RAIN Summit Indy Looks At Opportunities For Radio In Digital
September 9, 2014 at 2:40 PM (PT)
The RAIN SUMMIT took its customary leadoff position before the NAB and RAB RADIO SHOW in INDIANAPOLIS TUESDAY (9/9). The day-long seminar looked at digital audio services and radio's place in the new media landscape.
Sales Models and Big Data
The conference opened with a panel on advertising models moderated by SNL KAGAN's ROBIN FLYNN, with JELLI's MIKE DOUGHERTY, STRATA's JOY BAER, PANDORA's JOANNA BLOOR, and FOX NEWS' WILLIE SANCHEZ discussing new plans to monetize digital offerings. The discussion covered the value of connecting clients with digital, not as much with new ad units but more with, as DOUGHERTY put it, the "plumbing at the back end," programmatic selling, native advertising, and making digital sales concepts scale.
On a panel on the advantages of data collection for streaming audio, PANDORA's ERIC BIESCHKE, TRITON DIGITAL's ROB FAVRE, and NIELSEN's JEFF WENDER explained the benefits of gathering and deploying "big data." BIESCHKE said that his company's data collection goes towards improving the listening experience for customers and becoming "the perfect advertising opportunity." FAVRE noted that "big data" has allowed his company to determine that unlike broadcast radio, whose peak listening is in drive times, streaming's peak listening is between 1p and 4p weekdays. WENDER noted the need to hire smart people -- "astrophysicists" -- to analyze the flood of data, suggesting that small business can outsource (and joking that the answer is "www.nielsen.com").
The panel also addressed the issue of privacy, with BIESCHKE reiterating that his company is not selling information to third parties without consent and follows an opt-in policy, and FAVRE saying that his company is not collecting individually identifiable information. FAVRE also said that Boomers were the last generation deeply concerned about privacy issues, and that younger generations have grown up volunteering personal information. WENDER, asked about measuring streaming digital audio, declined to be specific but said that an announcement is expected soon.
Radio and Hyperlocal
SAGA's STEVE GOLDSTEIN moderated a panel about the opportunities in hyperlocal integrated marketing sales, with GOOGLE's CHRISTINE MERRITT, COX MEDIA GROUP's RICH REIS, PRESSLAFF INTERACTIVE's RUTH PRESSLAFF, and VENDASTA TECHNOLOGIES' GEORGE LEITH on hand. PRESSLAFF raised the issue that radio stations are already, through email services like her own, collecting a lot of listener data, but don't know how to use that data. LEITH pointed out that customer service now lives online, and that companies have no excuse not to be aware of customer reviews, positive or negative. REISS contended that pure play digital companies "wish they had radio," while MERRITT, hesitating to call radio late to the digital game, used the word "nascent" to describe radio's digital strategy.
Kurt Hanson's State Of The Industry
RAIN Publisher and ACCURADIO founder KURT HANSON delivered his "State of the Industry Address," discussing the growth of online listening as AM/FM radio declines (based on hours listening per week). He declared that AM radio "seems to be in its final years," pointing at markets where the top AM stations are below 15th or 20th place in Persons 6+ share. HANSON asserted that online radio AQH will equal AM/FM radio's in 6 years at current growth and decline rates. But while smartphones have become the device of choice for listening and streaming is reaching car audio, broadcasters seem to be resistant to change and would like to protect their old business model, contrary to consumer desires (using HD Radio as the example of how radio is pushing its own agenda while consumers have shown they want something else).
HANSON proposed a "New Audio Band, One Owner" solution, ("NABOO," his obligatory STAR WARS reference) for HD RADIO, suggesting that one owner get all the HD2 channels in a market, reprogram radios to offer the HD2s as a separate third band, brand all the HD2 channels in a market as one brand, and fold in AM channels as available. And he criticized the NEXTRADIO app, which he said was a misnomer - it's old radio - and "a solution to two largely nonexistent problems," battery life (about which, he said, people don't care) and data usage (with carriers' data packages selling enough data to comfortably cover usage for low prices). He offered that NEXTRADIO should rebrand, play the "emergency" card, focus on car dashboards, or look for a new meaningful benefit with which to sell the app.
Edison's 'Share Of Ear' Study
EDISON RESEARCH's LARRY ROSIN unveiled the new "Share of Ear" study looking at the relative shares of everything people hear, from radio to streaming, podcasts, and other sources of audio. The survey, done in MAY with 2,096 respondents reporting one-day listening, said that the average respondent listened to less than 4 hours a day; in total, AM/FM radio took 52.1% of lisrning, with Internet radio at 11.6%, SIRIUSXM at 7.7%, music owned by the consumer at 20.3%, 1.7% listening to podcasts, and 5.2% listening to music channels delivered via television. Limiting the responses to radio-style services, AM/FM reaches 75.3%, PANDORA is at 9.2%, SIRIUSXM is at 11.1%, and other Internet Radio is at 4.4%. But isolating 18-49 listeners, Internet radio overall jumps to 20.9%, and among 18-24s, Internet radio is at 29%. On a one-day basis, 72% reported listening to AM/FM radio, 39% to their owned music, 26% to Internet radio, 13% to SIRIUSXM, 11% to TV music channels, and 5% to podcasts. Asked about content type, 80% was to music, 9% to personalities or talk shows, 8% to News, and 3% to Sports. And only 50% of listening was on a radio, with 18% on mobile devices.
