Solutions for Radio’s Future Path into The Twenties

January 13, 2020

by Fred Deane

As we roar into the twenties, we take this opportunity to reflect back on the previous decade and assess radio’s progress, and more importantly, eagerly look forward to projecting solutions to the new decade’s challenges.

During the course of last decade, radio immersed itself even further into the mix of entertainment options the new age competitive multi-media landscape players have to offer. Keeping pace is no longer acceptable for the medium, leadership must continue to be our unceasing goal as we advance into more unchartered competitive waters in the decade ahead.

We asked our panel of experts to address the following two areas of discussion:

1. The biggest challenges of the previous decade and how radio has responded, and if radio is better positioned now then it was at the beginning of last decade.
   

2. Solutions radio needs to aspire to and achieve in advancing forward to competitively position the medium as a prime option over the next ten-year period insuring a relevant and thriving industry.
   

Our esteemed panel includes: Dom Theodore, Justin Chase, Rick Cummings, Mark Adams, Jonathan Shuford, Sam Milkman, Kobe, Jimmy Steal and Buzz Knight.

 

Mark Adams, Program Director, Wild 94-9 & Star 101-3, iHeart Media CHR Brand Coordinator

Broadcast radio is the #1 mass reach medium across adults and millennials in the U.S. Radio reaches 93% of Americans weekly and has been consistent with that reach for the past five decades. The biggest challenge is broadcast radio is we are being undervalued and there is a misperception of other medium’s size and reach.

Also thinking back a decade and speaking real broadly, I don’t know that the media industry as a whole was truly cognizant of the rapidly changing digital landscape and the impact it would ultimately have across all mediums. At iHeartMedia, we embraced it. Today our content and programming is available everywhere, on every device from smartphones and wearables to smart speakers and gaming consoles. It’s important that radio continues to evolve and use digital to our advantage, as digital listening is additive listening for us.

Social media platforms have also exploded into the media space. Facebook came on-line in 2004. Twitter in 2006. Instagram in 2010. Today our on-air personalities, stations and brands engage with our listeners and fans across every major social platform from Instagram to Snapchat, as social media adds another level of interaction with our listeners, and it’s important to connect with them everywhere they are.

While all of this presents new opportunities, as I’ve reminded my morning shows at various times over the past several years, all of those smart speakers are radios. We still need to continue to educate people on how to find their favorite morning shows and radio stations on all of these new devices and platforms.

Looking ahead, while it’s cliché’ to state at this point, it’s primarily going to be about content. Are you providing something consumers want, and is that product or service unique to your platform? To that point, it’s critically important for us to have compelling and authentic personalities that are delivering both personalized and localized content and programming for our listeners that is accessible on every device or platform via the iHeartRadio digital app. While to some extent that’s always been true, it’s becoming integral to remain both competitive today as well as excelling in the future.

Radio offers companionship in ways many competitive streaming services are not built to replicate, and building upon those positive points of competitive differentiation has never been more important. Our talent, on-air, on-line and on social channels and podcasting, have to be forging an emotional connection with their listeners as well as with the overall brand positions of our stations.

iHeartMedia is already better positioned to deliver upon those expectations far more effectively than any of our competitors; including a forward leaning embrasure of emergent technologies including new ways listeners can access or interact with our brands. We have to be where the listeners are, as well as try to anticipate where they are going, and we need to continue to innovate.

 

 

Dom Theodore, CEO, RadioAnimal Media Strategies

The radio industry has faced several major challenges over the last 10 years, but with each challenge there’s also an opportunity. If we are smart enough to listen and willing to reinvent, we can remodel the entire industry into something more robust and sustainable well into the future.

