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…
In the states where the races for the presidential election were the closest, radio advertising made the difference. According to an article in Politico last week, both candidates used radio to target specific segments of the population, with Obama spending quite a bit more than Romney. The article, which is also very nicely summarized by Fred Jacobs in his blog, notes that the campaigns saw radio as a way to reach voters who were not extremely political and might not be tuning into polls on a daily basis. As well, radio ads were a strategy for reaching busy younger adult women who spend lots of time in the car tuning in.
A nifty infographic that TuneIn, the Internet radio portal, sent me shows that voters likely to favor Obama were indeed listening to radio. Radio was a key strategy for the campaigns in swing states, with the Obama campaign airing a series of tailored radio ads for eight key states, targeting Paul Ryan, including specific ads relevant for Virginia, Colorado, Florida and Nevada starting in August, and Romney using swing-state radio ads to knock President Obama over his ” bayonets and horses” quip during the final presidential debate.
TuneIn looked specifically at how many listeners were tuning into political talk programming during the month of October and found more listening to liberal (so-called) democratic programming. Indeed, their data, which they sent me on Monday, largely predicted the outcome in most of the key swing states…
Triton Digital and Alan Burns and Associates recently released a new study Radio Tomorrow which focuses on listener attitudes and behavior with a focus on future prospects for the medium. It’s a dense study with a lot of interesting questions in it. For example,
25% of those asked stream music on a smartphone daily from AM/FM, Pandora and other sources, and the number climbs to almost 40% weekly. Pandora alone claims 11% daily and 15% weekly in terms of people using it, per the study.
Some of the news in the study is predictable: young people listen to radio less, want more control of their stations.
Some of it is less so – for example, the study found that 44% of listeners would be more likely to buy a phone if it had an FM chip in it. And of the nearly 20% who have internet access in their cars, many still listen to AM/FM (70%).
When asked if there is a medium that feels like a friend, 50% named RADIO. And they find radio ads more trustworthy and less annoying.
If you haven’t taken a look at this study you should. There’s meaningful takeaways for anyone programming a station, online or not…
New York Public Radio is setting the standard for excellent online content creation these days with a slew of interesting, high quality new programs. Some, such as Radiolab, rank in the top ten most downloaded podcasts on iTunes, while others offer a remarkable host of guests and really great content that other broadcasters would do well to take a look at.
While there’s often debate about the quality of broadcasters’ online content offerings, such is not the case at WNYC.org. Each week, Alec Baldwin hosts Here’s The Thing, a weekly talk show in which Baldwin interviews well known and interesting people such as Billy Joel, George Will, David Letterman, Peter Frampton, Herb Alpert, Kathleen Turner – the list is interesting and impressive, as is the show.
WNYC also produces and airs Radiolab – the podcast of that program ranks third in the iTunes list of most downloaded podcasts. The show is so popular they even charge $2.99 for their mobile app. All of the programming that WNYC creates also becomes part of the NPR portfolio of content, along with content created by other stations such as All Things Considered, This American Life and Morning Edition.
It’s not news that NPR does an excellent job offering excellent news and talk programming to its audience. It’s an impressive online offering that would challenge anyone’s idea that podcasting is dead. As NPR could tell you, it’s alive and well on their platform…
This week Apple was awarded a patent that appears to be a shot across the bow to streaming broadcasters. The patent enables switching from broadcastor streamed content to media stored on a device. By using information available from RDS data, broadcast listings or published programming schedules, the device would determine in advance what programming might not be of interest to the user and then switch to songs or podcasts stored on the device or streamed from a cloud based library. The system reportedly uses the device owner’s content consumption habits, as well as “like” and”dislike” interactive features to determine preferences.
Apple Insider presents this description from published patent information:
“For example, a user may not like a particular song broadcast by a radio station, or may not like a particular segment of a talk radio station (e.g., the user does not like the topic or guest of the segment). As another example, a user may not be interested in content originally generated by sources other than the media source (e.g., advertisement content). Because the user has no control over the media broadcast, the user can typically only tune to a different media broadcast, or listen to or consume the broadcast content that is not of interest.”
There are a couple of remarkable things about this, not the least of which is that Apple is certainly a formidable competitor. The fact that they have developed this new technology which focuses extensively on replacing radio content is noteworthy. Implications could be significant for broadcasters and others that offer single stream programming, not to mention ad-insertion companies and advertisers. In fact, there could be, would be significant impact for on-demand services as well, since it would make an individual’s music library more useful and relevant.
