Radio is cleaning up the nation (2 of 2)

I previously wrote about WSJ Radio going away, and my thoughts on why. Here now are some of my ideas of how radio can adapt, survive and grow.

What‘s the problem?

So, why are radio revenues shrinking, or not growing fast?
(Is it because of the Rush Limbaugh thing?)

Sure, I believe Rush plays a part in News/Talk radio revenue being down. But I also think there are many other factors.

I think the number one thing is competition from digital:

Advertising strategies are rapidly shifting as consumers rely more on online research and mobile phone apps. (June 2013)

Radio’s ratings and audience targeting, can’t match what a digital buy can do. Even if that digital buy is a digital “radio” purchase:

Here’s why Pandora is a treasure trove for politicos: […] When consumers sign up, they hand over their ZIP code, age and gender. […] As if that weren’t enticing enough for campaign advertisers, earlier this year Pandora informed political operatives that musical tastes say something about how people vote and provided an added filter for marketers. (October 2014)

In addition to increased competition I think the other factors are: quality of content, brand equity, audience metrics, proof of ROI, and others.

What’s the answer?

I think part of the answer is to acknowledge that broadcast radio is a mature business, and isn’t going to grow at a double digit clip. Owners and investors need to understand that and be happy with what they have.

But that still leaves the challenge of protecting what you have and growing even just a little bit. Nobody wants to own a business that is in decline.

Investing in digital is clearly key. iHeartMedia has done it (they renamed the company after iHeartRadio), and Cumulus has done it with Rdio.

While the media business changes all the time: HBOgo is now over the top, and radio is “audio” and the internet and smart phones are changing everything… it’s also still very simple:

1. Content 2. Distribution 3. Measurement 4. Monetization

Where is broadcast radio trailing the competition? Where is broadcast radio leading the competition?

1. Great content:

Who has the best shows on the radio? What unique value are you delivering better than anyone else? What radio station would you “TiVo” and listen to later? When was the last time you had to get home in time to hear something on the radio? When was the last time you waited until something was over to turn the radio off? Would you “binge listen” to a radio show the way you binge-watch TV?

Radio needs to do a better job at delivering value to their audience. Traffic, Weather and Headlines are commodities. Music is everywhere… and in many places commercial free.

Consumers can time shift their media consumption, and it’s quickly becoming the price of admission rather than a nice-to-have. What content are you producing that has a shelf life and can be time-shifted?

Create a brand with your content and stand for something that advertisers want to be associated with.

2. Distribution:

This is where Radio still has a HUGE grip on people. People listen to the radio in their car. But that edge is eroding, and radio needs to get better at developing loyal audiences that will seek out their content on any platform.

Don’t be afraid of the connected car radio folks, embrace it. Produce better programming than the competition. Deliver some kind of value to your audience and they will seek you out whether it’s AM or FM or digital.

Podcast businesses are seeing growth, and if you think about podcasts as “Netflix for radio” you can imagine lots of growth for on-demand audio. How do you go from imagining to actually realizing growth? Respect each platform.

It is not enough to take your terrestrial signal and stream it online. You need to understand how new platforms are used, and create content that is native to the consumer experience. “Traffic on the 10's” is not good content for an on-demand time-shifted consumer.

3. Measurement

Anyone happy with how radio measures their audience? How well does it compete with TV ratings, or internet clicks? How good is the data?

Radio ratings will never be as precise as digital ad buys. Invest in digital platforms. Build followers on social media. Enhance the on-air buy with data from your digital properties.

*by the way, building followers on social media or other digital extensions requires more than an intern sending out Tweets. You need smart people, knowledgeable about each platform producing compelling content. THIS IS NOT A THROW AWAY, ADD-ON, LAST MINUTE TASK.

4. Monetization

Radio is free, so subscriptions won’t be the answer. (Yes, you can create subscription content online) Advertising is where the money comes from.

So radio — are you winning the battle in 1, 2 and 3? If not, you’ll be losing the battle in #4.