08/09

FM on Mobile Phones? Be Careful what you Wish For

What’s the best way for radio to compete in a newly digital mobile environment?

Is it to ensure that every mobile phone has an activated FM chip?  Is it, in other words, to expand the limits of existing technology to cover new gadgets which are built fundamentally on newer and more interactive and personal technology?  Is it to turn a mobile phone into the same kind of radio that sits on your nightstand?

No, no, a thousand times, no.

Wild projections flutter about the radio industry regarding the consequences of FM chips in mobile phones - “30 percent more listeners,” goes one.  Forget the reality that “30 percent more listeners” will take us well over 100% by most estimates, and even 30% more listening by the same listeners is an impossibly rosy and unlikely projection based on scant evidence.

Let’s go with this faulty assumption and assume that lots of new listening to radio occurs on mobile devices where FM has been legislated into the device.

How will this listening be recorded?

Keep in mind these mobile devices are largely used with wired earbuds, thus blocking the famously audible signal that translates radio listening to PPM ratings. No audible signal, no ratings.  Not 30 percent more.  Zero percent more.

And if that radio listening transfers from an open-to-the-air radio to a mobile device, radio would actually lose listening.

Arbitron’s Bill Rose was very kind to share with me the “state-of-the-art” when it comes to this:

With the introduction of the PPM 360, we have modified our mailing materials to panelists. Now, all members of PPM 360 households receive their own box and included within that box is a headphone adapter and instructions on how to use this. In households that do not have the PPM 360, we ask about headphone usage when they first join the panel and then every 4 months during their tenure as part of the process to update household/panelist characteristics. For each person in the household we ask whether they have used headphones in the past year to listen to radio and if they say yes, we send them a headphone adapter.  We do not have listening statistics on the amount of headphone usage in the PPM panel.

I think the key sentence is the last one:  There are no statistics on the amount of radio listening by headphones in the PPM panel.

Arbitron does have stats on the number of first generation PPM panelists who say they listen to FM radio using headphones or earbuds.  That number, reported to me by Arbitron, was 19%.

Naturally, that stat will be influenced by the number of radio-enabled devices requiring earphones.  But it will also reflect confusion about what is meant by “FM radio” considering listening to FM radio via web stream is the same “FM radio” one listens to via a traditional radio tuner, but without the tuner.  There’s a built in bias to favor a larger response, in other words.

But let’s pretend it’s real.  That means compliance is critical.  Yet there’s no measure of compliance with the request that the adapter be used with the listening. Arbitron simply doesn’t know.

Does it discourage radio usage if even the most diligent PPM panelist knows it requires extra work to listen to the radio and record that listening for Arbitron’s benefit? Sure. Does this extra effort discourage the usage of the adapter in the first place?  Again, sure.  So incentives exist to listen less and to comply less often when listening occurs.

Beautiful.

And we should be charging ahead in this direction why, exactly?

So we have two issues:

1.  An FM chip on mobile phones would generally be associated with the use of earbuds, and if the Arbitron adapter is not used, then listening which is swapped from an open-to-the-air radio to a mobile radio would result in lower radio listening, overall. Radio listening will vanish into the black hole of technological progress.

2.  The headphone adapter is another hurdle for PPM panelists to accurately record their listening.  Arbitron has no statistics on the amount of listening with headphones and no measures of compliance with the use of these adapters.  If I were a broadcaster, I might request this (I’m just saying). However, any student of behavior knows that the harder you make something, the less apt consumers are to behave that way.  So this hurdle will result in either less radio listening behavior or less compliance in the presence of the behavior – either way, the result will be no incremental listenership and quite possibly listenership declines.

So anyone who tells you radio must be built into every mobile device should likewise tell you how that listenership is to be accurately measured given the natural constraints of audible signals blocked by earbuds and awkward attachments designed to solve the problem by creating more work – and less compliance – for PPM panelists who are busy enough carrying a meter around and keeping it in motion.

Because, gang, if the listenership isn’t faithfully measured and that listenership is swapping in from your open-to-the-air radios, your ratings and the ratings of all your peers will go down.

Be careful what you wish for.

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  • http://www.facebook.com/robert.l.andrews1 Robert Lewis Andrews

    While I agree that demographics are an important factor, theirs one big thing left out here- additional licensing. to cover the licensing for internet broadcast, you would have to pay for additional licensing. Would this additional licensing be worth the cost of demographics? You have to estimate how much TLH you will have on the internet, get the coverage to meet, as going over that hourly limit will cost thousands. Then you have to set up web design. Make it DMCA compliant, and while a guy like me can do it compliant in hours flat, whoever did the radio station page will have a little research to make sure the stream is compliant. For his work? that cost money.

