Mark Ramsey: Radio’s Streaming Effort May Be Screwed – Part 1

mark ramsey author logoGuest columnist Mark Ramsey is a media strategist, research analyst, author, and producer of the annual Hivio audio future festival. This article was originally published on his Mark Ramsey Media website.

It’s one of the most disturbing results from the recent Triton streaming audio trends report, and most broadcasters are looking the other way.

This is the picture I’m talking about:

The charts show year-over-year streaming listening growth for pureplays (e.g., Spotify, Pandora, etc.) and for broadcasters.

And it clearly shows two things: Pureplay listening is rising rapidly – it’s up more than 16% overall year-over year; meanwhile streaming listening to broadcast brands – the very same radio stations that almost everyone listens to for at least some time in an average week – is down by more than 1.5% year-over-year.

We know that audiences are flocking to digital platforms. Record quantities of media are being consumed on those (largely mobile) platforms. This explains the dramatic increase for pureplay listening. 16% in one year is huge!

But if audiences and time and attention are flocking to digital platforms, how do we explain the clear erosion in the listening to radio streams?

Listeners are letting their listening do the talking for them. And what that listening is saying should chill you:

Radio is not getting more important on digital platforms. It’s actually getting less important. The growth rate is not just well behind the growth in pureplay listening, consumption of broadcast radio brands online is actually shrinking.

But why?

And what does that mean for you?

Consider this:

Your radio brand is ubiquitous and on a platform familiar to almost everyone who wants to listen to it. That platform is the one we call “radio” and that audience includes listeners within your signal radius. These people can and do listen to your station using the technology they have grown up with in the places where they have always listened. Digital access does not generally solve a problem for them because they don’t generally have a problem getting your station in the first place.

Meanwhile, what you provide via that digital access is the same thing with the same feature set as what can be heard over the air, so there’s not much reason to seek your content out on digital platforms.

See, digital is a place for content which is different from radio or more than radio. Not “better,” just different.

Digital is a place for audio entertainment to be enhanced by other functionality: It’s a place to get great podcasts you can’t hear on the radio and/or get them on demand; it’s a place to hear exactly the song you want and not wait for it to arise in rotation; it’s a place to avoid the chit-chat and dodge the onerous commercial load; it’s a place that recognizes who you are and what you want to hear without reducing those tastes to the lowest common denominator. It’s a place for you to experience something which is impossible through a radio alone. It’s a place for you to be your own curator and not rely on the wisdom of the crowd for music selections. In fact, the reason to listen to audio content on digital platforms is, in a sense, because it is not radio.

And here’s what else digital is not: It’s not simply a new distribution channel for your legacy content. The logic of your presence there should not only be “we have to be everywhere.”

Disney movies need to “be everywhere” because Disney movies are utterly unique. But the less utterly unique your brand is the less appetite there is for it to be everywhere because the more ways consumers have to substitute for your brand. So the single biggest driver for SiriusXM’s streaming platform is (I hear) Howard Stern, not the dime-a-dozen hits channel. If I want a stream of hits, there are literally thousands of places and ways to get one. Hits channels sprout like flowers in the springtime online. Does the world need another one? How many stations called “KISS” do listeners want on the iHeartRadio app?

I see this fallacy playing out on every new distribution channel that comes down the pike. Indeed, I see it again in the case of Alexa-style smart speakers:

Here’s the argument: Because Amazon Echo and Google Home and their like exist, and because they are voice-activated audio tools, and because consumer use of this category is growing, your radio station should be easily accessible there. “We have to be where the puck is headed,” right? And while this argument isn’t wrong (no, there shouldn’t be audio playgrounds where radio ceases to exist), it’s not as right as you think it is. And the reason is simple:

Just because a platform distributes audio doesn’t mean consumers want your audio on it. And if you want proof of that, look no further than the streaming statistics shown above.

Just because a platform distributes audio doesn’t mean consumers want your audio on it Click To Tweet

Let me put it another way: The perfect audio built for a radio experience is not necessarily the perfect cluster of features built for other experiences (and vice versa).

Too often we fail to see what’s right in front of our faces: The great thing about radio stations is that they’re built to be great radio stations, not great other things.

That means they’re built to be listened to passively, not actively (thanks for nothing, Nielsen PPM). They’re they’re built to offer the content that offends no one and satisfies the average listener most of the time. They’re built to be consistent around the clock (meaning you don’t need this content on-demand, it’s always the same and always on). They’re built to balance the desires of listeners (the customers) with advertisers (the clients). They’re built to provide a mix of services, not just one (e.g., information, community, entertainment, and music).

So that decline in streaming for radio brands is more than a blip, it’s a sign of the times. Small wonder iHeartRadio is exploring subscription services and podcasts – that – not streaming radio stations – is where the growth is.

So your streaming strategy may be screwed, irrespective of what digital platform you drop your audio onto. But now what do you do?

I’ll tell you tomorrow in Part 2.

Mark Ramsey

One Comment

  1. I get what Mark is saying, but the other lesson we’re learning from digital-only companies is you can’t put all your eggs in one basket. Even Apple has learned that although the iTunes store isn’t the cash cow it once was, they’re not shutting it down. Same with their curated stations. So radio stations have to keep reusing its content in multiple ways on multiple platforms, using social media, and not giving up on the towers & transmitters. They’re all revenue streams, and you’ll need all of them working together (or separately) to make money.

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