Radio's New Music Fantasy

The recent headline "Google and MySpace will challenge radio’s music-discovery position," got me asking the question "What music-discovery position?"

In the years I have been analyzing consumer use of media, including broadcast radio, Internet and more recently smart phone behavior, radio has had the potential to capture the new music discovery crown.

Unfortunately, it never has lived up to this potential.






In 2007, Bridge Ratings conducted a series of deep studies of music consumers of all ages and, as you might suspect, found that 18-30 year olds were most interested in discovering new music though any means possible. In the category of where most of this discovery was occurring, broadcast radio followed peers and the Internet as the place to go to find great new music.

However, in focus groups to dig deeper, radio had the greatest potential of all three for new music discovery due to its primary benefits: ease of use, accessibility and the fact that radio is free.

Yet radio never took the initiative.

In the last two years I have discussed this notion of new music discovery with at least 100 radio programmers in the formats of Contemporary Hit Radio (CHR), Adult Alternative and Alternative.

Would it surprise you to know that none of them saw the wisdom of claiming the "new music" position in their markets by proactively promoting and playing new music by either established performers or undiscovered talent.

Radio's belief that it is the new music discovery destination is pure fantasy.

There's a fabulous on-line worldwide talent competition called "Fame Games" which boasts two million worldwide listeners; 70% listen in the U.S. alone. I have had an interest in this five-shows-a-week talent competition and thought it would suit American radio just fine.

"Fame Games" features unsigned artists of any cross-over genre competing for best track of the week and ultimately a major record contract.

This is a well-produced, fun feature that pits two songs against each other vying for the votes of listeners and the program's judges. So, I took it to U.S. radio.

American programmers won't go there.

Aggressively marketing one's radio station as the "place for new music discovery" would greatly bulk up a station's image if done properly and perhaps even draw young listeners back to a medium that is having its problems holding on to this important demographic.

So, when I read that Google or MySpace will challenge radio's music discovery position, or when I read the RAB's Jeff Haley's concern about how radio has to protect this turf, I have to shrug my shoulders.

As far as radio's listeners are concerned, there is no new music turf to protect.

Radio had the opportunity to claim this territory for itself at least two years ago when audiences told us that radio's convenience would make it the most likely place to go to discover new music.

It never took the opportunity and very well may find itself pushed out by new media which seems to take every opportunity to infringe on radio's weaknesses.

This all points to radio's biggest challenge: getting back to creating and presenting engrossing and compelling programming....for all ages.

The radio industry must build upon its rich history of being listener-focused.

In its confusion in recent years, radio has simply forgotten how to compete.

The Truism of Knowing Your Audience

It's becoming more and more difficult to target consumers with advertising. Just ask former and current clients of traditional media. The concept of cohorts, defined as a group of subjects - most often humans from a given generation - defined by experiencing an event - typically birth - in particular time span, is one of the reasons. The splintering of audience and the scattering of their media consumption is at the heart of the advertising challenge.

Bridge Ratings has spent considerable time and money studying one of these cohorts - Gen-Y - over the past five years and have what we believe to be a fairly honest and eye-opening understanding of this group's media interests and needs and the best way for advertisers and content producers to reach them. (Gen-Y typically refers to those born between 1981 and 1999).

We've also been one of the few research organizations to dissect the podcast universe. After a rocky start and terrestrial radio's quick acceptance of the medium, podcasting is gaining ground as a viable manner to extend its reach, solidify its brand and improve its distribution. While there are certain roadblocks to the medium's expansion to a significant percentage of the masses, podcasting - or netcasting - is becoming one of the advertising solutions in reaching the hard-to-reach Gen-Y.

Fellow research firm eMarketer estimates that advertisers will spend $400 million on podcast advertising by 2011 - up from $80 million last year. And there have been numerous articles written about advertising solutions to reach Gen-Y on MySpace, YouTube and other such media where Gen-Y congregates. Yet, none of the 'experts' in advertising seem to know this audience well enough to make that $80 million or $400 million effective.

Based on what I've learnt when experiencing the advertising on these Gen-Y gathering spots is that commercial content, production and length seem generally not to be customized to the tastes of those that are trying to be reached. We understand through out Bridge Ratings work that 'commercials' of virtually any kind are potentially a turn-off to this hard-to-reach cohort and they will even give up or use less their beloved MySpace or YouTube if commercialization gets in the way of their experience. But there are ways to make it work - ways that have been suggested by the Gen-Y peers we study.

The point here is that billions are spent on advertising to try to reach Gen-Y and there is a growing interest in podcasting as a platform for such things. But all of it will be so much dust in the wind, ineffective audio or video, if clients, agencies and producers don't take the time to know this audience.

Through the years, understanding the consumer has always been at the forefront of marketing. Today, however, more than ever, knowing your audience is a critical component to being effective with advertising - even to the point of having your target audience fully embrace the product and its benefits.

