05/09

Do People Really REALLY want FM on their Mobile Phones?

Another study from NAB has been issued which supports the notion that consumers want FM on their mobile phones.

And, like all studies about what people WILL do rather than what they HAVE DONE in the past, it’s flawed.

You can ask people what they value and what they have done and they will give you an answer that represents their best frame on reality. But ask them what they intend to have for breakfast tomorrow morning if the moon is in the seventh house and Jupiter aligns with Mars, and their answer will be far less predictive of actual behavior.

The NAB study asked some interesting questions, including this one:

During times of emergencies, such as blizzards, hurricanes, tornados and local or national security threats, a cell phone with a built-in radio would let you listen to local weather and other emergency alerts as they are happening. How important would this feature be to you?

That’s a decent question and it’s about what folks value, not how they predict their future behavior.  However, the question assumes no trade-off.  It assumes that the consumer makes no choice in how they would access this information.  It doesn’t, for example, ask them what form they would prefer to get their emergency information in (e.g., TXT, radio, email, tweet, etc.).

That said, it’s interesting to note that the fraction of consumers who consider this to be “very important” is actually down from 34% to 29% since 2010.

Then, after priming consumers with this value proposition for radio (and priming is a form of bias), they ask the “money question”:

When thinking about purchasing your next cell phone, would you consider paying a one-time only fee of 30 cents if you could receive access to local radio stations through your phone? This option would not require using a data or calling plan and would be a one-time only charge when you purchase the phone. Would you…[strongly, probably, or not consider this option]?

Now we’re into the “tomorrow’s breakfast” question.

The truth is that it’s easy to answer “yes” to this question because it lives in a bubble, whereas the real world features the nagging inconvenience of choices and trade-offs.

For example, we could ask this same question about receiving local radio stations in your toaster or your golf cart or your new tie. Actually, the idea of an extra 30 cents for radio in a new tie is a pretty good one!  Maybe I should have held that one back.

43% say they’d “strongly consider” the option of 30 extra cents for radio on their phones (ahem, but shouldn’t this be way closer to 100%?!  It’s 30 friggin’ cents!)

It’s a silly question for another reason – if you actually had two versions of the same phone, one with radio and the other without, and one was 30 cents more than the other, 100% of consumers choosing between those phones would buy the radio-powered one!

It’s easy to say “yes” to a small price point for value.  It’s tougher to trade that value off other value and determine what phone (not what radio) one is actually going to buy when at the point of purchase.

And then the study goes on to ask a truly absurd question:

Regardless of whether you own a cell phone or not, if your phone was equipped to receive local radio stations without using applications (apps) or your data plan, for which of the following, if any, would you use this function? Please select all that apply….[weather, music, emergency information, etc.]?

So now we are asking to consumers to imagine owning a phone (if they don’t) and further imagine that they are unable to use any apps or data on their device (note we are specifically not asking them if they would prefer to get any of this information by TXT, which is how Kenyan Coffee farmers will be getting it, and their grid isn’t better than yours).

So what does it all add up to?

I think it would be fabulous if radio were part of every mobile phone.  But I think it’s up to the consumer to vote for that feature at the cash register.  And it’s our value proposition, not a survey statistic, which will drive that outcome.

There are phones with this capability built-in – even in this study 16% of consumers say their phone contains a radio. Are they right?  Do FM-enabled mobile phones possess 16% of the market?  If so, then isn’t that a far better argument for FM on mobile phones than any biased construct that aims to predict future behavior without trade-offs?

And why is the selling point obsessed on emergency information when “the grid” goes down?  What about the convenience of using the same radio dial consumers are comfortable and familiar with transplanted to their favorite mobile device?

This is not a tough discussion.  Either consumers value the feature and actually buy the phones – or they don’t and won’t.

Rather than deal with hypotheticals and maybes, why don’t we deal with ways to make the cash registers ring for sellers of mobile devices?  Why don’t we deal with what consumers actually want, not what they say they might want later?  Why don’t we ask device makers how radio could help them sell more and better phones?

* = required field
  • Greg Smith

    “Study: Consumers want HD Radio in mobile devices”"iBiquity Digital unveiled the results of a recent comScore study that validates consumer demand and willingness to pay a premium for HD Radio Technology as a handset feature. 68% of consumers surveyed are interested or extremely interested in mobile phones that include HD Radio Technology. 75% of those who own a mobile phone would listen to HD Radio broadcasts via their mobile phone. $42 is the value premium consumers attribute to HD Radio Technology in mobile phones.”
    http://rbr.com/study-consumers-want-hd-radio-in-mobile-devices/

    This “study” was supposedly run in March 2010 concerning HD Radio in cell phones, but the “study” never appeared in comScore’s database. Then, the NAB created http://www.radiorocksmyphone.com/ which appears to be an offshoot of this “study”, but dropped any mention of HD Radio. Now, the NAB is no longer pursuing a Congressional mandate for FM capabilities in cell phones. In the lastest meeting with a House subcommittee, AT&T and Verizon were invited but did not show. The cell phone providers have been working on their own messaging alert system. With an estimated 700,000,000 analog radios, the NAB has no business demanding this of cell phone providers. These “studies” are totally bogus, and are a ruse to backdoor HD Radio into cell phones, as the NAB Board members are investors in iBiquity.

