By Daniel Neville on 2009/07/28
There has been a lot of talk and pontification lately by members of the media community about the future of traditional media. Newspapers seem to be slowly losing the will to create new business models and how many people who have a decent Internet connection watch television these days. Technology and its rapid advances seem to be the enemy of most traditional media and radio is no exception. As MP3 players, streaming broadcasts, file sharing and services such as LastFM and iLike become more popular, it looks like the writing is on the wall for traditional terrestrial broadcast radio.
At the same time any hope that a business model based around ad revenue will survive seems to be fading fast. There are some scary stats out there that support this:
- Over the last year there was a 13% decrease in advertising on radio.
- In 2009, online advertising spending is expected to surpass the amount spent on radio advertising.
- Radio advertising saw its worst quarter in history in 2009, with overall radio revenue down 24% to $3.4 billion.
Source - www.mediabuyerplanner.com
While threatening the existing business model, technology has a lot to offer. At Quirk, we believe that the Internet - if embraced as a part of a holistic marketing strategy - could save and even grow traditional radio station brands and their listener bases. This is especially true for Africa, where cell phones have become pocket PCs and as WiFi becomes prevalent in more areas. Internet radio streams are going to become easily accessible. Already, streaming radio is growing in record numbers; AmaRadio currently streams 38 different local radio stations, as listeners are continuously reminded on-air by DJs to visit their station’s website to listen live. That said, it only seems logical for radio stations to explore what opportunities the Internet can offer to cultivate their brands, promote their content and grow their listener base.
What’s Happening Right Now?
The most obvious thing that radio stations can do is to stream their live broadcasts. For the owners of terrestrial radio stations, adding an Internet operation is relatively inexpensive and it provides the opportunity to offer additional features, like podcasts. As stations start to add video and other media formats (lots of SA radio stations link to or propagate content from eye-witness news to their sites), the line between what they offer their consumers and what television and newspapers have to offer begins to blur.
A good example of this is the popularity of 702 Talk Radio's podcasts, which are recordings of the live on air shows. I imagine it is easier for them to offer such content as it does not stray into the realm of paying out royalties to musicians. Podcasts are also a great way of extending your advertising space. You will have to include fewer commercials, but those that are included can be highly targeted and, dare I say it, measurable - that is assuming that everyone who downloaded a podcast listened to the commercial.
Social Media is another area which radio has correctly identified as something that they can use to grow. In South Africa, 5FM is a good example of this, with most of their DJs on Twitter - Gareth Cliff and DJ Fresh are particularly entertaining. The 5FM website also makes a foray into the social networking world with their Blog Jockeys. The idea is that a user can set up their own profile where they can blog from, as well as create their own playlists. The 5FM DJs have also been given their own blogs, which is a good move towards making it easier for the listeners to connect with the personalities and faces of the station.
Overseas, this concept of using social networking has been taken even further. US radio giant, Clear Channel, has launched individual station branded social networks for its 12 radio brands. Each network essentially functions like a mini MySpace and users can:
- Create profiles, customise them with HTML codes and widgets, upload photos, music and video, blog and add friends.
- Customise their profile pages with videos from Clear Channel's catalogue of over 6 000 music videos licensed from major and independent labels.
- Join a chat room located in the station’s streaming radio player and chat live with other members of the stations network.
The biggest barrier that radio will have to overcome is around the licensing of content that they, or members of their networks, make available. But there this is no reason for radio stations not to try. The toughest part of starting a social network is building a community - which radio already has in the form of its established listener base. If anything, radio is the best positioned out-of-traditional-media mediums to take advantage of the technology and social tools the Internet has to offer.
Visions for Tomorrow: Tips for the Future
Social networking represents a large opportunity for traditional radio to gain relevance and currency online. They enable listeners to feel connected to others through shared music tastes and give the station a chance to establish themselves as real community hubs. The moves described above are the first step, but there are more things that could be done. Below are some suggestions of what the future could hold:
- Music Discovery - If they want to be relevant to a generation of consumers who have learnt to find their own music online, radio stations have to commit to showcasing new music, and lots of it. One of the reasons I believe most radio stations lost relevance is because they refused to commit to new artists. The success of sites like LastFM are testament to a need for consumers to find new music and radios stations. They would be perfectly positioned to do this through their social networks.
- Internet Streaming and Podcasts - Although I have said that streaming live broadcasts and releasing podcasts has been one of the things radio stations have seemed to quite happily adopt, I believe that they missed the true potential of these mediums. They saw it as a chance to duplicate their on air shows instead of an opportunity to make on demand content available to consumers. Why not let users choose which songs they want to listen to off a station’s playlist? In today’s world, consumers are becoming more and more used to getting things on demand - they don’t want or need to sit and wait for it to be broadcast to them. If consumers can create their own playlists, why not then make them available for download in podcast form to other listeners? Radio stations could turn these podcasts into mini franchises that are instantly sharable, while giving the users the feeling that they are genuinely involved in a community.
- iPhone / Smartphone Apps - As smartphones become more common, the opportunity for radio stations to develop custom applications that link users with the station’s community as well as constantly stream content, becomes huge. These applications could also become a massive source of revenue for stations - you could, for example, sell ring tones to consumers and targeted advertising space to marketers.
- Video - There is a huge opportunity for radio to get into the video business. Not only is video the new hot content, but there are endless ways radio could use their online platforms to showcase video content derived from local sources. Imagine being able to log onto a site, choose which song you want to listen to AND be given the opportunity to watch the music video. Who needs MTV anymore, and what better way for local artists to get themselves out there in a big way?
Final Thoughts
To survive and flourish, radio is going to have to rethink their current strategy of regurgitating content online. Traditional radio is accustomed to controlling the outflow of entertainment and information. Instead, the content needs to reflect the tastes of the station’s listeners.
Radio playlists need to be expanded and treated as the true driving force behind the station and listeners need to be given the ability to decide what they want to listen to. An approach like this would resonate very well with current and future Internet users and could increase station value, brand name recognition and open up new marketing and advertising opportunities. The bottom line is that consumers are now involved and accustomed to contributing, participating and dictating what they find important. Radio must realise this, adjust their approach and begin a rebirth.
