Tag Archives: Predictably Irrational

Option A or Option B

Over the years as I’ve been writing this blog, some of my critics have accused me of being negative on the future of radio broadcasting, comparing me to a “radio chicken little” that each week proclaims the sky is falling.

It’s hard to read something that makes you feel uncomfortable.

Predictably Irrational

I’ve been a fan of Dan Ariely, with his Predictably Irrational  books and his column “Ask Ariely,” which was published in the Wall Street Journal for just over ten years. If you don’t know, Dan Ariely is an Israeli-American professor and author, serving as a James B. Duke Professor of psychology and behavioral economics at Duke University.

On September 26, 2022, he announced that he was ending “Ask Ariely”, a weekly column that he has been writing since June 2012.

At that time, the reasons he gave were “our society now confronts some big, important, collective problems. We haven’t yet made up our minds as to how we will treat our planet, confront fake news, cope with a post-COVID workforce or mitigate the effects of inequality, hatred and political fragmentation.”

WOW, it kind of makes anything I write about concerning radio seem trite, doesn’t it?

Then, in December, Dan emailed his subscribers a letter called “End-of-Year Alternative Ask Ariely”, with thoughts that I’ve been mentally marinating.

Stay or Change

In life we are often faced with Stay or Change decisions.

  • Stay in our current job or Change to a new one
  • Stay married or Change to go our separate ways
  • Stay on the couch watching TV or Change to a more active lifestyle
  • Stay in the radio format we’ve done for the past 10 years or Change to something new

“In general, when we look at the decisions we make each day, most of them are not an outcome of active deliberation,” says Ariely.

The Future is Digital

One of the tough facts facing the radio industry is the move to an all-digital world. Inside Radio started off the new year with the headline story “Digital Audio Listeners Expected to Top 225 Million This Year.”

The facts they presented in the story were:

  • 74% of American internet users listened to digital audio in 2022
  • Time spent listening (TSL) to digital audio is increasing by its users
  • Digital audio consumption is nearly even with the TSL of broadcast TV daily
  • Digital TSL beats streaming video, using social media or playing video games
  • Digital adoption remains most common among younger generations
    • 91.1% among people aged 16-24
    (Smartphones are the dominant way young people listen to digital audio)

Last year saw the majority of Americans listening to digital audio on their smartphones while at home, and this number is expected to grow to 55.8% of the U.S. population by 2026 according to eMarketer.

eMarketer also points out that more than six in ten digital audio listeners in America were  paying for a streaming audio subscription in 2022. (Full disclosure, I pay for two different streaming audio services that began in 2022.)

The latest from Dave Van Dyke at Bridge Ratings research shows that digital media was the big winner in 2022, with 95% of consumers using websites or apps and 88% interacting with social media.

Then there was this headline from Edison Research, “Mobile’s Share of At-Home Audio Listening Leads AM/FM Receivers.” Edison has found that Americans over the age 13 now spend 35% of their daily audio listening time with digital audio via their mobile device while in their home. In contrast, Americans who are still listening on an AM/FM radio receiver is down to 26%. This probably shouldn’t come as a surprise, since the most recent Infinite Dial research found 39% of American households have zero radios.

BBC Without Broadcast

BBC Director-General Tim Davie was recently reported saying: “A switch-off of broadcast will and should happen over time, and we should be active in planning for it.” Davie went on to say: “consumers are awash with choices from traditional broadcast and new streaming services [and that] a change to [the BBC’s] traditional model is necessary.”

The internet has removed

the historical distribution advantage

of broadcast media.

Changing Your Perspective

Most of the people who read this blog, have grown up with broadcast media, but a person born just 10 to 15 years ago is presented with two options for listening to audio content, broadcast or digital. For these young people, these two options have always existed.

Think of it as buying a new car with or without air conditioning. People buying cars in the mid-90s didn’t even consider buying a car without it, as it was offered as standard equipment by virtually all manufacturers on new cars.

Broadcasters weighing whether they should “stay” with what they’ve always done versus “change”, should reframe this question by labeling the choices as “Option A” or “Option B”.

  • Option A: Broadcast Media
  • Option B: Digital Media

As Dan Ariely explains, when you change the framing of this decision from one that considers “stay” versus “change” to one that considers Option A versus Option B, you put each choice on a more equal footing.

“The problem is that the natural framing of “stay” versus “change” gives an unfair advantage to the “stay” decision because it is simpler, it require less change, less work, and does not make us feel that we are making a decision. It also doesn’t make us think much about what we would risk if we made the wrong decision. Of course, staying might feel like we are not making a decision, but by staying we are making a decision. By reframing the decision as “Option A” versus “Option B”, some of the advantages of the stay options are reduced and it becomes clearer what we really want to do.”

So, what say you? “Option A” or “Option B”?

I’m all ears.

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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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