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Wednesday, May 30, 2012
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Radio Industry, Losing Clout in Music Discovery


Positive reinforcement is the way most psychologists will tell you to approach improvement. And it would be nice to voice words of encouragement, relative to how the radio industry moves towards digital. Trouble is, it's difficult to put your finger on anything that broadcast radio has done well in the move to online.

Harsh assessments are never pleasant, but they are essential if your goal is to get to the truth behind where radio stands in its competitive stance with the internet. You, alone, choose which reports to believe. You, also, need to determine if there was ever a time when the radio industry showed a boost in momentum - especially after one of its conventions.

"I know this is not positive reinforcement but, as in some instances, tough love is more appropriate. In this case it's required." Tell the troops what they want to hear, then watch all go home and continue doing the same things the same ways - that's how we've watched this past decade unfold in radio. (Don't bother pointing to iHeartRadio because just its act of extending a "no commercial" policy shows it's not moving with the grace reported.)

Audio Graphics has been reporting on how the internet affects the radio industry since 1997. I was the person who first suggested that an online radio station needed to aggregate its inventory with other online stations if there was hope of generating advertising revenue. (This happened in 2002, long before any company was built to aggregate and sell advertising for online radio.)

Audio Graphics was also the first company to gather a network of stations and attempt to sell advertising in an aggregate manner. Though it didn't work out I'm proud that this attempt turned into an industry itself, and companies like Triton Digital and Katz 360 are pushing broadcasters in this direction today. It validates my original hypothesis.

Publisher's Note: I realize this is pounding my chest on contributions made to the internet radio industry. I also know that unless these facts come out at Audio Graphics, there are no industry trade publications (or large companies) that will give credit to a small organization like Audio Graphics for these important steps in internet radio's growth.



Today let me put forth another warning, with suggestion, stemming from Audio Graphics' surveys of online radio listeners. (This is another concept originating with AG and, since 2002, the only continuously running survey of its kind). You choose if the following data will have an affect on your future. I believe that this is of vital importance, and to ignore it will place broadcast radio in perilous grounds five years from now.

We've often heard the radio industry boast "radio is where people go to find new music." I searched for stats on this from multiple radio industry sources, but could not uncover the official numbers. Let's just say that the radio industry continues to, rightfully, claim it is where most people find the newest songs. For how long this will be is anybody's guess.

Looking at a just-completed Audio Graphics RRadio Network survey, one can see change taking place.

919 persons were asked to complete the statement "Lately, I've been finding most new music on...." When compared to that same request in July 2010, besides having "internet radio" now running away with the #1 response, there are multiple adjustments being made by the public. In the 12-44 demos:

7/2010 Today
Internet radio is the most popular spot
where online listeners are "finding new music"

58.21% 59.57%
Satellite radio is becoming less of a force in finding new music

5.25%

2.47%

Online Music Services are gaining influence

10.07%

15.12%

"Other" services ((Pandora, Spotify, LastFM, etc.) are flat

10.72%

9.57%

Broadcast radio is also relatively flat 11.82% 10.80%







Over in the 45+ demos, the response may surprise you.

7/2010 Today
Internet radio is pulling away as
the lead vehicle for "finding new music"

58.16%

67.28%

Satellite radio is becoming less of a force in finding new music

6.21%

3.20%

Online Music Services are losing influence

9.57%

7.59%

"Other" services ((Pandora, Spotify, LastFM, etc.) are flat

8.94%

8.51%

Broadcast radio is suffering near 5-point loss
as a vehicle for discovering new music

16.67%

11.80%






The take-away here is that movement on finding new music, away from the radio industry, is growing at a much quicker rate in the 45+ demos than the 12-45s. Conversely, movement for finding new music on internet radio is growing at its quickest pace in the 45+ demos.

What may appear to be much ado about nothing to those with an interest in protecting the radio industry comes across as a huge swing of confidence for finding new music on internet radio to all others.

In the world of mass communications - where you gather large audiences that listen to the same program, at the same time - familiarity is key in building audience size. But what we are seeing is that, as more people seek new artists, because of the repetition traditional media throws their way, internet radio is gaining share as the place where those over 45 years of age discover new artists/songs. This is happening at the same time that broadcast radio is losing its lead in introducing new music.

Back in 2002 when I gave a speech titled "It's Time to Tie the Lifeboats Together" to a group of webcasters, most every person in the room saw how it was a time to admit "change" was needed in how internet radio was sold. Kurt Hanson was in the front row for that talk, and saw how it changed the understanding of how internet radio needed to sell advertising.

Meanwhile over in the radio industry, everyone had the attitude "what, me worry?"

I'm throwing out another warning today. It concerns the way people go about finding new artists - and which musical acts will be big draws tomorrow. The radio industry is losing its grip on being the one that informs about new music. Internet radio even surpasses those companies like Pandora, Spotify, LastFM, etc., when it comes to introducing new music.

If you are in the radio industry, ignore this warning at your own peril. And, as you sit through this next convention - Convergence, by Radio Ink - see just how much change takes place within the radio industry after the attendees go back home. My guess is business will continue as normal, immediately following everyone patting each other's back for another well-presented convention.

Music radio is not the influence it once was. That the older set is showing the largest degree of movement away from the radio industry in this area should cause many radio managers concern. That there are still no online "new music" programs being promoted by broadcasters shows just how little effort is exerted to put something different on a radio station web site.

I know this is not positive reinforcement but, as in some instances, tough love is more appropriate. In this case it's required.

The radio industry is walking the plank as the new digital dashboards are being introduced. Failing to follow the trends for uncovering new music is going to be just one more reason why there's shrinking room in the vehicle for broadcast-band buttons.

Just look at the stats. This is data that won't show you the wrong path.

Choose to follow what's fed by radio industry trades, and you may just be lulled into a mindset of complacency because, as most of them report, radio is doing just fine and you can find all that you need to survive at any of its constant conventions.



















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