Posted on 08/15/2014 3:28:44 AM PDT by raccoonradio
Way way back, I think it was about 1998, I made a prediction in Radio Ink that talked about how one day all of radio would be digital and online and we would see a time when AM and FM stations were no longer the primary means of distributing our programming. I went so far as to say that some would sell off their properties because they were no longer needed. I got lots of hate mail on that one.
Yesterday, Disney, one of the world's most respected media companies, sent a signal to the media and advertising world that could be devastating for radio. Essentially, they said they are selling off their AM and FM signals because they no longer need them, since only 18 percent of listening is coming through AM and FM. The rest is coming from digital or satellite.
Let me restate that.... One of the world's giant media companies is saying we no longer need AM and FM stations because our listeners are digital. Ouch. This is the first time in history where there is actual action from a radio broadcasting company to remove AM and FM from their distribution. It's the first sell-off of AM/FM properties because their listeners are digital.
A GIANT MEDIA COMPANY SAYING RADIO DOES NOT MATTER
If you think this is some tiny story that does not matter because no one really considered Radio Disney a major player in radio, think again. This isn't about Radio Disney, really, it's about a GIANT media company that owned radio stations, sending a signal to the world that radio is no longer important to listeners.
Yeah, but....
We can find lots of "yeah but" statements to tell why this really isn't a big deal, but those will fly under the radar. Media will ignore that Radio Disney was not a giant part of the radio landscape, they will ignore that Disney has so many other distribution channels like their TV networks to drive digital listening, they will ignore that theirs is just one research study, or that there is other research, which indicates that digital is not impacting radio listening that much yet.
What they will pick up is that Disney research, which is probably believed to be the most credible, only indicated that 18 percent of listening was coming from AM and FM, and since most was on AM they may send a message that AM is even less valuable. That can't help, especially in light of BMW's recent announcement that AM is being removed from their new electric car.
IS THIS THE END OF RADIO?
I'm already getting the calls from the analysts, board members, advertisers and investors.... Is this the beginning of the end of radio?
Should we sell off our stations while we can?
This just proves that digital is crushing radio. Something seemingly so small as Radio Disney is sure bringing a lot of attention to the concept that young listeners are not using AM and FM radio.
If nothing else, it's a huge arrow in the back of AM.
THE VOICE OF DISNEY CREDIBILITY
If this were some small company that no one ever heard of, this would fly under the radar. But since it's a respected media company that has decided to shed radio as its distribution channel, it sends a giant signal about how they feel about radio.
Radio, of course, will state its case about its continued strength, its growth, its relationship with listeners, its domination of the car, and all the other expected arguments, and as always it will appear defensive because it's coming from us, even though there is truth and fact to support much of those arguments. The fact that it's radio people saying it is a lot less powerful than Bob Iger saying, "Disney is selling radio stations because our listeners are listening online." (Note: There has been no statement from Bob Iger that I'm aware of, but when Disney makes a major move like this, he would have to bless it.)
RADIO'S PR NIGHTMARE
This event is just another continuing part of radio's ongoing PR problem. Yet nothing, it seems, is being done. No giant PR firm is making radio appear hip and relevant in this digital era, no campaigns are reinforcing radio's story. Instead, many advertisers and business owners are are being told and believing that radio is dying. Just yesterday the head of one of the world's largest advertising agencies told me, "Pandora is doing a better job getting face-to-face with the advertisers and telling their story than the entire radio industry. Whether any of it is true or not, they are presenting data radio does not have, showing exact listening times radio does not have, and able to identify exact listeners in exact zip codes and deliver custom ads to those listeners; plus have they have a huge team in front of the customers and are making enormous progress."
On top of this is the giant automotive issue where the big car brands are putting Pandora and Slacker in their dash, and where, since our DASH conference last year, Google and Apple have entered the space to own the dash and dominate its audio.
