Happy New Year! One easy prediction is this: 2015 will be an eventful year for all stakeholders in online audio.
RAIN is pleased to present 43 predictions from 21 thought-leading guest futurists:
- Patrick Reynolds (Chief Strategy Officer, Triton Digital)
- Brian Benedik (VP, North America Advertising, Spotify)
- Simon Cole (CEO, 7digital)
- Alexandre Saboundjian (CEO, Radionomy)
- Alexis van der Wyer (CEO, AdsWizz)
- James Cridland (Radio Futurologist, U.K.)
- Jim Griffin (Managing Director, OneHouse & co-founder, Pho)
- Steve Goldstein (Executive VP, Saga Communications)
- Alan Cross (President, Brain Dead Dog Productions; digital music journalist)
- Tom McAlevey (Founder, Radical.FM)
- The 8tracks Executive Team (David Porter, founder; Jonathan Barnes, director of partnerships, David Johnson-Igra, director of marketing)
- Gordon Borrell (CEO, Borrell Associates)
- Angus MacDonald (Senior Counsel, Intellectual Property at University of California)
- Roger Lanctot (Associate Director, Global Automotive Practice, Strategy Analytics)
- Adam Sachs (CEO, Midroll Media)
- Paul Goldstein (Founder, PG Audience Development)
- Jack Isquith (SVP Strategic Development & Content Programming, Slacker Radio)
- Scott Burnell (Global Lead, Business Development & Partner Management, Ford Motor Company)
- Matt Cutair (CEO, AudioHQ)
- Jennifer Lane (CEO, RAIN Enterprises & Founder, Audio4cast)
- Kurt Hanson (Founder, AccuRadio & founding editor, RAIN)
We offered no direction, so the grouping of these predictions was shaped by the predictions themselves.
Audience Share & Competition
“Continued acceleration of Online Audio consumption Globally & in US as audiences migrate to personalized music & spoken word experiences.” Brian Benedik
“Between Edison Research’s ‘Share of Ear’ study and Nielsen Audio becoming more forthcoming with its trove of national data, we’re going to start getting a clear picture, for the first time in years, of the exact size of the slow but steady decline in weekly Time Spent Listening (TSL) per capita that AM/FM radio is experiencing. Consumers will slowly but steadily continue to spend less time with radio delivered via AM and FM and more time with radio delivered to their smartphones, tablets, and other connected systems (e.g., Sonos, Roku, etc.), much of which will be personalizable (for music) or on-demand (for talk), and all of which will have a lower spot load per hour.” Kurt Hanson
“For 2015, I am predicting the battle for TLH (total listening hours) and TSL (time spent listening) heads everywhere that it can follow eyeballs, ears and wallets. The back of Uber cars was just a beginning, with beacons leading the way to spaces like restaurants, elevators, retail, and other public performances.” Jim Griffin
“Sometime within the next year or two, at least one AM/FM broadcasting company will decide to go head-to-head with Pandora.” Kurt Hanson
“FM/AM radio stations will retain almost all of their audience in spite of being ‘old-fashioned,’ and tech writers everywhere will be surprised that they’re still operating. What decline there is, however, will be confined to music-intensive radio services.” James Cridland
“Radio won’t have a bad year in 2015, unless of course we have a mild recession, as some economists predict. The main reason for radio’s stability is the see-saw relationship between spot pricing (relatively cheap) and ROI (incredibly high). In an incredibly fragmented and noisy marketplace, radio still drives results. That’s good. On the digital side, I continue to be disappointed by the lack of creativity and, frankly, denial by many radio managers that digital will ever amount to anymore than 3% of total revenues. Only a few groups seem to “get it” and are developing digital padding for what’s likely to be a rockier future.” Gordon Borrell
“With a 1 billion market in the US, traditional broadcasters and Internet companies will finally wake up and start the market consolidation.” Brian Benedik
“With the commoditization of playlists, curation & personalization, a powerful new, defining characteristic will emerge. Suddenly, on-line radio’s audience will leap ahead of forecasts, creating at-once both a crisis for FM radio and a booming success for online radio.” Paul Goldstein
“Apple will launch iBeats (or whatever they call their on-demand streaming service) and surpass Spotify’s number of paying subscribers. Spotify will rush their IPO or suffer a significant reduction in valuation as a result of going public after the iBeats launch.” Tom McAlevey