    It just depends on how many radio stations want to play five card stud with their commercial sponsors. And that’s all of them, its easier to point out demographics from surveys and interaction than say ,”This is the grim truth of our internet TLH.”

    Not saying I necessarily disagree. Just food for thought and a little devils advocate. It all depends on how many commercial sponsors want to say “Show me rock solid statistics, and how my sponsorship benefits me.”

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  • Anonymous

    In long periods of power breakes in the power of mobile sites, FM still aviable on FM by help of diesel generators. Even strong AM stations got diesel back ups.

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

    It will be a sad day indeed when the primary benefit of the entire radio industry is reduced to public safety in the event of a rare crisis.

  • BP

    Why do you need a chip when all smart phones have the TuneIn App that has all FM stations?

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

    The problem with your question is that by “you” you mean the consumer.
    And when the answer becomes “just in case the lights go out” that’s pretty sad.

  • Anonymous

    Mark, pls note that Andrew Elliot recomends each and every country to keep ther SW stations intact and in stand-by in case of big wars soon comming up. can be the way only to treach listners with news when in escapings etc, no power ,no mobile, no local FM/AM radio.SW radio is the way only to penetrate listners in no eletric areas.. roy http://www.radiosyd.eu Subject: [mark-ramsey-media] Re: FM on Mobile Phones? Be Careful what you Wish For

  • Digital Guy

    News flash- mobile operators also have backup generators. Is there anyone in radio that actually thinks that mobile operators haven’t thought of this and don’t care if their service is available during an emergency? No, of course not. And of course the emergency argument is humiliating and embarrassing and ignorant and stupid.

    What radio should be doing is coming together to revisit the absurd rate structure for streaming. Get behind the Sirius suit. File a seperate class action suit. Do something, anything to show you want to move forward with the future.

    Yes, lowering the rates would boost Pandora’s valuation but it would ALSO raise the valuation of every broadcaster that has a digital investment.

    Btw, no one in the digital world gives one thought, ever, about Arbitron. Their model is even more broken. Don’t pay them a dime for their digital service, it has exactly zero value.

  • http://twitter.com/Bertofprey Albert Menacher

    I think there could be some benefits of putting an FM chip in a smartphone. But only if you are able to create value in combining their benefits. Think of GPS and the multitude of cool applications. Why would this not be possible for radio apps?

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

    Incredibly sharp and on-point observations that should be their own post.
    Mark Ramsey

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

    I don’t know. There’s a lot that’s possible for radio apps now but broadcasters don’t have much appetite for it.
    Mark Ramsey

  • http://www.facebook.com/jordan.guagliumi Jordan Wilder Guagliumi

    Many people forget that just because something is possible doesn’t mean that it’s worth doing. Or that it’ll make money. About 10 years ago, someone came into our station cluster all excited because he was putting web-cams all over the state. He wanted us to get involved and pay him handsomely for the feeds. I remember asking him how we’d make enough money with that on our website to pay him an outrageous amount and turn a profit. He just stared at me like I was crazy. After all, people could see the snowstorm on top of Mt. Washington!

    Regarding “GPS and the multitude of cool applications” – Can it be widely accepted and monetized? Radio is successful because of its simplicity.

  • Greg Smith

    There is huge opposition from the CEA and CTIA. There is no support from Congress and the FCC. Yet, recently Jeff Smulyan and the NAB had a closed-door meeting about the inclusion of FM/FM-HD chipsets in cell phones. The NAB claims they are not seeking a mandate, but I don’t believe them for a moment. The CTIA already has CMAS/NOAA alerts on cell phones. Virtually no one is going to listen to OTA radio when there are a multitude of streaming apps. Interesting that Smulyan is the only iBiquity investor pushing for HD Radio on cell phones, outside of the NAB iBiquity investors. A mandate will simply never happen, so what is the point in all of this? It is the height of arrogance for the NAB to think they can dictate/legislate the CTIA’s business-model.

  • http://twitter.com/dmr_radio Andrew Curran, DMR

    There are a lot of well informed people making intelligent comments on this critical issue, starting with Mark’s initial post. I’ll take a moment and add my perspective.