RADIO NEEDS TO OWN THE PRESS, NOT JUST THE AIRWAVES
Radio needs a giant PR and ad budget now. It needs to be handled by a major New York advertising conglomerate and it cannot be about using radio to promote radio.We always default to that alternative, yet we need to own the press, not just the airwaves. It needs to hail radio's relevance and find powerful stories that are believable and third-party research not related to any radio company or radio research company that builds credibility for its case. And it needs a giant team that is out meeting and promoting radio in a relevant fashion. Rather than trimming the RAB budget, the industry needs to increase it. Radio has a very capable leader in Erica Farber who needs to be empowered to take on this PR nightmare by directing the world's leading ad and PR professionals in a massive radio relevance campaign. I once heard that Pandora was spending $18 million on PR and yet the entire RAB operating budget is a fraction of this, and there is probably zero devoted to PR.
PERCEPTION VERSUS REALITY
Am I overreacting to the Radio Disney announcement? I hope so. I see it as a major PR nightmare for radio (and definitely AM Radio), and a reminder that there will be more things in the future supporting the digital world which reinforce radio's declining distribution, whether true or not. Remember: It's perceptions that people believe, not reality, and it is perception which needs to be changed.
Some wonder if deep in debt Clear Channel may give up on the likes of Rush in a couple years when his contract is over. (They had to move shows like Rush to a weaker station in LA...)
There are a couple comments to the article that say that maybe this isn't huge news, no surprise at all, and maybe the sky isn't falling:
---
Eric, Let's put this in perspective. Disney bought a bunch of AM Radio stations, many with questionable coverage. They do this to program to an audience of teens and pre-teens with the premise that this group has a ton of money to spend and/or influence the spending of their parents. The programming is good. AM does not reach that audience. They lose money. They decide to admit they were wrong and cut their losses. It is a business decision. No further discussion is necessary.
- Hal Widsten
Whereas on the Internet (digital), the message can be sent without the nasty environment. True, there are anti-business messages on the internet, but they are generally not on the same page as the internet advertisement.
Radio and TV are abusing their funding (Business Advertising) with the usual results being in perpetual decline.
The part of the article I found disturbing was BMW dropping AM altogether. Besides Rush and Vickie McKenna, I want traffic reports, I want a signal when I am driving through North Dakota and Sakatchewan.
It costs NOTHING to have AM in the car receiver. Maybe the antenna has to be a little larger for decent range. This was a decision made to project a certain image.
I don’t want to have to pay a monthly fee for news, traffic and talk.
I want AM in the car, oh and bring back a straight bench seat option while you are at it.
Talk radio pretty much has saved AM radio.
Four observations:
1. I live in Germany and note that FM thrives...mostly off music (rock, opera, jazz, interview formats), and AM is already dead. At best, I can get maybe six channels across the spectrum in clear format, and there’s no reason in Europe to own a AM station.
2. Having lived in the DC area for a couple of years, I can say that FM only has a couple of formats that ensure listeners. Music to some degree works, but sports, news, and conservative chat are what most rely upon to make the bucks. People have a couple of favorites and they don’t necessarily check around to find some new format or style.
3. With the exception of local religious radio stations, extremely rural areas, and local college stations, I’ll predict by 2030 that AM is mostly dissolved on business impact. I’ll even predict that all cars manufactured by 2030 will only have FM or satellite capability.
4. The big news here? It’s not just AM that is dying....the big three networks (ABC, CBS, and NBC)....are also dying. Like the newspaper and magazine business, they have a very limited future.
I can’t wait until someone realizes that society doesn’t need morning show or any news show personalities anymore...we need credible news from credible sources that doesn’t have politics weaved throughout...THAT WOULD BE GREAT!
MTV did away with the radio star in 1982...these things happen!
I haven’t listened to the radio since sometime in the mid-nineties. The songs all sounded similar. The commercials were annoying. Most of what they played was not engaging enough to sit through even on a long drive. The disc jockeys were really annoying. I have a postage stamp card in my radio with anything I’d like, including books.
Very insightful thread topic. Look what happened to analogue TV. Damn govt. got involved in conversion to digital. The future demographics will tell the tale. We older folks grew up on radio but the kids today are major online users. AM and even FM radio may decline or perhaps be digitized and received as such in autos.
As a kid used to carry around a small transistor radio—they are about obsolete now.
Yes, news and entertainment are mostly online (right here at FR).
But the mobile internet does not reach everywhere. I cannot stream programming into my car as I drive across the northern tier of Pennsylvania or upstate New York.
Right now, satellite radio provides me with a large selection of entertainment, talk, news, and traffic (even in areas where local stations do not cover traffic). So, for someone who travels, that is very important to me.
