Everything You Know About Radio Is Backwards
August 12, 2014
The way most radio corporations think about their business in the internet age is backwards.
When the internet first emerged, radio had to figure out what to do with the new technology. In the beginning, most radio stations said to themselves:
"We make our money by getting people to listen to the radio. Therefore, the key question is, 'How can we use the internet to get more people to listen to our radio station?'"
Here's what their thinking looked like:
How We Think About Radio and Our Websites
This is backwards.
This thinking is backwards because it assumes that radio transmitters are the best way to send, measure, and monetize audio content. But they're not anymore. The internet is still not perfect when it comes to delivering audio content, but it's rapidly improving, whereas transmitter technology is largely standing still.
More importantly, people have increasing access to audio content delivered over the internet. Fifteen years ago, I owned half a dozen devices with tuners. Now I own one: my car. But I always have my smartphone with me.
And I'm not alone.
Despite this, radio corporations have spent recent decades trying to adapt their audio content to an antiquated delivery system, when they should be using new technology as a platform to create even better audio content. When the audio content and the technology are at odds, we let technology drive our decisions. We reshape our content in the hopes that it will drive people back to their tuners. This leads to stations that sound "like your iPod on shuffle!" and play "two-minute songs!"
But in the long run, this won't work.
As an industry, we need to recognize that technology is not our core competency. At the end of the day, the thing that we are really good at is creating compelling audio content. It's time to stop launching satellites, forget about activating secret cell phone chips, and admit that the phrase "high definition radio" doesn't even make sense. We should focus on our audio content, and worry less about the technology that people use to consume that content. If our listeners are going to the web, let's meet them there.
This means that the key question now is, "How do we monetize our website?"
Here's what our thinking should look like:
How We Should Think About Radio and Our Websites
This model sets radio up for success. In the previous mode of thinking, the radio industry was desperately trying to hold on to an old technology. But in this model, radio is using the enormous audience it has built through it transmitters as a massive head start in launching an online business.
I think of it this way: Your website is the space shuttle, and your transmitters are booster rockets filled with fuel. Yes, you are eventually going to get rid of those booster rockets, but in the meantime, they can launch you well on your way to your destination.
So why don't we think of it this way? There are a few reasons:
1. We are addicted to Nielsen.
Let's face it, our sales teams, and by extension our clients, are used to measuring and buying ratings in a particular way. We're so used to talking about AQH and TSL, that we don't want to learn about PPC and CPM. Our reliance on Nielsen has built-in inertia. Monetizing our websites isn't just about using new technology; it's also about completely retraining our sales staffs. This is hard, especially when the industry isn't moving in unison. We think it's easier to find ways to continue to use the old sales system instead of learning a new one, even if that undermines our long-term progress.
2. We'd have to rethink our programming from the ground up.
Does the length of a commercial break have the same impact on listeners when they are listening with their smartphone instead of their car radio? What is the impact of on-demand audio content? Or multitasking apps? If we change our focus from "audio content via transmitter" to "audio content via the internet," we will have to re-examine many long-held programming beliefs. In other words, it's not just the salespeople who will need to be retrained.
3. We paid a lot of money for those transmitters!
Nobody wants to admit our transmitters are slowly turning into giant paperweights. But they are. Let's face it, the pace of technology is so fast these days that when you buy hardware, it inevitably becomes outdated. That's why we replace our smartphones every two years, our computers every five, and our cars every ten. Did you really think this rule wouldn't apply to your transmitters? Sure, you can probably get another two decades out of them, but as a long-term strategy, it's time to think about investing in new audio content delivery systems. Fortunately, one has already been built for us: the internet.
Despite these factors, I believe that the radio industry can move beyond its transmitter-centric way of thinking. If broadcasting companies can learn to generate revenue from their online presence, they have a huge advantage because they can drive their existing audiences to their websites. But to succeed, they'll need to rearrange their thinking first.