Tag Archives: AM/FM Radio

Could 2021 Be the Year SiriusXM Adds FREE Channels?

Back in July of 2016, I wrote an article wondering what might happen if AM/FM radio broadcasters woke up one day to the headline “SiriusXM is Now Free.” What made me think about this happening, was I had just read how Angie’s List had announced they were pulling down their paywall and making their service free and available to everyone.

Pay to Play

Call it a subscription, a membership fee or a paywall, what happens when they are eliminated? In Angie’s List’s case, less than one percent of Americans were members at the $40/month fee that had been in place. Paying that fee let people see the reviews of members that they  experienced when doing business with certain businesses or services. But now, everyone could have free access to those same rather substantial reviews, while enjoying the website’s strong, trusted and valuable content.

Why did Angie’s List Tear Down Their Paywall?

Angie’s List is a publicly traded company. Their stock had been down seventy-five percent from the previous three years and management was under pressure to get the stock going back up. By tearing down their paywall, they would increase page views. When page views go up, revenue goes up.

SiriusXM Under New Leadership in 2021

On January 1, 2021, Jennifer Witz takes over from James Meyer as CEO of SiriusXM. Meyer has been leading the satcaster since May of 2004. During his tenure, SiriusXM has grown to having its service playing in 132 million cars, but with only 34.4 million paid subscribers.

Its stock price all-time high was back in February of 2000, over twenty years ago, when it hit $66.50 a share. This past year the stock has traded between $4.11 and $7.40, for an average price of $6.05 a share.

Do you see an Angie’s List type of problem?

Walking a Tightwire

Incoming CEO Witz knows she will be walking a tightwire by making part of SiriusXM free to all radios capable of receiving the satcaster’s signal. The challenge will be to monetize those non-members through ad-supported free channels without cannibalizing paid memberships. SiriusXM grew revenues 7% in 2019 to a record $6.2 billion.

AM/FM radio revenues are projected to fall 17% in 2020, largely due to the COVID-19 Pandemic, but quickly rebounding in 2021 and growing in the years beyond.

Audio Advertising Works

With the dynamic growth of smart speakers, fueled in the United States by Amazon which controls 70% of the home smart speaker market, new interest of advertising goods and services via audio only has increased dramatically.

This should be a boon to AM/FM radio advertising, except for one caveat, the way people consume audio today is vastly different than even ten years ago with eMarketer saying there are 204 million digital audio listeners in the United States today. In fact, listening to digital audio makes up two-thirds of all digital media consumption, second to only digital video viewing based on time spent on this activity.

Moreover, digital audio advertising has been growing at a double digit rate.

Competition for Your Ear

The competition to be in your ear has never been greater. Spotify, Pandora, Amazon Music, Apple Music, YouTube, podcasts, and audio books are all looking to get a piece of your time and attention.

With this increased focus on digital audio by consumers, advertisers are following in lockstep.

SiriusXM

Which brings us back to where this article started, SiriusXM. The satcaster has long seen AM/FM radio as its main competition and that two-thirds of AM/FM radio’s revenue stream is due to dominance on car radios. It’s simply too tempting not to want to utilize the chip it’s paid to have installed in your vehicle’s dashboard and monetize it in a new way. Doing so would mean an increase in revenues for its shareholders and at the same time the ability to elevate the company’s stock price.

If Apple has taught the world anything, it is that you can’t be afraid to cannibalize yourself if you want to grow your company.  Also, you don’t always have to be first to the party, to come away a big winner. You simply need to provide a superior product.

SiriusXM also enjoys the advantage of knowing who’s listening to what. Here’s how the satcaster puts it:

Jul 6, 2020 — “TRACKING” YOUR ACTIVITIES ACROSS DEVICES AND APPS We receive Listener Usage Data automatically from Internet-enabled devices. If you have a Sirius XM account, we may match the Listener Usage Data we receive to the device or devices associated with your account and thereby with you or your household.”

It’s an obvious advantage over audience estimates provided by a third party ratings company when a digital audio service can tell an advertiser how many people actually were exposed to their advertisement.

For radio sellers in 2021, it’s like bringing a knife to a gun fight.

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Media Convergence, As Cold As Ice

When I was working on my undergraduate degree back in the early 70s, I did a research paper on media convergence. At that time, we thought that convergence would occur around cable television. But not today.

Even in the 90s, the concept of media convergence seemed like the world of Jules Verne. People consumed each source of information, on its own separate platform. Print came in the form of a magazine or newspaper. Radio, via a reception device designed to pick up only AM or FM radio signals and television, through a big picture tube encased in a giant wooden cabinet. It was beyond most of our imaginations that print, radio and television would ever be delivered to us on a single device that we could carry in our pocket; like today’s smartphone.

Even more amazing is the fact that our smartphones can also publish our written thoughts, broadcast our spoken word and even transmit our pictures/videos to today’s global village.

