I’ve been reading the trades, trying to grasp what is happening, and it is all so very confusing. Have you felt that way too? That’s what a period of disruption looks like. Black is white. Up is down. It’s enough to give you an Excedrin headache.
Jim Meyer, the CEO of America’s only satellite service reported strong growth in Q2. On his conference call he’s reported as saying that despite the surge in technology over the past ten years, AM/FM radio still attracts a big number of listeners. However, he also feels that the radio industry has a problem and it’s their product. He warns that if AM/FM radio doesn’t vastly improve their product, it will be to their own peril.
The feedback I received from my recent article “Radio & Traveling – Then & Now” that I wrote about in “From the DTB Mailbag…” seems to indicate that Mr. Meyer is not alone in that sentiment.
Then I read how just halfway through 2018, streaming is growing at a rate that defies mathematical trends. By that, the writer meant when it comes to percentages, they are usually big when the numbers are small but become smaller as the numbers of people engaged increases.
With this area of streaming, we are seeing BOTH the numbers of people who stream growing with the percentage of people who are now streaming.
That’s a trend worthy of keeping you up at night.
Adoption Curve for Smart Speakers
In my university “Process & Effects of Media Classes” I introduced my students to the work of Everett Rogers and his Diffusion of Innovation Curve.
Rogers studied how innovations with farmers in his native Iowa were adopted. He very soon realized that what he was witnessing occurred in all areas when a new innovation was introduced.
The latest research report from NPR/Edison, “The Smart Audio Report” showed we are into the Early Majority part of the curve with the smart speaker innovation.
Good News, Bad News
The smart speaker innovation has the ability to bring radio listening back into the home at a time when AM/FM radio is no longer the entertainment focus of the vehicle dashboard, replaced by the entertainment center that resembles the touch screen on your smartphone.
Unfortunately, the smart speaker also delivers an infinite world of audio choices and it is not a given that radio will be the benefactor.
Fred Jacobs basically lays out the fact that radio’s established brands such as a Z100 or a WTOP will find their engagement traversing from over-the-air to over-the-stream and onto smart speakers. I know that in my own case I can receive WTOP over-the-air, but atmospherics can play havoc with the signal at times. Not so with listening to WTOP via Alexa.
The best radio brands with strong listener engagement will grow.
The latest numbers indicate that cord cutting (eliminating the cable TV bundle) is growing faster than expected. The latest study from eMarketer says that we can expect people cutting the cord to grow to 33 million Americans in 2018.
Netflix is now more popular than cable TV.
The other night I watched Jim Gaffigan’s 5th Netflix special called “CINCO.” In his standup comedy routine, he hit the nail on the head about why Netflix is more popular than cable TV. Here’s what Jim said:
“Netflix has definitely made watching television with commercials kind of painful. Takes forever. You’re like, “What am I, growing my own food here? All right, Geico, we get it!” And it’s not just the length or the number of the commercials, it’s what the commercials say about the typical viewer of the show you’re watching. “Catheter? Why would–? Reverse mortgage? Back pain? I do have back pain. You know me so well, television show.”
What we are witnessing in the current period of media disruption is the changing habits of the audience. They now have choices. Lots & lots & lots of choices.
Baseball, still radio’s #1 sport is seeing the decay of its audience to a myriad of choices to watch or listen to the same game. It’s no longer the monopoly it used to be.
But worse, once you’ve developed the Netflix or Alexa habit, going back to any delivery system that delivers lots of interruptions is, as Jim Gaffigan says, “painful.”
Ad Supported Media’s Future
I believe that there’s a future of ad supported media, but it can’t be done the way it’s currently being done. Podcasts understand this better than broadcast.
Amazon Prime is good at airing program promotions before the movie starts, in much the same way that my local movie theaters do.
And who didn’t enjoy hearing Paul Harvey say “page two?” It would be the first commercial break in his news and commentary but we listened. Because Paul was as engaging with his sponsor’s material as he was with the rest of his broadcast.
And thank you Mr. Harvey for making me want to own a BOSE Wave Radio. I now have two of them. However, I now play my Alexa Dots through them.
Life’s Only Constant
My old boss used to always say, nothing stays the same. You are either getting better or getting worse.
And he was right.
Life’s only constant is change.
13 responses to “Disruption is Everywhere”
Dick: Well said, again.
For an industry that bases revenue on frequency and repetion, it’s a wonder why your words have been repeated so ofter and yet not acted on.
Another point not stressed nearly enough is how radio has been making commercials the same way for fifty+ years. The reference is not only to time but a different approach in melding a commercial’s copy with available technology.
Working with David Saperstein in the 80s, I cannot count the number of times we could not get owners or managers to see the value of having traffic reports. We’d say “it’s the only thing your audience can respond to immediately.” The stock reply was “if they want traffic let them go to the news station.”
Then, once traffic was accepted, we couldn’t get radio to place traffic reports outside of drive times. Today, because traffic is owned by radio, we have reports at times when there is nobody on the road. (Is a 1am report in Cleveland needed?)
I pitched this idea in the early 2000s – over 300 meetings, not one owner manager saw its value – http://www.radioadinfo.com/index1.htm
But let’s keep selling those catheters with :60 copy.
LikeLiked by 2 people
Thank You Ken for adding your perspective to the conversation. Always appreciate your insights.
Another real on-point article. If traditional, terrestrial AM/FM radio is to remain relevant in the years to come, it must return to its roots: real, live, and local. Especially local. There’s only so much automation that can attract the attention of an average audience before they start to tune out. Again, thanks for posting and sharing.
LikeLiked by 2 people
Thank You for adding your thoughts to the conversation.
LikeLiked by 1 person
Could Alexa and her digital siblings actually be good for radio? I say yes, provided the stations do their part to provide programming that people want.
As I read your latest dispatch, I was listening to Sean Hannity on WREC/Memphis — or rather, the online stream via the iHeartRadio app on my Amazon Echo smart speaker. If for some reason the WREC stream is down or becomes unreliable, I just tell Alexa to go to WLAC/Nashville, WOR/New York, or another station.
After Hannity, I’ll listen to Ben Ferguson’s locally-produced show. And on weekends I listen to Leo LaPorte’s “Tech Guy” show from KFI/Los Angeles, again via Alexa.
These people are radio personalities, just as much as disc jockeys Dick Biondi, Charlie Tuan and Rick Dees were in their days. It doesn’t much matter where they broadcast from, or where I happen to be. Online streaming gives radio a worldwide reach, as long as Wi-Fi or $G LTE are available. I still prefer over-the-air radio, but only when the signal is clear and the programming is entertaining..
Thank You Walter for sharing your perspective and how you’re using the latest technology.
My good friend John Parikhal wrote a comment on another website I wanted to share here, since it is so pertinent to this thread: “Predicted in The Third Wave by Alvin Toffler, over 35 years ago. He called it the de-massificaiton of media and noted the consequences (in the same book he predicted “electronic cottages” which is what he called working from home. Plenty of time to prepare.”