Tag Archives: RadioTunes

February 24, 2019 · 3:00 am

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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June 12, 2016 · 4:00 am

Radio’s Dilemma (or Opportunity?)

38Radio’s a business. Peter Drucker said “The purpose of a business is to create a customer.” A business also needs to make profit or it won’t be in business for very long. On that we can all agree.

Surprisingly, many business people who know this still go out of business, often because they focus on the profit part and not the customer part. Plus those businesses either never had or lost their competitive advantage.

Radio’s dilemma is it lost that competitive advantage. That being having an FCC license to broadcast. Not everyone could obtain a broadcast license – they were limited by the Federal Communications Commission (FCC) – or had the ability to profitably operate a broadcast property. Profitability is when you earn money in excess of your cost of capital.

The radio business made a lot of money. Many enjoyed cash flow margins north of 50%. Its success attracted more people into radio ownership because it “looked easy” and made a bundle of dough. As more radio stations came on the air, it drove up wages, increased competition and increased multiples for valuing radio properties when they were bought and sold.

If this type of growth and expansion was all that was taking place, the “circle of (business) life” would have seen the radio industry slow down as the overcapacity from all of the new radio stations fought over the not-as-fast-growing advertising pie. It’s similar to what happen to the casino industry as expansion took off in America after just Nevada and New Jersey were no longer the only two states to license casino gaming.

Enter the great disruptor; the Internet. Radio, as we all once knew it, would be changed forever. For the Internet would now provide the world with an infinite number of “radio” options, like Pandora, Spotify, iTunes, RadioTunes et al. All trying to be ad supported like OTA radio.

Clay Christensen wrote about what happens when an industry is disrupted in his book The Innovator’s Dilemma.  He tells the reader how incumbent companies often respond to their disruptors with disastrous consequences.

Radio looked at the Internet as a “free broadcast license” and put their OTA signals onto a stream and then tried to squeeze a little extra profit by running separate ads on the stream versus over the air. It created a little extra money for the radio business but created a less enjoyable listener experience.  Sean Ross recently wrote in his newsletter “Ross On Radio” how different and better a radio station he listens to online sounded when he actually traveled to the market and heard the same station over the air. The difference was in the breaks and it was HUGE.

It doesn’t have to be all doom and gloom.

Southwest Airlines has enjoyed four decades of profitability. Like Walmart, Southwest had a root purpose for existing. Sam Walton’s Walmart mastered logistics to keep prices to his customers low and Herb Kelleher’s Southwest focused on constant improvements to make travel by air more affordable to more Americans. Like all successful enterprises, they put the customer first and profits were the result of doing everything else right.

For radio to be successful on the Internet, it needs to create a better user experience that attracts and delights the listener or that creates a new and different user experience that will enrich the end users’ lives. Radio, over the air, FCC licensed radio has the best platform to promote its Internet products. The possibilities are infinite. But each product must have a purpose beyond just making a buck.

Businesses that grow have a purpose beyond profit. Businesses that focus their growth on profits won’t have either growth or profits.

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November 15, 2015 · 6:30 am

Bring Back the Radio Hackers

We never called them that back in the early days of radio’s reinvention period after the birth of television in the 1950s, but that’s what they were.

Radio from the beginning basically was a medium that killed Vaudeville. Radio enticed the performers of Vaudeville to bring their acts to this new mass medium. The sales pitch went something like this: you won’t have to travel every day of the year, sleep on trains and eat your meals on the run. When you move your act to radio, you will be able to go home every night to your family and have a “normal” life. And you’ll make more money!

Not all performers would make this transition. The downside to moving their act to radio was that no longer could they have one act that they could perform night after night. On the radio, they needed a new act every performance. That’s a BIG CHANGE.

When television came along, the successful radio acts moved to TV and radio needed a new idea.

Enter the Hackers

 Alan Freed would hack the term Rock ‘N’ Roll and become the first famous disc jockey introducing a new venue for radio.

Todd Storz and Gordon McLendon aka “the Maverick of Radio” would hack the idea of Top 40 radio introducing a tighter playlist and higher repetition of the biggest hits. After observing teenagers playing the same songs over and over in a juke box.

Better Practices

 Today’s world is infested with the concept of “Best Practices.” It can be a stifling thing when it comes to creativity.

Today’s radio was born out of hackers that were constantly thinking up “Better Practices.” Ron Jacobs and Bill Drake certainly did at Boss Radio in Los Angeles with 93 KHJ. John Rook did it in Chicago with both WLS and WCFL. Rick Sklar did it in New York at Music Radio 77 WABC. Plus there were so many others in all size markets. Radio was different everywhere you listened because it was being hacked in so many wonderful ways. It was exciting to turn on your radio and hear what was going to come out next.

Insanity

 The definition of insanity is doing the same thing and expecting a different result. We have a lot of that kind of stinking thinking today and I’m sure you’ve heard all the reasons for why this is the path some of our biggest broadcasters are taking. As the radio business grew from a mom and pop business to the behemoths of today a ritual of “Best Practices” replaced hacking.

Today’s Economy is a Hacker Economy

 We live in a world where it seems everything has been turned upside down by the World Wide Web, the Internet and mobile Apps. The power is shifting from the big to the nimble; the hackers. Learn to hack or be attacked by those that hack.

Radio is not exempt from this shift. And it doesn’t have to lose.

Radio has what everyone else would love to own, a mass audience. Radio today is delivering the largest mass audience of all the mediums.

It’s why every entity trying to play in the audio medium calls itself “radio.” Pandora Radio, Spotify Radio, TuneIn Radio, RadioTunes, Beats 1 Radio etc. What radio folks have that these folks don’t have is a broadcast signal that is ubiquitous and a listening habit that has been cultivated over many years.

However, what those pure plays have that radio is missing are hackers.

Radio needs to stimulate agility, creativity and take risks.

Stop thinking about where you want to be in 5 years and start thinking about what problems you want to solve most right now. The winners will be those most able to adapt.

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