Tag Archives: NextRadio

Reflecting on Radio Show 2016

60The radio show was close to home this year, just down the road from my university, in Music City USA, Nashville, Tennessee. Plus, the Tennessee Association of Broadcasters decided to roll their annual convention into an opening event at the Radio Show. So as soon as I finished my morning class, I was on the road to Nashville.

Tennessee Association of Broadcasters Kick-off

Whit Adamson, President/CEO of the TAB, put together an amazing opening reception and event inside the Country Music Hall of Fame. We were welcomed by TN Governor Bill Haslam who declared it “Radio Week” in the State of Tennessee. Then the Mayor of Nashville, Megan Barry, gave us a warm welcome to Nashville where she declared it “Radio Week” in Music City. The “red carpet” was fully rolled out for the radio industry and attendance would set a new record for the Radio Show.

Pillsbury’s Broadcast Finance Forecast Leadership Breakfast

The good news is radio is the “King of Audio.” The bad news is that revenue growth for radio underperformed ad spending post-recession. Radio’s 7% share of all advertising is predicted to decline to 6% by 2019. Why? Digital ad spend will grow significantly (40%) by 2019. And radio will struggle to reach mobile users.

The big takeaways from this session were: Investors want to see new growth catalysts like NextRadio, more event revenue and growth in digital/mobile ad revenues. Investors want no more than 3 to 4 times leverage with more industry consolidation. All of this investors feel will yield more “free cash flow.”

Investors worry about audience fragmentation and Millennial reach, radio’s competition in the car dashboard, the challenges coming from digital/internet, continued uncertainty over royalties and excessive leverage.

Focusing on Your Career Future

The room here was filled with young people. Radio mentors from all areas (except engineering) met with tables full of students and recent graduates to talk about the many opportunities available in today’s radio industry. The mood was once of excitement and enthusiasm.

Brittney Quarles and John Focke both would share their personal radio journeys with students as they shared advice such as: “the industry is small, don’t burn any bridges” and “find a champion for you and your talents” and “be careful who you share your dreams with.” The right mentors are essential to your career.

Beyond Basics – The Prosperous, Professional You

John Bates, Elizabeth Burton and Heather Monahan led a session in how to reach beyond your limits and build a better “Brand You.”

John Bates shared “3 ways to inspire and connect”: 1) logic is not the way, 2) human eyes connect you to another person and 3) be authentic. For example, people don’t connect with your successes, but your messes. You message is your mess. But above all else, “Make A Difference.”

Elizabeth Burton drilled down the importance of your online brand and that today your online activities build your reputation.

Heather Monahan told us that people take only 10-seconds to make an opinion about you when they first meet you. 50% of communication is nonverbal and your attitude is everything. And if you want to know what your personal brand is, ask others this question: “What value do I bring to you?”

The Digital Dash – Improving the Consumer Experience

Fred Jacobs, Steve Newberry and Scott Burnell (from Ford) all shared their perspective on radio in the car. The first big thing is car manufacturers don’t call it a radio in the dash anymore (and probably haven’t for some time) but “the center stack.” Into this part of the dashboard, everything a car owner wants can be accessed.

Steve Newberry (former NAB joint board chairman) really brought the whole issue home with his analysis of the technology revolution by saying there are two kinds of events: disruptive and modifying. Disruptive events would be things like television and FM radio. Modifying events would be things like cassette tapes, CDs and MP3s. Disruptive events change the landscape and prevent an entity from doing things the way they’ve always been done. Television stole radio’s programming and added pictures and radio had to reinvent itself with new kinds of programs. Modifying events such as records being replaced by cassettes and 8-track tape, then CDs replacing both of those to be replaced by MP3s merely modified the way people listened to their own music libraries but not how they used radio. The new digital/internet connected world is a disruptive event and radio needs to once again adapt to this revolution in communication. The future is bright if radio is agile and adapts.

Perception vs. Reality – The True Power of Radio

My first Arbitron rep was Pierre Bouvard. He’s a fountain of information. His presentation on “7 Things Brands Have Completely Wrong About Radio” tells the story in great detail and shows the challenges faced by radio sales people today.

