RAIN Summit Dallas Looks At Internet Radio's Future

Summit Today

KURT HANSON's RAIN SUMMIT DALLAS 2012 looked at the future of Internet radio TUESDAY afternoon (9/18) at the HILTON ANATOLE HOTEL in DALLAS.

The day's events were introduced by consultant WALTER SABO, who asserted that exclusive original content drives retention of audience in all media.  He said that research for SIRIUS XM shows that original talk programming is what helps the service retain the customer base, adding the example of HBO using original exclusive programming to retain customers after starting as primarily a movie channel.  

Addressing the monetization issue, SABO said that the problem is a matter of "ancient metrics" being applied to a new medium which is worldwide with infinite inventory.  Internet radio's "gold," he said, is the data it has accumulated about its users, something broadcast networks and stations could never offer.  He counseled radio operations to incorporate video into their offerings and stressed the need for interactivity, and warned that the "most dangerous person at the convention" is "the expert... there are no experts."  "We have no idea what the potential of this is," he said,"until every single person on earth was born while the Internet was in existence."

EDISON RESEARCH's SEAN ROSS moderated a panel on "Innovating Online Content," running through what DALLAS stations post on their websites before turning to the panelists for descriptions of their typical workdays.  Once that was out of the way, ROSS asked the panel -- RADIOPLAYER's MICHAEL HILL, TUNEIN's SCOTT FLEISCHER, NPR's BOB KEMPF, and ESPN RADIO's CORY SMITH -- about new projects they've worked on in the last six months, staffing for their respective operations and what local stations are capable of producing as exclusive content for Internet distribution, and other issues.  

HILL warned against complacency and new "disruptors" coming in, and KEMPF stressed the importance of measuring -- "measure, measure, measure" -- in quickly determining whether a project is working.  Asked about monetization, FLEISCHER noted the need to come up with a business model, and HILL instructed content providers to "stop underselling your assets" with low rates.  KEMPF counseled patience, saying "The audience is going to be there... the revenue will follow."

The IAB's MICHAEL THEODORE led a discussion on Internet radio advertising with a panel of agency representatives, asking the panel -- TBS PROMOTIONS' KAREN CUSKEY, THE RICHARDS GROUP's SHANNON HAYDEL, JWT's LEE TRIGGS, and GROUP M's TAYLOR WOOD -- about changes in their interactions with sales representatives and how the industry is past the "101" stage and maturing into exchanges of solutions and innovation.  The talk also covered the issue of metrics and examples of creative solutions for advertisers.

HANSON's talk on the "Future of Radio" looked at the move of audience from traditional to online listening.  Citing Clayton M. Christensen's "The Innovator's Dilemma" and "The Innovator's Solution," HANSON discussed "disruptive innovation" models using transistor radios as an example and applying the same concept -- technology overshooting consumer needs and expectations, and another not-necessarily-better-quality technology coming in to disrupt the market and take market share through price, size, or other appeal to consumers.  He also offered advice on how existing companies, using independent entities outside the corporate headquarters and changing their business models, can take advantage of business changes, with the gradual conversion of the primary business of traditional department store chain DAYTON'S to that of its discount division TARGET as an example.

A panel on "social radio" followed HANSON's talk, highlighting online and broadcast radio's use of social media tools.  The panel included moderator JIM KERR of TRITON DIGITAL, SOUNDCLOUD's MANOLO ESPINOSA, JELLI's MIKE DOUGHERTY, CLEAR CHANNEL's OWEN GROVER, and RADITAZ's TOM BROPHY, offering examples of shows and stations using TWITTER and FACEBOOK to augment programming and add interactivity.

One common theme of all the panels seemed to be how to monetize digital media, and one panel focused on monetizing the mobile audio space, with SPOTIFY's BRIAN BERNER, MARKETRON's SUSIE HEDRICK, PANDORA's KIM LUEGERS, TUNEIN's KEVIN STRALEY, and COX MEDIA GROUP's JEFFREY ULRICH weighing in on making money in mobile, moderated by INSIDE RADIO's PAUL HEINE.  LUEGERS said that 70% of listening to her service is from mobile but 50% of revenues are from mobile; BERNER spoke about his company's process to convert free users to paid subscribers, and ULRICH addressed the issue of splitting online inventory from broadcast inventory with ad insertion, saying that his company is "still evaluating our options."  STRALEY said that TUNEIN is launching its ad server this month and added that the service will show an evolution from display ads to more forms of advertising in the coming months; he also advised the industry to find ways to make engaging with promotions "elegant" instead of requiring them to pause what they're doing to look at a video or clicking something, but LUEGERS disagreed, saying that she doesn't think there's an eyes-off-the-device problem because most people have a hard time looking away.

