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Radio’s Future – “The Disruption is Ready to Happen” – a Q&A with

A No-Nonsense Marketing Smart Tip February 8, 2007

Watts Wacker is a well-known futurist, CEO of FirstMatter, LLC, and author of many business bestsellers, including The 500 Year Delta, and more recently, The Deviant’s Advantage. Watts is described by Wired as “the inheritor of the Marshall McLuhan tradition,” so media comes second-nature to Watts. We chatted about mediascape trends and the implications for the radio industry.

What follows is a brief summary, but check out the whole audio Q&A here:.

Watts, what trends will matter most in the next few years that would relate to people who work day in, day out in radio?

One of the most significant trends is what I call “self- selecting social organization.” People are looking to find people like themselves and coming together in almost a neo-tribal orientation of living. And there’s a tremendous opportunity for all media, particularly broadcast media, to facilitate these people finding “themselves” in the easiest possible way. And it would also result in a lot of new business models for radio.

Like what new business models?

Well, I like to use the example of video podcasting. I know a couple of women in Nashville who are 23 years old. They video podcast a show weekly. They’re suddenly getting people to give them $0.25 an episode. They do it every week. And if you get 50,000 people to send you $0.25 a week for 52 weeks, that adds up in a hurry. And suddenly, these women are their own production studio, and their job is just being themselves, where they podcast what it’s like to be 23 and be a mom in the world today. They’re putting together a neo- tribe of young women who are moms, and they’re facilitating them obtaining information.

That’s what I mean by a new kind of business model. That is why you see Time magazine saying the person of the year is “you.”

Here’s another example: It’s what I like to call the art of the short view. This would be organizing and selling on a one-time basis something to hundreds of thousands or millions of people where the opportunity has a half-life of about three weeks, and then it goes away. But then another one comes and rolls right across the beach like a wave, one after another after another after another. And you learn how to put together groups of people and get each of them to send you five bucks in the period of a few weeks, and then it goes away, and you figure out the next one. And it’s not that you do it once. You figure out how to do it, you know, 20, 30 times in a year.

Another important trend relates to what’s happening with miniaturization in electronic components. If you look at Moore’s Law, there are likely to be five more doublings of capability and halvings of cost. That means in ten years you’ll have an iPod the size of a pencil eraser and costing about seven or eight dollars. Why wouldn’t someone at that time consider just embedding it inside themselves? We embed chips in our pets already.

Perhaps the biggest trend that I would pay attention to in the short run is that while consuming is never going to go away, consuming as the defining criteria for individuals is. We are now using our media consumption as opposed to our physical consumption to explain who we are.

So you don’t go to a party anymore and say, you know, “Where’d you go to college? What kind of car do you drive? Where do you live?” Now you say “What do you blog? What websites do you surf? Have you read the article in Vanity Fair on terrorism in South America? Are you an Imus or a Stern person? Have you seen The Departed?

Whatever it is, we are revealing ourselves through our media. We are becoming focused in life around ourselves as media. So today, “I am the medium.”

You can see this play out in the creation of synthetic economies, where people are literally making a quarter of a million dollars in Second Life, which is a very popular emerging metaverse. They’’re making a quarter of a million dollars in the virtual world and downloading it onto their ATM card in this world.

And when that happens, suddenly you want to be in the broadcast industry and the content business, not just in the physical world, but also in the virtual world.

Where do you see the future of radio?

One of the reasons that I think radio could have such a vibrant next 50 years or so is the issue of imagination and particularly intuition and the allegorical composition of what radio represents. With radio, you fill in a lot of the blanks yourself. And I think that’s one of the great hidden opportunities of the medium you really notice when you hear great radio, whether it’s content or advertising messaging.

You use the expression “great radio,” and I’m wondering what you feel great radio is, and what great radio will be in the next five to ten years?

Well, my favorite closing statement from any broadcaster is “I’ll see you tomorrow on the radio.” You can fill in your own thoughts and develop the story in your own metaphors. That allows you to dig deeper into your own experiences, and it’s one of the greatest hidden assets of the medium.

People are so conflicted by a world awash in uncertainty and complexity that allowing people to answer as if you’re providing a question as opposed to giving a prescription is literally what the medium can do. Because radio doesn’t have pictures, it actually becomes more of a benefit over the next 25 years.

Take an all-music station where someone was smart enough to realize they could buy it for four months and remove all of the advertising on it, which Snapple did in Boston, and you’re touching that dimension of what I’m talking about. Even though it’s a format of all-music, you’re doing it in the way you’re presenting your commercial messages as opposed to strictly “running spots.”

There is a real opportunity for talk radio storytelling. You know, the only constant today in the world we live in is storytelling. And when you start putting forth questions instead of answers and you do it in a storytelling format, you could take talk radio to a whole new 2.0 – involvement with people.

I heard this on a student radio station for a local high school, which I listen to with great regularity, because these kids are figuring this out. If I was in the broadcast industry I’d pay a lot of attention to student broadcasters and what they’re doing, because the alternative formats are being delivered and developed for you right in front of you.

And what were those high school kids doing that you can’t hear on your local radio station there in Westport?

They were dealing with the tribe. They were clearly in a very micro-market. These kids knew that they had a different kind of audience, and they were talking to a tribe. They were not doing a format. They were touching all aspects of that tribe’s interests as opposed to developing a format that could go to people who like that format on occasion.

And so they are holding their audience throughout the entirety of their listening availability. They’re not channel-surfing radio anymore. They’re staying with one station that has all formats rolled into one – for them and just for them.

You’re describing a scenario where it’s not one radio station with a massive audience. It’s lots of radio stations digitally, internet, whatever, with tribal audiences.

Correct. See, you’re a genius. You said it better than I could.

This is why change usually comes from outside an industry: Because the leaders in the industry are afraid that change results in them losing power, market share, revenue, profits, whatever. All of the above.

And so the disruption is ready to happen, and it’s really whether or not the radio industry is willing to realize that the pain of staying where they are will be greater than the pain of changing.

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