    My current smartphone has a built in FM chip. In my experience, I am not cannibalizing open-to-the-air radio listening. In fact, the built in FM receiver requires headphones be plugged in, so I only use it when I’m running, doing yard work or other instances where I previously was listening to Pandora or my downloaded MP3 files. (I find switching between station apps, while on the move to be tedious.) As a result, I now consume more FM radio as a result of having the chip.

    With that said, Mark you make an excellent point about ensuring accurate measurement, which certainly needs to be addressed. In the meantime, we could use smartphones with built in chips to reinforce people’s habit of listening to local radio, while also increasing their consumption of the platform, which in turn can also help drive listening in the car and at work.

    When it comes to downloading individual station apps, how many P3s, P4s, etc to a station are taking the time to do it? My guess would be after P1s and maybe some P2s, there aren’t many downloads taking place. In addition, it’s still early on, but iHeart Radio has just 12 million registered users. One of radio’s core strengths is its availability and ease of use, which the FM chip would maintain.

    Radio is to audio content, what Google is to search… the 800 pound gorilla of their respected industry. Smartphones should have both.

  • Rich Wood

    Actually, most stations don’t have generators. The stations that do have them are usually those “strong AM stations.” The false premise that this push is based on is “serving the community” in emergency situations. Most of the nation’s “crisis stations” are AM, not FM. Few stations on either band have fully staffed news departments. During last year’s violent New England weather there was no place on radio to turn in Western MA for live information on the path of the tornados. One TV station had the information. Radio dealt with it after the fact with cell callers reporting damage. That didn’t help those in the tornado’s path.

    During the unexpected snowstorm many areas were without power for a week or more. Both radio bands were dead silent. No generators. The AM band was eerily silent. No radio. No electrical interference. No emergency information.

    I’d be less opposed to this proposal if it were based on an honest submission to politicians that it’s an attempt to increase listening rather than the lie that our butts will be saved in an emergency. This will be a decision based solely on politics, not real life.

    I agree with Mark that the extra heavy lifting required to adapt headphone listening for PPM measurement is a non-starter. Few of us are willing to dress up in gadgets that make us look like we’re wearing Police Officers’ belts.

    Those of us blessed with numerous pocket-sized radios are well aware of how unreliable they are, especially on FM. When I lived in New York City, none of them worked reliably. Here in the boonies, they don’t work well, either.

  • Rich Wood

    Actually, most stations don’t have generators. The stations that do have them are usually those “strong AM stations.” The false premise that this push is based on is “serving the community” in emergency situations. Most of the nation’s “crisis stations” are AM, not FM. Few stations on either band have fully staffed news departments. During last year’s violent New England weather there was no place on radio to turn in Western MA for live information on the path of the tornados. One TV station had the information. Radio dealt with it after the fact with cell callers reporting damage. That didn’t help those in the tornado’s path.

    During the unexpected snowstorm many areas were without power for a week or more. Both radio bands were dead silent. No generators. The AM band was eerily silent. No radio. No electrical interference. No emergency information.

    I’d be less opposed to this proposal if it were based on an honest submission to politicians that it’s an attempt to increase listening rather than the lie that our butts will be saved in an emergency. This will be a decision based solely on politics, not real life.

    I agree with Mark that the extra heavy lifting required to adapt headphone listening for PPM measurement is a non-starter. Few of us are willing to dress up in gadgets that make us look like we’re wearing Police Officers’ belts.

    Those of us blessed with numerous pocket-sized radios are well aware of how unreliable they are, especially on FM. When I lived in New York City, none of them worked reliably. Here in the boonies, they don’t work well, either.

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

    Good comments here, Andrew.

    First, yes, it is certainly possible that listenership to FM on mobile devices can be additive rather than cannibalistic. That said, the notion that listenership would rise by the “30%” figure which is being thrown about is patently absurd.

    My point about cannibalization remains true, of course. I don’t mean to imply that ALL usage would be cannibalistic, but unquestionably some will be. This is not like using streaming episodes or DVD’s of Mad Men to pump up ratings for the new season. It would be more like giving people more ways to watch the new season but only properly measuring the results when the show airs on AMC. More access is not necessarily promotional when the access is a perfect substitute for what’s on the air right now.

    I agree with you that apps are likely to be downloaded by fans primarily, but that’s exactly who apps are for. In fact, the whole bias for the mobile device is that the owner of that device gets to choose what goes on it. That’s the whole premise of mobile. A mobile phone is not a radio, it’s a personal entertainment device where I, the consumer, get to define my entertainment.

