7

Why radio should sell music

sean ross 300x300 logoI hope Apple isn’t really getting out of the paid download business. I have a happy and long-running relationship with iTunes and the iTunes Music store. Thus far, Apple has denied the reports elsewhere that it might phase out paid downloads over a two-to-four-year period in an effort to convert more users to its Apple Music streaming service.

But maybe, regardless of Apple’s plans, radio should get into the paid download business.

I understand that the paid subscription model already works just fine for many people. My lovingly maintained collection of 15,196 owned songs is already viewed not just as an anomaly, but a pathology. Even some label friends tell me they enjoy the freedom of streaming, not owning, these days.

But, like vinyl, owned music will be a good business for somebody. From Adele to Beyoncé to Drake, each new superstar release (including those that begin as streaming exclusives) testify that many music fans want to own digital music, not just visit it. And there’s no pejorative intended in pointing out that radio’s most loyal customers are the upper demos who probably have most entrenched attachment to music ownership.

Good things happen for radio when music is available through retail. The iTunes Music Store provided a showcase for mainstream pop’s resurgence in the mid-‘00s, and with it a resurgence at top 40 radio. Bad things happen when music is less available for purchase. The travails of R&B/hip-hop radio over the last decade have many likely sources, but they do coincide with the decline of those genres’ one-time community retail stronghold (and the format’s fortunes only reversed once streaming helped generate the kind of stories that used to be created by music sales).

Radio has been selling music for a long time. Just not directly. No broadcaster claims it as a primary goal, compared to generating ratings and advertising revenue, but radio’s ability to create a sales story is certainly at the heart of its resistance to the latest music industry call for a performance royalty. No matter where you land on that issue, radio is more valuable to the music business if it can demonstrably generate purchases, and if there are still purchases to generate.

For nearly two decades, radio has also been looking for an above-board way to emulate retail’s selling of in-store price-and-position to labels. With its “On The Verge” programs for developing artists, iHeart Media seems to have found that. (And theirs is not the only artist program.) Making it easy to purchase the music is just completing the process.

Radio would benefit from access to additional purchaser info and the “box-office” report that sales provide. The willingness to commit to ownership, even at the 99-cent level, still means something different from typing a song and hearing a song once.

Radio would likely have the support of labels in this endeavor, especially those that have already made their own deals with broadcasters on streaming and over-the-air royalties.

Broadcast radio would have an additional functionality. The streaming of broadcast signals is a not insignificant attraction, but it has levelled off. In a world where Pandora offers podcasts and Apple wants to replicate broadcast radio with Beats 1, why should broadcasters not offer one-stop-shopping, literally?

Broadcast radio would have an additional source of income as major broadcasters stare down the leveraged debt issues created by previous regimes. That can’t be minimized, but music sales would represent a way forward for growth, not just further economies in radio’s on-air product.

iHeart Radio is a logical candidate for this. But they are not the only possible candidate. Offering the ability to purchase and organize music would be a hook for any broadcaster looking for a second act beyond streaming. It wouldn’t be ridiculous for Pandora to offer more than a click-through to iTunes or Amazon. But iHeart has the benefit of enormous cume and a major footprint in contemporary formats. Digital retail would be an increasingly logical outlet.

For years, Apple has been an easy inspiration on a slow day for those covering the radio business. The “be like Apple” column has been written so many times that one wonders what radio writers will do now that Apple now has issues of its own.  Now, I am ready to declare that radio should be like Apple in at least one key regard.

Sean Ross

7 Comments

  1. I’ve said for years that record companies are missing a bet not placing more advertising on radio for their product. What retailer wouldn’t love to be able to give potential customers samples of their product…especially to a pre-screened customer base (listening to a particular format) that clearly likes the product category.

  2. Sean, great article! I’ve always thought that radio would be best utilized by the labels to reach their target music consumers more effectively than almost anything else I can think of? When im in the grocery store and I taste a sample of some new food I like…I buy it! They usually have the food right there ( or nearby so I don’t have to look for it) to put right in my basket for purchase! Seems lke it would be beneficial for everyone involved.

  3. Sean Ross,

    Just want to say I enjoy your articles here! I must say that i read everything you write on RAIN but this is the first time I have responded to you! Don’t know if you remember but you were the first person to ever Write about me in a trade publication back in the 80’s I am still doing radio Working with Cox here in Atlanta and still doing imaging for over 72 stations nationally. And hereis where I say keep doing what you do, because to me you are one of the most Prolific writers of our industry and you always make your point!

    Thanks again for all you do even when you think no one is reading! YES WE ARE at least I am! (lol)
    Mitch Faulkner

  4. I actually looked into doing this at one point. What I found out is there’s no money in it. OK, there’s .03 per song sold. Not really enough to justify the staffing and platform cost. Apple does it as kind of a loss leader to drive hardware sales. Radio isn’t in the hardware business, so there’s no real upside. But that’s the sad truth, and a reason why so many retailers have left the business.

  5. This article got my attention and I definitely think this idea deserves some consideration. It would be a tremendous asset to all artists and a new revenue stream for radio. Radio could definitely fill avoid that has been left in retail

  6. Radio can sell anything. If segments of the advertising community aren’t buying ads, there’s no reason to not advertise our own new competing businesses. In the earliest days of radio, stations were owned by wealthy local companies and used to promote their businesses. This can happen again.

  7. Thanks Sean for Why radio should sell music. As always a real thought-leader l article.

    One of the huge frustrations in the pre internet days was record companies’ not properly servicing retail. They were most often just reflective order takers. The stations played new songs first from imports (a problem less relevant to the US markets) and quite often the local record companies had no clue as to whether they had the rights to the song. Stations themselves often did not reveal what they were playing beyond title and artist and enquiries often presented a dead end in the anxious search to buy it so we could hear it. Even when these facts were known, delays of 3 months between airplay and availability to purchase were not uncommon. One small market station (7EX in Launceston) promoted its own Record Bar, but that was an exception.
    Predictably the internet has changed it all. First music recognition apps make chasing down a song a breeze (I use Soundhound) and then I can verify the title using a streaming service as a prelude to play listing it and perhaps, ultimately purchasing. If that’s too slow and filtered a sales cycle for the music companies, consider that a slow payback for all the time their business model didn’t serve eager and cashed up customers. Surely a station sponsored deep vault could add to binding listeners to the format and create the purchasing relationship.

    With an equivalent library of vinyl (45s) we are outliers, but the habit of purchasing has been ameliorated by greater free access, information and personal control. But the principle of ownership as you’ve espoused in your May 18 article, still holds and there is a potential purchasing symbiosis for radio to develop.
    The quality of available music is an issue. True MP3 is OK for the Phone/player delivery ecology but a there are times when a richer format quality is worth the expense. Indeed with the rebound of vinyl sales, maybe that paired with an MP3 duplicate is a marketing package for permanent music collecting.
    Assuming radio is to sell more physical product, then the radio version as played on air, is sometimes quite different to the offered version (usually way too long). If the station promotes that version of the cut, it should be appropriately featured and available. Album cuts and remixes at the record company’s discretion.
    Kind regards
    Mark Newstead

Leave a Reply to Mark Newstead Cancel reply

Your email address will not be published. Required fields are marked *