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Will Digital Success Cannibalize My Ratings?

Let’s suppose you create a great digital experience on your platform – maybe a great personalized version of your station or a customized player for your morning show only or a selection of compatible channels that are alternatives to the one on your air.

What is the first thing that comes to the mind of the programmer and manager responsible for your brand?

“What happens if my listeners like this experience more than my broadcast and I start losing listeners? What does that do to my PPM?  Whoa!  Maybe I should rethink this!”

This is not a hypothetical example.  It happens all the time.  And it’s a major roadblock to digital progress in our industry because we fear the consequences for our over-the-air ratings.

There are four things to consider here:

  1. If you don’t do it, a competitor will – and it may be a brand new competitor, not one from across the radio street.

  2. If you create an experience that your audience embraces, then you have created value for their eyes and ears, and that value should be monetized whether or not it occurs over the air.

  3. More distribution for your content is at least as likely to increase your audience (across platforms) as it is to cannibalize one platform versus another.  Almost all your consumers choose between you and other stuff, so much of that entertainment time is likely to come from the other stuff.

  4. You have to decide whether you’re in the business of pleasing Arbitron or your consumers in an age when consumers have a blossoming variety of choices and are fearless in sampling them.  Your future is content across multiple platforms, all leveraging the powerful relationships you have with your audiences.  Your future is not a bigger slice of the Arbitron-measured pie.  When digital is predicted to be the primary driver for radio’s revenue growth, zero percent of those dollars will come from your ratings.

The genie is out of the bottle, folks, and he refuses to be stuffed back in. Radio is in the problem-solution business, and if we neglect to solve the problems the way our consumers want us to on their timeline they will simply circumvent us altogether.

That is what happens when they check their iPhones instead of waiting for traffic reports on the radio.

That is what happens when their news updates come from a CNN “push” message rather than a half-hourly radio newscast.

This is what happens when a custom-made one-to-one music station is chosen over a one-to-many broadcast station.

We are entering an era of my way now. Not your way when you say.

All of these opportunities are within radio’s grasp.  But only if we venture beyond the limitations of ratings-based thinking.

After all, it’s your revenue that is already being cannibalized by competitors – visible and invisible – regardless of what happens to your ratings. If we live and die by the ratings then we shall live and die by how big the ratings-dependent revenue pie is, and many advertisers are shifting their dollars out of the ad bucket and into the marketing one.

Over the next five years, the media economy will grow at a fairly brisk pace, increasing each year after a 4 percent bump in 2010. But that won’t be enough to make up for the $40 billion in ad revenue that disappeared during the recession, according to a new report from eMarketer. The online research firm projects that even by 2015, spending still will not have rebounded to 2007 levels, peaking at $173.6 billion, or $13.5 billion less than in 2007.

Are you a vehicle for spots or a marketing partner?

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