The Car Won't Start So Let's Drive Somewhere

A Wall Street Journal article yesterday by Hannah Karp claims that the number of music-streaming services is set to explode next year, as record labels have warmed up to the idea of renting consumers access to a vast collection of tunes, rather than selling them individual albums or songs.

• "The percentage of the population that uses these is still really small. There's a long way to go before you saturate the market."  -- Frank Johnson, chief executive of Seattle's MediaNet Digital that they say will help bring more than 50 new streaming services to market next year.
• "Fans of country music, blues and jazz, classical and opera have been particularly underserved by streaming services so far, as has the casual music listener—the person who really just wants a button and doesn't want to make a playlist."  -- Vickie Nauman, president of 7digital, hoping to bring at least three more services to market next year.

Is it possible that due to caps on bandwidth and increasing costs imposed by consolidating carriers and royalty fees that those small numbers mean that streaming has peaked and consumers are happy with their current sources of music?

Could it be that there's not enough "long tail" in music to make the smallest niches worth doing via stream, given the built-in costs?  Are the lovers of unique types of music not available to the mass audience willing to pay more than the average person?

The completely optimistic article fails to mention those possibilities.

Investor beware.

Apps

Stop for a moment and look at your smart phone.  How many apps have you downloaded out of the "hundreds of thousands of possibilities?"

How many do you actually use on a regular basis?

My point, if you're a radio station or a radio personality, is not to discourage you from creating your own custom app, but before you do, think about what daily, hourly problem for your listener does your new app solve.

Especially if your app is going to be free.  There's no point in spending the thousands of dollars it's going to cost if it doesn't have a sustainable way to make money with it somehow well beyond that investment.

Of course, if you can create a fun, viral app that you can sell for 99 cents and gets downloaded 50,000 times in a day (which happens daily, of course), GO for it.  If you can replicate that trick once a month, you have earned the right to be called an app genius.  Maybe Apple, Google or Microsoft will buy you, turning you into the next Mark Cuban (or at least Fred Jacobs, who'd be the first I'd ask if I wanted to build an app since he has built a going business around apps)

I have downloaded almost 100 apps to listen to A&O&B client radio stations and even though they pay me to do it, I still seldom actually actually use them.  I find it more convenient to simply bookmark the station's streaming page and get there that way.

I admire TuneIn, SHOUTcast, iHeartRadio and the rest for what they are trying to do, but I find myself using Real FM Radio on my Android Phone where I already have my local fav preset.

Don't bother building an app for me unless it offers something better than that.  At the very least, include an "alarm" to wake me up to my favorite morning show, but the one already in my phone works well enough that I'd have to love your program a lot to go to the trouble to download and set it up, compared to just turning you on when I want to hear you.

Am I unique?  Perhaps I am, but at the very least put yourself in my shoes before you build your new app.

Improve Your Efforts

Arbitron's Bill Rose and Edison's Larry Rosin shared more insights into "Infinite Dial 2012" Sunday at Kurt Hanson's RAIN Summit in Las Vegas. 

Country may rank #1 in "Radio Today" listening levels, but when it comes to engagement, we're tied with six other formats for FIFTH place!

The country format is, sad to say, "just average" when it comes to getting the random radio listener in their town to sign up for email loyalty efforts and we have a lot to learn from rock, religious, public radio and urban stations in the typical radio metro.

Social is certainly growing for radio, but its impact as a marketing tool on listening prospects is HALF the reach of email.

The 2013 data is telling us to spend at least as much time with email marketing - if not twice as much as you do with social media.

We have work to do.

Reasons To Simulcast On Your Steam

A great discussion yesterday at Kurt Hanson's Las Vegas RAIN Summit on monetization of mobile and streaming media.

Key takeaways for me:

1.  That email database you've been building and using for two decades or more is still much more important and valuable to you than social media.  Use your social to grow and refine it.

2.  Stop with the irritating/time spend listening-killing ad insertion and just increase your broadcast rates to compensate for the additional streaming audience, which is growing and driving more use of your radio station, as A&O&B's Roadmap 2013 of country radio users has tracked for years.

Listeners are loudly telling us that they don't enjoy our streams as much as they do our over-the-air programming:

Mobile Money Is On The Move

The future of online revenue growth is going to increasingly come from mobile devices.  Ad insertion to mobile streams will work, but the level of unwanted interruptions will need to be under two to four minutes per hour. 

The quality of the ads will need to fit the environment you create around them.  The rates will need to be higher than anyone is getting today. 

Two five-six minute commercial breaks, carefully placed for maximum listening credit will continue to work in PPM for AM and FM radio as long as no direct competition plays fewer. 

