03/12

Hey Pandora, Watch That Commercial Load

radiodj

There’s this myth out there that its the personalization that provides the primary motivation to use Pandora: The limitless allure of choice and variety.

But I don’t think so.

I think it’s much more about the comparatively clutter-free environment. That is, fewer spots.

The “variety” argument:

Everywhere we turn, it’s clear that consumers favor hits. Even when he was onstage with me at hivio, the audio future festival last year, Pandora CTO Tom Conrad acknowledged that there is an equilibrium on each channel – that increasing “variety” past a certain point only invites consumers to “thumb down” that variety or skip it.

Likewise, Contemporary Hit Radio – stations with severely limited playlists – are healthier than ever today in spite of the proliferation of choices. No wonder, then, that SiriusXM’s version of the format – SiriusXM Hits 1 – is one of their most popular channels.

Sure, it’s not just about varied broad channels but also about hit-based narrow ones – the uber-specific formats nobody but you like. While that’s “variety” too, the market for niches will always be smaller than the market for hits. That’s why they call them “niches.”

The “fewer spots” argument:

What do the ratings tell us when a new station launches commercial-free? And what do those ratings say when we compete against a station built on a dramatic “uninterrupted music” contrast and the thin commercial load to back it up? What the ratings say is that these brands win and very often win big. Right up until their commercial policies change and the clutter spills from the speakers carrying all that extra listening to other stations.

In other words, even in terrestrial radio the facts are clear: Listeners love the hits and they love them unencumbered by spots.

By no means has Pandora overwhelmed the tolerance of its audience with its commercial load as it is today. Not, certainly, by comparison with commercial radio, but also not in its own terms. I wouldn’t be surprised if they added a spot or two every hour, and maybe that would not hurt them significantly. If I were Pandora, I would make sure my edge is always at least 2:1 – that is, half the spot load of my terrestrial radio peers.

So be wary, Pandora.

If the gap between the commercial volume on your service and the load on the local music stations ever gets to small, listeners will fail to notice any difference at all.

And then, all the personalization in the world will not be personalized to the thing the average consumer really wants: Fewer spots.

And you be wary, too, Mr. Broadcaster.

Because it will take more than smoke and mirrors and perceptions and images to make up for distinctions in spot load which are black and white.

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