These are older posts. Some on TV (up until 2010 or so). Before that they are mostly about starting up Foneshow.

Entries in radio (19)


Google is Leaving Radio

Google is bailing on radio.

I predicted this in this blog post a few weeks back.

I actually predicted
Google would fail with CPM based radio ads exactly two years ago.


Music Sales to Save Radio?

I've heard quite a few very senior radio execs talk recently about retail music sales being a way for radio to generate additional revenue. They want to put a transaction "button" on radios that allow for upstream communication to enable a listener to buy a song that is currently playing. This is real "out of the frying pan and into the fire" thinking. The music business is one of the few industries more messed up than radio.

Let me share a quote from Phil Schiller, SVP at Apple...

"The iPod makes money. The iTunes Music Store doesn't,"

Apple and their music store are currently dominating the music industry. Apple runs ITMS at break even so they can sell iPods at 50% gross margin.

Music is a loss leader for Apple. Copying the loss leader product of another industry to save your industry is not going to fly.


Land Line Telephones

As bad as the broadcast side of radio is (ignoring the naivete and pandering of some) it could be worse.

Just look at the land line phone business (from the New York Times today).

"The young, hip, cool people have cellphones only, and that is bad news for traditional phone providers. In a survey of Internet users, JupiterResearch found that 12 percent “do not subscribe to fixed voice service, and nearly two-thirds of them are ages 18 to 34.”"
But the future looks worse
“12 percent of online users indicate their intent to replace home phone service with exclusive cellphone use during the next 12 months,”
Of course this could never happen to radio broadcasting. Ha, sure it couldn't. An industry must be driven by its customers. Media consumption habits and needs are changing, radio must change to meet those needs.


NAB: Will Radio Send an SOS?

The radio industry will gather in Austin, Texas this week for the annual NAB radio conference. The radio business is in deep weeds right now. Listenership is down. Revenues are off. The audience is trending older and young people aren't listening. The future's looking grim.

What's broken? It's not that people don't like audio programming anymore. It's that the audience has changed in ways that radio does not understand. People don't consume media the way they did 5 years ago. Want to see the future of media consumption? Look at your TiVo. Look at YouTube. People want a user-controllable experience. They want media to be on-demand, in discrete single microchunks, sharable and re-usable as they wish. They need fresh content. They find out about new programming from their friends. They're quick to try something new, but quick to drop it if it doesn't fit their needs.

What's radio's answer to this? Mostly denial. David Rehr, head of the NAB, will inevitably give another one of his "it's not so bad" speeches in Austin this week. Enormous sums of money have been spent on the awkwardly-named "HD Radio" initiative (HD stands for "Hybrid Digital," not High Definition). HD Radio is a way of cramming more stations into the existing radio spectrum. More stations don't address the problem of the changing consumption habits of the audience. NAB is trying to get cell phone manufacturers to put FM radios into cell phones. As if the problem is a lack of radios.

So is radio going the way of the dinosaurs? Not yet. The industry need to realize that they're in the content business, not the broadcasting business. They need to understand that their primary competitive asset is the people who use their voices and minds to influence, entertain, and educate -- not the transmitters, towers and FCC licenses for which they paid so dearly. They need to embrace their local footprint and knowledge as a competitive advantage over internet radio and other sources of audience fragmentation.

Fundamentally, the distribution channel must change from a centrally-controlled broadcast model to a narrowcast model, where the consumer has more control. Radio can embrace new technologies. They need to understand how listeners consume the media.

Programming will change. Talk, news, and sports will become more dominant. Music radio can't just be music; iPods do that just fine. Music radio will need personality. They're in the audio content business -- it should not matter how that audio is distributed.

Revenue models will change. Advertisers too have a different set of expectations in the internet age. New technologies like podcasting, internet streaming, and cell-phone narrowcasting must be embraced as equal distribution channels to the broadcast channel.

The radio industry has a brief window of time standing open right now. I estimate it's about 36 months. They will either embrace change and understand what they are, or they will settle into the dustbin of industries that have failed to adapt to the changing needs of the audience. The time is now.