Podcasting

Steve Goldstein did an amazing presentation on podcasting by starting out with this Thomas Edison quote from 1922 “The radio craze will die out in time.”

Today mobile is eating the world. 20% of audio listening comes from the smartphone. For radio, podcasting is all about retention, growth and relevance.

Podcasting is no longer niche. It delivers the demos advertisers want. Podcasting is different than broadcasting. There’s money to be made in podcasting and radio has the perfect megaphone to promote podcasts to its audience. That’s radio’s “secret sauce” that podcasters wish they had access to.

Radio – The Local Media Company of the Future

Gordon Borrell and his research company are doing some incredible studies on the future of advertising. He immediately got the audience’s attention when he said in the last ten years $56 Billion has disappeared in advertising expenditures.

Banner ads are dead. But digital is not.

Local advertising growth is forecast to increase 7.6%, but non-digital will see a 6.9% decline in ad spend and digital will see a 22.4% increase in ad spend. In fact, 2017 is the year that digital advertising will eclipse all traditional media.

Borrell said when advertisers cut ad spend in one medium they spend it in another medium. Radio will continue to be bought, but only those stations who have well-trained representatives that understand the realities of today’s advertising and can put together a total marketing plan that goes beyond simply radio spots. Advertisers will partner with any media company who has reps that listen.

The good news is traditional media – like radio – is still necessary to drive digital advertising goals and deliver maximum digital R.O.I. (Return On Investment).  You can see Gordon’s full PowerPoint deck here.

Final Thought

The mood in the halls and in the sessions at this year’s Radio Show was very upbeat. The things being discussed and presented did not shy away from the realities all ad supported media face.

Anyone who attended came away with lots of action steps that need to be implemented immediately.

Radio currently is the #1 Reach & Frequency medium in the United States of America.

There’s no time to waste. It’s time to roll up our sleeves and “Make A Difference.”

Radio’s future depends on it.

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Tall Towers in Big Fields

55I worked for Clear Channel for five years. As best as I remember, not a meeting went by that John Hogan wouldn’t say “we’re not about tall towers in big fields anymore.” And as I watch radio companies all across America selling off their radio towers, I think that day has come to fruition.

Introducing the iPhone7

This week on September 7, 2016 the iPhone7 came out and the big news was that it eliminated the headphone jack. The radio industry was in shock. How would NextRadio be heard without the wire that connected the ear buds to the phone since that wire acts as the antenna to receive FM radio through a smartphone with the FM chip activated. Except Apple never activated the FM chip inside any iPhone.

PPM & the iPhone7

Then only two days later, Randy Kabrich published a concern that may be even more important to the radio industry, and that was, how would PPM* work with the new iPhone7? Randy posted this picture with his article iphone7-with-ppm and you really should read all that Randy has to say on the subject with his article on Tom Taylor’s NOW here.

Change is the Only Constant

Jim Carnegie, who founded Radio Business Reports, used to continuously preach to the radio industry you can’t hold back change. If you are to survive you must embrace change.

In the case of wireless headphones, the tipping point has been reached. More wireless headphones are now sold than wired ones. So I don’t think Apple was going out on a limb by eliminating a 19th century technology. I also fully suspect that AirPods will soon become the new “IN” thing.

What Should Radio Be Focused On?

MediaLife Magazine published a really interesting article on the seven important trends that radio should be focused on. You can read the article here. I will give you the “Reader’s Digest” version with some of my own thoughts.

The Future of Big Radio

Radio is best when it’s LIVE & LOCAL. The consolidation of radio has not been the successful business model that investors on Wall Street bought into. Of course the concept of “increasing shareholder value” and radio’s operating in the public interest, convenience and necessity were at odds with one another from day one. I would agree with MediaLife that radio’s future will be via locally managed radio operators.

The Future of Local Radio

Johnny Carson used to say: “If you buy the premise you buy the bit.” In this case if you believe in the demise of big radio, then you will also believe in the rise of local radio. I know right here in Kentucky many locally owned and operated radio stations that are fully engaged in every aspect of the lives of their listeners and they are thriving.