Keeping Up with Gen-Y

I can't tell you how long the alarm has been sounding for terrestrial radio to get its act together to save its future by developing new programming and content that will be compelling enough for today's under-25 year olds, but I do know that Bridge Ratings has been publishing studies about this for at least four years. And I know several other highly-respected researchers who have been doing it longer.

Yet have we seen any creativity on this front? I can't say I have. There are some youth-oriented attempts on HD radio, but these kids don't care about HD. Even satellite radio hasn't developed any programming that will attract this hard-to-reach generation. Is everyone just giving up? Knowing how important it is to develop future audiences, one would think both traditional broadcasters and the satellite radio companies would dig in their heels and get with it.

I was invited to present some findings at three corporate retreats last year. Bridge Ratings was commissioned to find out what terrestrial radio could do to make its business relateable to Generation-Y. Everyone nodded their heads, slapped me on the back to thank me for opening their eyes, yet nothing's been done!

Frankly, perhaps the reason nothing has surfaced that is compelling is because technology and Gen-Y tastes are a moving target and they are moving too fast for radio to keep up. First there was P2P music file sharing; MP3 players, iPods, iTunes, then Myspace, Facebook, YouTube - it can be exhausting for some. This I get. Now comes something new that will blow your mind: Mobile Social Networking Software or MoSoSo which is essentially the sophisticated reach of cyber-social networks like MySpace combined with the military precision of GPS.

New cell phones equipped with this software were marketed to the college-aged life-group by Rave Wireless last year. It's mobile GPS technology that enables students to find like-minded buddies (Bored? Love Indian food? Meet me under the clock!), it also offers a cyberescort service linked to campus police. If the student doesn't turn off a timer in the phone, indicating safe arrival at a destination, police are dispatched to a GPS location. Your friends can find where you are at any given moment and can keep tabs on your whereabouts all day long if they want. Fortunately, the locator function is strictly "opt-in", meaning users can turn it on and off at will.

The point here is that the more time that goes by, the more convinced I am that terrestrial radio - even satellite radio - are being left in the dust as today's youth clamor for more customized, on-demand, "what I want - when I want it" media which includes the high-speed train known as mobile phones. Cell phones are becoming, if they haven't already become, the new 'radio'. Cell phones serve the same function today as portable radios did two generations ago; they are just more sophisticated social technologies that are empowering groups of our youngest consumers.

Technology will not slow down. Shelf-life for any of these things grows shorter and shorter. The first wave of MySpace users long ago abandoned it and have moved on. Fodder for technology companies to stay ahead of the game. In fact, most highly-focused consumer-oriented tech companies have divisions of brainiacs whose only job is to work on what's next.

Has radio invested in anything similar for its future? Or has it given up on keep up with Gen-Y only to be satisfied with an aging listener base? This is what keeps me up at night.

Predictions of Demise? Not!

After years of managing radio stations at both the programming and general management levels, and more recently having my thumb on the pulse of what media consumers truly think about all their options - especially traditional radio - I am dumbfounded by the hard-line predictions being made by some of my contemporaries and/or dear friends in the business.

My thoughts on what I'm hearing and what you may be reading:

• The big one: The death of traditional radio
  

This concept is so far-fetched that one must wonder if those who are shouting it from rooftops have some ulterior motive - or those that speak of it with such certainty are just clearly ignorant. If I've learned one thing in this business of consumer behavioral research it's that trends in consumer behavior take longer than most realize, that technological advancement is usually slower in coming than expected, but once technological advancement reaches critical mass changes occur more quickly than previously thought.

Yes, terrestrial radio has competition for listeners' time and interest, but everything we see at Bridge Ratings indicates that industry 'experts' are not looking at the whole picture. Yes, the younger generation is listening less than they used to, but over 85% of them are still tuning in terrestrial radio and 2007 may very well be the year that this attrition trend actually stabilizes or improves slightly. This, of course, depends on whether the traditional radio industry programs better for the young generation and changes its thinking on not developing new formats and programming because 12-24 year olds is not a sellable demographic. Bah!

Adults are still listening. The attrition in 25+ adults is a trickle but still visible. There's more going on in people's lives that media - a fact that most prognosticators simply forget. In most cases, media options - including traditional radio - are like utilities to the masses, like the electric light switch on the wall of every room in the house. Not much thought is given to how the power gets to the house and how it lights up the room when you flick the switch. Media is the same way unless it's more engaging, foreground media like television. But generally, most media is treated as a utility. So, the masses do not think much about it, how much they use it, what they are viewing or listening to and how much they care about it. And the more choices we have, the more the apathy about media choices increases. So, traditional radio is not dead - far from it. There are certainly indications audience attrition could lead to some bad fate, but this is not a given.

