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…
Last week we learned from the Radio Advertising Bureau’s 2013 Revenue Report that digital dollars continue to increase at a much faster rate than other revenue segments for radio broadcasters. Up 16% over 2012, and 18% for the last quarter of the year, the digital sector for radio is picking up steam and promising to top a billion dollars this year.
One of the obvious reasons why the digital sector is growing quickly is that the streaming audience is growing in all the right ways – more and more of the 12+ population listens weekly and monthly, the time spent listening is increasing year over year, and the younger demographics are listening in much greater numbers than older generations – signalling promise for the future of the medium (and marketability to advertisers as well). All of these trends are recently documented by the updated Triton Digital/Edison Research Infinite Dial Report.
At the same time, radio broadcasters are tuning in to the huge growth opportunity that digital audiences represent. They’re refining their online offerings, improving their ad platforms, and becoming more savvy at managing and selling their inventory. All of this is creating a more sophisticated online marketplace – impacting radio’s ability to capture more digital dollars.
One of the things we do really well at RAIN Summits is examine trends and tools, and discuss best practices that the online audio industry is employing. We create panels that highlight opportunities in the industry – hoping that our attendees will engage and learn about ways that they can maximize their opportunity. We don’t restrict our topics to broadcasters only – instead, we sit broadcasters who stream side by side with online only platforms, and place the focus entirely on online audio.
I think we have a fantastic lineup of panels and speakers on our agenda for our flagship event, RAIN Summit West, on Sunday April 6th in Las Vegas. If you haven’t made plans to join us, you should. There’s a tremendous amount of momentum in our industry right now, and we need all hands on deck to join the conversation and feed the buzz. I hope to see you there.
Earlier this week, RAINNews reported that an FM station in Boston – WKLB – is running spots for iTunes Radio. The spots are live reads, done by radio station personalities, and they sound like this.
When asked, the station, owned by Greater Media, issued some statement that kind of sounded like: “if you can’t beat ’em, join ’em.” This doesn’t seem like an especially well thought out strategy for a company that owns a bunch of nicely branded radio stations with loyal listeners. Apparently, the requirements for the ad campaign from iTunes Radio included guaranteeing first in a commercial stop-set placement, and live reads (also known as endorsements) by radio station personalities.
The first time I listened to the live ad, I could barely believe my ears. I played it for my husband (who is not in the industry), and he couldn’t believe it either. A radio station personality literally encouraging its listeners to listen to something else, going on and on about how great it is!
Years ago, I worked at WTIC AM in Hartford, one of the best AM radio stations in the country. At one point, that radio station’s morning show with Bob Steele had a 60 share of the market. When I worked there, Steele was retired, and we ONLY had about a 20 share in morning drive. We charged a lot of money for those spots, and live reads went for a huge premium, because we understood the value of them. Live endorsements by radio station personalities are very effective. So I’m guessing that iTunes is paying a lot for these spots.
Yesterday Edison Research and Triton Digital did an initial webinar release of their Infinite Dial update. iTunes Radio makes its debut in the study, having launched just last fall. And they’re off to an impressive start, with 8% of persons 12+ in the US saying they listened in the past month.
And that’s before broadcast personalities started telling their audiences how swell it is…
By the end of this decade, 93% of new cars will offer streaming music as part of the built in entertainment system. That’s the prediction of new research out from ABI Research in the UK, which forecasts that global shipments of streaming music enabled automotive infotainment systems will top 66 million by the end of 2019.
The study says that Digital and HD Radio formats will never scale to replace FM, and auto manufacturers will continue to include FM receivers in cars for many years. But listening to FM will gradually be replaced by streaming radio and music services as more and more cars become connected.
Car manufacturers know that in car entertainment systems are important to consumers, particularly younger ones. The race to integrate connected dashboard technology is on. As carmakers search for innovative platforms to call their own, fragmentation is high at this early stage. Streaming services like Pandora, iHeartradio and Spotify, looking for ubiquity, must integrate with each platform individually, an expensive challenge.
The impact of connected dashboards on the future of radio is high. A connected driver can receive highly targeted messages based on what they are driving, and where they are located, offering greatly enhanced value to advertisers, and higher net cpms for the music services.
We’ll be discussing all of the developments, challenges, and impacts that the connected dashboard presents for our industry, with George Lynch, VP Automotive Biz Dev at Pandora; Michael Bergman, Senior Director, CEA; Jake Sigal, Founder, Livio; and other smart folks at RAIN Summit West on Sunday April 6th in Las Vegas. Join us and become part of the amazing buzz surrounding our industry at our biggest event of the year. Early registration rates end soon.
There’s a lot going on with streaming audio talk platforms that’s intriguing. I don’t mean podcasts, although there is certainly a growing demand and interest in that form of on-demand streaming talk programming.
Swell is a smartphone app that allows you to hear interesting content and like or dislike it, personalizing your content as you listen. It’s similar, but different from Stitcher, which gives you the opportunity to design your listening experience by selecting programs, but it doesn’t go beyond that to suggest more content based on your interactive likes and dislikes. NPR’s mobile app offers a nice way to listen to their own programming, while Tunein gives you a chance to pick your programs and listen to them archived or live.
Meanwhile, Spoken Layer is a new startup that offers publishers the option of converting their articles to professionally read audio. Scalable narration and content distribution, as they describe it on their site. The platform enables publishers to turn any text into spoken audio in just minutes, enabling audio delivery of their content. In fact, while Spoken Layer does have partnerships already with several well-known publishers, including The Atlantic, National Journal, Engadget and TechCrunch, any journalist can use the platform to create an audio offering of their piece, or record it themselves.
I like to listen to talk programming, particularly in the car, so I’m pleased to investigate options that help me get more of what I find interesting. Talk programming can be highly engaging and entertaining, making it a good format for advertisers. News/talk is a “lean forward” format – listeners are generally tuned in and listening actively, as opposed to music formats, which listeners listen to in the background. Years ago, I sold ads on a news/talk station in Hartford, and was often amazed at the response that an advertiser would get from a live read done by the morning drive personality.
Jason Calacanis, a very smart digital media entrepreneur, has just launched a new site called Inside, which offers readers a curated news feed that emphasizes excellent journalism on topics that the reader can choose. While it doesn’t offer an audio platform, it’s interesting to note that Calacanis is an investor in Swell also. Calacanis, whose career highlights include founder of Weblogs, a network of professional blogs that included Engadget and Autoblog, which he sold to AOL, will be the keynote speaker at RAIN Summit West on April 6th during NAB Show Week. He’ll deliver his annual State of Media speech there, and I expect it to be one of the most interesting speeches we’ve ever hosted at a RAIN Summit event.
The world of news/talk audio programming is changing, impacted by online offerings that enable a seemingly limitless listening experience. Choice is the name of the game, and consumers are in the drivers seat…