May 6, 2014
Even with Howard Stern serving as its main draw, more than a few radio and media pundits questioned whether SiriusXM could survive. After all, even after a six-month free trial offer, who would pay for something they could get for free? That same sentiment resurfaced when Pandora and the streaming services cropped up, offering consumers a multitude of music options. Yet SiriusXM has continued to grow from 100,000 subscribers when Steve Blatter joined the company to over 27 million today. Reaching that size of an audience, Blatter and SiriusXM's programmers can actually break bands - even before they're signed to the majors. Here's how they do it:
Tells us about your history in radio and how you arrived at SiriusXM?
I started in radio while in college working in Promotion and Programming for K-ROCK in New York City. This was around the same time Howard Stern joined the station; after graduating college, I became the MD at WYNY/New York, which was owned by NBC and was the most-listened-to Country station in the world. I would eventually move up to become the Director of Programming for MJI Broadcasting. From there I became Head of Programming for Big City Radio, which owned Y107, an Alternative station I launched that competed against KROQ in Los Angeles, as well as the Country-formatted Y107 in New York.
After about six years at Big City, I recognized there would be tremendous opportunities for music to be distributed over the Internet. So in 1999, I left Big City and created one of the earliest music recommendation engines and intelligent playlist creation systems. While developing this software with a partner, I was also doing some consulting work for Sirius. In 2003, I became head of Music Programming for Sirius and have been responsible for the company's music assets ever since. As for the software I created, it was later licensed to Yahoo and was integrated into their Yahoo Music Jukebox product.
How has the SiriusXM's music channels changed in terms of programming over the years?
Philosophically, not much has changed. What has changed is the size of our audience. When I joined the company, we had less than 100,000 subscribers. Now, 10 years later, we have 25.8 million subscribers - and around two million more subs in Canada. That's an amazing amount of growth in a fairly concentrated period of time. To put our audience reach in perspective, if you combine the markets of New York, Los Angeles, Chicago and San Francisco, you still wouldn't get to our market population of paying subscribers.
Another thing that has changed is the competitive environment. While we still view broadcast radio as our primary competitor, there has been an unceasing wave of new content providers offering music and non-music content over the Internet.
What do you see as the main differences between programming a SiriusXM music channel and a traditional radio station?
There are a number of things but from a macro perspective, a key differentiator is the range and depth of programming offered by SiriusXM. We offer 85 commercial-free music channels, 70 of which are distributed via satellite, versus a typical local market which has about 10 to 20 music radio stations.
The No. 1 reason people are dissatisfied with terrestrial radio is "too many commercials." We're able to provide a simple solution to that problem by making all our music channels totally commercial and sponsorship-free.
We also feel very strongly about not offering merely "products and services" to our subscribers, but providing real habit-forming experiences that engage, entertain and provide companionship for our subscribers. When you look across the 85 channels that we offer, each of them is narrowly focused on a target audience. The music on each channel is uniquely packaged and presented in a very authentic and credible manner. As an example, for a gold-based format such as our '80s pop channel, we don't just offer a jukebox-like mix of '80s music. Instead, the music is presented by the original MTV VJs, who all host exclusive daily shows on the channel.
The introduction of the PPM certainly impacted how terrestrial radio was programmed. Did it impact SiriusXM's music channels in any way?
Our stations aren't monitored by Nielsen, so we don't specifically program in a PPM environment. With that said, I think PPM has had a major impact on terrestrial radio. The DJs are generally not connecting on an emotional level as much as they used to, and secondarily, most FM music stations have become more conservative musically than they were prior to the PPM. We believe the impact of the PPM on terrestrial radio programming creates a bigger opportunity for SiriusXM to own the music discovery position and build more loyalty through engaging show hosts and production.
How does SiriusXM research its listeners to ascertain what they like and don't like?
We research audiences on our music channels on an ongoing basis. We believe that for our more current-based channels to remain competitive in a time when music is so easily accessible and things change so rapidly, we have to operate in almost real-time. It's now a totally fluid process.
Is the SiriusXM music channel listeners' demo any different than the listeners of traditional radio?
Our demo is not that different, but our psychographic is. SiriusXM listeners typically have more disposable income because they're paying for radio. And because they're paying for radio, we know they are very passionate about music, which leads to more record sales and more concert ticket sales.
