The primary lesson of CES for Radio

Posted on: Jan 07, 2008 in Radio's Future

The Consumer Electronics Show has evolved into an event which seemingly rivals the Oscars and the Superbowl.

And for good reason.

Because it’s not about the gadgetry. It’s about the future of entertainment. What it is and how we consume it.

Will there be announcements about HD radio? Sure there will. But – and this is important – don’t mistake good news for HD radio with good news for the radio industry.

The larger message from CES is that media and entertainment are knee-deep in a mash-up phase where nothing is what it used to be and everything is what it can be.

Broadcast TV is no longer “Broadcast TV.” In fact the pundits say you no longer need a TV to get most of its content because so much of it is online in one form or another.

Sirius and XM are no longer “radio” and now are a conduit between content and vehicles, regardless of what form that content takes: audio, video, interactive, you name it.

The crisis in our industry, radio, is that we are so ridiculously narrow about our potentialities. For example: Satellite radio has more audio channels, the thinking goes, thus we need to compete with more audio channels. Hence, HD radio.

But were we looking the other way when every other form of media exploded into every conceivable distribution channel and dimension (including satellite radio)? Were we looking the other way when we dragged our feet on streaming? Were we looking the other way when we nixed any Internet investments unless they could be liquidated on day one? Were we looking the other way as we celebrated radio’s new status as a “reach medium” at exactly the time advertisers are moving away from reach and towards accountability? Were we looking the other way as we chose to consolidate our way out of trouble and fire our way out of red ink?

Why do we keep looking the other way?

Even if HD radio were to become wildly successful it will only mean we lose faster. Faster because in addition to handing our audience over to our alternatives we will also be handing it over to a multitude of splinters of ourselves. Who will win in the battle between our HD-2 channels and zillions of alternatives, many crafted with much more tender loving care than the average HD-2?

So here it is for emphasis:

The future of HD radio is not the future of radio.

So if HD’s not the answer, what is?

The fundamental problem in our industry is, frankly, that we have so little content unique to us and so little content bigger than us.

If you’re all about the music then you’re about nothing unique at all. And it has taken the obliteration of radio’s monopoly over listeners’ ears for this to be made apparent.

Get this straight: It doesn’t matter that you have a tower. It doesn’t matter how many HD sub-channels you have. We have been borrowing the attention of millions of listeners all this time and now we must earn it.

We have the lion’s share of the audio pie today and new competitors are popping up all over to cleave off a slice. None of them owns towers. None of them owns HD sub-channels. All of them understand that media is a mash-up.

All of them understand that radio isn’t radio at all. Radio is content that lives on the radio in one, but not all, of its forms.

The future belongs to those who see a busy canvas with a million colors of media and have the content worthy of blending into each.

We have little of this content in radio today.

What are you going to do to change that?

Because it will not be announced at CES.

11 Comments;

George

The crisis you’re talking about isn’t limited to radio. I know that’s mainly the scope of your business, but nothing is limited to what it was any more. That’s what you learn from CES.
Meanwhile, all these new competitors have brought nothing new to the content table. Satellite just mimmicks broadcast. Internet is just streaming jukeboxes. Even cell phone content isn’t special or unique. Why in the world would I want to listen to Glenn Beck on my cell phone? It makes no sense.
No one has the kind of content that a lot of people want. The taste of the population has been boutiqued and narrow-casted to death. We’re at a point where every American can create their own radio station, each with an audience of one. This is not a radio or broadcasting or media problem. It’s a social problem that has affected media.
The problem with diversity is you lose unity. That’s where we are now. We have, as you call it, a canvas of a million colors of media, and you can’t make money with that.
http://www.mercradio.com Mark Ramsey

I don’t agree with your conclusion at all, George. You can’t make money with millions of colors of media? Sure you can.
Further, there’s plenty of opportunity for broadly appealing entertainment that is unique. And it’s too bad that radio has so little.
I’m not talking about M*A*S*H-times. Just American Idol times.
http://www.accuradio.com Kurt Hanson

George writes, “We’re at a point where every American can create their own radio station, each with an audience of one… and you can’t make money with that.”
Mark, you’re absolutely right — of course you can!
Radio products that have been specifically designed for the Internet, rather than mimicking the one-to-many broadcast model, like LAUNCHcast and Pandora, have tens of thousands of channels, each with an audience of one — and they are bringing in millions of dollars of revenues each.
Music-based radio moved from AM to FM in the ’70s because the technology allowed better fidelity. Similarly, music-based radio is moving to the Internet in the ’00s because the technology allows broader choice and it allows personalization.
George

