The Radio Gypsy’s Predictions for 2007

A No-Nonsense Marketing Smart Tip
January 17, 2007

Bella_1I don’t know how I ended up here, sitting at a small round table across from “Bella, the Gypsy Fortune Teller.” I had lost my way and stopped at this ramshackle storefront to ask for directions. I was taken aback when she said “Ah, I was expecting you.”

And so it was that I was having my fortune told. But, uncomfortable as I am with such things I thought I would cleverly shift Bella’s focus from my personal future to the future of the industry in which I work. She wanted too much money for that – “I charge Wall Street thousands for those readings,” she told me. So we settled on what’s ahead for radio in the next twelve months.

Maybe Bella the Gypsy’s predictions will come true, or maybe she was just working me for a $20 bill. Maybe she was in a demented haze, thanks to that half-empty bottle of gin by her side. We’ll see. In January of 2008.

The Radio Gypsy’s Predictions for 2007

1. After an on-air promotional campaign valued over $400 million, there will be between 1.5 and 2 million HD radios in the U.S. by the end of 2007. There will be nine times as many satellite radio subscribers and many times more listeners of Internet and terrestrial radio (“See Bridge Ratings for the latest projections,” Bella added).

2. The Internet will continue to penetrate the mobile phone market and will finally enter the automobile. And with it will come the potential for an all new – and potent – threat and/or opportunity for radio.

3. XM and Sirius will announce a merger. And they’ll include a spoonful of sugar to make the medicine go down with federal regulators.

4. More broadcast groups will go private. Because the only thing Wall Street likes more than double-digit profit growth is a wholesale change of ownership and all the commissions that ensue.

5. Radio stations will awaken to the value and the power of online listener communities. The “social” aspect of the Internet has largely been lost on radio stations which tend to limit their social integration to a MySpace page. More stations will turn their “databases” into community vehicles, where listeners register and interact with each other. The dialogue will go in all directions rather than one way: From station to listener. Listeners will join in order to link to other listeners and revel in the joy of their favorite station, not strictly to enter a contest and collect email “blasts.”

6. Radio advertising works and radio stations know it. Look for stations to experiment with accountability techniques designed to vividly measure and demonstrate the success of advertising and marketing efforts on behalf of clients.

7. The market for programming talent outside of radio will spark. Suddenly companies not in radio will be competing with radio for the ears of an audience – and those companies will need talent behind and in front of the mic. Stringing together songs is easy. Knowing what to put between them is a skill.

8. Despite plenty of kicking and screaming, PPM will become the obvious future of radio station audience measurement.

9. Audiences will choose smaller and smaller “hives” with which they have much more in common. And they may not be on the radio. These hives will have social interrelationships that go well beyond anything radio is currently experimenting with. The internet will facilitate “stations” for book clubs and high school classes and bowling leagues, all of which will compete with conventional radio for “ear-share.” It will not be about a narrow slice of music, but rather about a deep slice of listener culture.

10. As specialized as these hives are, they will not be able to provide top drawer talent any more than a local TV show can out-talent Jay Leno and David Letterman. Radio will increasingly look to stars to set themselves apart. With this will come greater risk and greater reward. When all the music sounds the same, that which isn’t music will burst through the noise.

11. Radio stations will hit their emotional bottoms and determine that making more money in the future will require spending more money in the present. They will wake up to the reality that investing in their brands will make the difference between long-term health and long-term obsolescence.

12. Apple has already announced an iPhone that features WiFi capability and full wireless access to iTunes. Before the year is out Apple will announce new models of their runaway bestselling iPods with the same WiFi capabilities. The good news is that listeners can stream your station anywhere in the world. The bad news is that listeners can stream any station in the world from your market. This will add considerable frictional competition to local radio stations on a platform that will be fairly ubiquitious, familiar, and completely portable. Much like radio itself.

13. Streaming will become mandatory for all radio stations. Stations will actively market and promote their streams. Stations will produce multiple streams – even if they siphon audience away from the “mothership.” Stations – and agencies – will increasingly see that ratings – of any flavor – will become less important while the the depth of a station’s reach and its ability to achieve results for its clients becomes more important.

“Are you sure about all this stuff,” I asked the Gypsy?

“Well,” said Bella, drinking deep from that bottle of gin and wiping her sleeve clear across her wet face, “some of it is just conventional wisdom, but the rest of it has the ectoplasmic ring of truth.”

“Then again,” she added before teetering off her stool, “maybe my spirit guide took a wrong turn.”

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  • 700WLW

    The Bridge Ratings are way off, related to HD Radio – over on Radio-info.com, we figured out that only 35,000 HD radios have been sold, so far – so, unless there is a real upsurge in consumer demand, no way are there going to be 1.5 to 2 million HD radios sold this year. And, we already know, that comsumer interest is flat-lined:

  • http://www.mercradio.com Mark Ramsey

    I saw the 35,000 figure associated with sales figures – in 2004. Not 2006. Let alone 2007.
    While I don’t know if Bridge’s projections are right or wrong, I am pretty sure they’re closer than yours.
    It’s important to be fair in this equation and not fight so hard for a point of view that we ignore the facts, as best we can surmise them.
    Also, your trend measure is deceptive since there’s no way we would expect HD radio to generate the search “heat” that iPods do.
    Here’s a look at Google search trends for HD radio without any external point of comparison. High? No. But up? Yes.

  • 700WLW

    But now, HD Radio, for Google Trends, is headed down. Ok, I’ll be more fair:
    HD Radio, after two years, and $250,000,000 in ad campaigns, is still way at the bottom. Of all the reviews on Amazon and Circuit City, for HD radios, none have received more than 300 votes, over the past year.

  • http://www.mercradio.com Mark Ramsey

    With all due respect, I’m rooting for success, not failure.
    By the way, that Google Trend picture should scare XM and Sirius more than it scares the HD folks!

  • http://www.endlessthoughts.com Rico Garcia

    I attended the “Future of Digital Radio” panel at CES last week. The HD Alliance’s projections put them at about 9 million radios in five years.
    I’d like to see their marketing and content improve so they can grow more than that. Is it just me, or is that a low number considering the campaign going behind HD?

  • George

    I think the campaign for satellite involves a whole lot more money, and has received far more positive press, and has only resulted in 16 million in 5 years.
    No wonder the stock price is down.

  • Huw Drury

    Re point No.12…’The good news is that listeners can stream your station anywhere in the world’….unless it’s a Clear Channel station, which are now blocked to listeners outside of the U.S. There are several ways around it (probably shouldn’t be mentioning that) but if you try to listen via their websites then your out of luck.

  • http://briangreene.com Brian Greene

    with HD radio being sold at 1,989 Wal-Mart stores in 85 markets, that might help.

  • Debra

    When is this talent hiring explosion to commence? I don’t see it yet.

  • http://profile.typekey.com/mramsey1/ Mark Ramsey

    I know of some.

  • Scott

    The HD experience for television buyers is out of this world. Walk into any Wal-Mart or Best Buy and you’ll see scores of really cool flat screen televisions. Cable and Satellite providers are also providing equally cool programming.
    Satellite radio also provides the same cool experience for consumers.
    Unfortunately the experience for HD radio so far is just sad. Spin the HD dial and you’ll find a small handful of Clear Channel stations offering listeners the same thing found on analog radio. The investment of $200.00 seems hardly worth it. And you’ll be lucky to find a working radio.
    Apples Ipod and Iphone made a huge splash. Even Satellite radio has benefited from positive media hype. So far HD radio is dead in the water.
    I hope HD radio doesn’t follow the path of AM stereo.
    And so far it’s not looking good for the home team..

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