03/24

Radio Spotloads and the End of the World

Bomb I bear witness to two fascinating articles – one by Sean Ross and the other by Jim Kerr – with different takes on the future of radio's spotloads.

Thanks to the new – and dramatically lower – spotloads of radio alternatives like Pandora and Slacker, Sean concludes "“A drastically reduced spotload is going to become the new paradigm" as the "expectation of an acceptable spotload is forever redefined."

That's a response in part to Slacker VP/Strategic Development Jim Rondenelli who indicated that his service had not had a single month since early last year where they had not sold out their four minutes per hour of inventory.

I'll leave aside the fact that if Slacker is selling out their inventory then their rates are too low.  Although anyone who sells airline seats for a living knows what I'm talking about.

I'll also leave aside the notion that the truly "acceptable" volume of spots is zero as long as we're talking about spots which are indifferent to who I am and what I want.

Look, listener tolerance is not a fixed thing.  It's a value tradeoff – I will tolerate unpleasant commercials in direct proportion to the value I place on the content surrounding those commercials.  Indeed, placing the emphasis on spotloads is entirely on the wrong side of the value ledger.  We should focus on what audiences are listening for, not what they're listening in spite of.

The problem is not that we have too many spots to justify our content's value, it's that we need content strong enough to provide value worth listening for.

Isn't this why Talk Radio has so many more spots than music radio?  Because it's worth listening through the spots for the content?

Meanwhile, Jim correctly notes…

Luckily, we have data that directly compares terrestrial radio with Pandora via Ando Media’s Webcast metrics. Does this data indicate that Pandora’s lower commercial load leads to significantly longer listening times? Not at all. The data show that terrestrial radio streamers have roughly twice the TSL as Pandora listeners, even with triple the commercial load.

Why, indeed, will Slacker and Pandora reset expectations for anything besides Slacker and Pandora?

Finally, it's worth noting that spots need not be the ugly interruptions they're painted to be here.  Nor should spots be the only manner in which an advertiser connects with a consumer via radio.  This kind of thinking imagines radio to be in "the spot business" rather than in the business of connecting consumers to advertisers via all manner of distribution channels and in numerous ways.

Ultimately, Radio needs to get out of its box and out of the business of spots and dots.

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  • George

    The fact, though, is this: Music listeners want music for free. They don’t want to pay subscription fees or sit through commercials. They don’t see a trade-off, they see two things: Free and everything else. There is nothing a music radio station can add that will make its audience sit through even ten minutes of spots an hour.
    That is not the case for radio listeners for news, talk, and sports. As shown by stations like WTOP and WCBS, their listeners will sit through 20 minutes of spots an hour. Same with Howard Stern’s audience.
    We’ve tried to sell other things, and they don’t bring even 10% of what spots bring. We can’t sell subscriptions, we can’t require listeners to give us their credit card numbers, and online revenues are no substitue for on air.
    This fact needs to be demonstrated to the RIAA, who think they can just grab 10% of radio revenues, without understanding that their content is actually creating the revenue loss. It’s driven by their audience that has devalued content, and expects to hear their favorite songs for free.

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

    But the Ando data reveal that listeners are indeed listening through those spots.
    Whether they’re attending to them is, of course, another question….
    Thanks George.

  • George

    That makes sense regarding the stream, since it’s not as easy to change internet streams as it is to push a button on a car radio. (at least for now) But PPM has a different story when those same spot clusters occur OTA.

  • Jerry

    Listeners will do more than tolerate commercials. They will anticipate the ones that promote products or services they want. They will also enjoy commercials that are clever & funny. Why is it in an era where the music and other content is thoroughly researched for listener enjoyment, but the commercials… Do the listeners really want phone numbers shouted to them a dozen times?
    As for George, does he really think that music is creating revenue loss? Let him try a format of 100% commercials & see how many listeners he gets.
    George needs to find some more creative ways to make money. Otherwise he will find himself following the path of my local hometown newspaper. More ads, more questionable ads, less content (a thinner paper) and a website that seems deliberately designed to prevent one from finding news.
    Keep up the good work, Mark.

  • http://profile.typepad.com/6p01053684fcbe970c charlestace

    “Isn’t this why Talk Radio has so many more spots than music radio? Because it’s worth listening through the spots for the content?”
    No, that’s not the deal, although your explanation comes close. Talk radio has always had bigg spot loads because interrupting talk (or news) programming with more talk (in the form of commercials) is less of a tuneout than occurs when music is interrupted with talk (in the form of commercials).
    Going from talk programming to commercials creates less of a sense of loss in the mind of the listener, when compared to the loss felt when music is interrupted by commercials.
    Talk and news stations have always been able to get away with higher spot loads because of the phenomenon I mentioned. It was true back in the 1970s and it can be true today (although many music stations are running a ridiculous number of spots).
    So it’s not that talk programming is considered more valuable, it’s that commercials on news and talk stations are less of a blow to be endured by the listener, relative to the programming content.
    Morning drive on music stations is a similar proposition. The more talk in the morning, the more commercials that can be borne by the listener (up to a point).
    I always instructed the traffic departments of the radio stations I programmed to max out morning drive with commercials whenever possible, in order to open up the remainder of the day for music.
    Of course, at that time, “maxing out” meant 8-12 minutes of spots per hour, not 20-plus.

  • David

    I think something needs to be said about the quality of the commercial. For me, most political, local car dealer and local tv news spots are so obnoxious, I don’t care how much I like whatever station I am listening to. I switch the channel every time. What used to be an art in the radio business has been reduced to an irritant for the most part.

  • http://www.walrusfm.com Dave Mason

    See? This is what we told you. We WARNED you. No we didn’t. Or did we? I sat in a meeting once (as part of a major radio company) talking about new commercial scheduling software. When I raised the question – “why can’t we schedule commercials the way we schedule music–the best hit the air first, the worst are always surrounded by the best” . . etc. etc. It was heartily accepted by the programmers. It was heartily ignored by the sales types. “Get ‘em on and get the money”. Doesn’t matter what it does to the audience. We can squeeze in another :15, and make it a 17 unit stopset and no one will care. This is a topic that needs sooo much attention that it’s not funny. At all. Show me a radio station that actually CARES about what goes on in those stopsets. I dare ya.
    We saw this when AM radio saw their audience go to FM. Now we’re seeing radio shift to NO commercial media. It’s insanity. Make it rare and people will pay more. Make it very valuable and they’ll even pay MORE. We have the technology. We need to find people who are creative, who can sell a product and pay ‘em. (Can you say commission?).
    Bad spots are the norm, and most always have been. If we can’t fix it-no one will. Even Domino’s realized their product needed fixing. They did something radio won’t. Domino’s fixed theirs.

  • George

    I think compared to other formats (such as news talk and sports), music is making less money. More creative ways to make money would be to create content we own, and that isn’t music. But no, we are not interested in 100% commercials. Although that works well for the folks at QVC.

  • Dave Mason

    Hi George… let's take a look at ROI. News/Talk is far more expensive to produce than music. Board ops, Producers, hosts, telephone screeners – that's just personnel! The technical expense (phone systems, delay) add even more. Music formats may make fewer dollars, but they may cost less too.

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