In January he posted a fascinating article (part of a book in progress) called “Better than Free.”
“Free,” you see, is the direction all products and services are moving in. “Free” with the support of advertising, or “free” in conjunction with the sale of something that is not “free.”
In the radio business – a service which is already “free” – we will need to reorient our thinking towards how we can profit in a world where the barriers to entry are dramatically lower (online) and the number of potential competitors and their skill levels dramatically higher. There will, in other words, be lots of “free” and lots of competitors for the dollars of advertisers.
So what to do?
The internet is a big copy machine, says Kelly. And when the copies are free you need to sell things which cannot be copied.
And Kelly poses this question:
Why would we ever pay for anything that we could get for free? When anyone buys a version of something they could get for free, what are they purchasing?
He has eight answers – all “better than free.”
“First in line often commands an extra price for the same good.” Folks pay more to see a brand new movie or read a brand new book than they’ll pay later on.
Part of Radio’s value is that it provides content first. Or, if not literally first, first to a broad marketplace. This is a huge selling proposition, I think.
“Personalization requires an ongoing conversation between the creator and consumer, artist and fan, producer and user,” says Kelly. “You can’t copy the personalization that a relationship represents.”
Radio is one-to-many over the air, but online it can be completely personalized. There is value to that personalization and consumers (or advertisers) will be willing to pay for it. This notion that our work ends when our stream goes live is one of the biggest myths in radio.
Consider Slacker’s personalized radio service. You can either get the free version (with advertising) or the subscription one (without). Either way, the service has value greater than “free.”
Says Kelly: “A couple of high profile companies, like Red Hat, Apache, and others make their living [providing] paid support for free software. The copy of code, being mere bits, is free — and becomes valuable to you only through the support and guidance.”
What if radio stations charged one price for spots and a higher price for the kind of hand-holding which can guarantee that a merchant will move her goods or services? That is, what if spots are cheap, but support is expensive? And support is expensive because it’s worth it.
According to Kelly: “You might be able to grab a key software application for free, but even if you don’t need a manual, you might like to be sure it is bug free, reliable, and warranted. You’ll pay for authenticity.”
It’s the much debated “stuff that goes between the records” that creates the authenticity for a radio station, assuming the station invests some resources there. Why listen to the station when you can hear those same songs (theoretically) on your iPod for free? Not just laziness or convenience, I hope. But also because listeners might perceive there to be a “hand at the wheel” of a really outstanding station. Because a great station is more than a jukebox with spots.
“Ownership sucks,” says Kelly. And that’s because it takes up space and requires effort to organize and store. As the cost of online storage drifts to zero and the cost of online content drifts to “free,” why own something which you can access whenever you want without those ownership hassles?
Radio is, in fact, the original always-on, always accessible music, entertainment, and information resource.
Says Kelly: “PDFs are fine, but sometimes it is delicious to have the same words printed on bright white cottony paper, bound in leather. Feels so good. The music is free; the bodily performance expensive. This formula is quickly becoming a common one for not only musicians, but even authors. The book is free; the bodily talk is expensive.”
Plenty of authors write books not because the books will make them rich but because the speaking gigs will.
Radio rarely makes effective use of this tool. We may sell live appearances to sponsors, but rarely to listeners. And why not to both? What’s it worth to go on a shopping spree with Ryan Seacrest (as one crazy example)? And can’t you sell that concept?
Kelly believes that audiences want to pay content creators, as long as it’s easy, a reasonable amount, and they feel certain the money will directly benefit the creators. Says Kelly, “Radiohead’s recent high-profile experiment in letting fans pay them whatever they wished for a free copy is an excellent illustration of the power of patronage.”
What aspect of your radio station’s content or services is worth paying for?
“A zero price does not help direct attention to a work, and in fact may sometimes hinder it. But no matter what its price, a work has no value unless it is seen; unfound masterpieces are worthless,” says Kelly.
If Radio is good at anythng, it’s good at throwing a massive spotlight on something and raising awareness for it. There are a zillion podcasts out there, but how many are as popular as the podcast for a single top morning show in any given market? Radio has the ears of more people than most podcasters can imagine; we are the shortcut to “findability.”