News around the US radio industry over the past week included Disney’s announcement that it will shut down operations at 23 of its 24 Radio Disney stations and concentrate on digital distribution platforms for the Radio Disney format. Partnerships with Slacker and Aha Radio – two streaming platforms, as well as Sirius XM satellite are the preferred partners mentioned in the announcement, and I suspect direct distribution will remain part of the formula as well.
As if to echo and underline that sentiment, on Friday the RAB released a 2Q Revenue Report that reflects a 3% drop in revenue driven by a 5% drop in core spot revenue. The upward momentum in digital (up 9%) and off air revenues (up 13%) mitigated some of that loss.
Of course, there has been a lot of analysis and discussion about ways that the industry can do a better job of selling its core spot inventory. None of which is a waste of time. But the reality, as acknowledged by Disney’s news, is that digital platforms are growing in terms of revenue and audience, and it’s a great place to put focus. Sure, broadcasters should look for better ways to frame and sell their core inventory. But they should also begin to aggressively grow their share of the digital pie. That opportunity is expansive, and requires a concentration of resources that only a few broadcasters have begun to dedicate.
RAIN Summits – the premiere educational and networking conferences for the online audio industry – take place several times each year in the US and Europe, and the next one just happens to be taking place on Tuesday September 9th at the Radio Show produced by NAB and RAB. The agenda is chock full of topics that will stimulate your digital innards:
- Ad Models with Impact
- Big Data and Streaming Audio
- Mobile is the New Black
- Maximizing Radio’s Hyperlocal Digital Opportunity
We’ll have a panel of legal experts discussing meaningful royalty issues, and another panel examining – with the help of a Grammy nominated artist and several programming experts – how EDM (Electronic Dance Music) became a gigantic phenomenon without any broadcast radio or record label support. And Edison’s Larry Rosin will present some brand new data from his extremely insightful Share of Ear Study.
It’s 2014 and the time is now to put more focus on your digital strategy. Registration is still open for RAIN Summit Indy. Make plans to join us. See you there!
In May Entercom, one of the largest broadcasters in the US, launched a new division called SmartReach Digital. The launch came initially to six of Entercom’s markets, with more to follow. SmartReach Digital is a full-service digital agency formed by Entercom, staffed with a team of experienced digital marketers. Dedicated sales reps will drive business in each Entercom market.
The idea is new and innovative to radio, but one that has taken hold with newspapers, tv, and other locally driven media outlets. Local market knowledge and resources are valuable and can be used to sell more than one media -that’s the thinking behind this strategy. With relationships with local businesses already established, sellers become trained marketing consultants, prepared to work with those SMBs to develop a digital strategy that grows business and drives revenue. Website design, search engine optimization, email marketing, mobile platforms, social media, text marketing, online reputation management, display advertising, and of course, Internet radio advertising – these are all marketing options that might be recommended. The online platforms that sell these products offer white labeled versions that enable an agent like Entercom’s SmartReach Digital to brand and execute the campaigns, perform billing, and manage the relationships directly with their local customers.
Want to know more? We’ll be examining this new and innovative approach to growing revenue and optimizing local direct sales teams at RAIN Summit Indy on Tuesday September 9th, during the NAB/RAB Radio Show week. Christine Merritt, Google’s Head of SMB partnerships and channel sales, North America, and George Leith, VP Sales, Vendasta, are two speakers who will join a panel discussion on options for turning local sales teams into digital marketing consultants. It’s a deep and lucrative opportunity, and one you’ll want to take note of.
At a recent neighborhood potluck someone asked me about my business. As usual, once I started talking about online audio, everyone at the table identified with Pandora. After a discussion of the types of stations they like to listen to on Pandora, one person mentioned the problem they’ve been having of hearing the same two ads over and over whenever they listen.
Which is precisely the experience my husband and I had on a weekend trip to Cape Cod recently, listening to Pandora while driving the two hours each way. Lots of music variety, but no such luck with the ads, which popped up every few songs. Unfortunately for us, our targetable zip code and demographic earned us two disheartening commercials – one for knee replacement at a local hospital, and one for a senior living facility. Yeesh, we’re old – parents of a college age kid – but we still work – and walk!
