Sometimes technological innovation takes away. Sometimes it gives.
Walk into any Best Buy and look for an AM/FM radio and it will be difficult to find one, but there are "new radios" right at the front of the store.
Digital has changed so much of legacy media. The music business was famously rocked by theft and illegal sharing on platforms like Napster. The movie industry filed suit against VCR makers, but later made billions with VHS tapes, DVDs, and streaming video. Print publishers now reach more people than ever — but on digital platforms.
Today, television has evolved to a predominantly on-demand medium, having crossed the 50 percent threshold from live viewing a few years ago. People watch shows at a time of their choosing.
So, where is commercial radio in the vortex of digital change? It is at a remarkable inflection point; streaming and mobile are becoming giants and forcing the rethink of AM/FM-only distribution strategies.
Audio listening is growing, however, people are accessing and listening to audio on new devices that don't have AM/FM dials.
The "new radios" in the front of the store are smartphones and smart speakers and how people listen to audio on them is different than linear AM/FM.
People are accessing and listening to audio on new devices that don't have AM/FM dials
Since Marconi, commercial radio has been making content for one-time use — on the air and gone. According to multiple sources, less than 1% of commercial radio listening in PPM markets is to time-shifted audio. In an on-demand, Netflix-loving world, that doesn’t portend good things for radio.
According to Edison Research, 1 of every 5 minutes of audio is now heard on a smartphone — as streaming and podcasts become more popular, and in-car systems like Apple CarPlay proliferate, that number is certain to rise.
Smartphones have become audio entertainment hubs, not surprisingly, with the highest use among 18-34-year-olds. Anyone with millennials in their lives sees the generational shift and expectation with media to on-demand.
At the same time, another significant change is underway in millions of bedrooms, kitchens, and family rooms: “smart speakers,” led by Amazon’s Echo, are on fire. Over the years, radio has lost a great deal of at-home listening. With some imagination by commercial radio, smart speakers have the potential to increase at-home listening.
The category is so fertile, we partnered with Jacobs Media to create Sonic AI, a company that develops audio "skills" for smart speakers. Among the things people do most with smart speakers is listen to audio. That's great news. The choices, however, are vast and far greater than the local radio dial - 100,000 radio stations, 400,000 podcasts and music and spoken-word content with low commercial loads, from services including Spotify, Amazon Music, and Pandora,
This smart speaker audio "superstore" of choice, suggests that stations that simply "check the box" by putting their stream on the Amazon Echo and don't go any further will likely be disappointed and more significantly, miss out. The on-demand potential for these devices is significant.
Every platform has distinct attributes, and just slapping broadcast content on smart speakers and smartphones is not going to be enough.
The biggest potential win is the opportunity to share great, curated “bite-size” content and to develop original, device-specific content to entice people to engage with smart speakers. Local TV news has done a masterful job of using the same newsroom that creates the 6 o’clock news to develop distinctive content specifically for mobile apps and now, smart speakers. We like that type of thinking, for smartphones and smart speakers.
The "new radios" have opportunity written all over them: Most of the audience misses as much as 80 percent of a top-performing morning show’s content, so time-shifting top content is a natural fit. In PPM markets, content listened to within 24 hours is accretive to Nielsen ratings, effectively creating an opportunity for extra quarter-hours. That’s something radio has never had before.
Unlocking the potential of the "new radios" involves new strategies for each platform.
If you don’t believe me, just ask Alexa.