1

2014 Predictions

Happy New Year! One easy prediction is this: 2014 will be an eventful year for all stakeholders in broadcast and Internet radio.

RAIN is pleased to present predictions from thought-leading guest futurists: Patrick Reynolds (Chief Strategy Officer, Triton Digital), Jim Griffin (Managing Director, OneHouse & co-founder, Pho) Paul Brenner (SVP/CTO, Emmis Communications), Michael Robertson (CEO, Radio Search Engine and DAR.fm), Paul Goldstein (Founder, PG Audience Development & ex-VP Programming, CBS Radio), Rusty Hodge (Founder & GM, SomaFM), Kurt Hanson (Founder, AccuRadio & founding editor, RAIN), Jennifer Lane (CEO, RAIN Enterprises & Founder, Audio4cast), Matthew Lasar (Co-founder, Radio Survivor), Bob Bellin (President, Clarity Communications).

We offered no direction, so the grouping of these predictions was shaped by the predictions themselves.

ADVERTISING — Internet radio advertising grabbed new interest in 2013, and is a significant area of interest for our guest soothsayers. From spot loads to pre-rolls to CPMs, 2014 could be a year of change and new ways to monetize audio.


“2014 will be the year that ad revenues see serious increases.”

“Google will add pre-roll ads to all popular songs on YouTube.”

“More of broadcast radio’s top ad sellers will be poached by online radio rivals.”

“Consumers have flocked to pureplays as a way to avoid commercials.”

“More dollars and higher CPMs will be spread over new web-only publishers as well as the stronger existing offerings who continue to evolve and steal share from the weaker.” Patrick Reynolds

champagne 01 150h

“2013 was the year that streaming audio moved from niche to more mass appeal. 2014 will be the year that the ad revenues see serious increases. Both established players like Spotify and Pandora, and new players like Apple, are putting substantial focus on streaming audio ads. Programmatic buying platforms facilitate ad buys. Major new players like Beats and YouTube will bring more attention to the space. The year ahead promises significant gains for streaming audio revenues.” Jennifer Lane

“Streaming pureplays will move towards ad-serving and localism, while FM streamers need to be more like pureplays. Spot loads and ad-based services will be prominent for pureplays in 2014. FM streamers need to simulcast FM to eliminate the bad breaks in streaming and need to look for ways to reduce spot load for streaming. Consumers clearly believe everything should be free and have flocked to pureplays as a way to avoid commercials.” Paul Brenner

“Google will add pre-roll ads to all popular songs on YouTube to monetize the many YouTube framing websites, but also to push signups to their forthcoming music subscription service.” Michael Robertson

“As the flow of ad dollars from FM to online radio companies grows, more of broadcast radio’s top sellers, especially in the top 20 markets, will be poached by their online radio rivals.” Paul Goldstein

COMPETITION — A crowded streaming landscape will get more jammed as new music services enter the U.S. market. Profitability is elusive even for established players. Everyone wants massive audience growth. How many winners can there be in the online space? Alongside the Internet audience-grab is AM/FM’s competitive stance, as it seeks to maintain listener share by leveraging broadcast’s historical values and new distribution avenues.


“2014 is the year broadcast radio will be rocked to its core.”

“There will be further consolidation in the pureplay field.”

“All-you-can-eat subscription services will show continued growth … Spotify and Rhapsody and Rdio and Beats Music slugging it out for on-demand music.”

“By the end of 2014 venture capitalists will have a clearer view of which stand-alone music services can survive.”

“Even with a non-stop flow of marketing for subscription services, it will be the ad supported music services that continue to grow.”

“Internet radio listening in cars will take a big leap forward.”

“2014 is the year broadcast radio will be rocked to its core. The migration of listeners from FM to online will continue to surge, far exceeding last year’s forecast (for 2014) of 159 million weekly listeners. The decline in the amount of time people under 30 spend with broadcast radio, will escalate. Broadcast radio’s “attention crisis” and the differentiation issue among online radio services will be addressed with original content innovation coming largely from non-broadcast audio media companies, further accelerating the audience shift from FM to online radio.” Paul Goldstein

“There will be further consolidation in the pureplay field; with the new combined TargetSpot/Radionomy buying merge 150wLoudCity and/or Live365. Triton will shoot back, buying whatever services like Live365 that TargetSpot leaves behind, possibly Backbone Networks. Shoutcast.com will be taken over by Slacker. Slacker channels will be added to the Shoutcast directory and tuning service which is used by a ton of radio apps. [Editor’s note: This prediction, essentially correct that ShoutCast will find a buyer and continue to operate, was submitted before today’s report of a Radionomy acquisition.] I also expect TuneIn to be in play, possibly purchased by CBS to compete with Clear Channel’s iHeartRadio. Rusty Hodge

“All-you-can-eat subscription services in a variety of media categories will show continued growth — Netflix for movies, Hulu Plus for TV shows, NextIssue for magazines, Spotify and Rhapsody and Rdio and Beats Music slugging it out for on-demand music.” Kurt Hanson

