top of page

Is Streaming Momentum Stuck? Really?


There’s been lots of attention in the radio industry trades lately about the lack of audience momentum for many broadcasters in the streaming space, even as so-called pure-plays like Pandora and Spotify grow by leaps and bounds.

Tom Taylor writes:

iHeart’s not the only terrestrial operator with flat or negative growth over the period from February 2013 to October 2014. #3-ranked CBS is down from about 69,000 average domestic streams (6am-8pm weekdays) to a little less than 60,000. #4-ranked Cumulus is off from a bit more than 70,000 to 58,104. Cox is off from 30,327 to 23,674. Even EMF, the giant Christian non-com operator of “K-Love” and “Air1,” is off from about 30,000 to about 20,000. So you could argue that iHeart’s strategy worked to keep it steady or slightly growing. Because generally, terrestrial radio hasn’t been growing online – while Pandora more than tripled, from 600,000 average active sessions in March 2011 to roughly 2.2 million in October 2014.

I want to dig into what looks like a “stall” and offer up some recommendations on how to get a larger piece of what is unambiguously a growing pie.

Let’s start:

  1. These statistics don’t tell the whole story. The greatest drag on streaming growth comes from younger-targeted music stations and the younger audiences that consume them. For millennials who want their favorite music, why not choose personalized options with fewer commercials over mass-appeal options with more clutter? By contrast, the audience for spoken word streams continues to grow, and publishers like NPR, ESPN, Dan Patrick, and various Sports and News brands are steaming ahead with double-digit gains. Finally, the static numbers Tom wrote about do not account for the station sell-offs by Cumulus to Townsquare or the dropping of the AOL/Yahoo agreements by CBS.

  2. The digital audio space is more competitive than the analog audio space. More options means a tougher fight to grow, even as the urgency and need to grow continue unabated. The new space may be more competitive, but at least some of that audience and some of that listening will be ripped from the analog space, so if you fail to compete you will simply fail – period.

  3. The actual experience of listening to some streaming products of terrestrial broadcasters leaves much to be desired. Digital partners like Triton have repeatedly demonstrated that a stream can sound as good as any over-the-air station, but not without a minimal amount of care and feeding which, surprisingly, some broadcasters don’t see fit to provide. If you don’t take your streams seriously, why should your audience?

  4. If I get your radio brand on each of the five radios in and around my household (that’s the average in the US), then why should I bother to listen to your stream unless my reception is crappy or unless I live out of town? In other words, if we look at the stream as nothing more than a new distribution channel for the same product that is already ubiquitous and familiar on my trusty radio, how much growth can you possibly expect?

  5. What’s the added value of the digital experience? That is, how do you activate the power of an all-new digital platform to bring more value to consumers than simply repurposing the over-the-air signal to a digital stream and calling it “radio”? Pandora is not simply a radio service, after all, it’s a personalized service – that’s added value that drives usage. What can consumers do with your digital audio that they can’t do with the over-the-air version? What is my added benefit to consuming your content online? Does your radio brand see streaming as a distribution “box” to check or as an opportunity to expand your brand and your connection with an audience?

  6. Various broadcasters are deliberately throttling supply – they are intentionally reducing usage in order to reduce the expense of music licensing fees. That will resemble shrinking demand when it really represents shrinking supply. This is fundamentally a business model problem masquerading as a demand problem, but don’t be fooled. Pandora and Spotify and others prove the demand is there – and growing.

  7. The car continues to be the place where most radio is consumed, and the biggest changes to in-dash technology in the car will be taking place over the next five years. Just as the introduction of smartphones transformed usage for Pandora, so will the emphasis on streaming in new cars transform usage for audio, albeit over a longer time window. We are in the opening innings of this ballgame today.

  8. It’s rare to see a stream marketed. While the absence of marketing is common for over-the-air radio brands, those brands are at least established on their AM/FM platform – not so for streaming brands which exist alongside millions of innovative new and entertaining alternatives, audio and otherwise. In fact, would you even know a station stream exists if you didn’t find it on an aggregator app or that brand’s own website?

  9. There’s generally a lack of investment and commitment in streaming. Because the music content is more expensive and because the business model is intentionally underdeveloped, it’s more convenient to play at streaming rather than commit to it wholeheartedly as the pure-plays have done. As with anything in business, commitment is at the heart of success.

  10. Streaming is viewed by broadcasters as “what we do with our existing station” rather than a palette of audio possibilities awaiting an artist with ideas to execute. The most progressive terrestrial broadcasters are programming new brands on streaming platforms and monetizing those brands by gathering data on the listeners and making the inventory “smarter.” If you have an audience of Hip Hop fans, then you should be streaming a menu of Hip Hop alternatives to that audience, not simply the one brand you’re famous for.

  11. “Streaming” is not the whole story – audio is the whole story. Some of the momentum online is to streaming pure-plays, but other momentum belongs to on-demand platforms like Spotify (which is both streaming and on-demand), YouTube (a huge source for on-demand music), and the universe of podcasts which unquestionably suck up some of the time that would, in simpler times, have belonged to radio. So you don’t just need a streaming strategy, you need a complete digital audio strategy – that’s streaming, on-demand, everything!

  12. Online you have to be unique to grow. On the radio consumers compare you to a smattering of other radio stations. Online you’re compared to everything else just a click away. So it’s not just more competitive for your brand from the perspective of sheer choice, it’s also easier for your brand to be commoditized alongside all the other streams that feature Iggy Azalea songs, many of which may even share your brand name! Want to grow? Be unique to the world.

Those are just 12 explanations for momentum that appears to be “stalled” and recipes for growth. You can probably come up with 12 more.

But at the heart of all of them is this fundamental problem: Traditional broadcasters tend to see streaming and online audio as a necessary burden, an introduction to a digital space where competition is thick, costs are higher, and revenues are lower, a space where business model innovation is critical, yet difficult and inconvenient.

It’s literally easier to make false and sweeping claims that “nobody makes any money streaming” than it is to build a streaming platform and monetize that platform based on sound strategy. And what’s easier is always more seductive than the hard work of growth and success.

And so we see stalled momentum and perhaps even some asking: “Why bother?”

Well, the answer is simple:

Because this is where the audience is heading, and as the audience goes, so goes your future.

Later this week I’ll offer some more ideas on what I’d do if I were you.

6 views0 comments


bottom of page