Advertising & Monetization
“In 2015 audio moves from fun and cute, to marriage material for advertisers. New standards will be ushered in, processes put in place, and tighter connections forged between buyers and sellers of the space, both equally committed to going where audience already is.” Patrick Reynolds
“Online audio advertising has been around the block for a while. But until recently most advertisers were still mostly buying brands. In 2015, we’ll see the continued rise of audience buys in which advertisers target specific audience demographics or behaviors regardless of the content or channel. The availability of advanced targeting capabilities combined with 1st and 3rd party data and rich tracking abilities allows audio advertising to catch up with display and video.” Alexis van der Wyer
“Programmatic — while in its infancy for audio — will make inroads and complement more traditional ways agencies have been buying the media.” Alexis van der Wyer
“The major labels are clearly reviewing existing on-demand relationships and could sour on free on-demand tiers. If this proves to be this case, consumption pattern revert to the tried-and-true, with free, ad-supported radio being the driver of discovery (for listeners) and promotion (for artists), which in turn feeds the on-demand consumption of subscribers (vs downloaders or CD purchasers).” 8tracks executive team
“Pandora will continue its growth in listenership and its even greater growth in monetizing its audience. Its sales staff of hundreds of top radio salespeople will continue to get higher and higher CPMs, as advertisers realize its effectiveness (thanks to short stopsets, accompanying visuals, and targeting).” Kurt Hanson
“There will be innovation of audio-specific creative for brands to interact with consumers.” Brian Benedik
“Advertisers will increasingly want to see audio as a key element of their multi-media marketing campaigns and not as a stand-alone feature. The ability to seamlessly combine and report across different media and enable retargeting will strengthen the value proposition of online audio for advertisers.” Alexis van der Wyer
Music Licensing
“For 2015 alone, SoundExchange will collect over one billion dollars in royalties! And these royalties are only from ‘statutory’ services, like Pandora and Sirius XM. A related prediction is that Pandora’s royalties to SoundExchange for 2015 alone will be over $500-million.” Angus MacDonald
“Statutory Rates for the next five-year period will closely follow today’s PurePlay rate, and the phrase “noninteractive” will win SoundExchange an award for ‘Most Misleading Descriptive Term’.” Tom McAlevey
“The back of Uber cars was just a beginning, with beacons leading the way to spaces like restaurants, elevators, retail, and other public performances. As these become digital services, they begin paying for the use of sound recordings — or else. It will prove the next battleground for proper payment for sound recording rights. The reasoning here is simple: With AM/FM sticks on the wane, their owners will chase crowd wherever they can find it, competing with the likes of Apple, Google, Spotify, Microsoft, Deezer and more along the way. They’ll need ubiquity and more to convince sponsors they have the laser-focused machine gun they need for targeted ad dollars aimed at mobile audience on-the-go.” Jim Griffin
“For the first time in U.S. history, the Copyright Royalty Board (CRB) will issue a decision that reasonably balances the interests of webcasters, copyright owners, and the general public, thanks to the fact that is this the first time in CRB history that both sides (webcasters and copyright owners) are represented by matching-quality legal representation.” Kurt Hanson
“Toward the end of 2015, a rate decision will be handed down by the CRB. It’s hard to predict the outcome, but we’re hopeful it recognizes a significant discount of on-demand rates and allows lean-back radio offerings to exist on a standalone basis, whether big or small, and not as a loss leader for an unrelated business model. A big change in rates could well trigger a wave of M&A among remaining services. The major labels are clearly reviewing existing on-demand relationships and could sour on free on-demand tiers. If this proves to be this case, consumption pattern revert to the tried-and-true, with free, ad-supported radio being the driver of discovery (for listeners) and promotion (for artists), which in turn feeds the on-demand consumption of subscribers (vs downloaders or CD purchasers).” 8tracks executive team