1) CONTENT IS MORE IMPORTANT THAN DISTRIBUTION: In a sea of distribution platforms, the best content wins. Operators have learned the hard way that much of the premium that was paid to acquire as many signals as possible was wasted money without unique and compelling content to distribute on them. Some of the biggest platforms (Amazon, Netflix, etc.) have wisely made major investments into unique content creation because they recognize this is the new race that must be won. Distribution is cheap. Your audience walks around with a device in their pocket that allows them to instantly communicate with hundreds to thousands of people, and if the content is good, it will likely be shared with enough people to make a radio station jealous with “cume envy.” Imagine how much more impact radio could have if we truly focused on creating compelling content that is difficult-to-duplicate rather than the generic “shifts” we currently accept as “industry standard” because they are so easy to package up and cheaply distribute.

2) RADIO NEEDS TO BECOME LESS RISK-ADVERSE: I’ve always been fascinated that consolidation has led to less experimentation instead of more. If you look at the largest consolidated groups in most markets with 6 or 7 stations, there are usually 3-4 truly viable stations that drive revenue, and then 2-3 stations that run some type of generic packaged programming to keep operating expenses low. Why not instead take these frequencies and turn them into laboratories where unusual and experimental formats can be incubated and hatched? The future belongs to unique content, this content has to come from somewhere. Why not take a chance with one of those many signals that currently produce little or no cash flow?

3) EXPERIMENTATION CAN’T BE RESEARCHED IN ADVANCE: I admit, I’m a research junkie. Some are surprised to hear that given how often I advocate for creativity, but I do place a high value on research when it comes to established brands. On the other hand, if a format is truly unique and experimental, it really can’t be researched in advance. I’m reminded of Henry Ford‘s comment, “If I had asked people what they wanted, they would have said: faster horses.” Or Steve Jobs, “It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.” These statements offer great insight into the minds of two of the most significant innovators in history, yet the radio industry is always asking “where has it been done before?” and “how does it test” rather than just trying it. The last 10 years have proven that amateur consumer generated content that doesn’t conform to traditional “rules” can be just as interesting and popular as highly researched and slickly produced content, yet rarely do you hear ANYTHING on broadcast radio that isn’t slick and produced.

4) RADIO MUST RECRUIT NON-TRADITIONAL THINKERS: Read a job posting at Apple, then read a typical job posting at any radio station. If you’re a creative type, there’s no contest as to where you’d rather work. Apple job postings talk about changing the world. Radio job postings talk about “working well in a team environment.” Say what you want about the “scrappy” radio business of the 70’s and 80’s, but when the hippie’s and crazies ran radio stations, there was much more unique content coming out of the speakers. In the era of consolidation, and particularly in the last 10 years, radio management pushed out the colorful and non-conformist types leaving nothing but good employees who are low maintenance and kind of boring to listen to. Apple was founded by a bunch of hippie nerds in a garage. The more they got away from that type of thinking, the worse they performed. Then they brought Steve Jobs back, the ultimate non-conformist, and that made all the difference. If we want to thrive, we need to hire talent that challenges authority and traditional thought, not conformists who simply execute a “format.”

5) WE NEED A NEW RATINGS SYSTEM: Nielsen’s PPM technology is an example of a good idea executed poorly. The sample sizes are too small, and the churn rate is too low. Statistically, one or two meters shouldn’t be able to swing a station from 2nd place to 10th place if the sample size was truly big enough. Plus, with such low churn rates, you can be stuck with a bad “dice roll” for many months until the panel changes over. Entire careers can literally be ruined by the time the panel churns. With so much broadcast real estate in the hands of fewer companies, the radio industry has never been riper to form an independent consortium ratings service funded by a pool investment from the various owners (at cost) with much bigger sample sizes and much higher churn rates. This data can then be used by all of the investing parties without limitation. This 3rd party company can actually focus on solving issues for the radio industry like attribution and data dashboards for advertisers. Products that we can actually use to sell more effectively.

6) RE-CONSIDER THE TECHNOLOGY: The last 10 years have taught us that HD Radio was an unnecessary technology that didn’t solve any real problems for the consumer. That money could have been much better used to exploit two-way and GPS technology to create addressable radios where some content can be geo-targeted and the consumer could literally respond to an advertisement by pushing a button on their radio. All of this technology already exists, but we haven’t put it all together in the form of a broadcast solution. Much like the advent of FM radio when AM stations handed out FM converters, radio should invest in the advancement of digital broadcast technology and development of a real digital radio platform.