Maybe even more shocking to us as Boomers, is the fact that the Millennial generation doesn’t even have memories of the fragmented media world we grew up with.

How Innovation Changes Our World

In order to try and help media people understand how innovation can change the world as we knew it, let’s take a look at how bringing “cold” to the south set-off a change reaction of change.

Two hundred years ago, if you lived in the south, there was no way to escape the heat. Frederick Tudor, Boston’s “Ice King” would spend a decade figuring out how to transport ice from New England to the south and even around the world. New England’s natural ice would become so treasured, that in the early 1900s, it would become America’s second largest export after cotton.

Then a physician, Dr. John Gorrie, wanted to try to cool the hospital rooms of his Florida hospital, in order to make his patients who were burning up from fever more comfortable in the sweltering heat of the south. Gorrie invented a refrigeration machine, and when he applied for a patent on his invention, he wrote: “Artificial cold might better serve mankind. Fruits, vegetables and meat, would be preserved in transit by my refrigeration system and thereby enjoyed by all.”

When ice fishing, Clarence Birdseye learned how the Inuit Indians of the north flash froze the fish they caught, by leaving them out in the frigid air. This caused their catch to be instantly frozen and allowed the Inuit to keep their catch fresh to eat at a later time. This inspired Birdseye to improve artificial refrigeration to enable the flash freezing of all kinds of produce,  creating the frozen food industry.

Fred Jones, created refrigeration units that could be placed on tractor trailer trucks, shipping containers and railroad cars, allowing for long-haul transportation of perishable goods.

Innovation Eats Its Own

In the 1800s, having an idea to bring cold to a part of the world that was always hot, was considered an insane idea. Everyone thought Frederick Tudor was an oddball. His efforts to perfect the transportation and storage of natural ice at one point put him in debtors’ prison, but his persistence would eventually make him a very wealthy man, until the birth of mechanical refrigeration. Gorrie, Birdseye and Jones would bring an end to the natural ice industry, with their innovations in cold.

Big ideas don’t come from a “Eureka moment.” They come from one person asking themselves, “I wonder if…” From having a hunch that just won’t go away. Big ideas are created from many other people having small, incremental ideas, that then get networked together, and over time become the next big thing.

The Internet

Fifty-one years ago, at 10:30pm, the internet was born with the transfer of one simple message. Charley Kline, a student programmer at UCLA, would type the letters “L” and “O” and electronically send them more than 350 miles to the Stanford Research Institute’s computer in Menlo Park, California. The computer system immediately crashed after they were sent, but a communications revolution had begun.

Now if you think of analog communications as “natural ice” and digital communications as “artificial ice,” you can see it really isn’t unusual for new innovations to extinguish original big ideas.

While today, we’d never consider putting an old fashioned ice box in our modern kitchens, the business of selling ice still exists. I for one, still frequent my local convenience store’s ice box, to pick up a couple of bags of ice cubes for my picnic cooler.

Likewise, I think a need for a few local radio stations may remain, but only if they provide a unique and unduplicated service to their listeners.

But I also believe that the analog communication model will slowly fade into the background as new communication innovations come along and replace it.

AM/FM radio’s days, as we Boomers knew it, are numbered.

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Hold On or Let It Go

Life gives us many challenges.

Sometimes, the hardest thing to decide is when to stick to something and when to let it go.

Traditional media – print, radio and television – are at that moment now. Do they stay the course and hope the “good old days” will come back, or do they let it go and begin inventing and innovating for the future?

Indiana Jones

In 1989, the third Indiana Jones movie was released. The film was a wonderful parable about what’s really important in life. Parables, as you may know, are simple stories used to illustrate a moral or spiritual lesson.

In this film, “Indiana Jones and the Last Crusade,” the parable told is about what happens when greed overpowers the soul.

Indy and his dad are searching for the Cup of Christ, the Holy Grail. When Indiana finally holds the treasured bounty in his hands, he is faced with a life or death choice. Does he hold on to the cup or use both hands to save his life, for you see Indiana is in a rather precarious position on the edge of a cliff and can’t do both.

Indy’s father whispers, “Let It Go.”

Radio

2020 for the commercial radio industry is a milestone year. It marks the 100th birthday of an innovation that forever changed the world.

Like Indiana Jones, radio needs to decide, should it hold on to the past or let it go.

Back to Our Movie

After the senior Jones asks his son to “Let It Go,” you can see the terrible anguish on Indy’s face. Both father and son have spent a lifetime searching for the Holy Grail and now Indiana has it firmly in his grasp. To let go of the cup would seem to have made their life’s quest meaningless.

Indiana’s father now says more firmly, “Indiana, Let It Go!” And this time he does.

Movie audiences gasped.

