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Creating the Future of Radio

A No-Nonsense Marketing Smart Tip April 14, 2005

A new report from Forrester Research predicts that, by 2010, nearly 10 million households will use HD Radio. Unfortunately, says Forrester, two million more households will listen to Podcasts, ten million more will subscribe to Satellite Radio, and twenty-five million more will stream audio from the Internet on their computers, through their iPods, via their cell phones, etc.

HD Radio is fine, but it is not the only or even the best antidote to what ails the Radio industry. I believe there are three things our industry needs to do to remain competitive, stay vital, and move vigorously into the future.

1. It’s the Content, Stupid

Your station doesn’t own Major League Baseball. It doesn’t own the hits. It doesn’t own any program it syndicates from others. Your station owns only that content it or its company creates. Period.

The Forrester study advises us to adopt subscription-based services, on-demand delivery, and other models aimed at monetizing every element of what we create and produce. This is, of course, a no-brainer. But to sell compelling content you have to own some first.

Our industry must act much more decisively to attract and develop star talent that we own unambiguously. We must transform the notion of station programming into the broader concept of developing station programs. We must act more like the television industry and program our radio stations likewise. We must launch the equivalent of fall seasons and take smart risks. We must invest in order to expect a return.

2. HD Radio is not a Panacea

Yes, the acoustic difference is profound, especially for AM Radio. Yes, the potential digital text services are significant. Yes, the idea that listeners can record our stations the way TiVo records TV is potentially appealing. Yes, the idea that one station can instantly become several has obvious positive implications.

But why will regular people be interested enough to buy these new receivers in quantities large enough to stave off our competition?

After all, digital sound quality is not what’s driving Satellite and “digital” per se is not a consumer benefit. The text services are interesting, but will not be unique to HD Radio. The ability to record our stations only matters if we offer content worth recording. And when every station becomes several stations we are buying more shelf space, but it’s on an infinitely larger and more competitive shelf.

Our industry must acknowledge that going digital, while necessary, is hardly sufficient. HD Radio is only a first step.

3. Follow the Ears – Everywhere

That’s the advice from Canadian broadcaster and blogger Tod Maffin, and I think he’s exactly right. Stations ask me if they should be streaming. Hell, yes. Should they be podcasting? Hell, yes. If it has a speaker or two ear buds then the Radio industry should be providing content for it, buying it, licensing to it, investing in it, and distributing through it.

Wherever ears are tuned to audio entertainment or information, that’s where our industry should be because that, not “Radio” per se, is the business we’re really in. That’s where your proprietary product should be. That’s where your future is.

According to Maffin, Cingular Wireless will debut new music singles from top artists before these songs hit the radio. That is, Cingular will be picking the hits. Another company, Mspot, is streaming “radio” stations to cell phones for $5 per month, and Virgin Mobile is streaming four “radio” stations to some customers with no service charges whatsoever!

“The ‘transmitter’ of the next century will be the cell phone,” says Maffin, not the radio tower. “Embrace all distribution methods or be made irrelevant by them.”

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