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What Radio Doesn’t Understand about Streaming

From Inside Radio:

Difficulty monetizing webcasts has some broadcasters pushing for a simulcast rule re-write. As listening to station streams continues to grow, some broadcasters claim there is a disincentive for them to push their audiences online. A combination of Arbitron simulcast rules and AFTRA talent fees is preventing stations from receiving Arbitron credit for online listening, which accounts for as much as 15% of total listening by some estimates. The subject of total-line ratings reporting — where a station’s on-air and online audiences are combined into a single estimate — is being examined by an Arbitron Radio Advisory Council (RAC) subcommittee. Current Arbitron rules require a station’s online stream to be a 100% simulcast of its on-air signal — commercials and all — and to meet minimum reporting standards to be eligible for total line reporting. Stations that qualify are not permitted to see estimates for the individual components.

First things first, swapping a listener from the radio to the stream can cannibalize your over-the-air ratings. However, we should not assume that all or even most streaming listening would otherwise shift to our over-the-air station.  This is a different distribution channel and most likely adds new listening events and new listeners to the total pie.  

That said, it's likely that SOME of that listenership would otherwise have gone to the station.  But so is it likely that owning multiple stations in a market means you're stealing a bit of listening – and thus share – from your own stations.

In other words, broadening the audience with more widgets always means more cannibalization.  The problem isn't controlling cannibalization – it's monetizing every platform.  And it's the opportunity cost (in very real dollars) of lost over-the-air ratings set against the revenue potential for online streams.

So the easiest solution is to settle this AFTRA issue and simulcast what's on the air with what's on the stream.


Sure.  But easiest is not "best" when it comes to radio's future.

And here's why:

1.  If radio is a "megaphone" (as I argue), then we have the power to lead audiences to many streams of content online – not just the one that mirrors our on-air broadcast.  That means one of the LEAST important streams for stations in the future will be the one that they run on the air.  The opportunity is to stream more – and more different – things.  The opportunity is to think of our audiences as people with diverse tastes, not simply as automatons who want our over-the-air station on every platform.

What?  This means inciting our own audience to listen to different things?  Yes.  Because guess what, they already do.  The average consumer splits their entertainment time between your station, several others, TV, iPods, online content, streams, video games, DVD's, etc.  Your challenge isn't to keep your audience inside your brand's walled garden.  It's to carry your audience to monetizable experiences you have a stake in.  It's to cannibalize everything else they do with their entertainment time besides listening to your station.

2.  The future of advertising includes a heaping measure of accountability.  And advertising online can not only be precisely targeted but it can also be contextualized and made more relevant based on the interests of the consumer herself.  Nor is advertising alone the only way to link the needs of our clients with the wants of our audiences.  Matching the stream to the station surrenders all the power of this accountability.

3.  You can already count exactly how many listeners you have online and how often they listen.  What an Arbitron overlay provides you is, more than anything else, a flagrant illustration of just how wrong the ratings are when applied to radio streams.  What is the advertiser to think when your stream adds hundreds of quarter hours to your overall ratings – few of which are shown in your actual listening metrics? Doesn't this kill confidence in the very tools we rely on for their precision?  Wouldn't it be better to say "ratings are the best thing we have for over-the-air – and precise, contextual, relevant, targetable, and accountable metrics are the best thing we have for online"?

So in the long run, broadcasters will need to determine whether they're in the business of maximizing Arbitron dollars or maximizing revenue whether or not it derives from Arbitron-laced dollars.

And that means determining whether you're in the "ratings business" or the business of connecting advertisers and consumers across platforms for fun and profit.

The world is moving to the latter.  And so are its smartest broadcasters.

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