“By the end of 2014 venture capitalists will have a clearer view of which stand-alone music services can survive. Spotify is comfortably positioned with a major new investment and strong brand recognition among jukebox services. Pandora and iTunes Radio enter 2014 as an Internet radio duopoly. YouTube will bring to market a very interesting product with a gigantic existing audience and deep pockets. All others will struggle to scale.” Brad Hill

“Even with a non-stop flow of marketing for subscription services, it will be the ad supported music services that continue to grow. Beats will launch with much celeb fanfare but only the most modest of subscriber uptake even though they announce they’ll accept Bitcoins. Spotify will join a dozen other high-profile tech companies with an IPO in 2014. They’ll concede a profit is nowhere on the horizon with their music business but will tease investors with promises to launch a video service targeting Netflix.” Michael Robertson

“Internet radio, led by Pandora, will make amazing progress getting into the automobile dashboard.  Internet radio listening in cars will take a big leap forward when it’s controlled by the screen in the center stack of the dashboard.” Kurt Hanson

INNOVATION — As listening continues to evolve, perennial questions resurface. What is radio in 2014? How does AM/FM fit into the future?


“2014 will probably look a lot like 2013.”

“The future of ‘Internet radio’ will continue to be measured in vague terms, delaying a clearer sense of the medium’s progress.”

“Flat year for AM/FM.”

“Innovation will mostly be hardware-driven.”

“Some predictions are easy. There will be more streaming and less downloading.”

“Flat year for AM/FM. NextRadio (the Emmis-led service supporting the FM chip in certain Sprint smartphones) will have trouble getting over the chicken-or-egg problem. It could be a nice service if all broadcasters supported it (with album art, metadata, etc.), but if it has only an AQH of a few thousand people nationally (i.e., an AQH of one or two listeners per local station), will broadcasters spend the time and money it takes to support it?  If not, more consumes won’t embrace it.” Kurt Hanson

“NextRadio FM-enabled smartphones will grow dramatically in 2014.” Paul Brenner

“The future of ‘Internet radio’ will continue to be measured in vague terms, delaying a clearer sense of the radio 01 150wmedium’s progress. Is Pandora radio? Is YouTube radio? Is SoundCloud radio? When we say ‘radio,’ what are we talking about in the year 2014? Given the major differences between individualized music services and actual 20th-century style radio stations, these are significant questions for investors, innovators, regulators, and entrepreneurs. I think that we should ask them more often, but that’s easier said than done.” Matthew Lasar

“Innovation will be mostly hardware driven with techies finding clever ways to deploy Bluetooth LE and USB-PD which will provide building blocks for the internet of things.” Michael Robertson

“2014 will probably look a lot like 2013. Consumers will make it clear that they love on demand streaming of radio and on demand type music services and adopt them more and more. Meanwhile, artists will pile on claiming that they’re not making any money from them, labels will defend taking as much as 70% of their revenue as fair and balanced and not one will show a profit. This adds up to the obvious yet painful conclusion that there is no current business model for streaming music.” Bob Bellin

“Some predictions are easy. They anticipate the arc of history: There will be more streaming and relatively less downloading, because just-in-time availability obviates our need to have and hold.” Jim Griffin

LICENSING — In the 2014 music business, the cost of content represents an urgent issue for both suppliers (musicians/labels) and distributors (on-demand and Internet radio services). In the U.S., the government regulates broadcast and webcast royalties. As online listening becomes mainstream, is the current licensing framework fair and sustainable?


“I predict music licensing starts to resolve itself in 2014. This is the easiest prediction of all because it simply could not possibly get worse.”

“The hand of Adam Smith will whip the herd together into better, easier licensing.”

“The only place with any wiggle room is the label’s piece of the pie.”

“Pandora will keep being Pandora, with the exception of starting to direct-license tracks in light of the increase in SoundExchange fees. As part of the direct licensing deals, Pandora will give enhanced placement to certain content.” Rusty Hodge

“The only place with any wiggle room is the labels’ piece of the pie which I doubt they will consider changing.” Bob Bellin

“Some predictions are tough. They anticipate real, fundamental change, and switching direction: More money for adam smith 01 150wmusic, for example. Unification that brings faster, simpler licensing. This sort of thing takes courage, a triumph of hope over experience. I will be bold about 2014, thinking the hand of Adam Smith will whip the herd together into better, easier licensing, bare-minimum registries that help us find those from whom we need permission or addresses to send checks. Market theory says we’ll get this solved without distracting government, but the House Judiciary Committee says it’s devoted more time to music licensing than any other subject. Yes, they really said that!

I predict music licensing starts to resolve itself in 2014. I confess this is the easiest prediction of all because it simply could not possibly get worse.” Jim Griffin

“It will become increasingly clear that online radio services expose consumers to new acts that they are then willing to pay for (either by buying CDs, MP3s, or listening to via an on-demand subscription package), just like AM/FM radio has always done, and that royalty rates per track should be lower for radio and higher for the subscription services.” Kurt Hanson

Brad Hill

One Comment

  1. Hi! I could have sworn I’ve visited this web site before but after
    going through some of the posts I realized it’s new
    to me. Nonetheless, I’m certainly pleased I stumbled upon it and I’ll
    be bookmarking it and checking back frequently!

Comments are closed.