 

Sam Milkman, EVP/Senior Consultant, Coleman Insights

There’s no doubt that the biggest challenge of the past decade for radio has been audience fragmentation.

Of course, radio isn’t the only industry dealing with this issue. Digital delivery has changed the game for newspapers. Streaming has changed the game for television and radio. There are simply more options for consumers, one could argue too many options causing decision paralysis. There is a certain amount of attrition that is going to take place regardless of how each medium responds to the challenges, but radio has two new avenues of growth if it leverages them properly: podcasting and smart speakers.

Radio smartly saw both as additives to its brands, not a distraction. Rather than seeing podcasting as the enemy, it has embraced the medium, finding ways to amplify its brands and tap into new revenue. Smart speakers are bringing radio back into the home, and while the battle for the car and workplace are much broader, it is a welcome platform. There’s work to be done here and we know it’s more than just building a skill, but radio is up to the challenge.

Looking back to the start of the previous decade, radio programmers were focused on how to beat PPM. How to game the system. We’re now seeing strategy come full circle, an awareness that successful tactical strategy won’t work without strong branding. So we’ve seen smart broadcasters put resources back into branding and strategic research and are seeing tangible results.

In this fragmented environment, differentiation remains the key to success. How can we win the hearts and minds of listeners by creating something special that they really want to affiliate with, vote for and make a part of their lives? Create a great idea and market it. Don’t just name your brand, make it mean something. Listen to New Country 101-FIVE in Atlanta to hear what I mean. “Made in Georgia, Loved Around the World.” That station gives me the same chills I felt in 1983 when I first heard Z100 “from the top of the Empire State Building” and knew I’d do anything to be a part of it.

If radio keeps its focus on branding and differentiation in the new decade, as well as ensuring distribution of the product wherever and however the audience wants, I’m confident the industry has a very bright future.

 

Jonathan Shuford, Program Director, WRVW/107.5 the River, Nashville

Last decade, the challenges changed from year to year, as they have for that matter for previous years and decades. From iTunes to YouTube to Spotify, there’s always a shiny new object that demands the consumer’s attention. Something always exists that many believe will “kill” radio, and yet we as an industry respond every time. I was worried about the medium 4 or 5 years ago, but to be honest I think we ARE better positioned now than we have been in YEARS. We’ve learned about the importance of our personalities and embraced them. We’ve started to learn how to harness the power of data to create the most effective playlist for our listeners. We’ve started using events, podcasting, and social media more strategically to expand the reach of our brands. And now the emergence of the Smart Speaker puts us in a unique position to have radio in the home again, an arena that we really haven’t competed in since the early 2000s. Will the competition continue to be tough? Absolutely. Will DSPs, on-demand video services, and podcasts continue to fight for the same attention that traditional radio is? Of course. But yes, radio is positioned for the first time in years to not only survive but rise above those attacks.

Regarding moving forward and projecting meeting our desired goals over the next decade, three things come to mind.

We need to continue to embrace personalities and encourage them to flex their creative muscles and engage with listeners in new and exciting ways. Allow them to BE personalities. It always has been, and always will be, the difference between radio and streaming. The human connection can’t be lost.

We need to build bigger brands. We’re not just radio stations anymore. We’re brands. We’re influencers. We’re social media entities. We’re friends and members of our communities. As programmers we have to continue to extend the reach of our brands through as many channels as possible. We’re no longer in a world where we can just sit back and expect people to come to us. There are too many choices, so we have to come to them. And those extensions can’t just be things we do because we feel like we have to. They have to be things we do genuinely because we WANT to. The brands that most effectively accomplish that will be better positioned to win 5, 10, 15, 20 years down the road.

