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 Last.fm, 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."

Millennials drive radio changes

By Emmanuel Legrand

A study based on a wide panel of radio listeners in the US provided ample evidence that radio listeners' habits are changing, but also that over-the-air radio is still a force to reckon with.

Jacobs Media's Fred Jacobs

Jacobs Media's Techsurvey12 covered 245 stations in the US and was based on 39,000 responses. It was unveiled on April 13 at the Worldwide Radio Summit 2016 in Los Angeles. Audiences are now heavily into social media and mobile: 86% have a profile on some or multiple social media; and 84% have a smartphone. "It is all about mobile," commented Fred Jacobs, President of Jacobs Media.

Mobiles are also become the device of choice in cars since 65% of the respondents said they were using phones to connect to content in cars. A major growing segment of radio content are ipods. In just two years, podcasting engagement went from 21% to 28%. "This is really happening," said Jacobs.

One disappointing device appears to be smartwatches, which went from 2% to 4% in engagement, and does not seem to receive any traction from radio listeners. "We thought it would be a bigger deal with double digit growth, and went from 2 to 4%, so no big deal," said Jacobs.

In short, said Jacobs, millennials are the ones driving the changes in radio consumption, and are much more engaged than baby boomers. They dominate in categories such as social network, smartphone, connect to car, connected TV, streaming audio, streaming video, use of MP3 players, and video games. Boomers are more into the traditional use of radio and television.

But traditional radio is still a powerful medium. When asked why they still listen to radio, respondents said: to hear favourite songs, for the DJs/Hosts, because they like to work with radio, "in the habit," "keeps me company," for news, "gets me in better mood," and "to check what's going on locally."

Similarly, a majority of listeners said that radio was still the main source for music discovery, ahead of friends or social media. This behaviour shows, according to Jacobs, that radio still has a major role to play if it manages to keep providing what people want to listen radio for. "There is an emotional connection to radio that you do not get from the other sources," said Jacobs.

But at the same time, he said, radio stations must be pro-active to engage with listeners online, though mobile phones, on social media or via podcasts. "A mobile strategy is not just an idea, you have to have a real strategy and you need to engage. Social media is now just so ubiquitous that you do not even think about it," said Jacobs. "FaceBook is such a monster, not only is everybody on it, but they are there all the time. But also on Linkedin, Google+, Twitter, Pinterest..."

With all the changes in the automotive world, Jacobs also suggested radio operators to make sure they keep abreast with the development in cars. "What is going on in the car is critical," said Jacobs. "We need, as an industry, to engage with Detroit." The same applies to the connected world. "There is also a culture for on-demand and radio has to address it," he said.

Jacobs added a note of warning: The overflow of advertising is one of the reason listeners, especially millennials, will turn away from radio. Interestingly, this is also a reason given by listeners who walk away from Pandora, the online radio service which provides hundreds of dedicated radio streams. "Pandora's momentum is not great," said Jacobs. "While 27% say that they listen more to Pandora, 23% say they were listening less. People who listen to Pandora the most are moving away and they are mostly millennials."

What's the problem? According to the survey, listeners mention the lack of song skip (51%), annoying commercials (49%), playing more commercial (47%), as well as listening to other streams, and too predictable. "Well, it is not commercial-free any more," says Jacobs. "The trend against annoying commercials is growing year on year. It leads to erosion and dissatisfaction."

Seven things about Super Bowl advertising songs placements

[This story was originally published by Music Week the week after Super Bowl in February 2016]

By Emmanuel Legrand

With over 100 millions viewers watching live the Super Bowl in American alone, the event is the most coveted moment of the year for music placement in commercials. Here are seven things you ought to know about placing songs in commercials during Super Bowl.

1 – It's a BIG event!

The Super Bowl is all about superlatives: It is the biggest sporting event in the United States; it is the single biggest spending evening on American TV; and it has also grown into one of the biggest musical opportunities of the year.

This is not simply because of the bombastic performances recorded during the half-time break that have become essential to the career of top artists – think Michael Jackson, Black Eyed Peas, Madonna, Prince, Paul McCartney – but also because this is the most coveted moment of the year for music placement in commercials. Advertising spots and their music have become an integral part of the show itself.

Veteran media consultant Jeff Pollack, Chairman/CEO of Los Angeles-based Pollack Music & Media Group, describes the Super Bowl as “the biggest television event of the year from a ratings standpoint, by far, and it is also the most important entertainment event in America. As big as the Grammys and the Oscars are, they are dwarfed by the power of football. This is World Cup stuff we are talking about. Nothing gets bigger.”

With 100 million viewers on average, and peaks at 115-120 million viewers, the Super Bowl is the most viewed TV programme in the US. It is also, says Brian Monaco, EVP, worldwide head of advertising, film and television at Sony/ATV Music Publishing, the “biggest platform in the year that all advertisers use to catch the eyeballs of tens of million people.”

2 – It's about spending $$!

It is estimated that brands spend in excess of $400 million for the Super Bowl alone in advertising expenditures. Advertisers and brands use the Super Bowl to unveil new spots that will get the attention of millions of customers, and each marketing campaign designed for the Super Bowl is guaranteed to get create the buzz.

In this age of fragmented audiences, the Super Bowl is one of the very few shows that gathers all demographics, and advertising spots are as much part of the show as the competition, notes Pollack. “Any other day of the year people try to avoid commercials,” muses Pollack, “but with the Super Bowl it is different: with advertisers spending $5m for 30-second spot, people are anxious to see them. They want to see which stars are in the spots, what music is used. The next morning people talk about their favourite ad or about the song in an ad. Advertising has become an entertainment component of the Super Bowl.”

“People pay attention to the ads, it's all part of the Super Bowl culture,” adds Jeanette Perez, SVP, Head of Global Synch & Brand Partnerships at Kobalt.

3 – It's a best time of the year to place music.

One of the key components of these ads is music, of course. Music publishing companies and labels are eager to place their music in what is the biggest of all shows. And because it has become such a platform, competition is intense among publishers and master owners to place their music, says Sony/ATV's Monaco. “Everyone tries to get that spot,” he says. Dan Rosenbaum, VP Commercial Licensing at BMG, sums up the importance of the event in one sentence: “Super Bowl is the Holy Grail, for lack of other word.”

Natasha Baldwin, Group President, Creative and Marketing at Imagem, compares it with the Christmas season in the UK. “In the UK market, everything is judged around which Christmas commercial you have,” she explains. “In the US, you are judged on the Super Bowl ads that you manage to secure. It is the measure of how you perform in the industry in the US. Internally, this is always something people talk about.”

Aside from the licensing fee, that can fetch in the hundreds of thousand dollars for superstar material, what is much coveted by rights holders is the environment itself. A song placed on a buzzing ad spot will create reaction on social media, trigger Shazam searches, incite people to stream or buy the song. In addition, placing a song in a Super Bowl ad acts like a the best credential for the authors of the songs and the publisher.

“There's a real value added from the buzz,” says Kobalt's Perez. “There's value added for the songs, the companies [that place the song] and the artist/songwriters. For catalogue songs, it shines a fresh light onto a copyright that can serve as a marketing template, and for a new developing artist, it could serve as a really big marketing launch campaign, so we are all looking for those opportunities.”

For Ron Broitman, EVP, head of sync for Warner/Chappell and Warner Music Group, who predicts that this year will be one of Warner's most successful Super Bowl ever, the benefits of placing songs are multiple. “It can be financial, depending on stature of song but it can be more than that,” he says. “Some tracks have seen streaming spikes after Super Bowl ads, older songs can get another lease of life, lesser known songs can get major exposure, new artists can directly benefit by attracting more fans to their gigs. “It sort of bleeds on all areas,” says Broitman.

4 – It's about superstars, but not only.

Whereas a few years ago, advertisers were favouring well-known tracks over new music, Sony/ATV's Monaco says that the choices made by music supervisors are almost equally split between proven hits and new tracks. “Obviously there are a lot of catalogue artists, but we see more and more new and up-and-coming artists been chosen.”

Sony/ATV, for example has placed this year Drake's Hotline Bling in a T-Mobile ad and BMG has Battles's Atlas on a Quicken Loans ad. Last year, Sony/ATV, which administers the Beatles catalogue, placed All You Need Is Love on an ad for the Republic of Ecuador. Similarly, Van Halen's version of Roy Orbison's Pretty Woman was featured last year in a Nationwide Insurance ad.

Heinz is using this year a Badfinger song represented by Kobalt. Skittles is using Aerosmith's Dream On. “It's a combination of different things,” explains Alex Flores, VP Marketing, Commercials, Film & Television at BMG. “Sometimes the spot is created around a song, like Dream On, and Steven Tyler has a presence in the spot. Some other times we get an email which gives you some indications, but you do not always get the full picture from supervisors because they are not always capable of saying that it is for a Super Bowl ads. They could need a song that everybody knows or one that is about to break or something that is exciting and new.”

Kobalt's Perez placed last year Show Me Love by newcomers Hundred Waters in a Coca-Cola ad, which she sees as the sign that major brands are interested in taking risks. “It really depends on the brand and their sonic aesthetics, and who is the audience they are targeting,” she explains, adding that for 2016, she has two major placements, one with a deep catalogue track and one with a track less than a year old.

5 – It's about timing (and secrecy).

Usually, brands and advertisers start working on Super Bowl ads several months in advance and briefs are sent around to rights holders. Imagem's Baldwin considers that brands are “taking the Super Bowl seriously more than ever before,” and tend to invest what it takes to make an ad that people will remember. “Placing the right music is part of the creative process,” says Kobalt's Perez.