“At the end of 2015, when the Copyright Royalty Board (CRB) announces the streaming rates for ‘statutory’ webcasting services for 2016-2020, the CRB will — for the first time — announce a royalty rate based, in part, on a percentage of revenue (as opposed to solely a per-performance fee) that will apply to most commercial webcasters. The problem for webcasters, however, is that the statutory rate (I predict) will be based on a ‘greater of’ formula between a per-performance rate and a percentage of revenue rate.” Angus MacDonald
Mobile & Cars
“2015 will be the year of smartphone integration in cars. Apple CarPlay comes to town, Android Auto, MirrorLink and a host of proprietary systems from car makers. It all means that drivers will become less dependent on AUX IN connections to access streaming or pre-recorded content. Bluetooth and USB connections in 2015 will set the stage for Wi-Fi connectivity in 2016 and beyond. All of the complaints about lousy interfaces and confusing connections will begin to fall away as new car buyers and owners and dealers start to ‘get it’ — especially in the context of streaming audio being the go-to demo for most dealers (ie. Pandora). Pandora is the gateway drug to streaming content in the car. The pressure on broadcasters to get more creative will be immense and intense. Time to go digital, stream, put your content wherever your listener is or wants to be. It’s a challenge. It’s expensive. But 2015 will mark a clear turning point when the preponderance of connectivity platforms for IP streaming finally reveals the future for what it will be and is fast becoming. The only thing working in the favor of radio is the fact that it takes a decade to replace the cars on the road. All that radio has working in its favor is the inertia of the installed base against the momentum of smartphone connectivity. Fasten your seatbelt.” Roger Lanctot
“Consumers will begin to be more conscious of the bandwidth they use (on mobile) – as bandwidth usage continues to increase by 60% year-on-year, network companies become more bandwidth conscious, and networks continue moving their customers off unlimited data. Google and Apple will tweak their operating systems to use less bandwidth as a result, and ‘how much bandwidth does it use?’ will be a question more users ask of streaming media.” James Cridland
“In Car Dashboards continue to diversify with integrations of major streaming audio companies. The in car streaming experience will have less friction and better value to consumers in 2015.” Brian Benedik
On-Demand, Podcasting & Talk
“On demand is in demand! Look for 2015 to be about choices in online audio. From podcasts to personalized programming, interactive advertising to programmatic buying, the next year will be about the platforms that enable listeners and advertisers to refine their options. Everything else – audience measurement, technology, revenue – will circle around the importance of flexibility that puts the audience and the advertiser in control.” Jennifer Lane
“2014 was a big year for podcasting, and 2015 will be even bigger.” Adam Sachs
“Digital media has long offered end users the ability to consume content with various levels of control ranging from linear feed to pure on-demand. In music, on-demand has quickly become a key component for an important portion of the audience. And popular music services have built experiences offering end users the required flexibility and control. However other types of audio content such as spoken words have lagged music and are still primarily consumed in a linear fashion despite the success of several prominent podcasts. In 2015, we can expect the coming of age of the ‘on-demand’ spoken words.” Alexis van der Wyer
“Audio on demand will continue to grow. Think along the lines of time shifted forms of video such as the DVR or on-demand services such as Hulu and Netflix. It is clear what is happening to video. In the world of audio, there is podcasting (please, do we have to call it that?). It is the natural progression of the digitization of audio and it just had a seminal Milton Berle moment (“Uncle Miltie” was credited with selling more televisions than anyone else as his TV show rode to great popularity in the 1950’s) with This American Life’s Serial program It has over five-million downloads and more significantly has generated a ton of talk and awareness.” Steve Goldstein
