TORONTO – The radio industry, electronic media’s elder statesman, is not in trouble and the sky is not falling, but radio broadcasters need to do a better job at promoting their advertising success stories to keep marketers from becoming too distracted by the “shiny, new toy” (a.k.a. digital audio streaming services).
That was the rallying call delivered by Erica Farber, president and CEO of the U.S.-based Radio Advertising Bureau, during an industry executive town hall session at the Ontario Association of Broadcasters’ Connection 2014 conference, held Thursday in Toronto. “Success stories work,” she said. “We do not do a good job of presenting our medium using success stories. We are all so afraid to share anything that we think would give away our secrets. Well, we really don’t have any secrets any more, guys.”
Farber added that digital streaming services “would love to have the results that we have… We are a great business, and we’d better be strong about it and fight for every dollar, because we absolutely deserve it” — a sentiment that was met by enthusiastic applause from the OAB conference audience.
Paul Ski, CEO of Roger Media’s radio division, added: “There’s no question that educated clients buy more (advertising) than uneducated clients.”
Ski said he sees streaming services as both complementary and competitive to traditional radio. However, he added, they will compete largely for a share of listeners’ time, and compete less for advertising revenue.
“That’s kind of the key issue, how people are spending their time,” he explained. “There are a lot of streaming services out there… I think there will be a big consolidation. Maybe in the end there will be three or four or five of them, and I think that it will take a particular amount of time away from radio. But I don’t think it’s going to be a large share, quite frankly, at this particular point.”
Google’s recently acquired Songza audio streaming service was the sole digital pure-play represented on the industry executive panel. Vanessa Thomas, head of Songza in Canada, said she believes traditional radio and digital audio services will end up working together.
“The next six to 12 months for streaming in this country is going to be unbelievable. It’s in its infancy right now, and it’s really going to explode.” – Vanessa Thomas, Songza
“Everybody is trying to get to the consumer, and I think the best way is for us to find a way to do it together,” Thomas said. “In terms of streaming services, trying to find that telco deal, who will be the first one to get to the connected car? The next six to 12 months for streaming in this country is going to be unbelievable. It’s in its infancy right now, and it’s really going to explode.”
When asked by the panel moderator, former CRTC commissioner Rita Cugini, what sort of impact the connected car will have on traditional radio, Vista Radio president Geoff Poulton responded: “It’s significant if we don’t get our shit together.”
Poulton went on to say the problem is the radio industry in Canada doesn’t have a cohesive approach to addressing new platforms, such as the connected car.
“We need to aggregate all of our Canadian stations into one platform. So we don’t make people download the Rogers app, download the Vista app, download the Corus app. Why would we make them do that?” he asked. “I shudder to think how much money our companies have spent developing individual radio apps in the last decade. It’s millions and millions of dollars,” Poulton said.
Farber pointed out that auto manufacturers, such as Ford, don’t have a standard dashboard for all of their car models — “Ford has 34 models and they have 34 unique dashes,” she said, adding that consumers will want control over their in-car listening experience and will ultimately decide what they want on their dash. For example, when Ford decided to remove dials from its first connected dashboard, consumer demand forced the car company to add dials back into its dashes.
She added traditional broadcasters shouldn’t just expect automakers to include radios in future car models either. According to Farber, Internet radio company Pandora has actively lobbied the automotive industry to include support for its digital music service.
“We (traditional radio broadcasters) never had relationships with the people who were manufacturing and making decisions (about) what goes in an automobile. This is a whole new world for us,” Farber said.
Poulton said he feels the radio industry in general has taken its audience and its advertisers for granted. “We’ve rested a little bit on our laurels through the halcyon days of AM/FM radio and here we are at a crossroads,” Poulton said.
“You can put your money in Facebook or Twitter easily. But radio rings cash registers.” – Geoff Poulton, Vista Radio
“There are a lot of sexier things right now to put your advertising dollars in,” Poulton said. “You can put your money in Facebook or Twitter easily. But radio rings cash registers.”
Ski added: “Some of the metrics in some of the digital opportunities are a little fuzzy… and some people have come to the realization that maybe they’re not getting quite what they would expect.”
On the metrics side, the role of broadcast audience measurement companies will change with the advent of digital streaming services, said Jim MacLeod, president and CEO of Numeris (formerly BBM Canada). Measuring digital audio and video consumption “broadens the scope quite considerably,” MacLeod said. “(Measuring) what amount of radio is being consumed online versus what is being consumed live on the air, that’s in beta right now,” MacLeod said. “But the streaming services, we’re not measuring at the moment. It’s the next step.”
The CRTC was represented on the panel by Ontario Commissioner Raj Shoan. When asked by Cugini if the emergence of streaming services will require the CRTC to augment or alter its broadcast regulation, Shoan said it’s far too early to say. “In the last 12 months, we’ve seen Shaw work out a strategic partnership with Rdio. We’ve seen Google purchase Songza and launch Google Play. We’ve seen Apple buy Beats…We’ll soon see Pandora launch in Canada. So there’s a lot coming down the pipe,” Shoan said.
“I don’t think you’ll necessarily see regulation (change),” Shoan said. “The numbers do indicate (radio) revenue has flatlined and I think it will probably be flat for the foreseeable future… but radio for the most part is a healthy, mature industry.”
He added that research gathered by the CRTC indicates 85% of Canadians still listen to traditional radio on a regular basis.
“So radio has a fantastic value proposition,” Shoan said. “It’s hard to compete against free, and if you’re a free service that offers local content and really connects with your community, I have to say it’s extremely difficult (for streaming services to compete with that).”
