Posts filed under ‘Radio’
Why Broadcasters Need To Work With Lots of Streaming Portals
Last week Clear Channel announced that they continue to expand the variety and number of streaming broadcast stations offered on iHeartradio by adding a list of college radio stations. College radio is a broad category that spans everything from student-run stations featuring block programming and music, news and sports programming to professionally-run stations with specific formats. At launch, iHeartRadio’s College programming will include more than a dozen of the leading college stations from eleven states across the country. 
It’s a nice move that college radio stations would find attractive – why wouldn’t they want to join up with a larger streaming portal? More potential listeners, an easy entry into mobile and automotive audiences. It’s a good idea, right?
I think it’s a fine thing that iHeartRadio is expanding into a major portal to broadcast streams. The name iHeartradio is a good one for a site with such a universal offering. A tuner-like portal that offers listeners the ability to sort through stations by geography and format and find just what they are looking for is a valuable offering for listeners who can search for the station from the place where they grew up or their alma mater’s stream.
iHeartRadio has a nicely developed offering, a handy mobile app, facebook integration and even some deals with automotive manufacturers, all things that are appealing to smallish broadcasters who can’t leverage those sorts of thing on their own. Signing on to iHeartRadio makes sense for all of these reasons.
Unless it’s an exclusive deal. Then what seems like a really good idea turns into a really bad idea very very quickly. Unfortunately some early deals with iHeartRadio by Univision, Greater Media, Cumulus, and EMF are rumored to have made iHeartRadio their exclusive digital portal. Despite the fact that other great big portals exist and already have lots and lots of traffic. Like, for example, TuneIn – a service that has one of the most popular streaming radio apps in iTunes, provides a tuner to many devices, and has lots of auto deals too. They’ve been around for a long time and are sending lots of traffic to lots of stations. Why abandon that?
Content creators should work with every distribution platform they can to give listeners access in as many ways as they want it. Leverage your content to build your audience through as many access points as you can. Limiting access is only good for one brand, and it’s not yours that I’m talking about…
Pandora’s Local Market Clout
Pandora released audience data today showing that they have grown their audience by 50% or more in top markets across the country in the past year. Releasing data that compares January’s audience stats with “holiday 2011″ stats, Pandora now claims to have a 1.0 rating with Adults 18-34 in top markets across the country. 
The report uses audience information provided by Pandora and analyzed by Edison Research using methodology that resembles that used by Arbitron, however, they make no specific comparisons to Arbitron’s reports or other stations in their press release. Releasing audience data in this form enables advertisers and agencies to assimilate Pandora’s audience reach with traditional broadcast radio stations’ reach. This assimilation of data and direct comparison to broadcast audience data is precisely the kind of thing that some broadcasters are trying to prevent.
It’s a powerful statement about Pandora’s popularity that they are able to deliver a 1.0 rating in all of the top ten markets in the US with Adults 18-34. You can read the press release here.
Arbitron’s Internet Radio Measurement Headache
In 2003 I started a company called Net Radio Sales that was designed, in large part, to offer a sales solution to streaming broadcast radio stations. Later that year I met with an Arbitron executive to discuss their decision to shut down server based streaming measurement and shift to census based measurement through comScore. I told Arbitron that broadcasters in particular would suffer from that because their streaming audiences were small and local, and would never show up on a national panel. At the time, Arbitron told me that they had two clients (AOL and Yahoo) who were pushing them to move to panel based measurement, and since they were the only two paying clients, the decision had been made. They shuttered Measurecast and moved to estimating streaming audiences based on comScore panel behavior. In case you don’t know the rest, a few years later they abandoned that game as well.
I’ll bet Arbitron wishes they had stayed in server based streaming measurement way back then, because what they had was a platform that measured everyone – streaming broadcast and online only stations, all together. Which brings us to the topic of the day. Now, Arbitron has a bunch of clients who want things done a certain way. Again. This time it’s their broadcast radio clients, and they want Arbitron to measure streaming broadcast stations and online only stations separately. Not just separately but differently, so that the ratings cannot be easily combined.
It’s a problem for Arbitron because their broadcast radio clients pay them a lot of money and they don’t want to alienate them. Those clients want Arbitron to measure their streams – in such a way that they can roll up their broadcast and streaming audiences into one and sell that total audience to advertisers. And they don’t want to be compared to online stations.
And then we have Pandora. Pandora has a large audience – large enough that they can now claim to have more listeners in many markets than some broadcast stations. And they are claiming that – by working with research firm Edison Research, who has helped them crunch numbers and make comparisons. Using standard calculations that are not proprietary.