But this is the conundrum that Pandora is faced with. In selling targeted ad campaigns to local businesses, they then become tasked with delivering them, and since we live in a small market (New London, Connecticut), they probably don’t have a whole lot of campaigns to send us.
From my experience, a few thoughts – first, those two campaigns were likely oversold for this market, and delivering them is requiring repeating the same ad over and over to a limited number of people. Second, there is no frequency capping going on with that campaign, and there ought to be. It’s not good for the advertiser when I hear their ad 6 or 8 times in a 2 hour period.
It’s also not good for the listener – but there in lies a question that is worth asking: is Pandora hoping that I’ll give in and upgrade to a commercial free Pandora One subscription? “It’s only $3.99 a month” said one of the folks at the potluck dinner, who thought it was well worth it. Actually, new subscribers now pay $4.99 a month.
One thing is for sure – with expansion into local markets, Pandora has some issues to contend with. Listeners are noticing the ads, and they’re talking about them. Targeted ads can be good for the advertiser, but they can also create repetition that is not valuable to the advertiser or the listener. Unless you’re in the market for a new knee…
Bragging rights for best online station are up for grabs now, as RAIN prepares to award the Fifth Annual RAIN Internet Radio Awards. Presented by RAIN News, this self-nominated awards competition is open to all streaming stations – and it’s free to enter. Winners will be announced at RAIN Summit Indy on Tuesday September 9th.
Five years ago, Kurt Hanson and I started these awards as a way to bring the industry together to celebrate excellence. We started with three categories, then expanded to four, and this year we added a separate category for International streaming platforms, bringing the categories to five:
- Best Overall Online Radio Service
- Best Streaming Broadcast Station
- Best Overall Digital Strategy
- Best Single-Stream Webcaster
- International Excellence in Audio
You can review the criteria for each category here, and enter the competition as well.
This is a competition for streaming audio services of all shapes and sizes, designed to include everyone, and celebrate excellence in our industry. If you haven’t submitted your service for consideration yet, please do it before the awards close on July 20th. Past award winners have included many great stations and platforms like Pandora and iHeartRadio, WEEI and ESPNRadio, Hard Rock Radio and The Blast.fm.
To submit your service right now, click here and complete the very simple entry form. You can’t win if you don’t enter, so do it today!
Know someone who should enter? Forward this email to them and encourage them to do it today!
According to a Zipcar study released earlier this year, Millenials – that generational segment born after 1980 or so who are adults now – think that having a smartphone is a lot more important than having a car. In fact, 40% of that group think that losing their phone would be a bigger hardship than losing their car. They also think it would be harder than losing access to a computer or a tv. Meanwhile, only 16% of persons over 35 would rather do without their phone than their car, and 40% of that age group put the car at the top of things they would not want to do without.
This wide discrepancy in the need to own a car has the auto industry back on its heels. It’s a sea change that has implications for all kinds of other business segments as well – including standard brick and mortar retail, and radio. AM/FM radio built its relationship with generations of listeners by virtue of its front-and-center placement in the car. Millenials lack-of-love affair with the car means they are less exposed to AM/FM radio as well.
The importance of a smartphone in the lives of this generation of younger adults has impacted radio in other ways – millenials don’t wake up with an AM/FM alarm clock, and they discover music via social networks rather than by hearing their song on the radio.
Radio broadcasters and auto manufacturers face similar challenges in needing to re-engage this key demographic. And radio – in all its forms – broadcast, satellite and streaming, is playing an important part in the strategy that car companies are pursuing to do just that.
The other day I was driving my car and listening to the radio and noticed two car ads. A Nissan ad featured Pandora, talking about how a trip to the store can turn into a rock concert with Pandora. The other ad talked about an entertainment system that lets one kid in the back seat watch the ball game and the other stream a movie at the same time. Car manufacturers have tuned in to the fact that connectivity and entertainment are essential to this group, and that’s what they are selling.
That’s an exciting proposition for radio. Trying to entice Millenials, the automotive industry is focused on selling dashboard systems that offer potential car buyers connectivity and choice, and feature radio (in all its forms). It’s a renewed chance for radio to engage with Millenials, on their terms.
