Driving is down in the US, according to an AP article that I read in my local paper over the weekend, causing folks that study that kind of behavior to conclude that our love affair with cars here in the US is coming to an end. The average number of miles drivers individually rack up peaked in July 2004 at just over 900 per month. Since then it’s been dropping, off 9% by last year at 820, and down again for the first half of this year.
Apparently, many factors are contributing to this trend, including the high cost of buying a car, the high price of gas, and the increased ability to purchase things online and even socialize online. Job losses due to the recent recession are a factor as well.
Which leaves me thinking about the impact that decreased driving is having on radio. Is the actual decline in driving one of the factors in radio’s declining AQH? The fact is that for the past decade, broadcast radio’s time cume has remained fairly steady at around 92% of the 12+ population, while it’s AQH keeps dropping. Some of this is due to younger generations preferring to listen on other platforms, like streaming.
But I’ve never heard anyone mention that the drop in time spent listening to AM/FM radio is tied to an overall drop in time spent driving in the car. And not only that, but this trend may be more closely tied to younger generations choosing other listening platforms over broadcast radio as well. Twenty years ago, two thirds of 18 year olds had their license. Today fewer than half of teenagers get their license in the first year they are eligible. That’s got to be having an impact on their time spent with radio.
Radio’s dominance over drive time has long been its mainstay. The waning of the time that folks spend in the cars is surely having a significant impact on the amount of time they are spending listening to their favorite drive time media…
How does this trend impact the future of radio and streaming? Don’t miss a great panel discussion on the topic at RAIN Summit Orlando featuring execs from Pandora, Ford, Pioneer Electronics, Slacker and others. You can see the full agenda and register here. Use the code Audio4cast to save a few bucks. See you there!
Digital revenue is the bright spot for radio according to the newest revenue data out late last Friday from the Radio Advertising Bureau. Digital revenues grew 16% over last year’s second quarter and are up 13% for the year. Serious attrition continues for network dollars which are down 4% for 2Q and the year. Digital is now poised to overtake network’s share of radio’s revenue pie.
The big elephant in the room is spot radio, which was only flat for the quarter but is still off 1% for the year. Of course this is not a good trend in the face of a modestly recovering economy. Ad revenues continue to shift to online and mobile media, as evidenced by the growth of radio’s digital revenues.
In a move that is likely a reaction to news like this, Clear Channel, which owns Katz Radio, the sales firm that controls the lion’s share of national spot revenues, has just signed on with IPG, one of the largest ad agencies, to build an automatic buying platform for radio inventory. According to Mediapost, “The initiative, which was developed by Interpublic’s Mediabrands unit, is dubbed the Magna Consortium, and is part of the agency holding company’s mission to automate 50% of its media-buying by 2016.”
Adults in the US spend on average 2 hours and 21 minutes each day on their mobile devices, which is nearly an hour more than they were spending a year ago on them. That’s a number that represents nonvoice activities – so it’s not the time that you and I spend talking on our mobile phones, it’s all the other stuff. Adults now spend almost an hour more per day using their mobile device than they do listening to radio.
The new numbers on Average Time Spent with Major Media by Adults in the US, 2012 from eMarketer are interesting. These numbers are not time spent exclusively with one medium – the adults in the study may well have been, and probably were multi-tasking – spending time with two major media at the same time. While the average time spent with mobile is soaring, the time spent with other media is dropping, but not nearly at the same rate. For example, time spent with radio dropped six minutes from 2011 to 2012 – from 1:32 to 1:26 per day. While that’s nothing to ignore, and it is part of a downward trend, I’m sure you agree with me that it’s not a precipitous drop. The same is true for television, which lost 7 minutes from 2011 to 2012 (but their time spent number is nearly twice that of radio at over 4 hours per day). Print is another story for another day..
This data shows that mobile isn’t gaining much of its time spent by adults by stealing it from other media. Instead, mobile is creating new media usage patterns that appear to be expanding the amount of time that adults in the US spend with media. That expansion probably comes from multi-tasking, with folks using their tablets while watching tv, etc., as well as new time spent with media in places where you hadn’t before.
Now this is interesting. Mobile media is expanding the time that adults in the US spend with media. Creating new dayparts, you could say. A little like making more time in a day..
This week the Boston Herald, one of two major newspapers in the city, announced that they will launch a new Internet radio station. Boston Herald radio will offer 12 hours of live local talk programming every day, featuring veteran local talk show hosts. In addition, all shows will be archived and available 24/7.
Boston has become a hotbed of live locally produced Internet radio.
Just about a year ago, we saw Boston.com, owned by the Boston Globe, launch RadioBDC, an alternative music format station, after Clear Channel flipped a format and fired the on-air staff ofWFNX. RadioBDC picked up the pieces and began streaming it online instead. The new Boston Herald Radio will enter to compete in an already healthy talk radio market where Entercom and CBSown strong talk stations with long heritages. Which you might see as stiff competition, or you might see it as an indication that Boston’s a market that likes to listen to talk programming.