Analyst: Radio CEOs In Denial

Re-Blogging Radio Ink

NEW YORK -- August 19, 2008: CL King & Associates analyst Jim Boyle says the RAB is likely to report a 6 percent-7 percent revenue decline for July - worse than Wall Street projections for a 4 percent decline. It would be the 15th straight month of down revenue for radio.

Boyle writes, "Radio has entered and seems stuck in a new, discouraging territory with the combined challenges of a secular slide and cyclical recessionary times."

Boyle notes that the "gap has remained very wide" between small-market and larger-market radio, with smaller markets consistently outperforming. In the July data he's seen, he says the average big market was down 7 percent and mid-markets were off 5 percent while the average small market was up by 2 percent.

"What are radio leaders doing to change direction?" Boyle writes. "Not much, it seems to us. The industry's larger groups do not appear ready to institute revolutionary changes yet in sales, programming, promotion, or station clusters. There is a notable sense of denial of how harsh the prospects have been and continue to be for radio."

He continues, "The classic CEO reply is [that] radio is not bleeding as badly as newspapers. We concede there is too little radio ad demand, but there is also too little rate card integrity and too little investment in radio's product and people for the long term. It very much looks to us as all rear-guard counterpunching."

Yup, he's correct.


Catch up

I've had a great week out in Silicon Valley. My panel at Digital Hollywood went quite well. Met some terrific folks. Made some great connections that can help us going forward. I also had some interesting meetings with some former colleagues who really helped with some product positioning issues.

When I was at the Radio Conclave a while back I met Jerry Del Colliano. He understands where radio is broken and he's got some interesting ideas about how to fix it.

Here's a quote:

"Look, how can I say this? If radio has to rely on its transmitters and towers, it's all over. The next generation is not growing up with radio. Getting into the digital future involves investing money. And that's after you know how to invest it by learning about the next generation."
The whole thing is here.

I'm flying east today.


More Radios in Cell Phones

Chip makers are cramming more and more radios into cell phones. But they're not FM radios (sorry David Rehr)

If radio wants to reach the cell phone user then they need to find another channel.


Radio Keeps Declining

Reblogged from SAI

In fact, radio has underperformed Wall Street's negative predictions in nine of the last 12 months--in most cases turning in a percentage drop at least double that forecast by analysts and investors.
The time to change in order to remain relevant is now.


Radio Beware

The end is nigh for the newspaper business.

If that photo (unapologetically stolen from SAI) doesn't sum it up, then nothing will.

Radio, look at this and see your potential future. If you insist on thinking you're in the broadcasting business and you think your FCC license and your transmitter are your greatest assets, then look to the newspaper industry to see your future in 3 years.

Realize you're in the audio content business. If you understand that your greatest assets are people who excel at educating, informing and entertaining an audience with just their mind and their voice then you'll move forward. Sitting back and trying to wait out the changing world will work as well for you as it did for the newspaper guys.

The business won't be the same. Broadcasting will be just one channel of distribution (an increasingly irrelevant channel). Your monetization models will change (more performance based ads and sponsorships). The industry might be smaller in terms of gross receipts but larger in terms of profits. The style of programming will change (it will be shorter and micro-chunked to facilitate P2P viral distribution). You'll have much less control over how your media is consumed but far better data about who is consuming it and why they listen.

But if you think your stick and your signal are your primary competitive advantages then you're doomed.

Edit: Just a quick follow up. Tribune is cutting 80 newsroom jobs.


Radio's Online Strategy Parties Like It's 1999

I just sat through a mind numbing session entitled the "wicked web" here at The Conclave.

The session could have been given in 1999. Not a mention of syndication. Not a mention of social news (which could be HUGE for radio). Not a mention of content sharing and embedding.

Truly sad.



The daily email news from Eric Rhodes at Radio Ink magazine included the following passage:

The Big Enchilada: Accountability
Just as innovation in radio often comes from smaller markets (necessity is the mother of invention), advertising trends usually emerge from big markets. What Madison Avenue does trickles down to Main Street. And advertising trends are alarming for radio. Accountability is what advertisers want -- and guess where they find it? Online media. National brands love the idea that you can track how many clicked, what they viewed, and what they bought. It's the ultimate seduction for advertisers, and they are abandoning traditional "non-click" media at a rapid pace.