A few weeks ago I was driving in my car listening to NPR during a pledge drive. As I listened to the announcer hawk mugs and even special solar/crank powered radios in exchange for signing up for a monthly “pledge” and heard him referring to donors as members, I realized that public radio is actually selling subscriptions, but calling it something else.
As we know, NPR is an audio service supported by its members (as well as some other revenue sources). In 2011, which was the most recent year I could find info for – NPR received an average weekly donation of just under ten bucks per listener per week. (That’s the total $ amount of pledges divided by listeners and weeks.)
While Pandora One and Spotify struggle to get users to pay less than $10 a month for their service, NPR manages just fine, netting 4 times that per listener.
Why is NPR is so successful at getting listeners to pay for programming? For one thing, they don’t call them subscription fees. Instead, they call them pledges – a far more honorable term, and they make every listener who donates a member, and send them a hat or a mug. It’s a clever marketing approach!
What else are they doing that online audio subscription services can do as well? Well, for one, they hold annoying on-air pledge drives, where they stop the programming, not for a few short commercials, but for highly intrusive on-air begging by personalities. It’s really obnoxious, and it works. Listeners respond.
Other tactics that NPR uses to extract donations – err, I mean pledges – from its listeners include bribery (as in the mug, hat, or solar powered radio mentioned above), flattery (our listeners like you are so smart), making listeners feel guilty, and – this is the best one – threatening to continue the on-air fundraising tirade unless everyone calls in with pledges right away.
So what can subscription services learn from NPR? I think the membership approach is a good one – remember the old American Express campaign “Membership has its privileges?” Creating a strong brand that people want to associate themselves with, and then selling that association – that seems to be a formula that works for public radio and a strategy subscription services may want to go to school on…
Yesterday Amazon announced a new feature that allows Twitter users to add something to their Amazon shopping cart by replying to a tweet with the hashtag #amazoncart. After connecting their Twitter and Amazon accounts, they can reply to a tweet for a product that has an amazon link and the product will be placed into their shopping cart for purchase. Later, they can visit their shopping cart and complete the sale.
“Add it now, buy it later” is the slogan used in the promo video by Amazon.
This is a pretty innovative strategy on the part of Amazon. Think about it — it encourages everyone who is selling anything to create a link for that product in Amazon and tweet about it. What’s more, if you actually take a little more sophisticated approach, you create your own little Amazon store, tweet the links to products in there, and enjoy some revenue sharing on the deal.
Amazon has more than 200 million registered users, all with credit cards associated with them. They have one of the easiest shopping cart platforms, with their proprietary 1-click purchasing. And they sell just about everything.
With their new “add it now, buy it later” promotion, consumers can easily react to a product they see tweeted, place it in their shopping cart, and purchase immediately or later. Either way, Amazon has placed itself in the middle of the transaction, making it easier for both the buyer and seller.
There are simply tons of ways that this can be used to make advertising more effective. For example, stations with a strong Twitter following can put their Twitter feeds to work. With advertiser permission, stations can tweet product links and run a coordinated ad campaign on their station and Twitter, extending the reach and impact of the ad campaign – and the bond with the advertiser. (Of course, this is for brand and product campaigns, not brick and mortar campaigns.)
Exciting possibilities exist with both iTunes and Amazon, who have so many registered users’ credit cards and make it so easy to buy. Now Amazon has figured out a great way to make it easy and attractive for everyone to want to use their platform to conduct business, and to encourage anyone with a Twitter following to promote Amazon links.
The streaming marketplace is becoming increasingly segmented, with big new brands like iTunes Radio and Beats Music competing with Pandora, iHeartRadio, Spotify, Rdio and a multitude of others for listener’s ears. Many of the streaming services offer similar options – personalized song recommendations based on a listener’s likes and dislikes, playlist building, social features, etc.. Some offer on-demand song plays as well.
Big data – the term used for collections of data that are so big that special processing is needed in order to use it – is a key component of these customized listening features. Services like Pandora, with 200 million registered users, collect information from listeners that includes their age, location, and gender. That basic information is useful for targeted ad campaigns. But there’s a lot more to big data than that – and that’s the stuff that music personalization is made of. Each time you like or dislike a song, skip an artist, type in an artist’s name, that’s more information that can be processed.
