The debate-of-the-week in the radio business is: What do we do to monetize our stream? Do we simulcast what’s on the air and throw it in as added (non) value, or do we treat the stream as an additional component in our brand arsenal and monetize it as such?
Look, there’s no magic in adding what amounts to a second distribution channel for the same content and running the same spots on it to sell it in bulk to agencies which like to buy in bulk and ratings companies that like to measure in bulk. This is simply a process of clinging tenaciously to a business model that is ever-tougher to execute simply because it’s the legacy business model that built our broadcast companies and made them so flush for so long.
What folks don’t understand is that this debate is not really about audio levels and public service announcements and whether or not a company “cares” about its content. These are all distractions – excuses. This debate is about business models.
What you’re witnessing here is the atomization of the radio industry into numerous industries that are not, strictly speaking, “radio” as we used to define it.
Broadcasters have differing event strategies, digital strategies, streaming strategies, brand strategies, and sales strategies, and they’re getting more different all the time. Many broadcasters no longer even speak a common language on these topics. How else to explain how one major broadcaster can dismiss streaming as fundamentally unprofitable while others rush in to illustrate how they are making serious money via streaming with some extra elbow-grease and some novel thinking?
Radio is becoming multiple industries: Some which look ahead and some which don’t.
You can treat your stream as an asset or you can treat it as another way to pray for a meter in some random chance encounter that PPM devices are becoming increasingly famous for. Let’s not worry about what the advertiser will do when they discover that our ratings methodology is, at the margin, based on hopes of winning that are no different from what drives the purchase of a lottery ticket.
Seth Godin, a guy broadcasters used to like to hear from until he started saying things they disagreed with, nailed this the last time we talked:
What you’re really saying is you would like the new money to be as brainlessly easy to get as the old money, and it’s not. And because it’s not and because you’re lazy, you’re not getting any of the new money are you? If you had listened to me and Mark when we first talked six or eight years ago and said: “We’re going to start collecting permission by zip code of people who want to hear from us,” by today you’d have maybe half a million people getting your daily newsletter. You know what that’s called? That’s called Groupon. Tell me why Groupon wasn’t started by your radio network? I don’t know why it wasn’t started by your radio network. You had everything you needed to start Groupon, except guts.
The problem is that too many broadcasters aren’t interested in developing new business models when the old ones are so easy. Unfortunately, our new economy is all about new business models and the innovations which drive and are driven by them.
How is monetizing radio’s streams any different from the monetization puzzle faced by Facebook or Twitter? How successful they will be in monetizing their brands isn’t my point. My point is that new business models are the only way to do it and they – and you – have every incentive in the world to develop them.
Before we blame the child for his sins, maybe we should consider how good or bad a parent we have been.
Focus on new business models. The past is over forever.