05/09

Yes, Pandora is “Radio”

It’s a question vexing many broadcasters, especially those charged with leading the radio industry:

Is Pandora “radio” or is it something else?

I’m going to put that to rest right now.

Yes, Pandora is “radio.”  And you are “Pandora.”  Get used to it.

That is not to say Pandora is identical to “radio.”  Whether or not the two are the same is irrelevant to users, advertisers, and broadcasters alike.  You don’t have to be the same as radio to be “radio.”

You simply have to be used by similar people and similar advertisers for similar purposes.

At issue is how we define “radio.”  And any broadcaster who defines “radio” according to century-old rules in a digital age is a fool.  Not only because they would make an incorrect conclusion about Pandora but because they limit their own prospects by diminishing their own horizon in an era of unparalleled opportunity.

Weak Argument #1: “Pandora isn’t radio because it isn’t local”

Pandora is personal which is better than local.  There is no advantage to local per se unless you create value to the consumer based on your proximity to them.  Radio tends to use the term “local” to define their mailing address rather than their value proposition.  If being nearby were the ultimate advantage than syndicated programming and Lady Gaga would not need to exist. “Local” is what you do, not where you are – just ask AOL.

Weak Argument #2: “Pandora can’t save your life in a crisis.”

True.  But I would hate to think the value proposition for the entire radio industry is being reduced to one which affects 1 percent of the audience 1 percent of the time.  Are we really nothing more than an elaborate and expensive Emergency Broadcast System that features “ten in a row”?    Being the emergency medium of last resort is a powerful advantage, but it’s not what separates “radio” from “non-radio.”  In fact, I could almost argue that “emergency information is a feature, not a brand.”

Weak Argument #3: “Pandora is a feature, not a brand.”

That is, any broadcaster can create the capacity for their consumers to personalize content streams.  While Clear Channel is rumored to be creating just this capability, it’s telling that almost no broadcaster has done this to date. What do you call a feature that is never featured? And why does radio need a competitor with 80+ million registered users before recognizing that this notion has value?

Meanwhile, the truth is that a personalized Internet radio experience can be both a feature and a standalone brand at the same time.  For example, the ability to download movies is certainly a feature on Amazon, but that doesn’t keep Netflix from owning the category and winning the lion’s share of that market.

Weak Argument #4: “Internet radio reception is spotty and drops a lot.”

It can if you’re motoring around town via 3G.  But it won’t if you’re tuned in via wifi.

And remember two things:  First, listeners have been trained to expect inconsistent reception from radio over the years.  Second, there is a huge incentive for technology to solve this problem not for Pandora’s sake but for the sake of the infinite number of other digitally-powered solutions that are and will come our way via mobile devices.  Don’t bet against technology when it has huge consumer demand on its side.

Weak Argument #5: “Pandora is non-social.”

Broadcasters don’t really know what “social” means.

“Social” doesn’t mean “we have voices on the air and listeners can call in to win things.”  “Social” doesn’t mean “everyone can listen to us separately at the same time.”  “Social” means that every consumer is having an experience they share in some way with others.  By that measure, it seems to me that both radio and Pandora are “social.”  Although I would also add that both radio and Pandora could be a lot more social than they are today.

The problem is that radio is functioning from the perspective of scarcity – the idea that we must hold on to every bit of everything we have had the way a man hangs from a highrise on a ledge.

What broadcasters are missing in this picture is that while outsiders will encroach on our turf, the playing field for your company has just expanded tremendously.  You are both the aggressor and the defender. I don’t see nearly enough broadcasters recognizing that broader potentiality.

Instead, I see an almost delicious zeal in diminishing these new definitions of radio, whether by damning Pandora, by ignorantly arguing that “nobody has ever made money from streaming,” or by foolishly pursuing the ability to duplicate spots on air and on-stream despite the fact that this undercuts the value proposition of the digital stream for the sake of presumed short-term ratings dollars in a world of infinite reach where ratings will matter less than attention.

It’s as if many of our leaders are so committed to the past that they are deliberately blind to the future.

As Seth Godin said to me not long ago, “if radio had collected all the email addresses of their listeners when you and I first starting talking, Mark, do you know what they would have today?  They would have Groupon!”

Wake up and smell the future, radio.

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