Online Radio Industry Burgeoned
Few people argue that radio has no future online; they are those who have their feet firmly planted in the broadcast radio industry. With a belief that nothing will dent radio's relevancy, they have failed to spend time understanding the velocity of change in audio entertainment and information platforms.
Those in internet radio only need a cursory glance at broadcasters to see fear, uncertainty, and a lack of the knowledge needed for winning with technology. Though, and this is an important caution, to date, the online radio industry has done little to differentiate itself as new and exciting in programming, or use of technology.
"Internet programmers need to look closely at their audience. Understand the needs of the people who tune in. Make sure your online station contains elements that are not delivered by the broadcast radio industry - there are many."
Let's clear something off the table: On March 8 a leading radio industry magazine publisher - Eric Rhoads - wrote an article
that stirred quite a storm. He claimed hearing a panelist at his Radio Ink convention say "AM and FM are being eliminated from the dash of two car companies within two years and will be eliminated from the dash of all cars within five years." Radio faithful, people who attend Radio Ink conventions and provide that publication with a solid revenue source, reacted swiftly and with anger.
I found Eric's statement alarming because this transition certainly will not occur within five years. But I also found long ago that publicly saying internet radio is challenging the broadcast radio industry is heresy, which leads to being ostracized.
Eric Rhoads wrote a retraction
on March 15. It was an attempt to calm the storm. In it he said, "My quote referencing two companies in two years was not an exact quote, and my reference to five years was inaccurate."
I received this in an email that same day from a person who attended the conference: "I heard the quote live in Santa Clara, 'I am aware of 2 car manufactures that will not be putting AM radios in cars in 5 years.' There is so much BS out there." In a Facebook post, another attendee reflected a similar view, but Eric Rhoads saw a need to do something. The hornet's nest had been hit, and radio punishes people who don't follow the herd.
The story gets more interesting. Between March 8 and March 15 another person who makes his money from the radio industry produced words stating he'd taken a survey of 1,000 persons, and that the radio industry was safe. It was the cavalry over the hill that those in radio needed. It was proof that Eric was mistaken. Radio would survive. Only this survey, if looked at with reasonable eyes, was full of holes.
Complete with charts, the questions were of this nature (paraphrased): "Would you miss your AM/FM radio if automakers removed it from your car?" Variations on this question were along the lines of (paraphrased) "I could always listen to stations on the internet..." and "My favorite station is on my smartphone, but I'd still be unhappy to have radio removed from the car."
You could predict the response with a Ouija Board; by a wide margin respondents said they would be unhappy if AM/FM was removed from vehicles.
Of course the problem is that people were being asked if they would be bothered if something they were familiar were replaced by something they had little knowledge of.
Back in 2001 U.S. broadband connection was only 9.1%. The majority of people were not willing to give up their dial-up connections. Like internet connected cars today, broadband was a technology that few had experienced, and unknown technology is feared by the masses.
Today broadband penetration is over 80%.
Asking someone if they want to give up their AM/FM in-car radio for an internet connected dashboard today is close to asking a consumer to let go of their film in 1999.
That survey got plenty of cheers by radio industry faithful. Eric Rhoads was panned by many of the same (he should not have been). And the online radio industry got another look at the cracks developing in its closest competitor's walls.
But here's where those in online radio and other internet based audio services need to be aware: Old time radio is resting its case on being local. I don't believe that's where the fight will be won because consolidation cutbacks have weakened the programming prowess of what was a once formidable radio industry. There's little in "local" that radio delivers which a majority of people cannot now easily find online.
Internet programmers need to look closely at their audience. Understand the needs of the people who tune in. Make sure your online station contains elements that are not delivered by the broadcast radio industry - there are many.
If you wish, as an internet station, technology allows for delivery of local information to anyone in the audience, easily. You see that every time you get a banner ad about a local business.
Internet radio is growing. TV commercials show tablet-style dashboard displays in the car, connected to a myriad of options that don't deliver 8-minute commercial breaks.
The signs of fear from the old world radio industry are wrapped in how many times people within throw around the words "we deliver compelling content." Listen to what's coming out of your speakers from local broadcast stations. It's evident confusion exists on this interpretation of reality, and the word "compelling."
For advertisers, buying into a cluster of 8-10 poorly produced commercials and receiving no accountability on the efficacy of your ad spend reflects a poorly planned campaign. Technology allows for exact numbers in audience and response. Radio online offers fewer commercials in a cluster, and accountability. (Targetspot is running a campaign - online - promoting this advantage.) It's reason #1 why so many ad dollars are moving to the internet. According to BIA/Kelsey, more will move away in 2013.
Radio will not disappear from cars within two-five years but that's not really what Eric Rhoads was saying when he wrote his first article. What he said was that a panel at his conference indicated a decade-long process would be starting. Unacknowledged by executives in the radio industry, it really began a few years ago.
Look at the penetration of broadband back in 2001 (9.1%), and compare that to where we're at today (over 80%). The velocity of change is staggering. Broadcast radio has not kept up with it. To claim otherwise indicates just how far removed old media is from new media.
Would you mind if auto manufacturers took your AM/FM radio out of your car? Ask that again in ten years. The response will be different, and the radio industry will look much like a dial-up connection.
While the broadcast side of radio has a near lockout on indie artists, introducing music is open wide to internet stations.
We listen for songs that evoke emotion; fast, slow, female, male, group, it doesn't matter. When an artist has the power to please, they should be given a chance to be heard.
Give Fiona (Miss 2.1)'s "Boy Toy" a listen
Add it to your playlist, free!
Such is the new world of music distribution.
The radio industry had its shot. It's time internet radio programmers take a chance and reach into a huge pile of talent. It is there that new hit songs will increasingly be found.