Was there a specific time when SiriusXM decided to really focus on breaking new music?
I don't think there was a specific time. We just honed our craft and refined the way we introduce new music on SiriusXM. One of things we feel is very important is if we're going to introduce a new piece of music, we'll play it in a meaningful rotation. There's no such thing as overnight-only airplay on SiriusXM, so when we add a song, we're typically rotating it a minimum of 20-plus times a week ... and sometimes a lot more than that.
One of the other factors that contribute to our ability to break artists is how we package and present new music. The staging of new music using production and on-air hosts who are knowledgeable and truly passionate about the music are both key drivers in creating listener passion.
Do you have examples of records or artists you broke before traditional radio played them?
In just the past couple of years there are over 10 artists that SiriusXM played exclusively that were subsequently signed to a major label deal and then had big hits at terrestrial radio.
Three big examples in the Country format are Florida Georgia Line, Cole Swindell and Parmalee. We were on Florida Georgia Line months before they were signed to Big Machine. Cole was not signed to the Warner Music Group until several months after we had success with "Chillin It." Parmalee was signed to Broken Bow, but wasn't getting any meaningful airplay other than SiriusXM. All three artists have since had #1 Country records.
On the Alternative and Rock side, Foster The People, Atlas Genius and American Authors were all regularly played as unsigned artists on our Alt Nation channel. All three were subsequently signed to major labels and have had big hits since then.
In the Pop genre, there are numerous stories as well, including Hot Chelle Rae, A Great Big World, John Newman and most recently with MKTO.
Do you cross records over from one music channel to another?
Definitely. Where it makes sense we strategically cross-pollinate songs across multiple channels. If you go back and look at the airplay data on Florida Georgia Line, you'll see that after we established "Cruise" on The Highway, our 20 on 20 channel was the first pop station in America to play the song, many months before it became a pop hit at terrestrial radio. .
How do you know when a record is really connecting?
We look at a variety of sources. We place a lot of weight on digital track sales particularly in the early stages of a record. As the song starts to mature, our in-house research plays a key role.
How do you ascertain burn on records?
One of the initiatives currently under way across all our current-based channels is what we refer to as "rotational velocity." We are moving towards cycling through current songs more expeditiously than we ever have before. We believe the rest of the world -- outside of radio -- is moving at a faster pace than ever. Yet you look at traditional radio airplay charts and you see songs taking upwards of 40 weeks to make their way up the charts. That's three-quarters of a year for one song! We believe we need to expose records more quickly to better reflect how music is being consumed today.
Have Pandora, the streaming services or YouTube impacted your programming?
We look at everything. YouTube views are definitely a metric we look at when assessing a piece of music. While we closely monitor Pandora and the other streaming services, they have yet to demonstrate an ability to meaningfully develop and break music.
A while ago, there were those in traditional radio who thought SiriusXM couldn't survive. Then as time passed and SiriusXM continued to grow, some in the radio space considered you to be Public Enemy #1. Now that role has been usurped by Pandora and the streaming services - and we hardly hear people in radio talk much about SiriusXM. Has any of that impacted you?
It has never bothered me or any of the music programmers at SiriusXM. In fact, whether it's Kid Kelly, Greg Steele and Dion Summers, or Trinity, Darrin Smith or John Marks, they all thrive on being the underdog. We love being in an environment where people tell you it can never be done. The competitive environment is now more crowded than ever. We view that as a motivating factor to constantly learn and make us better at what we do.
And what of SiriusXM's future? The latest buzzword is the mobile space. Is that where SiriusXM will be headed, too?
There's a mobile opportunity for everyone. At SiriusXM, we'll continue to innovate. We'll introduce some new formats later this year and our existing broadcast channels will continue to evolve. Our Internet-distributed service will also continue to grow. We've recently launched an innovative feature called MySXM, where listeners can customize their favorite SiriusXM channels based on key attributes of the channel. We believe MySXM provides a solid foundation as we build our customization offerings.
For me professionally, I always like to be challenged. I love being at a company that's now able to really make an impact on how Americans consume music. It's also very gratifying for the whole music programming team at SiriusXM to selectively identify artists we really believe in and meaningfully break them on a national level.