Under pressure from its clients, Arbitron recently sent out a letter intended to dissuade buyers from using the data that Pandora, with the help of Edison, has been releasing, stating: “We strongly advise clients to avoid comparing self-reported audience estimates from Internet music services to Arbitron radio audience estimates…” They offer several reasons why it’s a bad idea, including claiming that there’s no way to know if anyone is really listening. Really. The most overused objection to radio, the objection that every salesperson in the world learned to overcome in Radio 101? I just really think it’s the pot calling the kettle black on that one.
But on to the thing that really concerns me. Arbitron says comparisons between broadcast streams and online streams can’t be made because there is a vast difference between “one to one” and “one to many” streaming audiences. They’ve created an imaginary line to justify measuring the two categories separately and differently. Supposedly, because “one to many” audiences are all exposed to the message simultaneously while “one to one” listeners are exposed to the message during their unique sessions, the data is different and cannot be assimilated.
Huh?
“This is an absolutely meaningless distinction” says Kurt Hanson, Publisher of RAIN: Radio and Internet Newsletter and Founder of AccuRadio, an online station. “Case in point: If Samuel Adams wants to deliver one million impressions of a commercial to listeners in the 4pm hour next Friday (to use a simplified example), they can either buy (A) a couple dozen top AM/FM radio stations, in which case the WAAA listeners will hear it at 4:08pm, the WBBB listeners will hear it at 4:10pm, the WCCC listeners will hear it at 4:13pm, and so forth, or (B) they can buy their desired demographic slice of the audience of a brand like Pandora, in which case some listeners will hear it at 4:01pm, some will hear it at 4:02pm, and so forth. In BOTH scenarios, not all of the target consumers are hearing the spot at the same exact moment! That’s never been important to the advertiser. Both scenarios are precisely the same, in terms if effect, for Samuel Adams.”
I asked one of the smartest agency folks I know – Natalie Swed Stone, US Director, National Radio Investment, OMD, what she thought. She pointed me to her write up for RBR, which she wrote a few weeks ago, and I highlight this quote: “The research has to follow the investment patterns. The more uniform the data, the easier it will be–but marketers and agencies will continue to buy what they want and use best available research to evaluate and estimate behavior.” In other words, research firms should offer data based on the ways that buyers want to buy. If the research does not do that, buyers will do what they have to.
Network radio has been adding up time shifted audiences(that are not hearing the message simultaneously) for decades. It’s completely acceptable to represent a network audience’s AQH as the sum of the AQH’s of audiences across the country listening to a program on hundreds of stations at different times. Arbitron’s RADAR product does this. “When we buy national schedules—they can air on different stations at different times—within the prescribed daypart…” Swed Stone told me, “in TV, the currency is currently live plus 3 days (DVR) etc and the currency is the same –even if a person plays back the program 3 days later –it is included in the overall rating.”
To check my thinking on this topic, I spent a lot of time calling and emailing digitally savvy radio people, asking them about this issue. None of my broadcast sources would go on the record, but they uniformly told me that this is a spin game. No one thought the “one to one” and “one to many” distinction holds any water at all. “It’s not intellectually sound.” I was told.
Arbitron is caught in a tough situation. As a research firm, they’re obligated to create products that are fair and objective. But some of their clients don’t want them to do that in a uniform platform. The listening landscape is rapidly evolving into a space that includes new audio platforms. Ultimately, advertisers and listeners will decide the landscape – listeners will listen to what they want to hear and advertisers will spend to reach them.
The audio landscape has never been more diverse and interesting. Pandora, with its enormously popular platform is bringing new advertisers into the space, and this could be a big win for the industry. Grow the pie! Adapting to new dynamics would be time better spent that shoveling sand against the tide..
Cumulus Stations Join iHeartRadio
The week has begun with news of a streaming partnership between Clear Channel and Cumulus – the latter’s online stations will be accessed through Clear Channel’s expanding iHeartRadio online platform. The 570 Cumulus radio stations in 120 markets will be available on the New iHeartRadio platform wherever it is offered, including the Web, mobile devices and automobile.
This doesn’t come as much of a surprise in terms of what Clear Channel has in mind for its iHeartRadio platform, since they have recently added Univision‘s and Educational Media Foundation’s groups of stations as well. iHeartRadio is looking more and more like an Internet radio portal, offering access to Clear Channel’s broadcast streams and online offerings as well as streams of other broadcast stations.