    That’s why I don’t agree that smartphones “should” have anything. Mine “should” have whatever I, the consumer, want mine to have. And if I want radio built in, as you do, I am free to buy a phone which features this, and device-makers are thus incentivized to make them. And if not, then not.

    The notion that elements in the radio industry can and should muscle consumers belies the larger point: Consumers will want radio on their mobile devices in direct proportion to the degree that this content is unique and valuable.

    Let’s put our focus there.

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

    Good comments here, Andrew.

    First, yes, it is certainly possible that listenership to FM on mobile devices can be additive rather than cannibalistic. That said, the notion that listenership would rise by the “30%” figure which is being thrown about is patently absurd.

    My point about cannibalization remains true, of course. I don’t mean to imply that ALL usage would be cannibalistic, but unquestionably some will be. This is not like using streaming episodes or DVD’s of Mad Men to pump up ratings for the new season. It would be more like giving people more ways to watch the new season but only properly measuring the results when the show airs on AMC. More access is not necessarily promotional when the access is a perfect substitute for what’s on the air right now.

    I agree with you that apps are likely to be downloaded by fans primarily, but that’s exactly who apps are for. In fact, the whole bias for the mobile device is that the owner of that device gets to choose what goes on it. That’s the whole premise of mobile. A mobile phone is not a radio, it’s a personal entertainment device where I, the consumer, get to define my entertainment.

    That’s why I don’t agree that smartphones “should” have anything. Mine “should” have whatever I, the consumer, want mine to have. And if I want radio built in, as you do, I am free to buy a phone which features this, and device-makers are thus incentivized to make them. And if not, then not.

    The notion that elements in the radio industry can and should muscle consumers belies the larger point: Consumers will want radio on their mobile devices in direct proportion to the degree that this content is unique and valuable.

    Let’s put our focus there.

  • http://twitter.com/ScottSajones Scott Jones

    As a numbers guy I certainly appreciate the importance of tracking user trends, it is very necessary. I am also a firm believer that if you cannot measure it, you need to seriously consider other options or consider not doing it at all. However, in this case I wonder if this scenario falls into a different category all together. As broadcasters, content is king, we just need to make sure that content will work on multiple platforms. In this “iworld”, our listeners are continually telling us through their habits that they will listen the way they want to, when they want to.

    All of this to say, in this case is it really about measurement, or is this more about giving our listeners one more avenue in which to experience us in the presence of our brand. ( copyright Mark Ramsey). We after all are more concerned about loyalty as that is what creates profitability. Profitability is the measurement we all look with the most focus anyway. I again understand the importance of measuring that loyalty, BUT, I guess what I am trying to say is having the FM chips in and active without measurement would still be valuable. The measurement will likely come later.

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

    Scott, I hear you, but you are looking at this from the perspective of the radio industry, not the perspective of the consumer.
    What the consumer wants on her mobile phone is up to her, not up to us.
    The problem (such as it is) with radio is that we already have what is perceived as universal access. Thus consumers are not clamoring for radio to be present in their mobile devices. A clamor is unlikely to arise as long as every household contains five radios already.
    If we as an industry can get realistic about what consumers do and don’t want in their mobile devices then we will focus more on satisfying their needs on that platform and focus less on turning their smartphones into radios.
    Finally, I should add that more distribution for radio is always a good thing – but if it isn’t measured and it cannibalizes existing listening it will be hard to argue for it.

  • http://twitter.com/dmr_radio Andrew Curran, DMR

    Excellent points, but plenty of apps already come preloaded on smartphones, which complicates the notion of mobile phones being a personal entertainment device where I, the consumer, get to define my entertainment. Manufacturers have already set the table so to speak.

    The consumer certainly gets to chose what they will actually use on their phones, but unless manufacturers are going to start delivering phones without anything pre-installed, then radio needs to play by the same rules and come pre-installed.

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

    If radio was the reason why people bought phones, then radio would be preinstalled. You can bet on that.
    Lots of research has indicated that radio is not a reason why people do or don’t buy mobile phones in general.
    If radio wanted to pay for distribution on these devices (as other apps sometimes do) then it would be preinstalled.
    But there is no “should” or “should not” in consumer electronics.