“Spoken word comes to online music services in a big way- 2015 may be the year that the larger online music services begin to integrate spoken word content (news, sports, commentary, entertainment, etc) in their platforms. On-demand audio has generated a lot of buzz this year and live event content has performed very well so I think it’s only natural to expect that music services will begin to move towards a more diverse content model especially if the upcoming music royalty decision goes the wrong way for them.” Matt Cutair
“Podcasts like Serial and Marc Maron’s WTF interviews with comedians will remain a trendy niche product, but will continue to grow in popularity and as an art form.” Kurt Hanson
“In 2014 Serial became the podcast that transcended the podcast audience, truly breaking through to the mainstream. Importantly, it helped to break the story–which we in the industry have known for years — that the medium is profitable. So, in 2015 I think there’s going to be a rush into the space by many different players. More high profile talent will see it as a viable medium to reach large audiences, and also make money. High-traffic publications like Buzzfeed (perhaps) will make it part of their strategy, while MCNs will be figuring how to translate their properties into podcasts. New startups will create technology for podcasters and listeners, and we’ll see investors wanting to get into the space. 2014 was a big year for podcasting, and 2015 will be even bigger.” Adam Sachs
Programming
“Human curation is going to become a big part of 2015.” Simon Cole
“We will continue to see YouTubers and podcasters break out as personality stars, while terrestrial radio struggles to develop talent. As companies big and small further invest in audio, listeners will continue to have an amazing choice of options and niches.” Jack Isquith
“Spotify will not be just audio, but also video to compete with YouTube/Vevo.” Alexandre Saboundjian
“High-Res Audio may actually have a pulse. After years of having to deal with digital files that are deemed good enough, the pendulum may be swinging back towards proper high-fidelity recordings. Deezer’s high-res streaming sounds brilliant as do Sony’s new audio products. Audiophiles who have been largely neglected by the shift to digital music may finally see things to start going their way. Now if we could only convince iTunes to deal with FLAC and other best-sounding formats.” Alan Cross
“Neil Young’s PONO, a good idea ten years ago, will fail in the face of On-Demand services offering full lossless CD quality streams to music aficionados.” Tom McAlevey
“In 2015 people will realize that the human creation skills that are core to the radio industry, are also skills which are incredibly valuable in the streaming music industry. Human curation is going to become a big part of 2015.” Simon Cole
Other Predictions & Humorous Asides
“By the end of 2015 the culmination of CRB rate discussions, in-vehicle listening habits, and platform listening preferences of the youngest generations will result in the term ‘Streaming’ to mean the same as the word ‘Radio’ in much the same way that ‘Smartphone’ = ‘Cellular Phone’.” Scott Burnell
“In the first half of 2015, the biggest stories may well be YouTube’s and Apple’s on-demand services — the two biggest threats to unseat Spotify, the former given its massive, youthful listening audience, and latter given its pricing power and credit card database.” 8tracks executive team
“In 2015, Belgian Beer will stay the best beer in the world.” Alexandre Saboundjian
“I have one thing that I WISH would happen in 2015. I wish the industry would embrace Pandora, Spotify and other companies. They’re currently treated like a poisonous subspecies, when in fact they’re actually helping expand radio listening. We have to stop beating them up — and advise them to stop trying to beat up their own industry. Pandora’s audio advertising revenue is twice as much as Entercom’s and six times bigger than Saga. And they grew ad revenues by 41% this year. They probably compete less with local radio stations than local radio stations compete with each other. But wishes aren’t predictions, and I’m not holding my breath for this one to come true.” Gordon Borrell
“Star Trek: Axanar will get a theatrical release, and Kurt Hanson will emerge from the movie theater blinking and shaking his head in a confused manner, muttering something about continuity with the Hidden Frontier TV series.” James Cridland