming in & for reading our blog.
Besides there being no mention of advertising accountability (above), which the radio industry still refuses to address, there are these two points needing discussion:
1) Re: (Bob Case’s “…exclusive, relevant, exciting, interesting and amazing content.” At what point will someone stand up and point to this type of content on radio? There might be a handfull of quality content radio programs but, nationally or locally, I bet you can count them on two hands. (We’re talking about content that people look forward to tuning in to.)
Radio consists almost entirely of one song followed by another song with voice-tracks and lengthy commercial breaks between. Creativity left the building(s) long ago. (Which talent is given time to be creative?)
2) When you have only 2 dozen stations on the dial being found is easy. Today consumers have tens-of-thousands of radio stations and audio/video sources to wade through.
The radio industry never took search engine opitimization seriously, and it’s paying the price today. Search for “radio stations” on Google – https://bit.ly/Q8hdFU – and no broadcast groups appear in the top 50. iHeartRadio doesn’t show up until approximately the 45th position (page 4 on search returns). On Bing iHeartRadio does a little better, coming up on the second page (https://binged.it/VX5j3b), but Bing is a long way from Google’s 66% market share (https://tcrn.ch/Tk17Us).
As for how people find radio stations online, here’s a breakout from our own survey – comparing 2005 and 2010: Search engines are the #1 source by nearly 10 percentage points over the next (radio portals) – https://www.audiographics.com/survey_charts/survey47-finding_online_stations-2005_2010.gif
Fred, the radio industry has been warned about this for well over a decade yet we still see very little movement toward implementing ideas that have been used by pure plays and tech firms.
Once the digital dashboard hits broadcasters are going to need another way to draw audiences, because what it calls “compelling content” today exists mostly in radio exectuives’ minds. Where good programming is being produced it is going to be virtually impossible to find it, when mixed with radio’s new competition.
And there’s that advertising accountability issue, too.
Radio is not ready for this next decade of transition.
Ken, thanks for making this a more interesting post and a lively conversation. The SEO piece is something that we’ve seen also and as the connected car story becomes better known in radio circles, it will amp up the need for radio broadcasters to look at the world with a wider angle lens while continuing to struggle with “being found.” I hear what you’re saying about content, but also believe that many local brands still matter. How broadcasters grapple with transitioning audience from the the transmitter/tower to digital platforms is part of that challenge.
And as you suggest, changes in the advertising environment are germane, too. How can radio utilize its assets – an influential DJ, local knowledge, etc. – to help clients make money and deliver store traffic and results?
No one said it was going to be easy. Thanks for helping to frame the conversation and for reading out blog.