So now Boston’s two major newspapers have both tuned in to the fact that Internet radio is where it’s at. “Internet radio is exploding and it makes sense that the Herald rounds out our multimedia platform with talk radio programming. It’s perfect synergy,” said Boston Herald President and Publisher Patrick Purcell.
I couldn’t agree more. Last spring, Boston witnessed a remarkable thing in the search for the Boston bomber. They shut the entire city down and launched a manhunt the likes of which has never happened before. Residents sat in their homes, searching for and sharing information online about the progress of the search, along with the rest of the country. They watched television and listened to radio as well, but they connected online. If you’re running a large newsroom at a major newspaper in the city, it makes perfect sense that you would want to use that newsroom to power a piece of that conversation as well, doesn’t it?
I can’t wait to see what happens next..
Clear Channel’s iHeartRadio has added an interactive platform for talk radio to its offering. The newly announced iHeartRadio Talk will feature on-demand listener-created talk content alongside popular news, celebrity and entertainment “audiosodes.”
“Listeners who have been accepted into the iHeartRadio Talk library will be able to record and instantly share their perspective on any topic they choose – it’s basically like offering ‘audio Twitter.’” said Brian Lakamp, President of Digital, Clear Channel Media and Entertainment, “We are giving a voice to the everyman, and at the same time are enabling iHeartRadio users to discover and enjoy thousands of ‘audiosodes’ from the best talent around the country.”
Through a partnership with Spreaker, a platform that enables listeners to create personal radio broadcasts, iHeartRadio will also feature user generated content. iHeartRadio Talk will offer “Daily Pulse,” a customizable Talk channel featuring the most up-to-date news and culture highlights, which allows users to add content that is most important to them. The service will also enable listeners to search for their favorite talk programming from ABC News, American Public Media, TMZ, the Wall Street Journal and others, not to mention Clear Channel’s own featured talk show hosts like Ryan Seacrest, Glenn Beck, Rush Limbaugh, Sean Hannity and others. Local news weather and traffic reports can also be integrated into the offerings.
Adding talk programming and user generated content to the iHeartRadio platform greatly expands the offering and is a nod to several popular platforms like Stitcher, SoundCloud, and even NPR, which has a huge talk presence online. It’s a smart move for iHeart that greatly expands their service and probably makes them a more interesting standalone platform for dashboard integration as well – something that I’m sure was part of the plan..
There’s been a lot of talk lately about car dashboards, and connectivity, and the threat that new technologies like streaming may pose for AM/FM, which currently owns all of that real estate. For those of you who read this blog, or attend RAIN Summits, it’s not news that connectivity in cars is impacting dashboards, with more listening options available. Nearly all the car manufacturers have announced partnerships with streaming platforms. Just yesterday Volvo released news that its new connected dashboard, with a 7 inch touch screen and voice activation, will feature TuneIn and Spotify.
The dashboard of the future won’t eliminate AM/FM, instead it will offer more options. Connected, interactive options that enable listeners to choose stations from a mix of delivery platforms. Streaming options alongside HD options alongside AM/FM options, alongside – dare I say it – maybe even satellite options. All-in-one dashboard players.
No one (okay, maybe someone) said, or thinks, that AM/FM will be eliminated from car dashboards. The NAB would never let that happen. More than 90% of the population listen weekly. (Although, that number may drop as other options become available).
After that article appeared came letters and statements from car manufacturers, eager to assure broadcasters that they are not eliminating AM/FM from cars. General Motors Chief Infotainment Officer Phil Abram told Radio Ink that:
“While we are excited about the possibilities of Internet radio services and other emerging services, we understand that AM/FM radio is still a significant source of news and entertainment. In fact, it is an expected feature. We can’t speak for other automakers, but to be clear, GM has no near term plans to eliminate AM and FM from GM vehicles. We are committed to providing consumers innovative services that dramatically enhance the driving and riding experience. We expect AM/FM radio to be one of the choices consumers have in our vehicles.”
There, now doesn’t that make you feel better?..
Dial Global this week announced a partnership with SoundHound that will offer advertisers more interactivity with broadcast radio listeners. SoundHound is a music app that listeners can download to their mobile devices and use to identify songs. Now, advertisers can offer listeners access to exclusive offers and branded audio, video, and Web content delivered on their mobile device through SoundHound.
With this new technology, advertisers will have the ability to provide additional information to consumers via a “second screen” portable device – enhancing the interactivity of their radio campaigns. Reportedly, the consumer does not have to interact with a commercial immediately in order to tap into the “second screen” offering because the information will remain available for a period of time.
