September 17, 2013
On Wednesday, Sept. 18th Emmis Radio executives will make a presentation at the Radio Show about NextRadio, the FM radio chip and app now in Android phones through Sprint. There, they'll unveil how it works and its potential to be a game-changer for radio. Days before the Radio Show, SVP/CTO Paul Brenner talked to AllAccess to help fill everyone else in on what NextRadio can do and what Emmis will be doing to optimize its success.
How did you get into the SVP/CTO post at Emmis?
I've been around Emmis for more than 17 years. I started as an IT guy back in the late 1990s. Over the years, I just took on different roles in the company and I worked my way into the job. It took a lot of sweat and blood to get there.
Was there a time when it became apparent that digital would be so integral to radio's future success?
Probably in the late '90s. When Emmis owned television stations, we started doing interesting technology initiatives like TV Central Casting in 1998, so it's been a while.
And when did NextRadio come about?
Jeff Smulyan believed it was important to get an FM radio chip in smartphones. He made it our task to figure out how to get that done. There was a group of people inside Emmis who were part of Emmis Interactive, which was a subset within the company. We all put our heads together and came up with software concepts, which became product concepts. We started building prototypes and got together to do some branding, which became NextRadio.
We successfully blended over-the-air radio with Internet activity. I think of it as we brought the Internet to the radio. Whereas streaming brings radio to the Internet, we're bringing the Internet business to life on over-the-air radio. Now that the technology is there, our success will be predicated on the quantity and quality of content.
Did you talk to Sprint about what they wanted out of NextRadio?
We did. Their needs are pretty simple -- put existing, efficient technology into the phone that isn't costly and once you have it in there, make sure that technology creates an experience that compels the consumer to choose the Sprint product over another. That's what any carrier wants -- cost control and winning over new customers.
Was there anyone else in the loop on NextRadio's development?
Yes; it wasn't just Sprint, but we talked with consumers -- the people we see using apps regularly today. Based on the feedback we've been getting from the first 30 days of the app being available, we're already seeing it as differentiator. People are giving us reviews and comments and they're saying NextRadio is much better than streaming of the station, because we can run a data service on their smartphones, such as album art and interactive components. Consumers are saying, "This is great" -- they love it.
Of course, I don't know if the early reaction can be a bargaining chip on day one, but the initial trends we're seeing is that this is something completely unique for FM radio. Consumers are being drawn to it.
Are you currently talking to any of the other carriers outside of Sprint?
We have ongoing discussions with varying parties. The constant story, though, is that they want to see results and statistics. You can do every study or focus group you want on whether the consumer wants an FM radio chip in smartphones, but the real story will be told in how many commercial apps are adopted, how often and how long they use them, and how interactive they are with the content. That's the story we will be talking about to the other parties.
Have you set a success threshold in terms of number of phones with FM chips?
I don't know if I have one. A million phones sounds like a great number, but hundreds of thousands of phones could be just as great if we see a lot of listening hours, a lot of returning users, or a high volume of interactive usage by the listeners. Maybe 100,000 users would be enough to show those trends; I don't know. I can tell you now that we're already seeing positive usage and interactivity with the first 12,000-15,000 users.
How do you plan on reaching that goal - by getting more carriers on board, or by going straight for the consumer?
We have a two-prong marketing campaign that launched last Friday. One prong is about activating the phones and alerting more consumers. The other concerns content; we're trying to get broadcasters to recognize the need to put compelling content into the app so that when consumers turn it on, they'll find something unique and very interesting.
When you mention "unique content," what exactly does that mean?
We want broadcasters to enhance the existing content they put on the air. Go to TagStation.com, or pick up a phone from Sprint, then turn on one of many stations that feature not just music, but album art and other interactivity. You'll immediately see a difference. We don't need to explain it anymore; the difference is apparent, as soon as the radio comes on. Not only can users see great album art, they can buy the songs they're listening to, and they can take advantage of other features like text-to-win and find nearby. If you make it interactive, you provide an enhanced, compelling experience for the consumer.
