05/31

How Radio Can Battle Pandora – Part 1: Wake Up Radio

When broadcasters take a break from diminishing Pandora long enough to recognize that they have to worry about it, how do they respond?

More than a few broadcast companies are rushing to figure out how to manufacture personalized versions of their radio brands (yes, misbegotten “Pandora is a feature” crowd, I’m talking to you).  The idea is that this functionality has great consumer appeal, and Pandora’s success at offering it is a threat to the broader radio industry.

This functionality does have great consumer appeal, but that doesn’t mean it’s the recipe for conventional radio.  And that isn’t why Pandora is such a potential threat.

The fact is that radio – today’s radio – the kind in every home, workplace, and car – can already be personalized.

Every time you hit the button and change the station you have just personalized your radio experience.  And, like Pandora, the next song you hear can’t be predicted based on the one you just “skipped.”  Indeed, I’m here to tell you that punching the button is the exact same behavior as “skipping” the song.

Granted, the conventional “button-pushing” kind of personalization removes you from that particular radio brand.  But from the perspective of the consumer, skipping is skipping.

Okay, you might say, but Pandora uses all the thumbs up and thumbs down and skipping to craft a better radio experience for every consumer.

Not necessarily.  What Pandora constructs is a more uniform radio experience (note: I’m talking only about the music portion of the experience, not the spots, personalities, etc.). Fine tuning your offerings to my tastes is not the same as fine tuning your offerings to a uniform stream of content matched to any particular “genome.”  That’s because what I’ve heard before doesn’t necessarily predict what I want to hear next – let alone the genre of content I want next.

Further, from the consumer’s perspective a more “liked” (if not personal) blend of music is exactly what radio has been providing for generations.

Besides, I would bet that folks like “thumbing up” and “thumbing down” and “skipping” songs no more than they like changing stations.  Yes, everybody wants more variety – and ideally on one station, if at all possible.

None of this is intended to diminish the power of personalization in general and Pandora in particular.  I have written often enough on how profound this is. Just the fact that Pandora has the likes and dislikes of 100 million consumers is a staggering fact.

But broadcasters are under two mistaken perceptions:

  1. That Pandora doesn’t matter because radio is “big” and Pandora is “small.”  This is stupid thinking.
  2. That the way to battle Pandora and their like is by creating customizable versions of our brands or new brands which are built to be customized. This is wrong.

Pandora’s main advantage over broadcasters isn’t the fact that it can be customized.  It’s the fact that its ads can be delivered to particular individuals with particular characteristics and very little waste.  In other words, the threat now from Pandora is less an audience threat than an advertiser one.

Broadcasters are generally obsessed with foolish goals aimed at magnifying the reach of radio to more places and more devices and better measurement estimates of that listening.  Meanwhile, advertisers are recognizing the truth: That reach is less important than attention and accountability and estimates pale in comparison to 100% accurate metrics.

Wake up, Radio.

As we obsess on primping listening estimates for the advertising pie that pie is losing slices to more accountable alternatives – alternatives who know their audience by name.

(Click here for Part 2)

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