Radio Goes Digital

With radio company after radio company selling off their radio towers, the writing appears to be on the wall that all radio will be delivered digitally and via the internet. Gone will be towers and transmitters and FCC regulations, fees and fines.

Convergence of Media

I remember writing a paper on media convergence when I was in college. That was long before the concept of a world wide web. With the internet all media becomes identical. What difference is there between a newspaper, a radio station or a television station when each of them can do the same thing? What will separate them is the quality of their content.

NAB, NAA and IAB et al.

The coming convergence will really play havoc with media associations. When what once were separate and distinction constituencies will now also converge into a media association.

I remember being in Washington, DC when Senator Gordon Smith came on board at the NAB President. I shook his hand and asked him about the NAB inviting the satellite radio and internet radio operators into our big tent. I said better to have them with us than against us. He nodded and said that was certainly something to think about. (I think he may have just been being kind.)

Radio’s Opportunity

The History Channel did a program on the “100 Greatest Inventions” and number two on the list was RADIO. Number one was the smartphone. The smartphone really replaces many of our other devices. My digital camera lays somewhere gathering dust as my iPhone has been my digital camera since I got it. CD player, iPod etc, have been all replaced by my iPhone for playing my own music collection. My iPhone is my radio and TV too. Newspapers, magazines, books, are also easily accessible on my iPhone. I know I’m not alone in finding that their smartphone has become a very important part of their life. My iPhone is the model 4S. It’s ancient in the eyes of my students. That’s why the new iPhone7 with the 256GB storage, stereo sound, wireless AirPods, water resistant and all the rest has me thinking it’s time to upgrade.

For me, the big change is the size of the phone. I like the size of my 4S. It was just a bit smaller than the Blackberry Pearl it replaced, but the technology leap it offered over the Blackberry was incredible. I’m sure that the size thing is only in my perception and once I advance to the larger screen I will wonder how I lived without it.

No One Goes Backward

History shows that once people adopt something new, they never go back to the way it used to be. We may wax romantically about the good old days, but if we had to trade another time in history for life without our smartphones and wireless internet, I seriously doubt we could make the trade.

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*PPM is a Nielsen’s Personal People Meter. It’s a device used to measure radio listening in the top 50 radio markets in the USA.

Note: Randy Kabrich blogs here: http://blog.kabrich.com/

 

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SiriusXM Radio is Now Free

43

What would you do if you woke up one morning and saw this as the headline in all the radio trades? Have you ever considered the possibility of this happening? Well lots of people woke recently to this headline “Angie’s List is now free: What this means for your business.”

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 other members that had experienced certain businesses or services they had used. Now everyone can see those reviews. Angie’s List had developed a reputation for its members writing rather substantial reviews as well as being a website that is strong, trusted and contains valuable content.

Why Did Angie’s List Tear Down Their Paywall?

Angie’s list is a publicly traded company. Their stock is down seventy-five percent from three years ago. Management is under pressure. Tearing down their paywall means increased page views. When page views go up, revenue goes up. See the strategy?

Could SiriusXM Follow Suit?

Satellite radio currently captures about ten percent of radio listening and mostly in vehicles. The new digital dashboard entertainment centers will be a gateway to Pandora, Spotify, Apple, YouTube and more. Having an XM button on my Honda Accord, I know that my access can be selectively turned on or off by SiriusXM. When they do one of their free listen promotions, they don’t turn on all the channels, just the ones they think will hook me to listen. So, I would imagine, they could create a group of channels that could be on all the time and carry a limited commercial inventory attractive to national advertisers. Like the most popular musical venues, such as adult contemporary. Even if they only turned on the top five music formats, it would mean drivers could listen to them wherever they drove across America, plus SiriusXM would have the ability to pop in promos for their other channels that remained behind a paywall. It’s almost too scary to consider the possibility.

Teens Love Streaming

Teens love streaming audio and their smartphones. According to the Music Business Association and their data partner LOOP, teens spent 51% of their listening time on a typical day streaming their music versus only 12% of their time with AM/FM radio. This is a media usage habit being formed in the next generation. It not only affects traditional AM/FM broadcasters but satellite radio as well. This is a problem that needs to be addressed.

