Friday, March 21, 2008

Radio's Glass Is MORE Than Half Full

I just got a nice chance to spout off on my positive view of the radio business for David Wilkins, who was kind enough to want to interview me for the monthly client newsletter of the Gray's Harbor Radio Group in Aberdeen-Hoquiam-Ocean Shores (in lovely Coastal Washington):

DW: All of the news about old-school mass media these days seems gloomy. Papers closing, local radio stations being gobbled up by huge conglomerates, and the Internet threatening everything and everyone. How does radio--on its face the most anachronistic of the electronic media--stay competitive and relevant in the 21st century?

JA: Radio starts from a great place. In the face of all that publicity being generated by new media, "terrestial/analog radio" still reaches 94%+ of the 12+ population every week, and almost 100% every month.

The Arbitron Portable People Meter, which is the newest ratings technology now being rolled out in the largest markets and headed for the top 50 in the next decade shows that country music radio rates in the top three formats in Houston and Philadelphia, for example, with six to eleven year olds, so country is very hot right now and the vast majority of people - even in the face of personal digital media players' growth - still get their music on the (traditional) radio, the challenge for us in all media of course is to engage our loyal consumers and leverage our great brands to surround them as they turn to new media too.

We have a huge head start over all media and certainly the print media face a much more immediate threat to today's business model than radio or video does, but we all need to understand the emerging technologies, use them aggressively to entertain, inform and provide community where our current audiences live, work, drive and live all aspects of their lives.

Radio is already a multi-tasker's media, since you can do other things while using our products, and this is the wave of the future, multiple, simultaneous use of media.

This is changing the definition of "local' where once it meant a town or a community. Now, local is much more a one to one thing, much more personal and individual.

Radio has been the original interactive, personal medium for the last five decades. Our personalities relate to the community and have direct relationships, person to person already with our listeners. We simply need to adapt and engage at an increasingly micro and macro level, and just turn on the radio right now and I'd bet you will hear us doing just that.

Meanwhile, that PPM measurement, which is replacing the ratings diary - the leading way to measure radio audiences for the last forty years - is showing that radio today actually reaches on average twice as many people in an average quarter hour than diary ratings measurement has shown. Radio's reach from 6 am to 7 pm weekdays is as great as prime time TV and a lot bigger than the average newspaper's circulation. It's a great time to be in radio.

The biggest dogs which we compete for advertising dollars are under incredible pressure and are watching their reach fragment, splinter and decline. In that environment, radio remains stable and very cost-efficient. Meanwhile, as new media advertising grows exponentially, it will is less than two percent of radio's total revenues, so there is a huge upside potential for us to grab our piece of that new ad revenue-based "pie" which is emerging, Clearly, it's the place where growth will occur for most of us and we need to be specialists in helping our clients make the best use of multi-media marketing to grow their businesses.

DW: The biggest and most frequent complaint I hear about radio stations is the "vanilla complaint"--yes, I lifted that from your blog--stations play music that only caters to the largest and lowest common denominator, with a resulting lack of diversity and creativity in programming. There's a long history, especially among rock bands, of acts with huge followings that you never hear on the radio (Pantera, Iron Maiden, Phish, etc.). How can programmers > appeal to a wide audience without giving up relevance and stifling creativity?

JA: That's where the internet and HDRadio come in. As I said, radio right now remains a mass medium and we would be foolish to do anything to decrease the size of that audience by trying to narrow-cast or niche ourselves too much. When you reach 95% of the population every week, that does carry with it to serve as much as you can all of those people and so the only way to do that is to understand the universal and relatable common denominators which bring people together and don't separate them. If we cater too much to one small subsegment of our audience, we're going to make the size of our current audience go down and since advertisers look to us to bring them as many listeners as possible for the dollars they spend with us, of course everyone wants to reach the largest potential audience we can.

However, now we have HDRadio and streaming media emerging and as those technologies reach more people (at the present their reach is tiny, compared to analog radio's), we'll HAVE to develop creative new products of all sorts which aggregate more small communities within the reach of our mother ships.

DW: The way things are going it seems like one day soon we'll just have the Internet, sort of like the Telescreen in Orwell's "1984", and all the old media will be gone. What do you see as the future of radio?

JA: There is some truth in that. But, that won't happen until wireless broadband is available to 100% of the population. Of course, we are moving slowly in that direction. However, every household in North America has on average three or more radios. That's more than a billion radios just in America. And, they are built into many non-disposable things people use every day, their alarm clocks, their vehicles, home intercoms, even many of their portable media players.

It's going to take a long time before people throw away those radios which provide entertainment, lots of choice of their favorite audio and all for FREE.

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