We have to continue to learn. The same programming philosophies that worked in 1990 won’t work in 2020 and beyond. We have to continue to grow in our understanding of consumer listening patterns and attention spans, and program for our stations to not only serve our core but also the NEXT core, and the core after that. We have the luxury of having a wealth of data at our fingertips, not just about music, but about consumer habits, reactions, etc., and if we can figure out how it all comes together with our audience, it could be a game changer.

 

Kobe, Program Director & Digital Content Director, WWHT, Syracuse

I think the biggest challenge has been our overall philosophy as an industry. I believe many of us are still too romantic with “the way it used to be,” which may hold programmers, and their stations in general, back from taking more chances (with music, promotions, marketing, etc.), because it may be counter to what we were taught ten years ago and even longer. Being less risk adverse has led the industry to battling against ourselves to an extent. Although in the last 36 months I believe we are starting to do better as a whole.

In the past few years, we are seeing a shift in how we program our stations, which ultimately defines our brand. We don’t have to wait for songs to callout anymore in the traditional sense. We have other tools at our disposal measuring in more real time how songs are reacting, and this better equips us to further serve our listeners.

At the beginning of last decade, the tools we use now like Spotify, Shazam and Instagram, were practically baby brands. We didn’t have anything reliable to go on at the time mainly because we didn’t have a big enough sample size to put more stock into these metric tools. Consequently, we reverted to the traditional ways of measuring success of songs and trends. Now, Spotify and the iHeartRadio app have especially have become solid sources of data to see how people use our music and stations.

Knowing we can put more faith in these new tools, as well as other new brands like TikTok, have put us in a better position to adapt for the future.

For us to move forward and remain relevant, we need to not be afraid to try new things. We just did a contest here to send someone to LA to see BTS, and we used Twitter as the main driver sending people to our website. What we did differently is, we left the contest open to anyone in the United States. That literally goes against everything we may have been taught, but it shows how the game has changed now. With anyone being able to listen to my station on the iHeartRadio app, which can be accessed all over the U.S., why wouldn’t we open up a contest to anyone in the U.S.? Also, the BTS fanbase is bigger than just one market, and that’s who we wanted to serve in this one particular promotion.

Voice search will be playing a greater role in our lives sooner than later. We are going to be doing so much more with our smart speakers, the rise of audio search, and podcasts only will increase radio’s relevance. It won’t be automatic though; we will need to make some adjustments.

Many big stations and companies have already done this, but we need to stop thinking of our brands as “just radio,” we are more like a network. We should be finding ways to push out almost all of our audio content, on video as well. I view YouTube, Facebook, Twitter, Instagram, TikTok, Snapchat, Twitch and more. They are all different countries so to speak, we want to plant our stations flag in as many of those countries as possible and make our territory known.

Imagine if your station got on Snapchat when it first came out in 2012. What kind of following would it have now? As well as showing that your brand has been ahead of the curve of what is going on digitally. I believe that’s how we need to be thinking moving forward.

 

Justin Chase, Chief Content Officer, Beasley Media Group

Most of the biggest challenges we have are directly linked to the increased digital competition. I would say radio overall was slow to deal with this challenge but it would be difficult to find a broadcaster that is not proactively dealing with it today. There are many of us who are doing innovative and impressive things to remain relevant with the audience and advertisers. Many companies, like Beasley, have gone through a digital transformation and are starting to see great success. Companies and brands that have embraced digital are better positioned today than at the beginning of the previous decade.

Projecting forward, I think we need to (primarily) create more real innovation. I’m always proud when I read about a broadcaster creating something new or trying something new. We can’t be afraid to take some chances on things.

At Beasley, our three largest priorities are radio (the traditional business), digital, and Esports/Gaming. I’m obviously involved in all three areas but I’m really excited to be a part of Beasley’s newest Esports Division “Beasley XP” because we’re trying some things that have never been done before. We are now operating a couple Professional Esports teams and we’re producing a lot of different types of Esports content, mostly digital. However, one of the pieces of content is a syndicated radio show that airs on 70 radio stations (mostly Sports stations) through the Sun Broadcast Group network. The PDs who have elected to run our Esports show see what is happening in the gaming community and they want to find a way to attract this young male demo. Plus, they also realize the core Sports format listeners (40-50-year-old males) likely have kids who are into Esports and Gaming and our show can help them better relate to their kids. If we’re creative and keep innovating, we will continue to thrive.