Pattiz On Podcasts
PODCAST ONE and COURTSIDE ENTERTAINMENT GROUP founder NORM PATTIZ, calling himself "a cheerleader for radio for 35 years" and expressing distress over radio not being at its apex, discussed his move into podcasting in his address to the Summit. Saying that PODCAST ONE's KIT GRAY "reminded me of me," he described his intent with PODCAST ONE to create "WESTWOOD ONE for the digital age." He said that podcasting is not only not a threat to radio but could be its savior, offering on-demand programming options for the kind of "huge personalities" in radio, and noted the growth of brand advertisers for podcasting, normally dominated by direct response advertising. "We're gonna start providing local podcasts for local stations to offer locally," PATTIZ said, noting that the sole problem in the category is non-standardized metrics and adding that his company is creating its own measurement with input from EDISON RESEARCH. "Radio's gotta adapt, radio's gotta get hip to what's going on," PATTIZ urged.
Royalties once again got the RAIN treatment with another panel moderated by attorney DAVID OXENFORD. Attorneys AJ CORREALE and GARY GREENSTEIN were joined by the FUTURE OF MUSIC COALITION's CASEY RAE and PANDORA's counsel MORVARID METANAT to debate what might be in the cards for the upcoming 2016-2020 copyright royalty period. One possibility is direct licensing, which would allow publishers to withdraw from ASCAP, BMI, and SESAC and do (or deny) direct deals instead, possibly pushing rates up, although GREENSTEIN noted that the free market would probably result in some publishers getting more and others getting less. (When OXENFORD asked, rhetorically, "Why can't we just get along?," RAE responded, "It's the music business, DAVID!") And GREENSTEIN countered RAE's contention that having broadcasters pay more is an "issue of parity, an issue of fairness" by suggesting that in the next revision, payola laws could be relaxed to allow broadcasters to tell artists that if they want to get into the limited playlists of stations, they can pay for it.
Darren Davis Delivers Pep Talk About Radio
Sounding a different opinion from some of the other presenters at the conference, CLEAR CHANNEL NETWORKS and iHEARTRADIO President DARREN DAVIS delivered a keynote address that insisted that there's "no need to completely change our business... if we fix our image problem." Stations, he said, will always need "great content," with the key being how the stations use the content, making the syndicated material sound local and integrated. "We're not trying to build mobile homes... that look the same in every city across AMERICA," he said, likening his networks to the provision of lumber and materials for local stations to build their own houses. And he said that the greater upside is in monetizing what radio already provides, touting radio's stronger ROI than television or digital. "While the rest of the media is being disrupted," DAVIS said, "radio has been relatively stable." He said he looks at digital as expanding the reach of his radio brands and allowing for interactivity, and criticized companies for ignoring digital, but added that digital is "not a replacement" for radio but another choice, and will help radio in the long run.
Beats and Mobile
After a panel on EDM moderated by ACCURADIO's PAUL MALONEY and featuring artist RYAN FARISH with SOMAFM's RUSTY HODGE, CLEAR CHANNEL's ADÉLLYN POLOMSKI, and PULSE 87's JOEL SALKOWITZ, JACOBS MEDIA's PAUL JACOBS headed a panel on mobile and its future impact on the audio industry, with MARKETRON's DEBORAH ESAYIAN, WIDE ORBIT/ABACAST's JIM KOTT, BRS MEDIA's GEORGE BUNDY, NOBEX TECHNOLOGIES' GADI MAZOR, and ALPHA MEDIA's SCOTT MAHALICK. JACOBS kicked things off with the provocative assertion that radio on mobile has "flatlined," saying that radio companies and stations need to invest more in the mobile experience, move quicker, and escaping the "set it and forget it" mentality. "Too many look at mobile as just another transmitter," JACOBS said, adding that the present ratings system and ability to monetize mobile and the inability to combine mobile and broadcast measurement are "holding us back." MAZOR said that going mobile is not worth the effort if it's for monetization, but has benefits for gathering data and audience engagement and behavior; he also warned against allowing a station's stream to appear via an aggregator app, saying that "you lose the brand" and place the station among format competitors. MAHALICK said that he thinks the standard :30 or :60 radio ad is "going away"; "we can't just stick our head in the sand and be left behind," he offered.