Major brands are making statements like, "TV, newspapers, radio, and outdoor are no longer attractive to us unless they can offer the same accountability and data tracking offered by online media." This, my friends, is the big enchilada. This theory of advertising has hit Madison Avenue in a big way, and it is already starting to trickle down to the local level. That's why radio, a local medium, needs to heed the warning to become an interactive medium. It's not because we're losing listeners (we're not); it's because advertisers at the smallest, local level will demand the ability to measure data.

Detailed metrics were built into Foneshow from day one, we can tell you the demos of who listened to your ad. Not an estimate, the specific people (minus names of course). Furthermore, our CPC advertising (cost-per-click, or in our case cost-per-call) provides the ultimate in accountability. Advertisers pay only for demonstrative results.


What Business are You In?

From RadioInk Magazine today:

Analyst: Radio A 'No Growth Medium'

NEW YORK -- December 6, 2007: In a new report headed "Broadcast: Reevaluating the Landscape," Wachovia analyst Marci Ryvicker revises her long-term growth estimates for broadcast and outdoor, and is particularly tough on radio.

"Radio is a no-growth medium," Ryvicker wrote. "We previously believed that radio would someday show LSD top-line growth, but after 24 consecutive months of downward estimate revisions, we believe that 0 percent is a more realistic (and possibly the best case) scenario."

Ryvicker downgraded Entercom to "market perform" in light of her revised long-term estimate for radio, but she said that, even in light of her reduced estimates for TV and outdoor, "our model still suggest potential upside for Entravision and CBS."

If you're in the "radio business" or "broadcast business" rather than in the "communication business focused on audio", then Ryvicker is completely correct.

If you understand that the power of what you do is to use audio to inform, educate, and inspire people, then you're in a growth industry with a massive future. Don't be locked into the way things are now. The technology, the formats, the business models, everything is transitory. If you can adjust, you can win. If you can't adjust, you are doomed.

If you're in the "radio business" and you don't want to be left behind, spend some time reading this blog, then drop us an email and let's see how we can help one another.


Talkers Conference

Nic and I had a table at Talkers Magazine's talk radio conference in NYC on Friday and Saturday. Pretty much everyone in the industry was there. We demo-ed to to lots of important folks and made some tremendous contacts. It's a fascinating industry. It is not at all what it appears from the outside.

One very important theme that some people there got and some people don't get is that they are not in the radio business, they are in the communications business. If you marry yourself to radio as a distribution platform you will inevitably become irrelevant.

We're looking to hire someone who has experience and contacts in the talk radio business (a solid rolodex) to do industry specific business development in the space. You'll have the opportunity to help take the platform of talk radio to a new level. When you're this early in a company you'll be writing a lot of your own job description. If you're interested and experienced, get in touch.


This Week

On Thursday night I'll be in NY at the PaidContent Mixer.

On Friday I'll be at the Talkers Conference New Media Seminar.

On Saturday we'll be demo-ing at a table at the talkers conference in the atrium of the Embassy Suites Battery Park. Come on by and say hello.


Google Audio

Donna Bogatin at ZDNet wrote an opinion on Google Audio.

As we talked about earlier, accountability is what makes AdWords work. If you're going to try to disrupt an existing industry, you need to do something disruptive. I don't see anything very disruptive in Google Audio.

What I'm curious about is TargetSpot.


Internet Radio is in Big Trouble

Internet radio is in big trouble. The Copyright Royalty Board judges just denied to hear an appeal from web broadcasters to reconsider the new rates for internet broadcast of music.

The business model in internet radio was dodgy to begin with, as incremental listeners incur incremental expenses in a linear fashion. In traditional radio, the entire listener base offsets a large capital expenditure for the infrastructure and the FCC license. But once you have the infrastructure, 1 listener costs the more or less the same as a million listeners. Once your advertising revenue covers servicing the capital expenditures everything else is gravy. The more listeners you have, the better your margins.