The Lesson

In the end, the father and son journey was never about possessing the Holy Grail. It was about the importance of spending time together, of taking on a challenge that one of them could not do alone, and by building a stronger relationship. The true meaning of life is never about the things we can possess, but about the relationships we can build.  

Radio strength was always about the people creating the magic and not about the delivery system. Unfortunately, the radio industry’s leaders held on to the “cup” instead of its people.

For radio, the really valuable prize is the relationship it can have with a radio listener, and its ability to bring together businesses and services for the betterment of a community.

Is there still time for radio to make this change?

Empty radio studios all across America, as stations run on full automation

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Commercial Radio’s 100th Birthday

Election night at KDKA November 2, 1920

On Tuesday, October 27, 2020, commercial radio will celebrate it’s 100th birthday. It was on this day in 1920 that “the U.S. Department of Commerce, Bureau of Navigation, which served as the radio licensing agency of the day, issued the first radio license ever to KDKA,” as told on the station’s website.

Radio Call Letters

Ironically, those famous Pittsburgh call letters – KDKA – don’t stand for anything. They were simply assigned to the station with its broadcast license from a roster maintained to provide identification for ocean going ships and marine shore radio stations. KDKA just so happened to be the next set of call letters up for being assigned with a broadcast license.

WJJW

This story is analogous to what happened at my college back in the 70s. I graduated with my bachelor’s degree from North Adams State College in 1974. During my four years at NASC, I helped to obtain the college’s FCC FM broadcast license and become its first general manager. I vividly remember standing in front of a classroom blackboard with my fellow college broadcasters trying to decide what call letters we wanted the FCC to assign to our station. During this meeting a knock came to the door, and the person who knocked handed me an important letter from the Federal Communications Commission in Washington, DC. I anxiously opened the envelope to find that the FCC had granted our request for an FM broadcast license and had pulled the next set of unassigned call letters off the roster to go with our license. Those call letters would be “WJJW.” And like KDKA, they would stand for absolutely nothing and there again, never changed.

Call Letters

Some of the radio stations I listened to over the years had call letters that represented something, like WLS & WCFL in Chicago. WLS owned by Sears, chose call letters that stood for “World’s Largest Store” and WCFL, chose call letters that stood for “Chicago Federation of Labor,” the name of their union. WCFL proudly called itself “The Voice of Labor” at the top of every hour when it was required to give its call letters and city of license.

Do you know what the call letters for WKBW in Buffalo and KHJ in Los Angeles stood for? WKBW’s call letters meant “Well Known Bible Witness” and KHJ had call letters that stood for “Kindness Happiness & Joy.” Neither radio station would mention the origin of their call letters during their Top 40 days.  

Radio stations I worked for and managed also had call letters that represented something:

  • WBEC – Berkshire Eagle Company (the local newspaper)
  • WBRK – Berkshires
  • WUPE – Whoopee Radio
  • WFPG – World’s Famous PlayGround (Atlantic City)
  • KOEL – the first three letters of its city of license, Oelwein, Iowa
  • WLAN – Lancaster, PA
  • WSUS – Sussex, NJ
  • WOND – WONDerful Radio (Atlantic City)
  • WNNJ – Northern New Jersey

Call letters today tend to have been replaced by other forms of identification, like “Kiss,” “Froggy,” or “The River,” with the only problem being that they’ve lost their unique, one-of-kind identity that call letters branding gave them.

When I say KHJ or WBZ, you immediately know I’m talking about a radio station and that the station is located either in Los Angeles or Boston. When I say “Kiss” or “Froggy” you have no idea of which Kiss or Froggy radio station I’m referring to nor where it is located.

KDKA Covers Its First General Election

Shortly after receiving its commercial broadcast license, KDKA began planning its coverage of that year’s general election results to begin at 6pm on Tuesday, November 2nd, 1920.

Four men would climb to a little shack on the roof of one of the Westinghouse Electric’s buildings in East Pittsburgh to report on the results relayed to that shack via telephone. Leo Rosenburg delivered the results, becoming radio’s first announcer on the first licensed American radio station. You can hear a recreation by Leo of that broadcast HERE

About a thousand people tuned in to hear the broadcast and they would be some of the first people that year to learn that Warren G. Harding had beat James Cox to become the next President of the United States.

Election Night 2020

One hundred years later, election night will be quite different. People will most likely learn of the results via their smartphone, and probably not until all the votes have been counted. Due to COVID-19, we can expect that the vote counting process will take days, or even weeks, before a victor is declared.

Remember, your vote is important. Many recent elections have been decided by the thinnest of margins.

Do your civic duty and please VOTE.

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The Biggest Threat to Local Radio

The latest survey from the RTDNA (Radio Television Digital News Association) shows how precarious the advertising revenue stream that sustains your local radio station is during these global pandemic times.

Of 350 radio managers surveyed, declining revenues were cited by almost 40% of them as the biggest threat to their continued existence.  