And they are well poised to convince other broadcasters to get on board. They have a solid partnership in place with facebook to drive traffic and enable easy sharing, popular mobile apps and dashboard deals with Ford and Toyota to get their app built into 2012 cars. This must be appealing to other broadcasters with fewer resources to dedicate to extending their own online brand. Cumulus, with its new stable of Citadel stations is a good catch for Clear Channel. Cumulus has been a company that has always taken a skeptical approach to streaming, this offers them a fail-safe way to give listeners streaming access, share in potential revenues, but avoid risky expenses.
Cumulus will continue to stream its stations on its own station websites and mobile apps, the New iHeartRadio platform will serve as the sole digital aggregator for Cumulus stations, which will all advertise iHeartRadio on-air and feature a link to iHeartRadio on all their websites. Meanwhile Cumulus expands its proprietary daily deals brand SweetJack, which it launched last spring, to all Clear Channel stations. SweetJack’s national radio daily deals platform will get advertising on almost 1,400 radio stations and station websites across the country.
This is a smart move for both companies. Cumulus has been uncommitted in its approach to streaming, this partnership gives them an easy way to offer streaming access to listeners without dedicating resources for developing their own brand. And they get branding enhancements for their daily deals platform. IHeartRadio meanwhile gets a big list of stations to include in their streaming platform, increasing their offerings and furthering the concept that they are a universal resource for Internet radio. That’s something that will help them build relationships with car brands, etc..
Radio’s Online Revenues Up 15% This Year
Digital revenues will continue to be the bright spot in radio’s future, according to new projections issued by BIA/Kelsey. Radio’s online/digital revenues will grow to $479 million in 2011, up from $405 million in 2010. The five-year outlook indicates radio’s online/digital revenues will reach $758 million by 2015, representing a 13.4 percent compound annual growth rate (CAGR).
In particular, the report mentions the integration of digital and traditional assets, which is giving stations opportunities to attract advertisers through online, social media and mobile channels and drive on-air audiences online.
While radio revenues have seen sluggish growth of only 1.2% this year, the digital/online segment has grown 15% over last year and is projected to finish the year at $479 billion.
Pandora Reports First Profits
Pandora reported its first profits last week of $638,000 on revenues of $75 million for its third quarter of this year. This beats most analyst’s expectations and dashes last year’s losses for the same period of $1.77 million.
Pandora streamed 2.1 billion hours of programmimg -twice the numbers of last year same quarter. According to Chief Executive Officer Joe Kennedy, About half of Pandora’s $66 million in third-quarter advertising sales came from mobile users, a “triple-digit” increase from a year ago.
“Rapid growth of 104% year-over-year in listener hours and record Internet radio market share growth to 66% illustrates the strong demand for personalized radio,” stated Joe Kennedy, Chairman, President & CEO of Pandora. “Our growing scale and powerful, multi-product advertising platform is enabling Pandora to increasingly penetrate areas that were once solely served by terrestrial radio. Our momentum in transforming the radio industry is stronger than ever.”
For third quarter of fiscal 2012, total revenue was $75.0 million, a 99% year-over-year increase. Advertising revenue was $66.0 million, a 102% year-over-year increase. Subscription and other revenue was $9.0 million, an 80% year-over-year increase.
This news came a week after the Radio Advertising Bureau released third quarter revenues reporting $190 million in digital revenues for US based radio broadcasters in addition to modest growth in spot revenues.
SNL Kagan Sees A Billion Dollar Market For Internet Radio In Ten Years
SNL Kagan and Senior Analyst Robin Flynn have produced a 2011 report on the Economics of Internet Music and Radio that’s very comprehensive and insightful. Using existing data points from RAB’s quarterly revenue reports, publicly available financials on Pandora, and research from Triton Digital and Arbitron on audience, SNL Kagan provides an excellent summary of the marketplace and its players, both online only and radio broadcasters.
Digital/online ad revenue will become an increasingly important and larger portion of radio’s revenues. The report pegs annual revenue for 2011 attributable to digital/online, including website, streaming, hd, and other digital sources, at $713 million for 2011. That number will grow to $1.55 billion in 2021 and comprise 7% of radio’s overall revenues.
Internet only stations will grow revenue at a faster rate – coming from $293 million projected annual revenues in 2011, that number will be $365 million in 2012 but reach $1 billion in 2021. Those projections are based only on ad revenues and do not include revenue from subscription or song download sales.
Pandora’s IPO has provided insight to the business model for an Internet radio station, and it’s a challenging one thanks to the enormous share of revenues that are owed in royalties. SoundExchange takes 45% of Pandora’s revenues and leaves them still losing money after ten years. The report quotes several radio broadcast company CEOs discussing the expense of streaming thanks to those issues as well. But most agree it’s a channel that they can’t afford to ignore.
