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Thursday, April 25, 2013
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Memo to Online Radio Industry: Please Don't

I had a deja vu moment yesterday when doing my daily read of RAIN. The headline: "Kelly Research launches 20-channel 'local' Philly webcaster." On the surface there's nothing wrong with someone who has vast amounts of radio experience launching an online radio station. Underneath this headline, though, we have a beast of a different color.
"I've said this dozens of times since first becoming involved with purchasing advertising online: You can buy CPM for as low as 64 cents."

The sentence that got me shaking my head hardest was near the article's end: "Kelly Music Research has registered 'iRadio' domain names for the top 50 markets in the country." That's also when deja vu vibes grew strong.

Compare these two RAIN screen shots, one describing a former GSM from a Cleveland radio group creating 13 years ago. (Click on each to expand.) It too was not just a local online radio station. It was to be so much more than local radio could offer.

Check the words at the end of this June 2000 article about "About half the music will be programmed ... The rest will be decided hourly by users clicking their choices in a process the site calls 'musical democracy in action.'" Sounds like today's social radio, doesn't it?

Admittedly we are in a different era. But there is so much online advertising available today that the revenue potential of a single station - serving a sole community - is so limited as to make it nearly impossible to compete when media buyers are familiar with multiple online ad options. Google alone is hitting local advertisers and offering discounts. Here's what I am able to offer clients.

After trying accountable advertising, and finding it at a much lower cost than the local radio industry (and now the local online radio industry), put yourself in the shoes of business owners. Which are you going to choose?

I've said this dozens of times since first becoming involved with purchasing advertising online: You can buy CPM for as low as 64 cents. What's bothering me about is that there is nothing in the story eluding to the revenue potential of the station, or how it plans to deviate from the radio station revenue model of selling advertising with CPM pricing.

There is no doubt that listening to radio online is growing. But what needs to be found by former broadcasters wandering into these waters is a knowledge that they can't use the same old business model, even if it includes music that's not being played by broadcast radio. There are just not enough people in any one city to build a large enough online audience to make this a success.

There may be more platforms to place a signal on. But as a writer of software code, I'll state how difficult it is to place that signal on those various platforms. Additionally, you need to hone skills in social media, mailing list and data base management, search optimization, analytics, and metrics - all having nothing to do with radio programming. (Look at how easily the radio industry bungled the act of creating podcasts. Do you remember the all-podcast-all-the-time Neither does anyone else.) may have an honest intent of serving the area surrounding Philadelphia with a great selection of music that's not heard on broadcast radio today. Only, it seems apparent in just the short writings at RAIN and that Tom Kelly is approaching things much too much like the radio industry would, and not enough like those who are listening to radio online want it to be.

Local internet radio is a nice thought. But low one-ad rates, high performance royalties, lack of a "new" presentation, and the low numbers of people who will tune in are all items needing more consideration. Another major problem is not focusing on the gamut of analytics within radio's reach - like simplistic A/B testing.

Online your ADI (Area of Dominant Influence) is measured in thousands of miles - that's nationally, or at least regionally. Locally, I don't see how any online radio station will make a go of it; competition is too intense, and options are too plentiful (making advertisers and audience too meager).

I am not ashamed of my track record on calling disasters within the radio industry. Though the radio industry never listened, my forecasting has been close to 100% since my first writings in January 1997. I even tried convincing the person launching that it wouldn't work, for many reasons.

For, we'll keep it simple. It's going to get a blast of attention early on, then fizzle because it offers little more than music you can't hear on broadcast and jocks that the public have been trained not to pay attention to anymore.

That Mr. Kelly has purchased 50 domains in anticipation of success tells me there's too much focus on tomorrow, without any testing whether what he has will work today.

BTW: Here's the mousepad. That company also anticipated branching out (to 83 cities) so close to its creation - an early sign of wishful thinking?

While the broadcast side of radio has a near lockout on indie artists, introducing music is open wide to internet stations.
Here's a Pop artist to consider: Diverse - "New Boy."
sample song

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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 Diverse - "New Boy" 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.

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