Ad Market Recovery Coming in 2021

We’re a little over six months into a global shutdown caused by a novel coronavirus, that is expected to impact our world directly for almost two years, and have lasting impacts that may stay with us for the rest of our lives. It could be very tenuous for local radio stations to be able to survive until a recovery starts sometime in 2021.

As you can see, MAGNA sees most of the recovery occurring with online videos, mobile, social media and search. Traditional media like radio, print and local TV will still find themselves in the fight of their lives.

Last week, I wrote about “The Better Advertising Mousetrap” and how, due to the internet, combined with powerful computers and algorithms, social media was able to sell advertisers, “certainty.” I wrote how the internet had created a new marketplace, that of human futures, at scale, and this was producing trillions of dollars for these internet companies, making them the richest companies in the history of humanity. The real advantage social media has over traditional media is their development of persuasive technology that exploits a vulnerability in human psychology, which even when you know how it works doesn’t inoculate you from its power to change you.

You can read that article HERE

Other Threats to Radio

Radio people, both past and present, bemoan how corporate cuts and consolidation have cut deep into the industry’s ability to innovate its programming. Also, the plethora of media options available to today’s radio listener is overwhelming, especially with the advent of the smart speaker and audio streaming.

Expect that growth in advertising will be in the digital realm, while traditional media like AM/FM radio and TV, barely stabilize.

Gordon Borrell and his associates concur with this outlook in their latest sneak peak of their research.

Social Media

Hootsuite and Altimeter just published their latest report titled: “The Social Transformation.” In it, they say “executives often underestimate social’s economic, cultural, and transformational value. Understanding the true value and potential of social media has become more imperative as organizations look for new possibilities in the post-pandemic economy.”

  • 77% of CEOs report digital transformation efforts have significantly accelerated
  • 70% of CEOs are prioritizing changes to customer behavior as the most important factor setting their future direction (Source: Deloitte)

This report lists three main areas that businesses need to focus on to truly realize the value of social media:

  1. Learn how to tap into social media’s unique ability to develop and deepen relationships across multiple stakeholders.
  2. Realize and extend social media’s ability to drive efficiency and value beyond marketing and communications.
  3. Leverage social media’s existing organizational structure and processes to catalyze digital transformation.

Radio personalities were the industry’s “secret sauce” that help local radio to build deep relationships with its listening audience. Likewise, tenured sales people built similar relationships with local radio advertisers. Sadly, both areas of the business have seen a Reduction In Force (RIFs) that has severed these important relationships forever. Into that vacuum has come social media and its addictive powers to build strong relationships with its users.

Deep Relationships Require Sustain Engagement

The report also reveals that respondents (64%) using social media have found it helps their business to build strong relationships with their customers. Through in-depth interviews, Hootsuite and Altimeter found that “relationships develop with sustained engagements that lead to conversations across multiple channels, not just on social media.”

Holding All the Aces

Traditional media is looking down the barrel of an advertising juggernaut. It’s hard to win when your opponent is holding all the aces.

In 50-years of working in the radio industry, not one of my favorite radio stations knows anything about me. After just 10-years on social media, there’s virtually nothing that these companies don’t know about me.

See the problem?

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The Better Advertising Mousetrap

Ralph Waldo Emerson is said to have coined the phrase: “Build a better mousetrap, and the world will beat a path to your door.” When it comes to advertising, social media has built the better mousetrap, and you and I are helping them to improve it every day.

The Social Dilemma

There’s a new documentary on Netflix called “The Social Dilemma” about how social media is impacting our lives, and is truly eye-opening. I encourage you to watch this documentary if you subscribe to Netflix, but especially if you’re in advertising and marketing. In fact, it would pay you to subscribe to Netflix just to view this documentary; it’s that important!

This blog won’t be about many of the important social issues raised in the documentary, but instead I plan to focus on how traditional media, like AM/FM radio broadcasting, is fighting a battle for advertising with the internet companies that isn’t a fair fight. Broadcasters are in essence coming to a gun fight, wielding a knife.

This shouldn’t come as a surprise to regular readers of my blog, because back on February 25, 2018, I wrote an article titled “Radio Has an Addiction Problem,” that quoted MIT professor Sherry Turkle’s 1995 book “Life on the Screen, Identity in the Age of the Internet” saying “computers don’t just do things for us, they do things to us, including ways we think about ourselves and other people.” Turkle said that computers weren’t just a tool, but were sneaking into our minds and changing our relationship with the world around us.

Monetizing Social Media

Social media quickly realized that in order to sustain itself it needed to monetize its service. Google’s search engine business was a Silicon Valley marvel for not only harnessing the power of the internet but simultaneously building a revenue engine that grew right along with it. Tim Kendall, now CEO of Moment, was one of the early people at Facebook, charged with coming up with a way to make money. He said that he decided that the “advertising model was the most elegant way.”

