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AG News: 7/7/2008

How Many Radio Stations Does One Person Need?

Interest in internet radio is growing not just from consumers, but in the upper-management ranks of the radio industry. Consecutive quarters of dropping revenue are forcing those who used to call people with warnings about impending WiMax competition "naysayers" to reconsider whether there was any "nay" in what was said. I think we all know Chrysler answered that question last week with its announcement that some 2009 vehicles will be WiMax-equipped.

In the radio industry, it's like the clouds just parted. Industry trades are now predicting that rays of revenue will shine down if the problem of surviving in a world with thousands - no, tens of thousands - of competing audio programs is overcome.

...Which brings us to a major question anyone involved in producing radio programming needs to address: How many stations does one person need?

Choice is great. It's an ability that all people should have in every facet of their lives. However, too much choice is not great. It's a pain in the neck to many people; which translates into, even if there are tens of thousands of radio programs out there, people will still return to the 3 to 6 stations that best serve their needs.

Reading an article by Sean Ross at Edison Media Research, titled "Taking Control Of The Infinite Dial," I found myself questioning whether a local station repurposing its on-air signal is a good enough use of internet streaming; i.e., whether information about local happenings, within the audio portion of a station's online presence, is enough to pull in an adequate size audience for advertisers to reach.

The thought that a person needs ten thousand stations to choose from is ludicrous. What takes this beyond ludicrous is the thought that a person will be sampling all stations within a specific format genre to determine which 3 to 6 will become part of his or her life.

It's not much of a secret that a portion of the population wants music-intensive programming. Shut the jocks up, play the songs I like, and be a background sound that doesn't interfere with my regularly-scheduled day - that's what these folks are looking for. Just an educated guess here, but I'd say 95% of current internet-only radio stations satisfy this group.

Another portion of the radio/audio audience is looking for substance. Intellectually-stimulating conversation, tidbits about artists or events (local or not), and information that the listener can repeat to friends as a means of saying "I'm on top of what's hot" make up the rest of this group's desire. (That "what's hot" can be news, sports, celebrity gossip, etc.)

Edison Media's Ross begins to jump some of these hurdles with the following comments: "Part of the job of every program director must be honing a station into a franchise that has a reason to exist among thousands of others"; and, "Part of the job of every marketing director in radio should today become the on-line presentation and search optimization of their stream." Only, as closely as I've followed these categories of standing out online and optimizing for search engines, it's my opinion that radio is lacking in each. Here's why:

1) Creating a "reason to exist among thousands of others" online is an impossible task when a local station fails to add non-local elements to its streaming broadcast. Online, you are forced to play to two audiences - local and global. The fact that Arbitron requires stations to stream 100% of its over-the-air content to have its online audience included in local ratings sucks the incentive out of adding internet-only components.

2) Search engine optimizing of radio web sites has been ignored since the beginning of search optimization. To incorporate what's needed for high SERP (search engine results page) rankings will require a total site redesign on (an educated guess) 80% of today's radio industry web sites. This topic has been addressed at since the year 2000, and it has been ignored. To revamp for better search returns now will cost the industry hundreds of millions of dollars... and that's another educated guess based on the knowledge I've gained from optimizing many web sites and knowing how many man-hours it takes to get results.

When WiMax begins making its way into other manufacturers' vehicles, the public won't be searching for favorite stations while driving. A favorite station will already have been selected via laptop or desktop, and then entered into the in-car unit to add to the few dozen pre-loaded stations lucky enough to make that pre-installed list.

Instead of having only a handful of competitors, radio broadcasters are facing thousands; but the public is still only going to use 3 to 6 stations as main audio programming sources.

Referring back to Sean Ross' article, let's digest one more question he asks: "So what then can radio as a whole do to take control of the Infinite Dial?"

Here's one more educated guess that represents what I've felt for a long time (after watching the radio industry stand like a deer caught in the headlights of this oncoming train called radio streaming). Radio can do nothing. It will not "take control of the Infinite Dial" any more than it will regain the credibility local stations used to carry.

The radio industry had its chance. Instead, it chose to force HD Radio down the throats of its audience at a time when the audience was rebelling against corporate-produced items forced upon them.

Now radio must join the fray of thousands of competitors, where each is struggling to generate a large-enough online audience to make itself marketable. Just a handful of those have succeeded today. The radio industry's only other option is to become part of the long tail aggregate of its audience for delivery to online advertisers, and hope that a low CPM can overcome high royalty rates.

The Infinite Dial is just that, stretching out for thousands of urls, with each delivering small clusters of audience.

By waiting until today to address the issue, radio broadcasters are getting in at the end of the line.

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President, Audio Graphics
Ken Dardis
Online Since January 1997

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