Kurt Hanson’s “State of the Industry Address” identifies digital opportunities

RAIN News founding editor Kurt Hanson delivered his semi-annual State of the Industry Address at RAIN Summit Indy last week. In addition to expected Star Trek references, and a disconcerting Star Wars mention, Hanson drew trendlines, isolated an important consumer demand across all media, targeted problems with certain industry products, and suggested solutions.

The fulcrum of Hanson’s key points was a repeated invocation of what consumers primarily demand: “Consumers want online delivery of a deep-variety, personalizable product.” That maxim drove the reasoning and science of the presentation, and splintered into several examples — newspapers, magazines, music, movies, books, and even coffee — where legacy businesses are being supplanted by comapnies that deliver “deep-delivery, personalizable” products.

Turning to AM/FM and Internet radio, Hanson projected a crucial crossing of two closely scrutinized trendlines: the decline of the former (charted as hours per week), and the rise of the latter. Using multiple data sources, Hanson predicted the lines would cross in six to eight years, when online radio’s Average Quarter Hour metric will equal FM’s:

Hanson cited smartphones and smart cars as forces driving consumers to online audio sources, and argued against reticence in adopting new business and product models, quoting a warning in The Innovator’s Solution by Clayton M. Christensen: “By the time the legacy firms decide to jump in, it’s too late.”

Kurt Hanson grappled with specific products when he dove into HD Radio (FM’s digital broadcast solution in the U.S.) and NextRadio (a mobile FM-tuning app available in some phones).

Hanson listed four problems in the marketing and implementation of HD Radio:

• The name is a misnomer
• Its “secret channels” are too secret
• The channel numbering system is unwieldy
• Programming is unmemorable

And with those, a set of solutions that involve changing ownership rules, tuning schemes, branding conventions, and the inclusion of AM channels, which hanson says are dying.

Then cam NextRadio, which Hanson calculated to have an AQH rating of 0.1 listener across the U.S. Here again the problems were identified:

• The name is wrong
• It solves unimportant problems (battery conservation and data-plan expense)
• Users don’t want to use a $600 device for a $20 purpose

Hanson’s recommendations are to rename the app, emphasize the emergency alert system inherent to radio, and focus on car dashboards.

More broadly, Hanson identified upside for opportunities in online radio to achieve that consumer mantra of “a deep-variety, personalizable product.”

First, create as differentiated position in the market — Hanson used his own company, AccuRadio, as an example, citing its targeting of an older demographic of working professionals. Hanson also evangelized the advantages of being a genre specialist, targeting a local market (as many pureplays highlighted in this site do), and venture to international regions.

Listen to Kurt Hanson’s keynote address: