TORONTO – Despite the flat growth experienced in the radio industry for several years, radio still has an opportunity to prosper in the new reality created by the encroachment of audio streaming services and the emergence of machine-to-machine connectivity.
That’s according to industry analyst Scott Cuthbertson, chief financial officer of e-Radio, who spoke at the Ontario Association of Broadcasters’ Connection 2014 conference in Toronto on Thursday. “We’re staring down the biggest opportunity we’re going to see in media in our lifetimes, and I think radio is in a very central position to take advantage of that,” said Cuthbertson (formerly the media and telecom analyst for TD Securities).
Cuthbertson outlined his vision for how radio could reinvent itself to become “the backbone of the Internet of things”, by identifying its core competency and leveraging its competitive advantages over online players.
“So what’s radio’s core competency?” he asked. “It’s reliably communicating timely information to millions.”
Cuthbertson listed radio’s competitive advantages as: privacy, ubiquity, economy, reliability and safety. He expanded on these points to say radio’s one-way communication means there are no privacy issues, and radio networks are up and running everywhere, making them ubiquitous.
In terms of economy, “on a one-to-many basis, I don’t think there’s any cheaper way to reach a mass audience,” he added. “It’s very, very tough to compete with radio on price, and the infrastructure works and is in place.”
And again, radio is reliable and safe, he said. “You turn it on and it works.”
Cuthbertson (whose company also lists former CHUM Radio VP Duff Roman as EVP broadcast operations) highlighted some of the ways radio’s underutilized capacity could be used to send information directly to machines. “One of the lowest hanging pieces of fruit is utility messaging,” Cuthbertson said, adding that radio could provide the means for communicating real-time electricity pricing to household appliances and SmartMeters – and not by sending them the latest hits…
To improve customer relationship management and cut costs, radio could be used to help car manufacturers handle automotive recalls by sending notification messages to the radios installed in the cars needing to be recalled, he continued.
"One of my suggestions, if I may, is to use this lemon and make lemonade out of it.” – Scott Cuthbertson, e-Radio
Government-mandated emergency broadcasting systems are another way radio could make a push into the machine-to-machine space, too. “One of my suggestions, if I may, is to use this lemon and make lemonade out of it,” Cuthbertson said. “The government is mandating that you provide a secondary service to provide emergency messaging to people… So you can communicate, using another channel, with everybody in your region, the important stuff like there’s a tornado coming or other things, limited only by your imagination.
“I think that could be the catalyst towards getting radio to become the backbone of the Internet of things, just that one thing,” Cuthbertson said.
Finally, radio needs to leverage all of the FM chips installed in newer-model smartphones that are often disabled by carriers. Smartphone users could receive stock tips, weather information and traffic reports via those FM chips. “It’s another way to communicate with people broadly. You don’t need more bandwidth, you don’t need a lot of expense. This is very, very high-margin, additional new revenue,” Cuthbertson said.
He concluded by saying if radio doesn’t reinvent itself before the window of opportunity closes, “something else will become the backbone, and you guys will be left on the sidelines to play music,” he said. “I think Radio 2.0 is going to be the most exciting chapter yet.”