NextRadio App

Thanks to Jeff Smulyan and Emmis, the NextRadio App is the way FM broadcasters can get their audio into those smartphones, without running up a user’s data plan. However, Sprint has already removed many audio streaming services from running up their data plans by letting their customers listen as much as they want at no extra charge. Since teens avoid paying any fees whenever possible, free is always an attraction.

Less Than 1% of World Pays For Streaming Audio

AM/FM radio has been built on free. That’s an advantage that too often gets taken for granted. According to Nielsen 61% of people find out about new music via their AM/FM/satellite radio.

Price is the number one reason more people don’t pay for streaming audio. Out of a worldwide population of over seven billion people, about forty-one million buy some form of audio streaming; 0.58% of the world’s population. That percentage turns out to be lower than the total number of people who have a Netflix subscription around the planet.

23,870 AM/FM Radio Signals On-The-Air

The FCC just published their latest numbers for broadcast stations as of June 30, 2016. We are approaching 24,000 signals for radio in America. 19,194 of those signals are FM and 4,676 are AM. Plus we have two satellite radio signals, Sirius & XM, which are now under a single owner.

Pay & Free

It doesn’t take a whole lot of imagination to see satellite radio one day deciding to have the best of both worlds. Offer premium pay channels to those willing to pay for them and at the same time create a free tier of channels that could be ad supported by national advertisers.

What history shows us are things that happen in other industries and services eventually make their way around to virtually all of them. It’s only a matter of time.

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Evolve or Lose Relevance

23In two months, the world’s largest radio meeting will once again be taking place in Las Vegas; the 2016 NAB Show. Ironically, since leaving the radio industry and entering academia at Western Kentucky University, I attended my very first NAB show in 2011 and have every year since. So as visions of massive crowds and very sore feet dance in my head, I thought I’d look back over those past years and see how the theme of these meetings has evolved.

In 2011, the NAB highlighted that media consumption had become more digital and connected. TV everywhere strategies, mobile TV, the connected TV and the use of social media dominated the show.

In 2012, everyone was shouting about 4K video, ISP content delivery and the evolution of special effects technology. Everywhere you went you were shown 3DTV (I didn’t care for it, personally.)

In 2013, the NAB show hosted its first ever 2nd screen Sunday and the impact of more than one screen (the television set) vying for the viewer’s attention was fully recognized if not totally embraced by broadcasters.

In 2014, the NAB show wasn’t so much memorable for what it had but for what it didn’t have 3DTV. What had once been prolific throughout all the convention halls was now nowhere to be seen. 4K video & TV was now all the rage with Japan’s NHK demonstrating 8K video & TV. NHK said they will be recording the Rio Olympics in 8K and plans to televise (in Japan only) the 2020 Olympics in 8K. When you see TV pictures this detailed, you can instantly see why 3DTV bit the dust. 4K and 8K feels three dimensional and you don’t need any funky glasses.

Which brings me up to last year’s NAB show in 2015 where the theme was “Evolve or Lose Relevance” voiced by NAB President/CEO Gordon Smith. Smith urged broadcasters to embrace the new technologies like ASTC 3.0 & 4K for TV, and NextRadio’s mobile app for FM radio on mobile devices. Smith also talked about the spectrum auction which begins in March 2016 and characterized the auction as both “exciting and daunting.”

What may have been most daunting and certainly not exciting was to have been an AM broadcaster at this meeting – or any of the meetings of the last five years. Move along guys and gals, there’s nothing for you to see here. HDRadio was there every year and I think they had more cars outside of their convention hall than any previous year featuring their spiffy HDRadios, a technology that has been better embraced by the automakers than radio broadcasters for the most part. And of course, there were drones. Lots & lots & lots & lots of drones. Big drones, little drones…a drone for every size and budget. I’m wondering if the FAA will start coming to these meetings along with their friends from the FCC.

The only thing I haven’t seen addressed over these past five years is what seems to me to be the elephant in the room. Everything is supported on a business model that has been around since commercial broadcasting began in 1920, that being the selling of advertising. The covenant with the consumer of radio/TV programs was we will give you the programming for free if you allow us to expose you to our advertisers; a business model that worked extremely well through the birth of the Internet and dial-up connections. It would be the introduction of broadband and its rapid expansion that would challenge everything.