And the devil is in the details, which might be comforting if the patent holder were any other than Apple…
Tim Castelli, President of National Sales, Marketing & Partnerships for Clear Channel Media and Entertainment, will be the keynote speaker at this year’s RAIN Summit Dallas, Tuesday, September 18th at the Anatole Hilton in Dallas. Castelli joined Clear Channel in March from AOL as their digital chief. His resume also includes Tech Industry Director for Google and Publisher of Rolling Stone Magazine.
Clear Channel’s role as a leader in the development of radio’s digital future is significant and Castelli’s keynote should be an insightful perspective from one of the company’s key players.
RAIN Summit Dallas will be held on the day immediately preceding The Radio Show produced by RAB and NAB. A “partner event” of The Radio Show, RAIN Summit Dallas is the premiere educational and networking event for Internet radio, focusing on the intersection of radio and the Internet. RAIN Summits are geared to both broadcasters on the Web (like Clear Channel Radio and CBS Radio), and Internet-only webcasters (like Pandora, Slacker, and AccuRadio).
As another highlight of the event, “RAIN: Radio and Internet Newsletter” Publisher Kurt Hanson will present his “State of the Industry” address on the future of radio in this age of new media. Hosted by Hanson, the Summit will feature a variety of other speakers and panelists, offering insights on the business, programming and technology aspects of online radio, including topics such as “Monetizing Mobile” and “Social Radio.”
RAIN Summits are a great way to learn and network in the Internet radio space. The speaker list for September is growing and already includes execs from NPR, CBS Local, Myxer, Cox Media Group, TuneIn and many others. For more info, click here. Hope to see you there!
By way of disclosure, I am the President of RAIN Summits.
Clear Channel’s move to make a direct licensing deal for over the air performances with record label Big Machine is a stunning development for the radio industry. I’ve spent a day or so pondering all the ways this could impact the issues, and have come away marveling at what a forceful move this was by Bob Pittman and his team. (Read excellent coverage by RAIN here.)
The radio industry has been refusing to cut a deal with record companies that would compensate artists for over the air play in exchange for a better deal on streaming royalties. Broadcasters and the NAB have tried and failed to come up with a solution, and the issue is currently headed for Congressional intervention – with Future of Audio hearings that started yesterday on the hill. Hence the incredibly nervy and savvy timing of Clear Channel’s announcement that they had signed up to pay a share of both on-air and online revenues to record label Big Machine, the company behind such big names as Taylor Swift, Rascal Flatts and Tim McGraw.
Bob Pittman is indeed just what the radio industry needs.
The radio industry has been moaning about streaming royalties for years. This has caused them to take a half hearted approach to Internet radio, which in turn has created mediocre offerings that are not competitive with highly developed interactive offerings such as Pandora, Spotify and others. But their unwillingness to pay over the air royalties to artists makes the record labels unwilling to negotiate better digital deals with them.
Meanwhile, online listening is growing exponentially.
“Unrealistic rates on the digital side were choking the ability to expand digitally for radio companies,” said Irving Azoff, a Clear Channel director and chairman of Live Nation Entertainment Inc.. “We’re trying to convince labels to enter into a direct deal because we can’t get legislation passed,”.
“Someone has to go first, someone has to take a risk,” said Clear Channel CEO Robert Pittman. “If digital grows a lot, this will be a good deal. It’s a gamble. But you win nothing if you don’t take a chance.”
So Pittman took a chance. He took a look at the future of radio and decided that digital is it. Reluctant to let Congress determine how his game will be played, he cut a deal with a little record company that has a few big names. By doing that he forced the first brick out of the wall between broadcast radio and performance royalties for artists, and I suspect we’ll see the whole thing come tumbling down. Broadcasters will pay over the air royalties, because their hand was forced, but also because it just doesn’t make sense that other platforms have to and they do not. Playing fields will be leveled, programming will improve and opportunities will grow – for radio stations and for recording artists.
Broadcast radio revenues grew 1% in the first quarter of 2012, with revenues derived from digital assets at the helm, according to the Radio Advertising Bureau. Digital revenues for broadcasters grew 10% during the same period, or ten times as fast as spot revenue. Network revenues grew 8% and fueled the growth as well.
“While advertisers continue to capitalize on Radio’s Spot and Network efficiencies, they’re increasingly utilizing local digital capabilities and audience engagement that this medium affords.” said Erica Farber, the newly appointed President and CEO of the Radio Advertising Bureau.
Digital revenue now accounts for more than 4% of radio’s overall revenue. Digital revenue grew 15% in 2011, while spot radio lost 1% and network grew 3%. Digital Revenue is made up of activity generated by websites, Internet/web streaming and HD Radio.