Key to effective use of big data are services that specialize in processing that information. Companies like The Echo Nest (recently sold to Spotify) and Gracenote (owned by Tribune Company) work with many of the platforms, creating data sets that enable Pandora, Spotify and others to better understand their listeners.
Big data processing is important on the advertising side as well. Companies like Pandora and iHeartRadio employ their own fleet of programmers to keep their data proprietary and make it understandable and useful. Third party providers like Triton Digital work with many companies to process their data and create identifiable audience characteristics.
Using a combination of zip code analysis and an individual’s music tastes, Pandora has begun creating audience profiles based on political affiliation. Exploring similarities between music choices and movie preferences, The Echo Nest concluded, among other things, that “if you like crime movies, you most probably enjoy listening to Jimi Hendrix, The Beatles, The Rolling Stones, Jay-Z, The Who, Bob Dylan, and Pink Floyd in that order.”
From selling tickets to the Carole King musical “Beautiful” on Broadway by targeting listeners who like her music, to selling flowers for Mother’s day to guys of a certain age who tune in to kid programming so their kids can listen, it’s exciting to think about the possibilities that big data can offer to streaming audio.
In a deal similar to the partnership they announced with Cumulus last fall, Rdio and Grupo Bandeirantes have announced a joint venture and powerful strategic partnership encompassing marketing, distribution, content and promotions that will significantly expand Rdio’s presence in Brazil. It’s a nice move on the part of the smallish streaming service. Under the leadership of CEO Anthony Bay, the company has been pursuing aggressive marketing tactics and forming alliances like this.
Brazil is the largest economy in Latin America and the second largest in the Western Hemisphere. It’s also the seventh largest economy in the world, and growing quickly. Music and culture thrive in Brazil, making it an attractive play for streaming services. Spotify and Deezer are both streaming in Brazil, and Rhapsody has a carrier deal with the country’s largest mobile phone provider Telefonica while Muve, owned by Cricket Wireless has a deal with the country’s second largest ISP, TIM. (Of course, youtube claims its share of streaming music listeners as well.)
While mobile technology and adoption is strong in South America, challenges such as low credit card penetration make subscription services without a carrier or other mass billing backbone a potential challenge to Rdio’s plans. This deal will support their marketing and brand awareness efforts as well as lend credibility.
“Global expansion and localized customer experiences are key focuses for Rdio. Brazil is one of the most dynamic countries in the world with a vibrant music culture. In fact, Sao Paulo and Rio de Janeiro are among the top cities for Rdio users in the world,” said Anthony Bay, CEO of Rdio. “We’ve had success in establishing a unique customer value proposition with our partners in other territories, and this partnership allows us to create a more diverse, all-encompassing listening experience in Brazil that travels from radio to TV to online to mobile.”
In the global streaming game, Rdio’s unique strategy of partnering with existing traditional media companies seems like a good idea, giving those companies an online audio extension, and helping Rdio extend its share of the streaming market.
Digital measurement firm comScore released new data on mobile and smartphone usage last week, showing that more than 163.2 million Americans own a smartphone. That number represents 68.2% of the mobile market and is up 7% over 3 months before. Apple ranked as the top smartphone manufacturer with 41.3 percent share, while Google Android led as the #1 smartphone platform with 52.1 percent platform market share.
As the smartphone audience expands, streaming music apps continue to benefit. While the most widely used app is Facebook, two streaming apps – Youtube and Pandora – are in the top five, with 48 and 45% reach into the mobile app audience.
Pandora’s mobile strategy is the key to the streaming platform’s amazing success. It was the 9th most downloaded app in the iTunes app store last year – a stat that is particularly impressive given that it’s been around a long time, and many people already have it. By way of reference, Facebook is number 8, and Spotify is nowhere to be seen.
Earlier this week at RAIN Summit West, keynote speaker Jason Calacanis talked emphatically about the importance of mobile, saying that it is the only thing that is important. Those that develop winning mobile platforms win consumers. With more than 70% of their listeners on mobile, Pandora understood that concept early and capitalized on it…