As broadcast radio companies battle new media competitors – as well as fight each other for ratings, shares, and revenue – a sense of who the industry is competing against becomes more elusive and even debatable.
Aside from the changing radio ownership landscape, competition has taken many forms – services like Pandora and Spotify, a growing number of podcasts, personal music collections, and other stations in the market. They're all battling broadcasters for consumer attention and advertising dollars.
And then there's satellite radio. As time goes by, it's becoming more apparent the threat from SiriusXM is a clearer and more present danger to broadcast radio. Considering the #1 location for AM/FM radio consumption is the car, then satellite radio provides the greatest challenge.
And as we learned in this year's Techsurvey, that's especially the case for people who own a “connected car” – one equipped with a media platform like Ford SYNC, Chrysler UConnect, or Toyota's Entune.
Among all respondents, broadcast radio has a solid 64-share in the car. But among owners of “connected cars,” AM/FM's piece of the pie drops to 55%, while satellite soars to 21%. Interestingly, other streaming alternatives along with podcasts barely budge.
Seth Resler shows you how to use webinars to generate leads for your radio station's sales team.
So what gives? Our theory is that SiriusXM is the biggest beneficiary of dashboard connectivity because it's the easiest and most familiar for drivers to use. It still requires some work to access Pandora, Spotify, or podcasts in most cars. But satellite radio is seamless. It's as easy to preset “Classic Vinyl” or “Deep Cuts” as WMGK or KSLX.
And when you think about some of satellite radio's recent activities, broadcasters should be paying attention. Here's why:
1. Pandora investment
Last month, it became official: SiriusXM has sunk a massive $480 million in Pandora. For the satellite radio giant, it's a bold move and adds another attacker to the assault on broadcast radio. As SiriusXM's CEO Jim Meyer told investors this week, they're still looking for synergies between the two entities. Each has a strong automotive presence, as well as large audiences.
And a newly released “Definite Guide To Audio” – a strangely under-publicized “analysis” by Pandora – is more than a shot across the radio bow. Explaining that radio, a “century old medium is far from dead, but any impartial observer can't ignore the tell-tale trends of a medium in transition,” Pandora cites an aging audience, cratering TSL, heavy commercial loads, and eroding dominance in cars as the culprits.
2. The new 360L platform
Pandora is doubling down on its stronghold – the car. When it goes live next year, 360L will offer SiriusXM subscribers time-shifting, on-demand, personalization, and great ad targeting. This more robust feature set will more strongly connect subscribers, as well as providing much-needed data for strategy as well as revenue generation.
SiriusXM announced in June it's officially invading the home via the suite of Amazon smart speakers. Once enabled, their “skill” allows satellite subscribers to access all channels with a simple, “Alexa, play Bruce Springsteen Radio on SiriusXM” – in kitchens, bedrooms, garages, and wherever these devices are placed in people's home and offices.
So, what are the implications for broadcast radio as SiriusXM expands its position into streaming, in-car enhancements, and smart speakers?
It's a message to radio companies the stakes have been forever raised. And it's critical radio keeps pace. These investments by Sirius and the growing number of players in the digital entertainment space ratchet up the demands on broadcasters to provide a quality digital experience.
And yet in many situations, broadcasters have simply checked off the boxes for streaming, apps, podcasts, and other digital platforms, often providing minimal funds, strategy, and focus. It's been easy and cost-effective to take the easy and cheap way out – opting for poor quality streams, utilitarian paint-by-the-numbers mobile apps, and recycled podcasts.
We're seeing this now with the Alexa phenomenon that's sweeping the industry. As we discussed in yesterday's post, it's essential broadcast radio brands stake their claims on these devices by providing relevant, memorable skills desirable to the rapidly growing number of owners of smart speakers.
And now the lure of DIY Alexa skills – as easy to assemble as a nightstand from IKEA – gives stations permission to cheap out – rather than develop a meaningful, fun, and entertaining experience using voice commands. And the industry ends up being lulled into thinking it has checked off the “Alexa box.”
Too often, radio spends most of it time and energy staring at the mirror, rather than thoughtfully studying the changing environment around it. The industry trades and gossip sheets are often filled with “radio stories” – who's in financial dire straits, who's merging, who's swapping, and who just started in morning drive in Tulsa. Research is devoted to the analysis of local radio markets and genre segments, rather than on the bigger picture. And sales staff continue to chase “radio dollars.”
And yet, the game is now being played on a more complicated three-dimensional, multi-platform field. Digital can't be thought of as a second house or a second car, and yet, that's the way it often ends up in the grand scheme of things. When radio invests the bare minimum and exerts a minimal amount of strategic effort on its digital initiatives, it relegates these important outlets and initiatives to second-class status.
Yet, consumers don't view streaming, podcasts, apps, and Alexa skills as rudimentary entertainment and information outlets. In fact, their standards rise every year as their patience for mediocrity and malfunctioning technology erodes.
When radio sees a formidable and direct competitor like SiriusXM, not to mention the bevy of streaming music services, brilliant podcasts, and compelling mobile apps, the need for digital strategy, commitment, and investment has never been greater.
No one knows exactly who first said it, but many attribute this quote to Kurt Vonnegut in “Cat's Cradle.”
“In this world, you get what you pay for.”
One line that clearly was authored by Vonnegut applies to radio's ongoing commitment to digital:
“And so it goes.”
It's time for broadcasters to stop checking off the digital boxes, and get serious about SiriusXM – and the cornucopia of other digital attackers.
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 1,200 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 National Radio Hall of Fame in 2018.