So if you were a car dealer that sold ten times as many efficient hybrid cars as you did station wagons, you’d order more hybrid cars for your lot, right? You’d train your salespeople in the best ways to sell hybrid cars, and you would make sure that everyone knew you had a lot of them. In fact, you would move them right up to the front of your lot. That’s the way broadcasters should be looking at their online and digital products. As the engine that is driving their future…
It’s been a strong news week for Pandora, which is not unusual – the service has a great strategy for maintaining visibility in the media. That’s good for their brand and all of Internet radio by-the-way.
They recently released some new data from a study done by The Media Audit surveying 54,000 people in Los Angeles about their radio listening affinities. As reported in the LA Times, “Pandora beat out local stations such as KIIS-FM, KNX-AM4, KROQ-FM5 and KOST-FM in the survey of 54,000 adults who were asked in the biennial phone poll, in October, what stations they had listened to in the previous week.” In fact, “The research group estimated that 1.9-million people in Los Angeles listened to Pandora between September and October of 2011. The No. 2 station, KIIS-FM, garnered 1.4-million listeners in the same time frame, according to the survey.”
This caused the Huffington Post to headline an article with the proclamation that Pandora is the Number One Radio Station in LA. I’m sure the folks at Pandora were very happy about that.
Meanwhile, Inside Radio, a publication owned by Clear Channel which owns Pandora competitor iHeartRadio, was busy covering a story about more research on Pandora’s listeners. Mark Kassoff and Company, a radio programming research company, surveyed 1,177 Pandora listeners, asking them just what they like so much about the service. Their conclusion? Pandora listeners are control freaks. And that’s the headline that Inside Radio chose for their coverage of the info.
Now, despite the headline, the Kassoff data is actually pretty good – revealing to those that read past the opening sentence that people like the personalizable options that Pandora gives to listeners. Kassoff goes on to examine in his survey the ways that Pandora and FM are different, and encourage broadcasters to focus on those differences. Which is a great conclusion for his study..
The stage is set for RAIN Summit West in Las Vegas on Sunday April 15th to be one of the best RAIN Summits ever. This year’s event will take place at LVH – Las Vegas Hotel and Casino, formerly the Las Vegas Hilton, which is adjacent to and attached to the LV Convention Center. RAIN Summit Las Vegas is an education partner of the NAB Show.
The program is a good one – designed to examine and discuss many aspects of the Internet radio and digital audio marketplace from a business perspective. Panel discussions will focus on programming, revenue and planning strategies in a format that allows competitive businesses to sit together on stage to discuss, agree and disagree while sharing ideas with the audience.
The day will feature a keynote speech by Traug Keller, SVP at ESPN Audio, one of the most successful digital audio platforms. Under Keller’s leadership, ESPNRadio.com became the most listened to live stream of any terrestrial broadcaster in the world, reaching more than three million unique users per month. His insights are sure to be informative. There’s a long list of other interesting panelists, and at the risk of leaving someone off the list, here are a few names: David Carson, US Copyright Office; Jim Cady, Slacker; Jon Mitchell, Spotify; Jim Lucchese, The Echo Nest; Tim Murphy, Entercom; Steve Jones, ABC News; Steven Kritzman, Pandora; Sandhi Kozsuch, Cox; Michael Robertson, mp3Tunes; Larry Rosin, Edison Research. And lots of other smart folks.
Did you read that list? Hopefully you noticed the best thing about it – that RAIN Summits is a discussion that includes every side of the Internet radio conversation. From streaming broadcasters to online only platforms, straight up simulcasts to on-demand and personalized services, it’s all part of the discussion at this event. Lots of smart talk, dynamic agreement and disagreement. That’s how an industry evolves.
A new feature this year at RAIN Summits will be POVs – short talks by industry leaders on the same topic. This year the topic is “Redefining Radio” and we’re looking forward to hearing what Triton CEO Neal Schore and Liquid Compass CEO Zackary Lewis, among others, have to say on the topic. We’re still looking for a third POV speaker, so if you have an idea of who you would like to hear from, let me know.
In the meantime, if you haven’t already made plans to attend, now’s the time. The complete agenda and growing speaker list for RAIN Summit West is available here, and right now you can register for $99 including lunch and cocktails, and all registrants can save $100 on an NAB registration and get a free exhibit floor pass as well.
RAIN Summits are the best educational and networking events for our industry – providing a full day of programming and plenty of opportunities to meet people. I hope I’ll see you there!