  • http://www.facebook.com/chrisbaker04 Chris Baker

    In today’s business age it’s all about value.  Let’s look at the top 2 things they say they would use this FM chip for again.  Musically speaking, I would venture to say that people would choose to be able to interact with the music that they hear us playing by “liking”, buying, sharing, etc..way before the would just want to listen. Yes, an FM chip would allow you to listen without using your data.  That’s great, but it severely limits the opportunities to interact with the audience and for us to be seen as more than a jukebox.  It would be a GREAT backup to have an FM chip in a phone for severe weather, but I don’t want the industry I love to be “the backup”.  Would it not be better to provide video, text and other visual elements alongside our audio signal?  What about multiple audio signals from our various mobile units?  An FM chip can’t provide that opportunity.  Those are all value added propositions to our current client base (consumers and advertisers).  If I were in charge I’d be developing that angle so I could create more revenue streams and further endearing our brands to our audiences.  I’d be looking for value added propositions to add to our current portfolio of offerings so we are strategically setup for the future’s future.  We seem to be forgetting that the delivery method of our content does not define and constrain the brand’s we have developed.

  • Lisamgs

    These studies need some serious reworking.  For instance, you can design studies that use discrete choice modeling to better determine trade offs of what people want and for how much $$ that are much more realistic than these questions.    

  • Anonymous

    As long as we’re asking silly questions, here’s my contribution:

    You have found the perfect phone and it comes with your choice of promotional offers. Which of the following two offers would you be most likely to choose?

    A: Getting access to local radio stations through your phone for a one-time only fee of 30 cents.

    B: Preloaded apps from Pandora, Spotify, Slacker, and MOG, plus a 3-month FREE premium subscription to each.

    As for tomorrow’s breakfast? I think I will have banana nut bread and coffee, with my RSS feeds (where I saw this post) and Spotify (if I want music). But this could all change tonight.

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

    Good point.

    And easily within the reach of the phone makers.

    That’s the thing about trade-offs…we can imagine as many as we want. That’s why the best ones are the ones that actually exist in the market.
    Mark Ramsey

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

    Yes, but the purpose of this research is to persuade, not to inform.

    And that is the biggest shame.

    Mark Ramsey

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

    This is all exactly right.

    I pondered going into the issue of what good this really does radio in the long run if it actually happens, but I felt like that was a different post…
    …one which you just wrote. :-)

    Thanks

    Mark Ramsey

  • Huw Drury

    It always amuses me how the radio industry expects others to do their work for them. If the backers of this idea are so convinced their survey data is accurate, why don’t the get the funds together and build a radio with a phone in it? The old ‘put your money where your mouth is’ principle. Want to test how good the idea is…put it on kickstarter.

    Why should phone manufacturers who make damn fine phones be expected to tack bits onto their products? Of course, if the radio industry had led the way in the first place instead of sticking their heads in the sand for so long we wouldn’t even be having this discussion.

  • Luiz Artur Ferraretto

    Mark:

    I’m writing from Brazil, where there isn’t this
    discussion. Here, listening FM radio in mobile phone is so common. In fact, the
    AM stations tend to end your operations because that. Of course, teenagers and
    other prefer listening mp3 files of music, but news, sports (soccer) and services
    are still important for the listeners.
    Luiz Ferraretto

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

    Yes, things work differently in different parts of the world, but in each part one thing is common: Consumers have spoken.

  • Anonymous radio programmer

    This also presumes that radio stations will be staffed properly in times of need or emergency situations.  How many times have we heard the story of an out-of-market voice-track running during a local emergency?  If radio is going to pose itself as a live, vital service, it has to be one.  I think if the survey asked about people’s confidence in radio’s ability to deliver these crucial services at times of acute need that the results might have been revealing in an entirely different way.

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

    Fortunately there are still plenty of examples of radio doing this right!

  • Dave Mason

    This is a tough room.  Many things count in this world, and as we know it radio doesn’t.  It’s a utility, always has been and always will be.  We can’t force phone manufacturers (or as Mark puts it-tie manufacturers) to put radio in their devices.  We need to provide a service that people want and expect.  There’s plenty of research on what they want.  There’s little attention paid to that research for the most part.  Never mind the reason – just give ‘em what they want.

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

    Thanks Dave. Always really good to hear from you.

  • Anonymous

    I wonder how many people who end up with a radio in their phone will remember it’s there and use it. I think about my phone camera, which I always forget is there (Okay, I’m not a young person anymore). Further, it’s the worst camera ever (don’t have an IPhone). How good or bad will phone radios be? There are so many factors that can’t be researched.

  • Dave Lange

    Mark I usually agree with you and the great studies you do, but on this one I wonder if we did include broadcast radio in cell phones would we eventually end up like the European world (or many other countries) where cell phones come with FM or DAR receivers in them?  When you look at a whole world in your phone so dependent on bandwidth and more bandwidth every day and more and more users streaming videos, downloading whatever, and jumping on their browsers all the time it would be great to have some entertainment in my hand that didn’t require tons of data and big chunks of bandwidth.   Do we really know what we want in a cell phone?  I wouldn’t have thought of having an app so I could read the stars every night but I do.  Back in 1998 there probably were not a lot of people that wanted a camera in their cell phone.  We now have so many options for our phones – why not an FM or even an HD tuner?  

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

    Hi Dave!

    Those capabilities exist in those phones because consumers in those countries demand them. There are many reasons for that, including the fact that radio isn’t nearly as mature in some corners of the world as it is here (the less mature it is, the more novel it is, and the less ubiquitous it is WITHOUT a built in capability on a mobile device).
    And while it’s true that nobody knows what they want until it’s in front of them, there ARE phones in the US with these capabilities and they evidently are being overlooked.
    There’s no argument NOT to have these things in phones except for the best argument: Consumers are training themselves to get their fix in other ways (or on other gadgets, like the 800 million radios in every work, home, and car).