As lifestyle shifts toward mobile continue, technology that enables radio campaigns to benefit are essential. eMarketer forecasts the number of mobile shoppers in the US will increase by 24% in 2013 to 118 million consumers and represent 62% of digital shoppers. Over the next four years, the overlap between mobile and digital shoppers will steadily increase as the number of mobile shoppers grows to 174 million in 2016, 80% of all online shoppers.
Mobile interactivity both increases the impact of a campaign as well as the ability to quantify effectiveness. “Until now, radio has struggled to keep pace with the kind of measurable engagement offered by newer digital marketing platforms. Together with SoundHound, we have created a marketing solution that delivers trackable engagement between listeners and brands.” said Ken Williams, President of Dial Global.
Digital revenues generated by US radio broadcasters shot up 11% in the fourth quarter of 2012 compared to the previous year, and pushed the full year over year increase to an impressive 8%. Spot dollars increased a mere 1%, further emphasizing the brightness of the digital horizon for radio.
“The continues stellar showing of the Digital sector…underscores the fact that th eRadio industry is finding additional ways to monetize these streams and that advertisers are taking advantage of new platforms to reach our listeners,” said RAB President and CEO Erica Farber. The digital revenues category represents revenues generated by websites, Internet/web streaming and HD Radio including HD2 and HD3 stations.
As the overall contribution that digital revenues makes to radio’s revenue edges closer to 5%, Internet advertising revenues are hitting record highs. The Interactive Advertising Bureau reported that Q3 of 2012 was up 18% over a year earlier, with Q4 numbers yet to be released. With spot radio dollars stuck in barely positive territory, digital solutions that enable broadcasters to unlock a portion of that pie become an important piece of the radio economy.
RAB president and CEO Erica Farber will deliver a keynote speech at RAIN Summit West on April 7th, offering her perspectives on radio’s digital initiatives and prospects for the future. Other panels will explore online options to capture more revenue as well. For more information and to register, click here. (Early bird registration ends next week.)
The big audio news out of CES yesterday wasn’t about streaming as Sprint announced that it will begin enabling FM chips on select Android and Windows smartphones during the next three years. This makes them the first US wireless carrier to make a deal with broadcasters to deliver FM radio on some of their phones. Broadcasts will be delivered through the NextRadio tuner, a receiver application for FM and HD smartphones developed by Emmis.
NextRadio accesses broadcasts of local FM stations and uses the phones data channel to integrate interactive elements from song and artists id, social tools to advertising info and messaging, creating a hybrid radio experience that is much more similar to an online radio experience – because it is partially online.
Fared Adib, senior vice president, product development and operations at Sprint, stated, “We look forward to bringing Sprint customers another entertainment choice through NextRadio. This new, easy-to-use service adds another dimension to the versatility of our wide array of smartphones and will deliver a new avenue for thousands of local radio stations across the country to reach our customers.”
With smartphones being used by more than 50% of consumers in the US and growing, this is big news for radio broadcasters. The NextRadio tuner, which provides an enhanced listening experience, has no doubt been a critical part of the strategy to get Sprint on board. Apparently, according to Inside Radio, the deal also includes a commercial spot bank for Sprint. There’s still work to be done – Apple, At&t and Verizon are not involved in this deal, but it’s a good day for FM radio, that should have a positive impact on HD as well. I’m looking forward to seeing that data on who listens.
Sprint’s announcement came out of CES yesterday. It’s interesting to note that broadcasters and NAB have been at odds with the Consumer Electronics Association, who produces CES, because CEA opposed broadcaster attempts to mandate FM chips in mobile devices.
An article in the New York Post last week notes that Taylor Swift’s new album Red is not available for on-demand listening on streaming services like Spotify, Rdio and Rhapsody. This is a strategy that other artists have used as well – Adele and Coldplay both held off making their new albums available on similar services. While it’s a leap to say that the strategy was the reason that the album had the best sales in its first weeks of any non-discounted album in the last decade, it’s reasonable to conclude that it didn’t hurt.
Streaming is growing in popularity and record sales are dropping. Some artists and their companies are seeing a relationship between the two and concluding that making their new releases available on these services is bad for song sales. Unfortunately, the amounts that they get paid by the services when listeners listen to their music doesn’t compare.
Ironically, Swift didn’t see fit to hold her album back from airplay on broadcast radio. A deal earlier this year means that she’s actually getting compensated to some degree by some big broadcast companies including Clear Channel when her songs play on the radio. While that probably doesn’t amount to much, it’s forging a new relationship between recording artists and radio.
It’s important to note that it’s the on-demand services that are getting shunned by Swift and others – Pandora has the album, as does iHeartRadio and other services that don’t enable listener to build playlists and request music by song, artist, album, etc.. There’s a growing perception that those services are being used as music collections and replacing song sales.
It may well be that artists, especially the big names, will continue to hold back their albums from services like Spotify for a while as part of their launch strategies. Or the services may find a way to be more relevant to those artists in their early song sales days, by providing data, promotion, sales support, in an effort to get back together again…