Secondly, we need to continue to elevate our brands and personalities on all platforms. Remember the old phrases, “just do good radio” or “I only care about what comes out of the speakers?” This no longer applies because it’s just as important how we look and sound on our streams, websites, apps, smart speakers, social media, etc. We also need to remember that hiring, retaining, developing, and coaching our talent should be a top priority for our business. They are so vital to our success in the future. At the moment, it’s our greatest advantage against our digital competition, which may not always be the case.

 

Jimmy Steal,101.9 THE MIX VP of Brand and Content

In my opinion radio’s biggest challenge as a mass appeal medium, measured by an imperfect mass appeal measurement system, is to continue to succeed in a personalized media world with increasing generations of music fans that were not raised on radio. These newer generational waves want what they want, when they want it, on whatever platforms they want. So, our future success is not guaranteed, unless we rally our industry leaders in an unparalleled spirit of strategic cooperation and self-awareness focusing on the five critical things that truly matter.

Great personalities…Are we doing everything to find, nurture, and highlight them? (If not turn the transmitters off now). Does our imaging/promotions/branding support these personalities in a way that’s in sync with today’s listeners tastes?

Are we now truly a gross impressions medium with TSL becoming increasingly unrealistic in our attention deficit/choice addled society?

Are we doing enough to rapidly transpose the value of our terrestrial brands/personalities to our audience in daily digital content creation for all of our earned/owned digital platforms?

Are our trade organizations depicting radio in their marketing as the truly vibrant, ubiquitous, cool, and unique entertainment source that we really are? Have these same radio trade organizations guaranteed radio’s place on the first screen in auto audio in-dash entertainment systems?

As an industry how much has creativity and innovation suffered at the hands of servicing debt?

While radio may not return to pre-digital disruption levels, radio will absolutely continue to be a be a ROI positive business. But sadly, if we, as an industry, do not focus on these few critical things, well, our biggest wounds will be self-inflicted. I’m very fortunate to be working for Hubbard, a company that does the right things, at the right time, for the right reasons. Let’s have more of that from everyone please in 2020 and beyond.

 

Rick Cummings, President of Radio Programming, Emmis Communications

Last decade presented numerous challenges. Revenues flat to down since the recession; more and more autos with tethered phones and radio companies with too much debt, which prevented the kind of R & D and marketing necessary. Finally, a proliferation of “choice” introduced by the digital world. Any one of these circumstances would make for a challenging environment and this industry has seen them all. Radio decision-makers have recognized it’s ‘compete or die’ time and have begun to view a broader audio world without their gatekeeper glasses. Investing in podcasting and other ‘on demand’ content and platforms, are crucial steps.

Looking forward, NPR is arguably the only radio company to have developed a dual revenue stream. If radio can develop that, then it begins to insulate itself against the slow declines in usage as OTA television has (with far greater declines). Moving aggressively into the ‘on demand’ mindset will become more critical. It’s a Netflix world.

 

 

 

 

Buzz Knight, Buzz Knight Media

Radio’s biggest challenges have been how to best understand our listener’s behavior, how to best know how to capture our audience’s heart and soul, and how to properly respond with meaningful actions so we are poised for change. Our world is changing so rapidly and we must keep up with the pace of change or we will be left in the dust.

I believe we truly are better positioned now than at the beginning of the previous decade as a result of disruptive factors that continue to open our eyes to the future. We have to maximize every available platform and connect with our current audiences and our potentially new ones. Fred Deane was right on it some weeks ago when he pinged me about Gary Vaynerchuck’s appearance at the NAB Radio Show this past fall. Gary is the CEO of VaynerMedia and he brilliantly talked to the show attendees about how our philosophy regarding distribution needs to change and adapt to the times.