But, once we start to have satellite internet coverage, even satellite radio will be challenged.....each person can customize what they want to hear. That is the epitome of individual liberty and how capitalism makes the most of itself....by catering to the individual.
AM/FM radio required advertisers to target “groups” of people....not very effectively. TV targets “groups” of people.
The internet targets individuals, based on your searches, favorites, etc. (let’s avoid the privacy issues for now).
So, the internet caters to INDIVIDUALS while radio/TV cater to COLLECTIVES.
In business, when you can cater to the individual more than your competition, you will win every time!
That is the secret that our founders utilized....giving power to the individual over the collective.
It works in both government and in business.
Too many commercials, and annoying ones. It’s telling that Clear Channel launched hot country stations in Boston and Pittsburgh and they’re non-commercial for now to attract
new listeners—and the Boston station doubled its ratings in one month. But when they come back...oh, time for a commercial break, a LONG one.
Songs indeed sound similar, especially the modern stuff like Fla Georgia Line, Luke Bryan etc. Annoying DJs, yes; and radio has them read off liner cards, not act like people who can be your friend. There’s a disconnect...
I have been a DJ on a non-comm college station since 1981
and play interesting stuff and engage with my audience. We aren’t slaves to the ratings books. And I joked on air that while the country station will eventually drop their non-commercial streak, we won’t...and yes people do need to have money but the big companies like Clear Channel etc are not doing it right, and are suffering these days.
” Look what happened to analogue TV. Damn govt. got involved in conversion to digital.”
Now there are areas that get no broadcast TV, it’s satellite or no signal.
It's not all BMWs, it's just for electric cars where BMW engineering was not up to the task of reducing or eliminating the electromagnetic interference coming from their electric motors and associated circuitry.
“But, once we start to have satellite internet coverage, even satellite radio will be challenged.....each person can customize what they want to hear.”
The satellite internet will be infused with commercials you will be forced to see/hear. The advertisers won’t let their market escape without a fight.
There’s a couple of things this article leaves out.
1) Terrestrial radio signal streaming via the internet. Primarily this is done via iHeartRadio.com and is my primary means of listening to WOR in New York while at my desk; even while being at my office in NYC.
iHeartRadio.com puts on a giant music festival in Las Vegas every September with current pop stars. If there is to be a PR campaign for terrestrial radio, it should be in combination with streaming.
2) When I do listen via a broadcast signal, I’m tuned into the HD signal on FM. WABC - AM in New York is simulcast on 95.5,HD2. Unfortunately WOR does not have HD space on FM.
So if BMW is including a radio that can access standard FM signals as well as HD Radio, then that’s probably OK.
All that said, I like antenna broadcast radio for security and subversive reasons. As the article states, it easy to know who exactly is listening to a streaming audio channel. That means it’s easy for a government agency to track who is listening.
Also, should there be a major failure of the Internet infrastructure (I know it’s designed not to), it’s possible to still communicate one to many via a power generator at the signal source and a battery in a receiver.
As the father of teenagers, I do find it unfortunate for them that the shared media experiences that I had with friends at that age are much more fragmented now. I don’t know what kind of cultural touchstone they’ll have in common when they get older.
Progress.
“The part of the article I found disturbing was BMW dropping AM altogether.”
Wow. Why don’t they just include a “complimentary” (and mandatory) lifetime subscription to NARAL and GLADD when you buy their car.
Freepers that are good actors could have a lot of fun with BMW - show up at the dealer, go all the way, about to buy the car, and then ask “oh yea, I forgot, let’s go back to the floor so that I can listen to your AM reception”. And then walk out, after telling the dealer that you won’t accept an aftermarket mod, as they generally are not reliable.
I do that that — listen to digital — now.
I have 3 radios and none of them can pick up many stations. I live very close to a local religious station and it drowns out many others.
Now, I use a program called RadioSure and listen via my laptop and/or desktop. It plays many US and foreign radio stations.
Of course, that is capitalism. But those commercials will be tailored to YOU, so they will be a little more interesting than the pablum created for "groups" you see on TV currently.
The reason AM radio has endured all these years is greater range. Satellite radio pretty much nullifies that.
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