Thursday, April 28, 2016

Radio's future is mobile and connected

[An edited version of this story was published by Music Week]

By Emmanuel Legrand

Faced with increasing competition, the radio sector faces a few challenging years ahead, but will continue to connect with its audience if it gets back to do what it does best -- curation and connecting listeners -- and embraces the concept of multi-platform content. 

That was the consensus expressed by the speakers at the opening keynote session Agents Of Change -- The Future Of The Global Radio Community at the Worldwide Radio Summit in Los Angeles on April 15.

TV host Larry King quizzed an international panel of radio professionals on the global future of the medium and the report card was rather dark: Audiences are switching to other content services; radio groups -- especially in the US -- are burdened with debt (iHeartMedia), for sale (CBS Radio), or suffering from a lack of capital injection (virtually all of them); cars -- which used to be the prime source of listenership -- could soon be lost to all sorts of devices and apps with the introduction of connected cars; and scouting and grooming on air talent was becoming harder as younger talent would move to other mediums such as YouTube.

The list of woes seemed endless. Yet, professionals expressed some positive perspectives for the future. "Radio is still a great great business," said Larry Wilson, Chairman & CEO of Alpha Media, and independent radio group based in Portland, Oregon. "It still generates an unbelievable amount of cash flow. We are still in the 30-40% margin, and not many businesses can say that."

For Jeff Smulyan, CEO of radio group Emmis Communications, part of the problem of radio in the US is that advertisers do not see radio as the powerful for that it is to reach massive audiences. "We reach 93% of the people," said Smulyan. "The reality is that we have to change that perception."
Emmis' Jeff Smulyan

Smulyan added that the next frontier for radio will be to engage with consumers through mobile phones and give them the opportunity the experience radio through their device of choice. "We have to regain portability," said Smulyan, who used his time to promote the NextRadio app, which allows listeners to connect with the favourite radio stations. "We have a generation that does not know that they can access radio on their phones. The most important thing is winning the smartphone, and if we win it will change this business for ever."

[In another session at the WWRS2016, Andrew Curran, President of DMR/Interactive, voiced his support to the need for radio stations/groups to have a radio strategy with mobile devices. Smartphone users interact over 150 times a day on average with their mobile devices, that's over 1000 times the week. And time spent using apps went from 23h/week in 2012 to 37h/week in 2014. "Aggregating that audience is important," said Curran, "and you need to have a mobile strategy."]

In the US, most of the radio consumption is in cars, and food for thought came from David Taylor, CEO of Aupeo, which provides personalised radio services, and also Director of Connected Services for Panasonic. Taylor said that the car revolution is underway from connected cars to self-driven cars. "The way people are using the cars is changing," he warned. "And we are starting to see consumers think about cars differently."

Even if fully autonomous cars is probable a decade or so way, cars are getting more and more connected and Taylor believes that not only it will impact radio but that "the radio industry is well positioned to take advantage of that." AM/FM radio stations drive the car audiences for the moment, but once connected cars become the norm, consumers will switch to whichever source of content of their choice through the cars' dashboard or via their mobile devices.

Hubbard's Ginny Morris
Ginny Morris, Chairman & CEO of family-owned radio group Hubbard, said that she "worries more about connected cars than about streaming services. "There are already a lot of alternatives and in connected cars there will be a lot more alternatives," said Morris. "But if we are smart, that will make us better."

Coming with a different perspective was Chris Price, Head Of Music for British public stations BBC Radio 1 & 1Xtra. "Our job is to bring young diverse audiences to the BBC and getting young people to listen to radio is a challenge," he said. Hence the multi-platform strategy developed by the BBC, chasing audiences through social networks and engaging on YouTube.

Price surprised the predominantly US audience at the Summit by saying that the Radio 1 has a "head of visualization', Joe Harland, whose job is to think in visual terms for the radio. Price credited Harland for building an audience of several millions on YouTube. "We are preparing radio for the next generation," said Price. "Young people engage in myriad of different ways. We still reach 10.5 million listeners every week, but hours have gone down because kids listen to music on YouTube, and elsewhere. Our strategy is to get kids engaged and fish where the fishes are."

Price, who worked previously with MTV and, also pleaded for a more risk-taking music programming. "As a programmer what I think the most of is what we are going to play," said Price. "In the ten years that I have been away from radio, one of the things that has changed is the multiple ways of measuring how popular a track is in the market. Ten years ago we would use our guts to determine if a song was good for our audience; now you have YouTube, Shazam, Spotify. It is easy to be certain about a track using these points. It should make radio better but my concern is that if we elevate data to that level, we will have a boring homogenous culture. That would be worrying us so my message to programmers is use your ears and your heart."

Price added, "As public broadcasters, we have the duty to reflect and to challenge people's taste. We take that role seriously. It is easy to reflect the popular taste but hard to challenge people's taste. But what I want to do is break the next David Bowie."

PMG's Jeff Pollack
On the panel "Broadcast, Satellite, Digital, Mobile, Streaming, Podcasting & The Dash," radio expert Jeff Pollack, Chairman & CEO, Pollack Music & Media Group, forecasted a bright future for streaming and for radio. "The streaming world looks robust: Apple Music is off to good start, Spotify has over 100 million users, Deezer is strong in some coutnries," said Pollack, who added: "I really don't see a super competitive environment between Spotify and [US leading radio group] iHeart. Yes, they share listeners, but we all claim to be in each other's business."

For Pollack, radio is still the major competitor to radio. "I would not spend a lot of time worrying about Spotify but more about CBS or Cumulus across the street. But we have to be aware -- and all our teams must be aware -- of the important forces going on with streaming music," said Pollack.

Pollack says radio can be strong at doing what it has done best for the past 50 years which is to connect listeners and curate music. "In a universe of 20 million songs, radio has never been more potent, because shrinking the list is a very important function of radio," said Pollack. "We should not underestimate that."

He also invited radio operators to diversify their businesses, like iHeart did when it decided to expand its events division. "iHeart leads the events space, and there is a lot of revenues coming from there," said Pollack. "I'd also like to see more enhancement for broadcast radio is in the video sphere. This will play a huge part in keeping [radio's] relevance. There are no reasons why I should not go to a radio site to see a video. It is still part of the curation process and it is a logical fit."

He concluded, "I would not like radio to try to be what it is not. I'd like radio continue to do what it does best. In this world of too many choices, it is not about more, it is about being selective."

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