“You can’t make money with millions of colors of media? Sure you can.”
Only if you own most of them.
Other than American Idol and the occasional sports event, what else attracts large audiences? Not too much. Certainly no one singular thing on any radio alternatives.
http://www.donkeith.com Don Keith

Mark, I agree with much of what you say on your blog–based on 25 years in radio, 12 with Tapscan and Arbitron, and now 6 on the media-buying side…but mostly as someone who loves radio as the personal, powerful medium it CAN be. But the series of questions near the middle of your piece (“looking away”) is about the most succinct and powerful summation of the reasons for radio’s demise that I’ve ever seen anywhere. It should be part of the eulogy at the funeral for this once-great medium!
And to George’s point: almost any radio station/content provider who is advertiser supported has some value to some advertiser at some price. How the provider packages, measures, prices, sells, and delivers that audience determines what that value is. I’ll pay much more for a tiny audience than I will for a huge audience…if that tiny audience converts to customers better than the massive one does and they are priced based on performance rather than audience share.
Don
http://www.donkeith.com
http://www.n4kc.blogspot.com
George

“if that tiny audience converts to customers better than the massive one does”
The problem right now, and this is endemic of all ad-supported media, not just radio, is the public turns off advertising. If they can skip it, mute it, or bypass it, they do. If your web page requires them to sit through an ad to get to content, you’ll lose them.
We’re running response ads in various shows, and no one responds. People listen to the shows, but not to the ads.
The audience Mark wants to reach wants to get their message from people they trust. And quite simply, they don’t trust the media right now.
So we can spend a lot of time debating who screwed up, or what kind of content we should provide, but the audience has already made their mind up. They want it now, they want it their way, and they want it free without advertising.
http://richardphelps.blogspot.com/ Richard Phelps

If you have a captive audience – a proven cornered niche – you will have no problems with response.
For one to have a captive audience, must equate to them trusting you. How do they do that? They are #1. You reflect them, not how you think you should, but how they think you should.
Do you have public forums where your listeners can physically meet with you and you can discuss ideas of what they like, and dislike? THAT is gaining a captive audience. College and ethnic stations breathe this kind of interactivity.
Sitting on the 2nd or 18th floor of a building guessing will not get you far if this is the kind of future we are all apparently about to succumb to.
cheers
George

“If you have a captive audience – a proven cornered niche – you will have no problems with response.”
The radio audience, for the most part, is not captive. They are often doing other things. Mostly driving in their cars, but sometimes working, sometimes shopping, sometimes eating.
But I get the rest of your post, and that’s a great idea to build those communities of fans for your station. Sort of a MySpace for radio.
http://www.donkeith.com Don Keith

George, you make a strong argument that NO advertising works, and we know that is not true. Targeted ads with a message that resonates work. That ain’t easy, though. Again, people want entertainment, information, and companionship from whatever medium they choose. They want to feel they are a part of something. American Idol is not the monster it is because the talent show is a new concept, it’s because viewers feel they have some say in the outcome.
I can remember radio personalities who could tell their listeners to buy a product and the store shelves would be emptied. They never took on an advertiser they didn’t believe in because they had built a trust with their audiences. In some cases, those audiences weren’t that impressive in Arbitron, but the personalities moved product, got response, and did it consistently.
Do listeners have more choices nowadays? Would it be so easy for a single jock to have that much influence in today’s fractured media world? Sure and of course not. But I still think programming that attracted enough of a defined target of listeners would have tremendous value to advertisers.
Don
http://www.donkeith.com
n4kc@blogspot.com
http://www.mcvaymedia.com Rockie Thomas

Mark, your points are right on. The new digital tower is actually the absence of one.
Radio traditionally had profited from a scarcity model of controlled distribution. If a radio stations tower reaches (X) amount of people in a market and the radio station has (Y) share, then station can price according to the perceived limited amount or scarcity of consumer ears.
Internet or digital distribution changes all of this…it’s the opposite. It’s not about scarcity…it’s about scale on two levels…tonnage and niche. Think of it this way, traditionally radio has lived in the bell curve of distribution where the mainstream lives in the middle fat part. The new distribution is an inverted bell curve where distribution works on a very, very large scale (YouTube) or on a very, very small scale (Pandora, iTunes). While all of this is not any earth shattering information, it is still information being ignored by many broadcasters.
Radio (and the labels) main problems are about control and once we loosen our death grips on the ‘old’ cliff we are all hanging on, we will find the ‘new’ floor was only 10 feet below us. Just let go.
MUSCLE13

I am trying to read all these comments but……
This is not rocket science. Content is King