Are you suggesting broadcasters do FM chip or app-only promotions?
NextRadio would ideally be an extension of what people already do on the air, such as giveaways, text-to-wins, calls-to-action. There are a number of very natural things you can do. We're just providing a new platform for broadcasters to choose their own ways to do it.
I'll give you an example. In Chicago, there are several Hubbard stations that do quite a bit of compelling content with NextRadio. They happen to have content that does what you're suggesting. Inside of TagStation, the cloud service that feeds NextRadio, there are interactive ideas and content, such as a "Trip To Wine County" promotion that's on Hubbard stations in Chicago. Whenever they run a promo for that, they have a text button that's already activated in the app - it's a one-touch text to register for the trip. Those kinds of things are already going on in these markets; stations also have to think about their own ideas. We're basically saying, "Look at what stations are already doing on-air and on their websites in terms of promotions and giveaways." We're giving you a new way to create interaction. With a smartphone app, you can drive interactivity right to the point of sale. Mix it in with mass-market radio, and you have more ways for your consumer to take action, which is right in front of them.
How many radio groups are on board with the FM chip?
When you're talking about support of the FM chip, the majority of the largest radio groups have been involved since the beginning. A couple groups are still in discussions with us; they're verbally on board, but they haven't signed on the dotted line. We'll continue to work on that.
On the content creation side, we're seeing great growth. All of the CBS Radio and Hubbard stations are doing things; groups such as Greater Media, Beasley and Entercom are all participating in content enrichment, and so far they're having varying success. Once we start publishing data of real consumer listening, things will pick up. I run a report every day to find out what's happening with the 250 radio stations that are tuned into NextRadio right now.
Is it important to get other carriers on board sooner rather than later?
The important thing for us was that when we launched with Sprint on HTC Phones, it was essentially a soft launch with one phone using a never-before-done product. We had to flush out some problems that typically crop up when you put something new out there. We kicked the tires a bit. We've now been doing that for 30 days, letting it grow organically, and I'm pleased that we've started out this well so quickly.
Regarding the public side of deal, we'll be doing NextRadio for all Android and Windows phones, but not iOS phones. I would put iPhone in same camp as carriers who want to see consumer demand before they take any action. Sprint believed in us the first time we met with them. They saw the value of FM radio chips for smartphones; others haven't had that reaction ... yet.
Are you currently lobbying the other carriers, or are you waiting until you generate enough data to convince them to get on board?
It varies. We have different relationships with all of them. Some we talk with quite frequently; some hardly ever. There is a continual "show me some results" mentality out there. In terms of early results, we'll disclose a lot more at the NAB Radio Show this week. And we'll offer ideas on some pretty good content. My session is on Wednesday (Sept. 18th) at 2:30p ET.
How will you be promoting the importance of quality content to radio?
We have two approaches to this. The first is on a "target market" basis. We have to identify groups and target markets with Sprint and HTC; we're launching those this week. Initially we'll be meeting one-on-one with those "target market" station owners to teach them about what kind of content is available within TagSation, and how to come up with their own ideas. It's like teaching them how to fish.
And then right after the Radio Show, we'll start making a series of events available for anyone. They'll be able to join webinars we're setting up. It's just going to take a couple of good, successful examples, such as the wine country trip, to get them started. We'll bring creative and copy instruction to the sessions; we can talk about how to convert that promotion or commercial to enhance the NextRadio app experience. We're going to be doing webinars on a regular basis to get people to understand the real power they have in this.
Is there a critical-mass goal of participating stations and/or carriers you have in mind?
I'll base my answer solely on the growth curve we've been predicting in the spring. Given that we're ultimately paying our way into 10 million handsets, we're starting with a 3-5-million handset market. If we can reach a critical mass in six to nine months, I'll then say we're winning over the industry.