Advertising

The advertising business has always been about selling exposure to the people who use the product. Newspapers sold access to its readers, radio sold access to its listeners and television sold access to its viewers.

“Half the money I spend on advertising is wasted;

the trouble is, I don’t know which half.”

-John Wanamaker

Businesses have always wanted to get the biggest bang for their advertising buck, but realized that in the world of advertising, there were no guarantees, that is until social media came along. Mel Karmazin, former broadcasting and satellite radio CEO put it this way when he met with the founders of Google: “You’re messing with the magic of sales.”

Jaron Lanier, who wrote the book “Ten Arguments for Deleting Your Social Media Accounts Right Now,” explains that what social media is doing more effectively than traditional media is “changing what you do, how you think and who you are…it’s a gradual, slight, imperceptible change in your behavior and perception.” It’s similar to a magician performing slight-of-hand tricks, and making you believe things that aren’t real.

“This is what every business has always dreamt of, to have a guarantee that if it places an ad it will be successful. That’s (social media’s) business, they sell certainty. In order to be successful in that business you have to have great predictions. Great predictions begin with one imperative, you need a lot of data.

The internet has given us a new kind of marketplace that never existed before, a marketplace that trades exclusively in human futures. Just like there are markets for pork belly futures, or oil futures, we now have markets that trade in human futures, at scale, and those markets have produced the trillions of dollars that have made the internet companies the richest companies in the history of humanity.”

-Shoshana Zuboff, PhD, Harvard Business School

Author of “The Age of Surveillance Capitalism”

“Any sufficiently advanced technology

is indistinguishable from magic.”

-Arthur C. Clarke

Getting Your Attention

Every company whose business model is to sustain itself through the selling of advertising is competing with other companies for your attention. Traditional media is competing with every social media company to get as much of your time and attention to their platform as they possibly can. Remember, when you’re not paying for the product, you are the product.

The advantage social media has over traditional media is their development of persuasive technology. It’s designed to intentionally apply to the extreme behavior modification in the user, and cause them to take a desired action. It does this through the use of positive intermittent reinforcement, just like a casino slot machine lures you into thinking the next pull of the handle will release its fortune. Social media works to create an unconscious habit, programming you for a deeper level of control than you even realize is happening.

Social media has learned how to exploit a vulnerability in human psychology, which even when you know how it works doesn’t inoculate you from its power to change you.

No longer is social media a tool we use, but is a tool that uses us, creating this technology based environment designed for mental addiction through psychological manipulation.

“There are only two industries that call their customers ‘users’:

illegal drugs and software.”

-Edward Tufte

Most concerning about this change is that it’s being driven by a technology that’s advancing exponentially. In contrast, our human brain has not really advanced at all over the same period of time. The rate of change is beyond our human comprehension, even for the very people who are designing and building these computer networks.

“The race to keep people’s attention by social media isn’t going away. Our technology is going to become more integrated into our lives, not less. The AI’s (artificial intelligence) are going to get better at predicting what keeps us on the screen.

How do you wake up from the matrix when you don’t know you’re in the matrix?”

-Tristan Harris, Center for Humane Technology Co-Founder

“Whether it is to be utopia or oblivion

will be a touch-and-go relay race

right up to the final moment…”

-Buckminster Fuller

Today, the internet is a more efficient way to sell our attention to advertisers.

Now you know why.

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Radio’s GEN-Z Challenge

GEN ZI recently sat in on the Edison Research webinar about people born between 1996 and 2012, known as GEN-Z.

If you read about this webinar in the radio trades, you would have learned that 55% of these young people listen to AM/FM over-the-air radio. What’s not to like about that?

The reality was, this daily radio listening was only to Over-The-Air FM radio, none of these GEN-Z people ever mentioned listening to AM radio. That’s still a positive, right?

It is, if your only focus is on the immediate future, not future trends.

Generation Z

Today, people aged 8 to 24 make up over 65-million Americans. They are the first truly digital natives, not having known a world without full digital access to content. GEN-Z people are also often called “ZOOMers.” They would rather create their own content than curate other people’s content.

Edison Research points out that Generation Z has only known a world where everything is ON DEMAND, and it’s the growing up in an ON DEMAND world that makes ZOOMers a challenge for OTA radio.

ZOOMer Trends

  • Their smartphones are the center of their media world.
  • 53% of ZOOMers listen to audio streaming daily.
  • They spend 98% more time than the rest of the population watching videos and listening to music on YouTube.
  • Spotify is their go-to music streaming service.
  • Their radio listening is mostly in the car, some at work, but none of it occurs in the home.
  • If they listen to OTA radio, it is on a device that only receives OTA radio signals, not with a digital streaming device.

