OK, it started with this screaming headline in Radio Ink. (You have to hand it to Eric Rhoads – he loves a good controversy and enjoys using his publication as a forum.)
And from there, a digital can of worms opened, eliciting comments – often emotional – from many different sides of the question.
We have the utmost respect for Jerry. He is one of the most enigmatic broadcasters of all time, having accomplished so much in Philadelphia that he has indelibly impacted the entire industry. Jerry is not just a thought-leader – he’s a bona fide icon and philanthropist who puts his resources and efforts behind causes and business ventures he believes in. That’s one of the reasons we selected him to participate in our memorable “President of Radio” session at our Summit back in 2008 in Austin.
Some of the comments that appeared in Radio Ink in response to Jerry’s statement even suggest that supporters of streaming are somehow anti-broadcast radio. Or that focusing on streaming takes our eye off revenue generation for the main product.
Perhaps we can lend some clarity to the conversation.
First, CX – or the Consumer Experience – something that we have written about extensively in this blog. Simply put, broadcasters (or book sellers or travel agencies or phone companies) have got to acknowledge what the customer wants or else face the truth that she will simply go elsewhere.
Today, the options are many and they are easily accessible. If a fan of B101 or any other radio station wants to listen on their iPhone or office computer or laptop while sitting in a Starbucks, the station’s audio better be available on a quality stream. Otherwise, she’s gone.
And as we well know, buying a standard AM/FM radio is simply not as easy or attractive as it was back in the ‘70s. Many consumers don’t even have a working radio at home, aren’t allowed to have one in the workplace, or simply find it convenient to stream on the aforementioned devices. To deny the changing ways and new channels in which the audience entertains themselves is folly. To not provide great radio content on these devices is to simply walk away from listening – and revenue opportunities - and hand over your audience to another source.
Radio’s “problem” with digital isn’t an argument about technology. It’s a debate about whether the consumer matters. Too often, broadcasters see the world through their narrow “What’s in it for us?” lens. If we cannot monetize it, cannot market it, or cannot somehow fit it into the budget, it simply isn’t viable. Listeners don’t see it that way. Their propensity to multi-task, their shortening attention spans, and their expanding options all work against an industry that is in denial or simply turns its back on them.
Second, investment in infrastructure and platforms is the key – and in that regard, radio has an advantage over Pandora, Slacker, and the other pure-play Internet broadcasters. Our brands, our personalities, our local market reputation and know-how can come together to leverage viable digital strategies and multi-platform successes. Instead of looking at new technology as an albatross, broadcasters need to start viewing it an opportunity.
If you think back to what radio’s pioneers must have been thinking back in the 1930’s and 1940’s, consider that the U.S. economy was in far worse shape than it is today. And yet, those entrepreneurs bought land, erected expensive towers, built buildings, and hired staffs – all on a bet that radio would one day be ubiquitous in homes, cars, and workplaces. And that the revenue would follow. At that time, Americans entertained and informed themselves mostly through print media – magazines and newspapers – and at movie theaters. Radio was not a sure thing, and you can bet that naysayers were in abundance.
Tim Westergen is all about building infrastructure and amassing fans. His bet is that if Pandora is available in enough locations, channels, devices, and avenues, ubiquious access to his product will eventually turn into dollars. We can debate this logic as many have, especially since the IPO launched. But to sit around and spend time haggling over Pandora’s financial viability misses the point of Westergren’s goal and his brand’s impact on traditional radio stations – to offer his content to consumers wherever and whenever they want it. And Pandora fans aren't concerned with profitability. They simply want entertaining content wherever and whenever they can get it.
That’s CX – and whether or not it’s a money maker for Pandora and its investors – what is the logic of this argument when it comes to radio? Why wouldn’t broadcasters want to study consumer behavior, gadget acquisition, and media usage, and then be sure their content is available to their audiences in modern, cool locations? Don’t digital and its new channels present an incredible, exciting opportunity to modernize radio, providing currency through accessibility via new gadgets and technologies?
Third, these arguments are all about monetization, and it is frankly still too early on the digital revenue curve to know precisely where it’s all going to end up. While Eric Rhoads was writing his headline about Jerry Lee, these other stories were all over the trades last week:
Clear Channel angers a media buyer because they reduce the available inventory in their streams
iBiquity puts up money to encourage radio salespeople to generate revenue from HD Radio
Pandora's IPO puts their value at close to $3 billion, but the CEO can't answer questions on CNBC about if or when they will be profitable
What does this tell us about the challenges and opportunities that are in front of us today in radio – and the ones that the industry will be facing in the not-so-distant future? Yes, it's the money. And no, we don't know right now today exactly how this is all going to shake out.
This argument isn’t about “To stream or not to stream.” It’s about the difficulty of facing change and about the eventual challenges to aggregate audience, and to generate profits from these efforts. In the early days, few new businesses are profitable in their embryonic stages – Amazon, Google, Facebook, and now Pandora are all modern examples. All of these brands have done what radio’s pioneers did eight decades ago – focused on consumers, recognized opportunity, took a risk, built infrastructure and access, created content and functionality, and then developed a business model that made the venture successful.
Finally, there’s the matter of focus. Radio, its employees, and its trades publications enjoy a good conversation, a good debate, and lots of back-and-forth. And that’s what makes our business interesting.
But too often these days, we find ourselves arguing over questions that do exactly what Jerry Lee warned against in the Radio Ink piece – losing our ability to stay zeroed in on what’s important because we’re debating tertiary and often irrelevant issues that miss the point of where consumer tastes are heading.
When we spend time debating whether Pandora is radio or whether streaming is a good business model, our competitors take the opportunity to keep furthering their missions to dominate the world of new media.
On their big IPO day, Pandora executives spent the better part of a day reiterating their goal to redefine radio. That's what they're focused on.
Radio broadcasters would do well to beat Pandora and other challengers to the punch, and modernize their medium proactively. In the early years, Kodak could have developed digital cameras. Barnes & Noble could have launched an eCommerce site to sell its books while Border’s might have created an eReader of their own to match or improve upon Amazon’s Kindle. But that would have required a recognition and acceptance of the Consumer Experience. It would have also meant not being in denial about societal and technological change.
Radio could lead the way toward a multi-platform “anywhere anytime” model leveraged on its great personalities, familiar brands, and local roots – if it stops debating meaningless issues and focuses its strengths and assets on providing its great content to its audience, whenever and wherever they like it. CBS Radio's annoucement yesterday about Radio.com, Last.fm, and MP3.com suggest that this thinking is most definitelly in-play in corporate radio headquarters. It is in keeping with the spirit of radio's early swashbucklers.
If we build it, the audience – and the revenue – will surely come.