For BMG's Rosenbaum, a lot has to do with the relationship established over the years with music supervisors, following the pitches, informing about the catalogue, answering briefs and be ready when a request comes around. “When we get a request in, the first thing we need to do is to determine what is the creative project especially when deal with famous artists,” says Rosenbaum. “The creative has to be approved by the clients. Then when get to the negotiation where it is all about about assigning the right fee that, from our perspective, is respective of the artist's stature, as well as of the client’s budget is. When the two can meet, that’s when things happen.”

“It starts with a normal pitching process,” says Warner's Broitman, “but in the two months leading up to the Super Bowl, you feel a sense of urgency and a spike in volume. And because it is such a bigger stage, you get the sense of a bigger impact, so you sometimes pitch bigger songs that can connect.”

The requests from brands depend on the type of campaign they are planning. In some cases, the spot will be a one-off, broadcast only on Super Bowl day. Sony/ATV's Monaco says he's even done a one-day license for the use of a song, just for Super Bowl. But what all publisher relish are the long-term campaigns that can last months or a full year, which will give a longer visibility to their songs.

The whole process is shrouded with secrecy from the outset, as brands try to out-do their competitors, and keeping the secret until the time the ad is aired is part of the process. All the publishers Music Week talked to before the event said they were tied by non-disclosure agreements. “I have some half-time action but I am not allowed to talk about it,” said Baldwin two days before the show.

6 – It's about the buzz

More and more brands chose to leak the spots online a few days before the event to create the buzz, generate traction on social networks. Shazam is used extensively during the Super Bowl broadcast, especially when new music is used.. A successful ads get Shazamed, consumers go to streaming services to check the songs, which generates additional action on social media.

“After the Super Bowl, we are always talking to brands and advertisers to follow what happens to the song, if it's buzzing,” says BMG's Flores. “They check Instagram, FaceBook, follow the traffic. It can change the value of the copyright or can impact the value of that song in another ad.”

“Buzz is good,” adds BMG's Rosenbaum. “Before, nothing was released [prior to the Super Bowl] and what they [advertisers] found in past few years that releasing spots earlier creates a buzz and interest in the product.”

Warner's Broitman appreciates when brands chose to use Youtube to raise awareness. “It gives momentum to the songs,” he says. “Sometimes we even see the benefits [of such visibility] before the commercials are aired.”

Sony/ATV's Monaco says the novelty in the past few years has also been the way in which brands have been using social media to build awareness for their commercials. Some brands, he explains, have a strategy focusing on the Super Bowl based on analytics, trying to find the best way to reach the audience and keep it interested. “For us, it gives a lot of life to song if all goes well,” says Monaco. “It is not just a one-off. This is excellent because it gives us a platform to introduce new music and it is a win-win for everyone.”

Adds Monaco: “It is always interesting to see what happens after [Super Bowl] in terms of sales or with touring if the creative is done well. We work closely with brands – more and more are willing to share data – and we then try to work with artists to piggyback on what is happening. That is something we did not have before. It's good that they want to share that with us.”

In the end, a successful Super Bowl is about managing expectations, providing the right song that will fit the brand and the creative side of the commercial and negotiating the right license fees. “All these opportunities are great and open doors for other brands the rest of the year,” says Imagem's Baldwin. “That's why pressure has intensified for publishers and writers to get on these spots. Everybody knows that you've got your credentials if you have an ad in the Super Bowl.”

7 – And it's lucrative!

Fees paid by brands for the licensing of songs placed in commercials during Super Bowl are the most closed-guarded secrets. All the licensing executives from music publishers interviewed by Music Week declined to comment on fees. A ballpark range of a licensing fee for a song in a Super Bowl ad can go from $100,000 to over a million dollars (like Eminem's Lose Yourself in the 2014 Chrysler ad, which also included a cameo from the artist), depending on the notoriety of the artist, the status of the song, the way the song will be used and if it is a one-off or a full campaign. As BMG's Rosenbaum puts it, it depends on the stature of the artist and the client's budget.

For music publishers and owners of sound recordings, this is the most important part of the year. Some companies like Sony/ATV can have up to 12 or 15 placements in Super Bowl ads, but, adds Kobalt's Perez, achieving high targets is “more difficult now than ever because the visibility is huge and there is much more competition.”

The positive about this year is that advertisers are spending significant sums of money for Super Bowl ads, unlike a few years ago when, in the wake of the economic recession affecting America, brands were cash strapped and it had an effect on music licensing fees. “I can remember that six-seven years ago, after the economic meltdown, there were hardly any licensed songs,” recalls BMG's Rosenbaum. “So it’s changed quite and it's a good things.”

When it comes to fees, Sony/ATV's Monaco claims that 2016 “is still a very healthy year.” Catalogue tracks “come with a big cheque” but what makes this year special, according to him, is that “in past years terms were short and now terms are longer, they can be up to a year, so that is a new trend, and a positive one.”

So is it financially rewarding? “Of course,” says Imagem's Baldwin, “you get a big sync fee and millions of eyeballs on your composer or your artist. It is a phenomenal platform.”