Attorney DAVID OXENFORD led a panel discussion on music licensing with SESAC's GREG RIGGLE, SOUNDEXCHANGE's COLIN RUSHING, and LIVE365's JOHNIE FLOATER kicking around where they think the royalty debate is headed and the digital services' hopes for parity with broadcasters for royalties. 

KNOWDIGITAL's KELLY ELLIS followed with a presentation of focus group research on streaming audio strategies, noting that the category is maturing in the minds of early adopters and now more willing to criticize streamers like PANDORA and iHEARTRADIO for perceived problems like crashing, lags, sound quality, and covering up commercials with "cheesy music"; ELLIS said that only a few years ago, respondents could not be prodded to complain at all about the streaming services, and played the response of one man who considered PANDORA "old."  ELLIS also said that consumers are becoming more aware of iHEARTRADIO but are confused about what it is, thinking it's a concert or a broadcast station's slogan, and most use it to listen to a local station via the Internet.  Consumers, she said, are more likely to call streaming "using PANDORA," with the service's name serving as a generic term.  They also dislike signing into a service or requiring use of Facebook to log in, and see broadcast radio as superior for some things, including local programming, traffic, news, and other information.

RADIONOMY's THIERRY ASCAREZ unveiled his company's move into the U.S. market in a "Pecha Kucha" presentation, showing off how the service allows users to create and program their own streaming stations, including revenue sharing from advertising revenue, with the platform handling distribution and rights management.

CLEAR CHANNEL Pres. of National Sales, Marketing and Partnerships TIM CASTELLI gave a keynote presentation on digital helping to revive radio's future, discussing how traditional radio has "lost its way... it's really not all that sexy" and how digital "has gotten a little of our groove back."  He said that radio "isn't the newspaper industry" and is still one of the Big 3 media (with TV and, now, the Web), reaching about the same audience size as in 1970 with no pronounced dips.  He also noted the CLEAR CHANNEL's monthly reach is larger than any other media company, ahead of GOOGLE, FOX, and FACEBOOK.  "People love their broadcast radio," CASTELLI said, adding that he thinks the image problem the industry has is not among consumers but among industry people.  Radio, he said, is personal, local, social, and "it's about discovery."  Digital, he said, is good for everyone; he ticked off a list of reasons that stations, consumers, and advertisers benefit from the advent of digital, touted iHEARTRADIO, and called mobile the "clear opportunity for radio."  He counseled a "360 approach" that stresses "national reach with local activation," and said that CLEAR CHANNEL has been working on the strategy to approach advertisers with its radio, outdoor, events, and digital platforms.

A panel on Online Strategies for Local Broadcasters moderated by CBS RADIO/DALLAS' DAN HALYBURTON included EMMIS DIGITAL's ANGIE MAY, RADIATE MEDIA's DAVE VAN DYKE, WCHL-A/CHAPEL HILL, NC and CHAPELBORO.COM owner BARRY LEFFLER, TRITON DIGITAL's STEPHANIE DONOVAN, and TARGETSPOT's ELIZABETH PARDIEU.  The panel discussed how their companies use and sell their online products (and, in the case of LEFFLER, how his station created a separate website and sells with a separate staff for more incremental revenue than if combined).

And the RAIN Internet Radio Awards were bestowed on the following:

Best Single-Stream Webcaster: ROOTHOG RADIO
Best Streaming Broadcaster: ESPNRADIO.COM
RAINMaker Achievement Award, presented by TRITON DIGITAL: EZRA KUCHARZ, CBS LOCAL DIGITAL MEDIA
Best Overall Digital Strategy: CLEAR CHANNEL's iHEARTRADIO
Best Overall Radio Service: PANDORA and ESPN AUDIO (tie)

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