  • Budd

    Raiising the issue of Arbitron measurements is important. But, we need as many listenrs that we can obtain and that includes on mobile receivers. The
    problem is Arbitron which has never been able to produce accurate
    radio ratings. From the Diary method to PPM, its all an illusion. Our goal is to produce results for advertisers. You need this with or without Arbitron.
    The ultimate solution is an electronic measuring device that measures electronically what any person is listening to or viewing. It will be up to Arbitron or its successor to come up with accurate measurements.
    Neilson has solved that with electronic devices. I vote for maximum
    access to FM radio stations, notwithstanding Arbitron’s deficiencies.
    Perhaps we can all stop using Arbitron, and what a joy that would be.

    Budd ih Los Angeles

  • Jeff Smulyan

    Mark, you’ve never let any facts get in the way of your analysis, so I won’t confuse you with any more today.
    Jeff Smulyan

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

    If indeed this is from Jeff, I’m disappointed to see a comment like this. Especially since I specifically worked with Arbitron to get the details right.

  • Greg Smith

    In the past, I’ve seen such nasty comments from Peter Ferrara on Jacob’s Media HD Radio posts. Jeff’s comments don’t surprise me at all, because he knows that this is all going nowhere. I do commend Gary Shapiro for standing his ground in support of the CTIA, as he must realize the true objectives of attempting to force FM/FM-HD chipsets into cell phones.

  • Jaye Albright

    Where your opposition is coming from is less clear to me than it is for the other advocates pro and con, whose financial interests are pretty obvious.

    I assume
    it’s idealism and a drive to push us all as rapidly as possible into the
    future, since his financial interests are supported by today’s radio
    too.

    Of course, the future is definitely coming at us lickedy split and we
    are in the midst of rebuilding business models to capitalize on it, but
    that’s no reason to shut the doors and turn out the lights while radio
    just as it is today remains so important to so many folks (FM Chips in Cell Phones Survey Results – NAB).

    Et Tu, Ramsey?

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

    Hi Jaye!

    I have no opposition to anything. I am simply assessing the trends and the marketplace in an even-handed way as I have been doing for years.

    As the HD radio situation proved – another case where I was shouting against the wind – my track record is not too bad.

    My choice is to go along with strategically misguided thinking or to speak out for the sake of the very industry we’ve been working in for years.

    Go ahead, legislate FM into mobile devices. Any thoughtful person who thinks this changes anything over the long run is not thinking clearly.

    That’s my position.

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

    I think it’s worth noting that an open conversation is a good thing and everyone – from me to Mr. Smulyan (if that’s even him) to Peter Ferrara back in the day are doing what they feel is best for themselves, their careers, and their industry.

    This is what the “marketplace of ideas” is all about.

  • Anonymous

    best solution is to have a wind-up crank radio with shortwave. A SW station can cover a continent. The disater in Australia in an area as France, no power to mobile, local AM/FM etc and the shortwave did work all over the area.

  • http://twitter.com/ScottSajones Scott Jones

    I would agree with these statements and that does make sense. The push for radio on cell phones definitely is being driven by the industry and not the consumer.

  • http://www.facebook.com/people/Antoni-Caleca/100001340392970 Antoni Caleca

    Can’t listening to FM on a cell phone be measured? I understand the PPM dilemma, but doesn’t Arbitron still use diaries. If a person could listen to FM on a cell phone, they could save data charges by listening to an FM station, if the content is there. Curious about your answer.

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

    Diaries and PPM meters are mutually exclusive. Markets use either one or the other, not both.
    “…if the content is there” is a big “if.”

    Can Pandora be duplicated on FM? What about on-demand?

  • Joe lamb

    Forgive the voice of a “consumer” (I stumbled across this thread while searching for explanations to the removal of FM Radio from my new Galaxy S3 phone) but I am astonished how many people on here are so dismissive and apparently so cocksure about what we consumers want or need. First: TuneIn and the like afford INFERIOR sound quality to built in FM – this is important. Second: we consumers pay enough already for our mobile phone price plans – we have no relish for paying more on data. Third: we are growing tired of our media consumption being MONITORED, aggregated, monetized and our privacy being abused. Be thankful we listen at all. Last but not least, FM radio is a universal technology that has worked well for decades, with sound quality as good as and in many cases better than digital radio – take it away at your peril!

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

    Hi Joe,

    I’m not presuming what consumers want, but I am presuming that device manufacturers (who want to move merchandise) are keen on what consumers want.
    Needless to say, what consumers want never means what ALL consumers want. But I suspect you are in the minority unless device manufacturers are behaving irrationally and with disregard to their own bottom lines.