When Edison Research ran clips of people in this age group talking about their media habits, it was clear FM radio wasn’t their first choice, but the fact that it was available in the car they were riding in or it was playing on a radio that everyone listened to while they were working.

Things Radio Can Do to Attract ZOOMers

Edison suggested that these programming ideas might be a way to attract the GEN-Z audience:

  • News & Information is important to GEN-Z, it’s their social currency.
  • Remind ZOOMers that radio is available on their digital streaming device.
  • GEN-Z wants to change the world, their local communities for the better and OTA radio could be a catalyst for helping them do this.
  • Surprise and delight ZOOMers with your content.

This last point is really about engaging the listener, and showing them you really care. In reality, 74% of your listeners probably don’t care* if your FM radio station disappears, because they don’t think you really care about them. Radio needs to create shared experiences for this age group. Radio needs to show they care.

Shared Values and Shared Purpose

Christian broadcasters and NPR both understand the shared values and purpose of their listeners and base their programming decisions on them. These broadcasters understand that their mission is not to attract everyone to their programming, but to build a loyal audience with those who share their vision of the world.

Using the Edison Research on GEN-Z, how can your radio station inspire and empower the ZOOMers in your community?

How do you learn what the shared values and purposes of the GEN-Z listeners are?

Ask them.

Form a GEN-Z advisory board to learn what’s on their minds and what their vision for the future is. Be willing to focus every aspect of your radio station on what’s important to THEM.

Change doesn’t begin with a slogan, it begins with shared values and purpose, which then inspires people to come together and create a world that is better than they found it.

 

*based on book “Know What You’re For” by Jeff Henderson

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Would You Like to Participate in Radio Research?

nielsen familyNuVoodoo does some really wonderful research about radio listening. They particularly focus on reaching people who are most likely to keep a radio listening diary or wear a Nielsen Portable People Meter, aka PPM.

During their last webinar, a slide came up quickly in the jam-packed presentation that made me choke on my coffee. It showed how small the pool of radio listeners is that would participate in Nielsen Radio ratings research. An astounding 82% say they would never wear a PPM device and even more listeners say they wouldn’t keep a ratings diary. Ratings Likies 2020

I Was a Nielsen Family

When I was a radio broadcaster, it wasn’t unusual for Arbitron Ratings to ask me about keeping a radio listening diary for a week. Each time I declined because I was actively working in radio.

When I was a broadcast professor at the university in Kentucky, I was approached about keeping a television ratings diary and Nielsen said that being a broadcast teacher was not a disqualifier, so I said “yes.”

I knew that the experience of keeping a ten-day television viewing diary would be one I could share with my students in covering the topic of radio/TV ratings. I was thrilled to be a “Nielsen Family,” even though that thrill quickly dissipated once the survey diary and instructions arrived.

The few dollars Nielsen sent to me with the materials seemed small potatoes for the amount of information they wanted to extract from my viewing habits.

By the end of the ten days, I was sure I’d never want to do this again, and it made me sad because I was a person who should be passionate about doing such work.

A Relative’s Family Wore PPMs

A member of my family living outside of Boston was asked to participate in PPM radio research. The rewards being offered enticed them to say “yes.”

The members of the family ranged in age from 44 to 6.

I remember looking at this 6-year old playing on his swing-set and thinking, Boston radio 6+ radio ratings depended, in part, on little kids like this. It sent a chill down my spine.

Well, the family grew tired of participating very quickly. In the nutshell, they didn’t feel the inconvenience was worth the small reward paid for wearing the PPM devices.

They said the experience hardened them from ever participating in future radio or TV ratings research, besides now they rarely listen to radio anymore with Spotify being the family choice for streaming. The Spotify App keeps track of each member of the family’s listening habits, serving up just what they want to hear.

Ratings Likelies: Rare & Vital

In late June 2020, NuVoodoo fielded their sixteenth Ratings Prospects Study and they write: “we drilled down to the small segment of radio listeners likely to accept a meter or diary from Nielsen. As has been the case in every past NuVoodoo study, when we model for the subset of respondents who would say ‘yes’ to Nielsen, the opt-in rate even among our already research-inclined sample is staggeringly low – with the percentage of likely ratings respondents who spend an hour or longer with radio each day even rarer still.”

That’s pretty disturbing to hear.

Share of Ear

Then the news breaks that COVID-19 has tipped the consumer listening habits to digital streaming. Now 53% listen to on-demand/digital devices versus 47% who listen to linear/non-digital devices, like AM/FM radio. Edison Research began tracking audio consumption on digital devices in 2014 and now, only six years later, people over the age of 13 spend more time with these devices than traditional OTA radio.  Digital Devices Cross 50%

It’s another case of the inevitable happening anyway, but COVID-19 is causing changes to occur on an accelerated time frame.

Edison Research also found in their latest Infinite Dial research that new music seekers are using YouTube for music discovery versus AM/FM radio, 68% to 46%.