Blockbuster vs. Netflix is a good example. 2004 Blockbuster has 9,000 stores and almost $6 billion in revenue and only 4.4% of American homes had broadband. Netflix was mailing DVDs to its customers. 2010 Blockbuster files for bankruptcy, 68% of American homes have broadband and Netflix had been streaming to their customers for three years. Today Netflix has a market cap of almost $33 billion.

That really brings home the concept of “evolve or lose relevance” doesn’t it?

So what will the business model for media be evolving to? That’s the billion dollar question. Nobody knows. But what we do know is that Apple gave up its free iTunes music streaming at the end of January 2016 and now will only offer a paid subscription model. Disney’s ESPN is suffering the “agony of defeat” as more consumers cut their cable bundle (for which it’s reported that ESPN gets $7 per sub) and is causing this revenue stream to dry up while the cost of bidding for live sports events continues to escalate. Everything appears to be moving in a direction of asking the consumer to pay for what they want – like they do for HBO, Showtime, and Netflix etc.

So what’s the plan Stan for broadcast radio and TV? Or for any advertising supported medium for that matter? I think about this a lot.

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The Problem with Digital Radio

The problem with digital radio is FM radio. FM radio is loved by the consumer. They don’t find anything wrong with FM radio (other than too many commercials). With no perceived need to change, the FM radio listener doesn’t. That’s not just a problem for radio station owners in America, but all around the world.

I often like to compare the start of HD Radio with the introduction of the iPod by Apple. Both happened about the same time. One has sold hundreds of millions of units and now is no longer made, and the other is HD Radio.

Interestingly enough, the introduction of digital audio broadcasting was born around the same time as the World Wide Web. It was born before MP3s and iPods. Born long before the advent of Smartphones and Tablets and yet, digital in the world of over-the-air radio transmission is still waiting to get traction with the consumer.

FM radio commanded 75% of all radio listening in America back in the 1980s when the number of AM and FM radio stations in America numbered about the same. So it’s no surprise that over three decades later that FM dominates when the number of FM radio stations, translators (FM stations) and LPFM (FM stations) far outnumber AM radio stations that are on-the-air today in the USA.

Across the pond, the British government was planning to switch that country’s radio listening from FM analog to digital when the penetration of digital radio listening reached 50%. They thought that would happen by 2015. Currently digital radio listening in England stands at only 36% and the government has now wisely put off setting a new date for this transition.

The problem in England goes beyond just radio sets in homes and cars. British folks also can listen to FM radio on their Smartphones. Unlike here in America, the FM chip that comes inside Smartphones has been turned on. These chips remain in the off position in America with no way for a Smartphone owner to turn it on without “jailbreaking” their phone which is illegal. The members of parliament aren’t about to turn off a system that serves around 25 million listeners, if they want to get re-elected.

I own one HD Radio. My local NPR FM radio station broadcasts with 100,000 watts on their analog FM signal. It’s crystal clear and comes in everywhere I go. They simulcast their NPR and other talk programming on their HD Radio signal too. That is plagued with dropout and a short range in terms of where I can pick it up. The same HD Radio that picks up the digital broadcast of my local NPR radio station also has an FM tuner (but no AM tuner). I can switch between the analog FM and digital FM, and to my ears they sound about the same. And therein lies the problem. No perceived difference other than one goes great distances with no drop out and the other is HD Radio.

At this point in time, what seems clear is that is FM radio isn’t going anywhere anytime soon. AM radio station operators would benefit by having a similar FM signal that delivers the same coverage area as their AM license provides sans the sky wave effect. Giving them a low power translator is an insult in my opinion. All Smartphones should have their FM chips turned on. NextRadio should be embraced by FM broadcasters. All broadcasters need to focus on their content and make sure that whether it’s over-the-air or over-the-Internet, it’s of the same high quality and offers all of the same content on both.

I’ve never heard an FM radio listener complain about the quality of their signal and what they do complain about, isn’t being focused on by broadcasters. We have no time to lose.

FM radio has the delivery system in place. Take advantage of it to serve, entertain and inform.

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