Internet radio’s audience is growing, and connected devices are expanding the audience and time spent listening. Optimizing cpms for targeted mobile ads is a critical piece for Pandora in overcoming the digital royalty expense. Interestingly, SNL Kagan has projected that Pandora will take 4% of 2011 mobile ad revenues in the US, ranking fifth behind Google, Apple, Yahoo and Twitter.
Arbitron Partners With AdsWizz
Arbitron has announced a deal with Euorpean based online audio ad serving and measurement company Adswizz which signals their intention to return to server based streaming audience measurement. During an earnings call, EVP/COO Sean Creamer reported that Arbitron signed an agreement with Adswizz last week.
“AdsWizz will process the server-based, streaming log files exclusively for our planned digital radio service. This collaboration is designed to help us to realize our vision for providing standard reporting metrics for over the air and digital streaming audiences on behalf of our current radio broadcast customers and for digital music service clients. We are currently working with both our radio station clients and the digital service providers to develop the first report deliverables.”
Arbitron departed from server based streaming audio measurement when it purchased and subsequently shuttered Measurecast in 2004. Earlier this year they announced a plan to develop a comprehensive streaming audio measurement solution. A server based streaming audio measurement solution would put Arbitron in direct competition with Triton Digital’s Webcast Metrics, which currently measures services including Pandora, iHeartradio, Slacker, CBSRadio, AccuRadio and others.
Creamer’s announcement also promises a solution for current radio broadcast customers and digital music service clients. While it may seem obvious that the only way to produce a credible streaming measurement platform is to include both streaming broadcast and online only services, I had heard rumors that some of the broadcast clients of Arbitron were opposed to a solution that included online services like Pandora and Slacker. I’m hoping everyone has come to their senses on this point.
Competition in audience measurement of streaming can only be a good thing as it will encourage continued development of each solution’s capabilities. It’s also a good sign of a thriving industry…
Check In Radio Makes Mobile Contesting For Radio Easy
Triton Digital has introduced a new product that radio broadcasters can use to interact with their listeners. Check in Radio is an app that listeners can download to their smartphones and use to “check-in” with their favorite radio stations. It’s basically Foursquare for radio, agreed Patrick Reynolds of Triton when we spoke about it yesterday. I think it sounds like a pretty useful tool for stations.
Check In Radio is easy to use for both radio stations and listeners. After registering their station, broadcasters simply announce their contest on the air as usual, but ask listeners to “check in” via the simple smartphone interface within a specified time period to be automatically entered into the contest. The app has an intuitive user interface and GPS-based location awareness that automatically pulls up stations in the listeners’ current area. Stations can access the intuitive back-end interface to monitor check ins and select winners.
Check in Radio is a free app for iPhone and Android. Stations can register their station and begin using it right away. Claiming their station enables broadcasters to access a back-end dashboard which features check in monitoring and enables stations to determine contest winners.
This sounds like a cool way for stations to interact online with their FM listeners. It also gives stations an opportunity to expand their relationship with those listeners. In the meantime, Triton is expanding their database on those listeners as well..
Study: Listeners Love AM/FM Streams More than AM/FM Broadcasts
Americans are spending more time in their cars, time spent in cars on weekdays has increased by over an hour since 2003. Last week, Arbitron, Edison Research and Scarborough presented an update to a study from 2003 called The Road Ahead that looks at in-car listening options and adoptions.
While radio continues to the the audio listening choice in cars, its dominance has dropped by 12% since 2003. Back then 1% of people chose satellite radio, and listening to ipods and Internet radio streams was not an option. Now, 8% of folks who have driven or ridden in a car in the last month have listened to satellite radio, and a whole slew of new choices have bubbled up to compete with AM/FM broadcast radio. 6% listened to a Pandora stream, 4% to an AM/FM stream, and 2% to another non-Pandora stream. (The numbers are not exclusive so we can’t add them up).
The study also looked at the way people “feel” about various listening platforms, and the results are very insightful. At the top of the list of things people “love” listening to in their car is satellite radio with 54%. 34% “love” listening to Pandora via a mobile phone. And 30% love listening to AM/FM streams via a mobile phone, while 28% “love” listening to the same content on their AM/FM radio. New technologies, notes the study, get better “love” ratings, even if the content is the same..
Despite a proliferation of new in-car technologies, radio remains the “king”. But that’s not a license to be complacent, cautions the study. Instead, radio should recognize that “digital platforms are crucial to protecting radio’s in-car franchise. In fact, the authors of the study believe that HD radio has the ability to “provide the ‘wow’ factor for AM/FM in-car radio. This must be based on the higher “love” ranking that HD Radio gets among people that have it.