• MySpace is over - See above. MySpace is evolving and their claims of 100 million users is deceptive if not incorrect. More than 50% of those who visit the URL don't visit again after a month. The number is closer to 40 million actual core users who visit daily or weekly. These are the people who make up this virtual community and previous estimates as to user counts were wrong to begin with. And MySpace's demography is changing, too. With more parents and adults aware of what it is, they are setting up accounts for any number of reasons. If anything, MySpace is becoming more mass appeal and early adopters visit less often but still have accounts.
• Email is over - Spam certainly has ruined the enjoyment of this wonderful communication too, but 2007 should be another banner year for Email. Again, IM'ing and texting are the tools of communication for the under 21's who find email to be a non-immediate way to stay in touch. They like the idea of real-time communication and email doesn't deliver. Adults find email to work just fine. From marketers to business communication to personal contact, there's nothing better these days. Those who are predicting the downtrend in email use are once again not considering all the facts.

Consider this when reading about consumer trends. The masses move slowly. Their changing ways are certainly impacted by early adopters and innovators who don't always set mass trends. Most consumer behavioral trends move slowly...slow enough for some of them to be reversed.

The Missing Link

Gen Y Americans (those aged between 18 and 26) spend 12.2 hours online every week, 28% longer than 27-40-year-old Gen Xers and almost twice as long as 51-61-year-old Older Boomers. Gen Yers are also much more likely to engage in social computing activities while online.

Inside these powerful numbers is a key for terrestrial radio - or any business with the need to capture this moving target demographic. There are a handful of broadcasters who understand not only the need to pursue Gen Y, but also who have begun to figure out that the Internet is a god-send. Up until very recently, it has been difficult, at best, for any marketer to capture the attention of the all-too-critical 18-26 year old consumer. But they live on the Internet. They are mobile consumers most of the time, but when they sit still for 12 hours a week in order to surf on-line, the opportunity to reach them is glaring.

2006 was the year in which traditional radio discovered they needed to get traction in their efforts to attract Gen Y back to traditional media. There are those who say this generation is lost forever to traditional media, but they really are referring to the early adopters and innovators among this group who are the leading edge of those who have gravitated away from traditional radio, for example, because there was/is nothing of compelling substance for them. Well folks, it's not too late.

By our observations of the entire spectrum of 18-26 year olds (38 million of them), the dark ages of traditional radio are far from evident. 17% or 6.5 million Gen Yers have mentally committed to new technologies that have replaced traditional media. MP3 players and the Internet consume most of this commitment and they will be difficult to re-attract. But 83% of this group, in our analysis, is either still listening to traditional radio or is sharing their listening with new technologies. It is this group broadcasters should target.

2007 should be the year of re-investment by traditional broadcasters in their products (radio stations). There are a few broadcast companies that never stopped doing this and whether small or large, these companies - over the long term - are profitable companies which attract excellent talent and management and...they are winning. They believe in spending money today even though it may mean less profitability in the short term in order to insure a more stable workforce environment and an on-air product that caters to the local community and gets results for its advertisers.

The word "courage" is found at the core of what is missing from much of the management employed at today's broadcast companies. There really is a shortage of people who have the quality of mind or spirit that enables them to face difficulty, danger, pain, etc., without fear. It's a trait lost on many but it is one that is sorely missing from management skill sets.

If you are in a position to hire, motivate and direct your workforce, look for courage as an asset along with the other skills you require of your managers. Finding courage in yourself and reflecting it back on your staff is the missing link to sustaining and protecting the future of traditional media.

Three Reasons

I must admit I'm stumped.

I've seen enough research over the last few months that has been predicting radio's woes for years. I saw a study originally released in 1999 that projected that 12-21 year olds of that year would be significantly alienated by traditional radio by 2005. While its specific time-spent-listening projections were off, the point was well-taken: terrestrial radio was not catering to this generation and by 2005 the 12-21 year olds of then (the 19-28 year olds of today), there would be striking changes to terrestrial radio because that generation would be losing interest.

'99 was the year of Napster, you'll recall, and though their P2P model eventually blew up, the damage had been done. The youth market was beginning to salivate over their power: getting what they wanted, when they wanted - on demand; they didn't need traditional radio.

I'm stumped because confirmation studies by this company (Bridge Ratings) and other highly respected radio research organizations during 2006 show conclusively that company operators, general managers and programmers have ignored the signs first seen 6-7 years ago and continue to shield their minds from the reality.

Are there any operators out there today who have the guts and conviction to try to win back these lost demographics?

"Why should we, Dave?" I hear you say. You think that the youth are gone and can't be salvaged so why try?

There are three potential reasons traditional radio has lost its way:

1. They are in denial
2. They don't know what to do about the attrition or are operationally unable to do anything
3. They don't care

Which do you think it is?

As we consider that another year has come and gone, the radio industry can look back on a year where, as a whole, radio stations began to rise to the challenge of all the new media surrounding it. The industry also now knows that it will be an up hill battle to slow the attrition that has seeped into Gen X and Gen Y; that these generations are not leaving because satellite radio is the answer or even that MySpace, Facebook or the iPod has changed communication forever.

The industry must accelerate its most aggressive tactics now - embrace as many new technologies as it can, reallocate its resources to support the understanding that it is a content business and that terrestrial radio is the best at creating content 24/7.

So, which of the three reasons listed above pinpoints the foundation of the lethargy the radio industry finds itself in?