Reminiscent of those great 1950's sci-fi films depicting a meteor headed toward earth, radio operators are facing impending ratings trouble. And like those movies where disaster seems light years away, this one is going to catch radio by surprise.
The coming calamity involves Arbitron crediting for streaming radio broadcasts. The good news is that more and more terrestrial operators are providing streams of their AM and FM signals. A recent J.P. Morgan analysis shows that broadcast stations are capturing a considerably larger share of overall Internet streaming. It suggests that more than 20% is comprised of radio streams from CBS and Clear Channel stations. Of all terrestrial broadcast streams, Clear Channel dominates 45% of this activity.
But the "meteor" side of the story is that broadcasters won't get full ratings credit for their streaming activity in Arbitron. That's because most stations' streams aren't true simulcasts of their terrestrial signals because broadcast commercials cannot be carried on the streams. Union/talent fees are at the center of this problem, necessitating stations to "fill" commercial clusters with all sorts of superfluous material (mostly unlistenable and clumsy, by the way).
The bottom line is that sometime in 2007, Arbitron will very likely start reporting non-terrestrial listening (satellite, streaming, etc.), and a radio station's Internet stream will have to be listed separately. It's not an "Arbitron thing," it's the way it has to be done in order for advertisers to truly get what they're paying for.
Meanwhile, imagine picking up an Arbitron book, seeing a 5.5 share for WAAA-FM, and then seeing .7 for WAAA-FMi - or however it will be listed. It's not going to make broadcasters happy, and worse, it could even discourage some from continuing to provide a stream.
And that would be a tremendous mistake. Because if you talk with anyone just outside of radioland, they'll reinforce the importance that a strong web presence and an Internet stream has today, and will most certainly have in the immediate future. Clear Channel, to their credit understand the importance of streaming, and this is one case where emulating their initiatives makes good sense for all broadcasters. But if an FM station isn't going to get "combined credit" for its stream, there's going to be a lot of indignation. Sad to say, the better job you've done promoting and establishing your stream, the more you're likely to be hurt.
So, rather than waiting for this "crediting meteor" to slam into our business, thus creating chaos and panic, radio operators can begin to address this problem now. It may be a complex issue, sorting out rights and talent fees with agencies, but it's a necessity if radio is to truly participate in the digital frontier.
This is clearly a job for new RAB head, Jeff Haley, as well as the captains of industry who head up radio's biggest companies. It may not be as immediate a problem as first quarter BCF, but it will clearly come back to bite our industry in the rear if it isn't addressed - and soon.
The Arbitron Advisory Council has been all over this, as have other concerned industry leaders. But to date, nothing has happened. This is a great time to send this blog - and other corresponding evidence - to your managers, owners, and others who have a controlling interest in radio's future. Otherwise, we're going to become a bad 1950's sci-fi movie - and another reminder to the media world that radio just doesn't get it.