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3 Lessons Radio can Learn from Netflix


On the surface there are a zillion differences between radio brands and Netflix. One is local, while the other is national, even international. One is free (for the most part) while the other is by subscription. One is audio and the other is video. And so on.

But the similarities are more important than the differences, because like Netflix, yours is a media company competing for the attention of consumers in a marketplace facing blistering changes and blossoming alternatives.

There are at least three lessons any radio brand can learn from Netflix:

1. Invest in content

The list of “Netflix Originals” is long and growing.

While hits like House of Cards and Orange is the New Black are the best known, Wikipedia lists more than 30 upcoming original series or continuations. And that list includes Marco Polo, one of the most expensive TV series ever made, second only to HBO’s Game of Thrones.

Radio broadcasters often deflect content creation discussions by arguing that “there’s no money” available for such folly.

But this ignores the issue at the heart of Netflix’s Originals: This is not about spending money on content because there’s lots of money to spend. It’s about a strategy which recognizes that destination programming is central to Netflix’s future, that simply repurposing other people’s content diminishes Netflix to the status of a “distribution channel” in an era when distribution channels are a dime a dozen.

The future is not in distribution. It’s in distribution and unique and compelling content which powers that distribution.

This is why Netflix is growing. This is why Netflix is investing. This is why Comcast and Disney own original content plus distribution. One without the other creates a vulnerability.

To the degree that radio broadcasters fancy themselves as distribution channels for the content of others (either music or non-music), they make themselves vulnerable to new forms of distribution and new makers of content. Radio Disney divested itself of all those AM stations in large part because a distribution channel that was once viewed as essential is now at worst irrelevant and at best redundant to more effective options for the Radio Disney audience.

If iHeartMedia could turn back the clock and buy Pandora, do you think they would? You bet they would. In fact, a former top executive told me so. Pandora would have been an investment in a new form of distribution and a new form of content (personalization and the secret sauce of the “music genome project”).

A smart broadcaster today would be browsing the aisles that contain companies like PodcastOne and Nerdist and Earwolf and Smodcast. Companies lacking the enviable stage of a broadcast platform, but chocked full of unique and compelling content.

Are they?

2. Own the content

“Invest” in content doesn’t necessarily mean “pay for syndicated content” (although it might mean “resell your owned content to somebody else”). Ideally it’s invest to own. Owning content means it’s yours for as long as your talent and your contracts last.

Netflix can justify the big price-tag for Marco Polo because Netflix holds all international rights to the series. That means it will never run on would-be competitors in a foreign country, as House of Cards does.

Plus, a property like Marco Polo – like cinematic summer blockbusters – is built with international appeal in mind.

So are you developing or locking up unique and compelling content that you own – content with broad appeal?

3. Distribution has consequences

It was only a few years ago that Netflix announced its quickly aborted plan to split into two companies – one that would mail old-school DVD’s to your house and the other that would be all-streaming all-the-time. It didn’t take long for Netflix to realize two things: First, consumers didn’t understand, appreciate, or want the confusion. Second, one day Netflix will be all-streaming all-the-time no matter what name they print on the shingle outside the door.

In other words, the trend to consume video content via streaming is inexorable.

Indeed, Netflix subscribers’ total streaming hours almost tripled from 2011 (the year the “split” decision was announced) to 2014.

Netflix recognizes that distribution channels come and go (it was 2002 when Hollywood brought us The Ring, about a toxic VHS cassette that killed whoever watched it; doesn’t that sound downright quaint in the YouTube age?). Indeed, technology itself comes and goes, and even if it doesn’t disappear it will fail to be relevant from a cultural or business perspective.

Vinyl, after all, is still around, but its commercial impact is trivial. The AM radio platform is certainly less consequential with each passing year (and that lack of consequence is proven by the fact that when we discuss FM chips in mobile phones it’s accepted without argument that there would be no home for AM there). And as goes AM may one day go FM.

But two things will always be important: Unique and compelling content and the distribution platforms to bring that content to the masses.

Developing strategy means planning for the long term today. It means placing bets on rising distribution platforms with unique and compelling content built for those platforms and not simply repurposed on them.

The Netflix experience via streaming is fundamentally different than the Netflix experience of queueing up DVD’s. Likewise, a radio stream should not simply be viewed as the over-the-air station now available online. No more than a book is a play is a movie.

Frankly, what too many radio broadcasters are really guilty of is a strategy based on the next three months with the assumption that the next three to six years will be a linear extension of that strategy. In other words, steady as she goes – nothing is really changing.


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