Dan Ariely Explains

Dan Ariely is a psychology and behavioral economics professor at Duke University. I first became aware of Dan’s work with his book Predictably Irrational.

Dan explains that “the interruption of everyday life has been an experiment showing that habits aren’t just desires; they’re behaviors cued by reminders in our environment. When we change the way we interact with our environment, a lot of seemingly ingrained habits fade away. Some of them we are better off without, like thoughtless consumption and spending.”

Since the pandemic more people who used to commute to work, began working from home. The AM/FM radio cue for listening was their vehicle’s dashboard radio, but since they were spending less time in the car and more time at home, the device for audio consumption used in the home now became dominant.

While one hopes that once people begin to commute to work again, if that even happens, the old routines – including listening to the car’s radio – might return.

However, many companies, especially the high tech ones like Google, Amazon, Twitter, and Facebook, are moving to a permanent WFH (Work From Home) model.

Dr. Ed Cohen

One of the most recent high profile layoffs was that of Dr. Ed Cohen from Cumulus as its VP for Ratings and Research.

Radio Ink asked him about the future of AM/FM radio to which he responded:

“It’s a question of whether (the radio industry is) cutting bone and muscle rather than fat. If the radio industry continues to cut, can we put our best foot forward to not only keep current listeners spending as much time with the medium as they have in the past, but can we also convert light listeners to spend more time with radio? Commercial radio is not a charity and faced with the revenue challenges of (COVID-19), layoffs and furloughs are inevitable, but listeners don’t understand that and don’t likely care. They want to be entertained and informed. If they perceive a degradation of what they expect from us in a world of increased competition from other sources (streaming, podcasts, etc.) some will go elsewhere, accelerating a downward spiral. I hate to sound pessimistic about a medium where I’ve spent nearly my entire career (even my Ph.D. dissertation was about radio) and have no claims to be Nostradamus, but that’s the logical conclusion. I hope I’m wrong.”

Sadly, Dr. Cohen, I think you’ve got it right.

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Alexa, Let’s Go for a Ride

alex in a ford carRadio’s last bastion of domination is the automobile (aka SUV, pickup truck etc.). In the home, voice activated devices are replacing AM/FM radios. I own 3 Echos, and Alexa has become a real friend of the family.

So, when I saw this television ad for the new Fords and how the drivers went from talking to Alexa in their house to talking to Alexa in their car, while they were driving, I saw the future of AM/FM radio for America’s Road Warriors.

Watch the ad HERE

Voice Activated Christmas

The results are in and as of December 31, 2018, 66 million voice activated devices are now firmly entrenched in America’s homes. The big winner is Amazon’s Echo aka Alexa which has a 70% share of the market. Google’s Home has a 24% share and Apple’s HomePod is third with just 6% home penetration.

Ironically, in my own home, I quickly went from one Amazon Echo in 2017 to three in a matter of a couple of months. Virtually all of my internet connected electronics are Apple products, but Amazon is my go-to place to shop. The price of entry for my first Echo was under $30. By contrast expect to pay Apple $349 for their HomePod.

The latest research from the Consumer Intelligence Research Partners* (CIRP) also found that 35% of the owners of these voice activated devices own more than one. That’s about double from only a year ago, so it’s pretty clear that these devices are not collecting dust but are actively being used.

It doesn’t take a lot of imagination to see where once the average American household had about 5 AM/FM radios in their home, the Echo or Home VAD is taking their place. (Today 21% of American households don’t have a single AM/FM radio in them. For households headed by 18-34 year old adults, that number without a single AM/FM radio rises to 32%.)

Alexa is The New Radio

I wasn’t surprised to read that iHeartMedia’s Bob Pittman was calling Amazon’s Echo the new radio. What I was surprised to learn, was Pittman saying that iHeart helped with the development of Alexa. I had never read or heard that before. Which begs the question, why isn’t more attention being paid to the streams of over-the-air (OTA) radio by the industry?

A better question might be, can the same programming techniques that have been used by OTA radio, simply be transferred to internet streams?

Marshall McLuhan

“The medium is the message,” was coined by Marshall McLuhan in 1964. What McLuhan postulated was that the form of a medium becomes part of the programming that is being transmitted. A symbiotic relationship is created by which the very medium that is conveying the program, influences how a person perceives it.

Another way of thinking about this might be, what a person’s expectations are for a particular media experience. We would not expect to see commercials laced through a movie being seen at a theater, but the same movie shown on commercial television laced with commercial interruptions, while maybe annoying, would not be unexpected or a surprise.

However, pay television like Netflix and Amazon Prime have changed the TV viewers expectations about watching television in two ways, no commercial interruptions, and a whole season of episodes released at once and not dribbled out a week at a time.