100% simulcasts do make radio more listenable than what we've offered, but the long breaks will push the mobile listeners away unless we find ways to create content that drives constant usage and either charge subscription fees for hearing it with no commercials and/or create custom content designed just for mobile listeners with extremely brief pre-rolls in front of it.

The future isn't as different as many people paint it, as long as we remain open to the hard facts of the expectations listeners and advertisers have and build our businesses around them.

Open Stream, Insert Foot?

While China was simply an amazing adventure and an eye-opener, it's great to be back (in Korea now) to a country where I can post to Blogger and Word Press again.

One of the best things about July and August is that radio's streaming fees paid to Sound Exchange go down a bit as listeners vacation and listen a bit less online as a result.

However, the trend line is obvious, as listeners migrate online (from A&O Roadmap 2012):

Pandora, we feel your pain, as more and more folks stream our programming we make less and less money since the numbers generally are too small to increase rates enough to our online advertising efforts to grow revenues sufficiently to cover the costs.

Many A&O clients report now spending the equivalent of two full time salaries on the costs of streaming.  If we're willing to spend that kind of money to do it as a service to listeners who increasingly demand and expect it, we owe it to ourselves to make the quality the best we can make it.

Morris Radio Group Topeka Market Manager Larry Riggins said this week, as he pulled the plug temporarily on ad insertion in the wake of Saga's decision to simply simulcast FM on their streams:  "I just get so frustrated that, as an industry, when something doesn’t work quite the way we need it to, we give up on it instead of investing the time and money in technology to make it work.  Streaming can be a huge boost to radio everywhere if we are willing to use the technology it takes to do it right."

He plans in the long run to hopefully return to ad insertion on his stations' streams.  "We are only going to simulcast until we are comfortable with the performance of the new updates on our current system, or have a new system in place.  We feel our streams are important for listenership and revenue and can enhance what we are doing moving forward."

Meanwhile, of course, there are numerous proven ways other than Ad insertion and/or Ad replacement to enrich the online experience for your listener while still making good online money right now:

1. Podcasts (audio and video)
2. Personality blogs
3. Player takeovers
4. Synchronized banner ads with audio spots
5. Social media
6. Local info and entertainment portals
7. Mobile apps
8. Jobs/Help wanted
9. Portable media
10. Video pre-rolls 
11. Discount daily deals
12. Etc, etc, etc!

Take the time to do some homework yourself by reading and joining in on the many powerful arguments now going on, pro and con

• http://radioink.com/Article.asp?id=2524451&spid=24698
• http://www.fastcompany.com/3000934/quick-write-down-notebook-maker-moleskine-goes-analog-digital
• Radio’s Future requires Innovation
• Ad Messaging Is a Problem for Simulcasted Streams
• http://www.audiographics.com/agd/083112-1.htm

And, if you're lucky, attend the secret meetings.  (smile)

Yes, it would be ideal if radio could offer something much, much better online than what we do on AM and FM.  Yet, as Sean Ross has been pointedly reporting for many years, we simplyhave not been able to accomplish that except in very rare instances.

Country listeners in A&O's 8th annual "Roadmap 2012" perceptual study had some suggestions for you which they said would make them listen longer.

Highlights = far and away the stop 3 answers:

• Better Quality of sound
• Faster Connection
• Eliminate Lag time so I can win contests           

Honorable Mentions for:

• Fewer commercials, better quality commercials
• News and traffic updates
• More Prizes
• Eliminate the “auto turn off”

So, at present (having been out of the country during the "it was not a secret meeting"), I am also encouraging A&O clients to join Saga in simply simulcasting on air 100% online so the listening experience is at least the same as listeners have come to expect unless you and your ad sales/insertion provider can offer a superior product). 

A second benefit is that the listening recorded by ARB is no longer lost, since it can be claimed as a genuine simulcast. 

Third, with no lengthy delay, listeners can enter and win call in contests in real time and not be faced with the disappointment of learning that they constantly seem to miss the opportunity to win as long as they listen online.

Long term, it seems to me that if you hope to do well in mobile streaming, you're going to have to produce something specifically targeted for the needs of smart phone users, with a much lower commercial load that most of us are carrying on our steams now.

If you're going to dip your toe into streaming audio, make sure it's after putting only your best foot forward!

Why The "Record" Business' Hair Is On Fire

A study from Strategy Analytics reports that downloads and streaming music services such as Pandora and Spotify are set to pass CDs as the music industry’s biggest U.S. revenue source.

SA's Ed Barton posted data on its website predicting U.S. digital music sales will rise to $3.4 billion this year, moving it ahead of the $3.38 billion in revenue from CDs and vinyl.

Within 3 years, digital music will surpass physical purchases globally, he adds.

I can't possibly top the comment in reaction to that news from The Conclave's Tom Kay in this week's Tattler:  "No wonder I’ve had such a devil of a time trying to find that Lady Gaga 8-track."