As we are well into the second quarter of 2014, it’s time for Pat Welsh to bring us a roundup of the newest in advancements in audio technology. Welsh checks in with a list of the latest updates to the worlds of streaming audio, in-car entertainment and much more.
Pat Welsh
By Pat Welsh
New technologies and new companies continue to encroach on the territory of established media. So, as I have done every few months, I wanted to go over some important new technologies and trends that threaten – or provide new opportunities to – radio.
Nielsen’s most recent Cross-Platform study shows a healthy terrestrial industry. Radio remains the #2 most-used medium in the U.S., (2 hours, 46 minutes of daily usage, down slightly over the past couple of years). The danger signs are in the demographic trends; listeners aged 50-64 spend the most time with radio, but even Millennials – 80% of whom listen to Internet radio – report increased time spent with terrestrial radio in the latest Edison Research study.
So here are some of the most significant new developments and announcements that provide both threats and opportunities.
- Online radio growth – Both total usage and the number of options have increased. Online listening is estimated at 12-20% of the total. Terrestrial-based radio services are getting a big chunk of that thanks to their launch of innovative online and mobile platforms and services. Radio apps are furiously adding new features: customizability, games, improved ad sales capabilities, etc. Meanwhile, pure plays are gaining ground too, although a key Wall Street analyst, Richard Greenfield, disputes Pandora’s claims about its reach compared to terrestrial radio.
- More streaming audio – Streaming services made up 21% of music sales last year, and paid subscriptions blew past 6 million. But wait…there’s more! Since the first of this year Beats Music and Milk Radio (exclusively for Samsung devices) debuted. Later this year we can expect new on-demand streaming services from YouTube, Amazon, Deezer (French company) and Apple (thanks to tepid response to iTunes Radio and the flattening of iTunes music sales).
It’s not just more services; it’s frictionless access. Companies are announcing new bundling deals with mobile carriers: Beats with AT&T, Spotify with Sprint, etc. And the increased competition means price reductions, which should lead to greater consumer adoption.
But it’s not just the idea that there’s more competition; it’s who is providing it. Google (YouTube), Amazon and Apple are the new Big 3 Networks of the digital age. By the end of the year all three will likely have: complete audio streaming (both radio and on-demand) services, a music store, a streaming video service and a media box to stream online content into your living room, not to mention your mobile device (which one of the New Big 3 might have built).
- Apple’s patent for commercial skipping – Apple’s new patent for “auto-station tuning” promises to let listeners change stations automatically when commercials come on. This is a mixed blessing for radio. Lower commercial loads are what many people cite for their preference for Pandora and other pure plays, but if listeners can easily skip the commercials on terrestrial radio …well, don’t tell your advertisers.
- FM on mobile tries to break through – Sprint placed a big bet on the appeal of FM radio on mobile through the NextRadio app. It seems to be working. In mid-March, Sprint reported over 240,000 downloads of the app. In what might be a case of too little too late, Blackberry is trying to get in the game too.
- Podcast listening is steadily growing – According to a Pew Research study, over ¼ of Internet users now download or listen to podcasts. There’s still a shocking amount of confusion with consumers about what a “podcast” is, but despite this, more people are listening.
- Combining online and terrestrial ratings – Nielsen is working on establishing a system to combine all forms of audio into one ratings service. It’s just a matter of time before we have one number that adds station streams to over-the-air shares and puts them up against online pure plays. Meanwhile, Canada’s ratings service, BBM, which also uses the PPM methodology, is doing the same thing in Toronto, Montreal and Vancouver. Preliminary results show that station streams add an average of 3% to over-the-air listening.
- Ratings combined with consumer purchases – In the middle of the last decade, Arbitron trumpeted an initiative, called Project Apollo, to combine PPM listening and viewing data with consumer purchasing data. The project was terminated due to cost constraints in 2008.
Recently, Nielsen announced a similar product for TV stations called Nielsen Local Buyer Reach, which will link local TV viewing data with actual consumer transactions and auto registrations. TV reps will get data on over 40 product categories to show to advertisers.
Although there are no announced plans to expand into radio, at the Nielsen audio client conference in December, executives said they expected to begin revealing the link between listening data and consumer purchase data in both PPM & diary radio markets sometime this year. That’s great news for radio, a medium that represents 28% of media consumption but only 7% of total ad spending.
- An OS for your car – Battling Google’s aggressive moves in the connected car space, Apple finally debuted its CarPlay at the Geneva Auto Show. Originally called iOS In the Car, CarPlay will enable iPhone users driving new vehicles from Ferrari, Mercedes or Volvo to perform numerous functions using a push-and-hold button on their steering wheel. Eventually, Apple’s CarPlay automobile infotainment system will also become available on vehicles from BMW Group, Ford, General Motors, Honda, Hyundai, Jaguar, Kia, Land Rover, Mitsubishi, Nissan, PSA Peugeot Citroën, Subaru, Suzuki and Toyota.
Most car companies have been installing their own proprietary operating systems that don’t always play nice with smartphone operating systems. This is a much tighter integration of Apple’s iOS into cars, enabling users to activate Siri to issue voice commands to make calls, use the Apple Maps navigation system, listen to and respond to texts, as well as control music from their phones and some third-party audio apps, such as Spotify, iHeartRadio & Beats Radio.
- Clickable radio – The Westwood One radio network has partnered with SoundHound to make both commercials and programming clickable. Hosts encourage listeners to access additional content by holding their phones next to the speakers. This provides advertisers with immediate, trackable metrics for terrestrial radio ad campaigns.
- Wearable radio – Nike just made news for shuttering its wearable technology division. That and the public backlash to Google Glass have cast doubt on the idea of wearable technology. Nonplussed, Samsung recently unveiled its new Galaxy Gear 2 smart watch, and Clear Channel created the first radio app to work with it. Using the Tizen operating system, iHeartRadio will offer its 1500+stations and 18 million songs on the Galaxy Gear, as well as over 30 other devices, including Galaxy Note and S Series smartphones and Galaxy tablets.
One thing we’ve learned over the years is that the proliferation of new technologies and platforms hasn’t cannibalized traditional media. Multi-tasking users have enabled traditional broadcast media to thrive, while print media barely survives. The key to staying viable is continuing to aggressively adopt these new technologies and platforms in tandem with our audience. They don’t just want to be passive listeners; they’re also active users.
Pat Welsh, Senior Vice President/Digital Content, Pollack Media Group, can be reached at 310 459-8556, fax: 310-454-5046, or at pat@pollackmedia.com.