In internet radio each listener incurs additional fixed expense -- server overhead, bandwidth and licensing. So if your revenue per user is lower than those expenses per user, adding users just means losing more money. Under the new license rates I can't see how rev/user ever gets higher than expenses/user.

I didn't blog about this when it first happened, but there was no shortage of coverage. I think there is a larger question here of whether there is a business model for online music at all.

Many people suggest that the RIAA was driving this (the RIAA, justifiably, is a favorite whipping boy) but if you follow the money, the NAB has much more to gain by the new rates than the RIAA.

Edit: Replaced blocked image


More Google Radio

The New York Times has another piece on Google's offline advertising ambitions.

In particular, Google’s effort to sell radio ads, the oldest and most advanced of its major offline advertising plans, has run into several hurdles, including radio stations that are wary of losing control over the sale and pricing of ads.

The promise Google offers old-line media markets is that it can replicate the formula that has worked so well for it online. It is a formula that relies heavily on technology to allow advertisers to buy their own ads, have them appear on relevant pages across a vast network of Web sites, and then track the results.

The key phrase there is "then track the results". How do you programatically track the results of CPM based advertising?

I blogged this extensively a while back.


Beyond Broadcast 2007

I'm going to be down in Cambridge next Saturday for Beyond Broadcast conference.

From the conference description:

"For 50 years broadcast media have played a powerful role in shaping political culture and mediating citizen engagement in the democratic process. Now a participatory culture is putting the tools of media creation and critique in the hands of citizens themselves. We invite you to MIT—to explore the means, the message, and the meaning of the post-midterm, pre-presidential YouTube moment."

We're hard at work on the Foneshow platform creating tools for political candidates to communicate with the people and people to communicate with candidates. We're excited to see what others are thinking and get their feedback on what we're doing. If you're going to be there track me down.

Just as an example of what we're talking about.

Get "Barack Obama Podcast" on your cell phone!

Just enter your cell phone number here

The only bummer is Podcamp Toronto is the same weekend and I can't be two places at once.


Google, dMarc and Radio Advertising

Last year Google bought dMarc for ~$100 million in cash and a earn-out option for another billion. Last week the two dMarc founders left Google and there's speculation that things are not going as planned with Google's into move into the $22 billion radio advertising industry. There are rumors of cultural clashes between the radio people and the Google folks, clashes between Google's fundamental belief in an automated sales process and the radio industry's historical use of sales reps.

Google's automated sales process for AdWords works so well because their cost per click model (CPC), tied to their auction system for pricing and selling ads, leaves emotion entirely out of the ad purchase decision cycle. The purchase decision ends up being a strictly intellectual process of looking at the cost of the ad buy, looking at the conversion rate of clicks to purchases, and setting an auction bid that gives you an acceptable return on investment for the ad.

Traditional radio advertising is a whole different ballgame. Radio ads cannot be CPC advertising; they are based on cost per thousand (CPM) impressions. The primary value of CPM advertising (especially in a one-way medium like radio) is increasing brand awareness. It is very difficult to make a hard correlation between radio ad buys and incremental revenue. The ROI on radio ads are much fuzzier and harder to quantify. Therefore the decision to do brand advertising, and more specifically how much to spend on brand advertising, is a more emotional sales process. An emotional sales process goes much more smoothly when a sales representative is there to ease the buyer along.

It's an interesting problem to tackle. The move toward mobile is creating a hybrid market. Which sales model do you follow? We're developing the clickable audio ad, which you can do with a feedback-enabled audio system like the cell phone. You can combine the emotional pull of audio ads with the demonstrable ROI of CPC ads. The goal of audio ads in a mobile medium starts to be less about brand building (though it still is), and more about invoking a direct call to action, AdWords-style. Hear an ad, press the "5" key, and be connected to the advertiser. You're listing to a movie review; you "click," the call is transferred to MovieFone, and you buy your tickets. Or you initiate any of the other options possible with a live connection -- like requesting follow-up emails with more information; or calling open API web services and, for example, clicking on a preview for a TV show and programming your TiVo. We're continually inventing new implementations for the clickable audio ad.

It's a new world out there.