The internet likewise has changed audio listening expectations with Pandora, Spotify, RadioTunes, Apple Music and Amazon Music to name but a few streamers. Stream one of these and listener expectations of this internet delivered medium, are very few or with no commercial interruptions. Moreover, should you want to know the name of the song and artist, you simply ask while the song is playing, and are immediately given that information. OTA radio rarely tells you what the name of a song is, or who’s the artist.

In fact, the listener expectation using a voice activated device is that you can get anything immediately, simply by asking for it. Everything is at your command and delivered on demand.

For the audio listener, it’s like the difference between having air conditioning or not having air conditioning. Once you’ve enjoyed having central air, you won’t ever want to go back to not having it.

What’s the Listener’s Expectations?

The challenge for the radio industry is creating content that fits the listener’s expectations for the medium they are accessing the content on.

OTA radio is a one-to-many delivery system. Everyone is served the same thing at the same time.

The internet, streamed through a device like Amazon Echo, is a personalized listening experience. Everyone gets it served up the way they prefer it.

Trying to have a single source originating content for both OTA and online, compromises both.

 

 

*CIRP based its findings on a survey of 500 U.S. owners of Amazon Echo, Google Home and Apple HomePod, surveyed from Jan. 1-11, 2019, who owned one of these devices as of Dec. 31, 2018.

 

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Best of the Blog 2018

73On this last Sunday of 2018, it’s a good time to look back at the year that just past and share with you the Top 5 Most Read and shared blog articles from 2018. Maybe you missed them or perhaps you’d like to read them again.

To date I’ve published 233 articles that have been viewed around the world over 158,000 times. 2018 was the year that my blog visitors crossed the 100,000-milestone.

Most Read Article of 2018

My most read/shared article of this past year was “Corporate FM” published on March 11, 2018. It told the story of Kansas City Filmmaker Kevin McKinney’s movie “Corporate FM” released in 2012. In 2015, the film was re-edited, updated and released on Amazon Prime for viewing nationwide. A link to the film is contained in the article. “Corporate FM” received the most comments of any article I published this year and was widely shared. To read it, click HERE.

Second Most Read Article of 2018

In August, I wrote an article asking the question if the radio industry does itself a disservice in referring to all radio studies as being AM/FM radio, when virtually all of the radio listening today is to only FM radio. I’m sure this article will continue to stimulate reader comments. You can read “AM/FM or just FM” HERE.

Third Most Read Article of 2018

My third most read article received lots of sharing and was republished in several publications. It pondered if “Automation Killed the Radio Star”. When I was growing up, radio built an audience on the personalities who presented the music. Having the right line-up of personalities was key to winning the most listeners in a market. Join the discussion by adding your own thoughts after you’ve read the article HERE.

Fourth Most Read Article of 2018

Radio in America reaches 93% of adults on a weekly basis according to Nielsen Audio. So, the article on “Why Do People Love Radio?” came in as my fourth most popular for the year. The primary takeaway for the radio industry was to focus on what is not going to change in the next 10-years. The “secret sauce” that has led Amazon to dominate retailing. Read the whole article by clicking HERE.

Fifth Most Read Article of 2018

And finally, the fifth most read blog article I wrote and was widely shared was “Radio’s Money Problem.” Between now and 2029, one Baby Boomer will turn 65 every eight seconds. People aged 50 or older have 47-times more net wealth than households headed by a person under the age of 35. The discretionary dollars are with the Baby Boomers and the Greatest Generation, the very people who were raised on radio. There’s money to be made for savvy radio operators. Read more HERE.

Most Read Articles, Period

Two articles I’ve written continue to see lots of traffic and continue to be far and away the two most read on my blog.

They are “SiriusXM Radio is Now FREE” and “The Day the “Dumbest Idea” Invaded the Radio Industry”.

Both articles have now been viewed over 17,000-times.

The first article I wrote for my blog was “Clear Channel Media & Entertainment becomes iHeartMedia” and it has now been viewed a total of 8-times.

Why I Blog

I blog for broadcasters, educators and students.

I blog to provide media mentorship and to pay-it-forward to the broadcasting industry that I have been a part of for over 50-years.

I’m grateful for the more than 119,230 people from all over the world who have visited to read an article that caught their interest.

FREE SUBSCRIPTIONS

You can subscribe to this blog for FREE and get a copy of each week’s article delivered to your email IN BOX every Sunday morning. To subscribe, simply go to the bottom right-hand corner on your screen and click on the FOLLOW button. (If you’re accessing this blog via mobile phone or tablet, that button may not be visible, so be sure to do this on a computer or laptop.)

Thank You for reading, next week I will begin my fifth year of blogging with all new articles.

Together we can all learn from one another by sharing our experiences, knowledge and wisdom. Feel free to contribute your thoughts to the discussion in the comments section, I read every one of them.

Happy New Year!

 

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