Internet Radio and Beyond

Thursday, April 19, 2012

The Changing Face of Radio's Ears There are more than a couple of items to discuss today. We'll hold things to the two most important. 1) Anyone with radio DNA is in awe of Dick Clark's contributions to multiple entertainment industries. I join all who mourn his passing; 2) Online radio is making more news and, for the radio industry, it's not the kind you will read about in trade mags. The headway gained by internet radio is starting to resemble a NASCAR driver pulling ahead - with the pack not sure if it needs to dip low and slow on the next curve or increase speed (with the possibility of calamity).

The most recent case of how internet radio is eating into the budget of the broadcast radio industry comes from Coca-Cola. It's "partnered" with Spotify in a "global initiative," and promises to "advertise Spotify globally via paid media and product packaging." Other app deals being worked by Spotify are with McDonald's, AT&T, Intel, and Reebook. "If you are in the broadcast radio industry, your choice is to shrug off this data or start implementing moves to counter the prediction." Spotify is not the only online radio company teaming with corporations, either. Pandora is "teaming" with many auto makers and getting the "P" in major ad campaigns. Microsoft and LastFM are getting together with an Explorer 9 web app. Slacker announces an integration with Bing. And, Live365 (the Rodney Dangerfield of internet radio) long ago teamed with Oprah Winfrey's Harpo Radio and multiple major artists who have branded their own stations. Examples are the Atlanta Symphony, Pat Metheny, and Carlos Santana. (My words to you: do not underestimate the power of Live365.) The common thread through all of these deals is that the broadcast radio industry is being left behind, for a reason. Change is all around. It's not the kind that will kill broadcast radio but it is going to have a profound impact on how traditional stations do business in the not-too-distant future.

I have a couple of stats to share which come from the current Audio Graphics internet radio listener survey; as the only continuously running survey of this growing group, it's important for the radio industry to pay attention to what's being said. From the deals spoken of above, it seems advertisers are. First, though, a sentence on how Google is revamping its audience analytics to offer an "alternative way of measuring the audience for online media by implementing metrics similar to those used in television." We not only have those who listen to radio changing patterns, there's also a movement for delivering to advertisers more familiar ways of packaging audience numbers. As with most everything reported at Audio Graphics, this comes with the warning of "ignore at your own risk." The Media Audit’s Phillip Beswick was quoted at the NAB/RAB as stating, "10% of people don't listen to broadcast radio." To add credence to what follows, I will state that 9.84% of internet radio listeners responding to AG's latest survey report they don't listen to broadcast radio either.

Now that I've got your attention, here are a few more facts. In our current survey of internet radio's audience Audio Graphics asked the following, the same question posed in 2006:





"If you label your TOTAL radio listening, what percentage of time do you spend with broadcast radio? What percentage with radio online?" With the exception of listening to broadcast radio 40% of the time, and internet radio 60% of the time, all other categories show interest in online radio increasing. Notice how listening to broadcast 90% and internet radio 10% has a dramatic 5.1% drop.

More people are spending less time with the traditional radio industry. Tracking what is being done and asking the radio listener's opinion of what they will do a year from now also offers some intriguing stats: "By this time next year, what do you see yourself listening to most?"

If you are in the broadcast radio industry, your choice is to shrug off this data or start implementing moves to counter predictions. From my perch there doesn't appear to be enough being done to counter. I continue to hear a repeated refrain: "Radio delivers local content that can't be duplicated online." It's a tired phrase that's not true anymore. From all of the above, draw your own conclusion.

My hope is that you see the dichotomy between what is happening in the radio industry and the rise - and staying power - of an iconic figure like Dick Clark. Dick did not sit on old ways. He changed everything that came in contact with him, constantly changing the lives of every one of his fans, artists he worked with, and advertisers.

As an industry, radio hasn't changed much in the past 60 years. It certainly has not offered advertiser anything different in approach to messaging, or in accountability of message delivered. That action is what the companies mentioned (at the start of this discussion) also have in common. Until/unless broadcasters stop defending where they've been, and begin charting new courses for what's ahead, there will be no change in these stats - except in favor of the internet. Each set of ears that's listening to radio is attached to a face and mind that's changing daily. The radio industry needs to follow this lead, or dip low and continue to slow. There's really no other option left.

Internet overtakes television to become biggest advertising sector in the UK Record £1.75bn online spend makes UK first major economy to spend more on web ads than TV, says IAB

The UK has become the first major economy where advertisers spend more on internet advertising than on television advertising, with a record £1.75bn online spend in the first six months of the year.
The milestone marks a watershed for the embattled TV industry, the leading ad medium in the UK for almost half a century. It has taken the internet little more than a decade to become the biggest advertising sector in the UK.
UK advertisers spent £1.75bn on internet advertising in the six months to the end of June, a 4.6% year-on-year increase, according to a report by the Internet Advertising Bureau and PricewaterhouseCoopers. To put this in perspective, in 1998, when the IAB first measured internet advertising, just £19.4m was spent online.
The internet now accounts for 23.5% of all advertising money spent in the UK, while TV ad spend accounts for 21.9% of marketing budgets.
The IAB originally predicted that internet ad spend would overtake TV at the end of 2009; however, the crippling advertising recession accelerated this by six months. TV advertising fell about 17% year on year in the first half, to about £1.6bn, according to the report.
The IAB's figures show that of the total of £1.75bn spent on internet advertising, £1.05bn, or 60%, was spent on search advertising on websites including Google, up 6.8% year on year.
Online classified advertising grew by 10.6% year on year to £385m, about 22% of total internet ad spend. But online display advertising, such as banners on websites, fell by 5.2% year on year, to £316.5m. This was an 18% share of all internet ad spend.
The ray of light within the online display ad sector was the nascent, but rapidly growing, online video advertising sector. The IAB estimated that this sector grew by close to 300% year on year, to almost £12m.
Thinkbox, the UK TV marketing body, has taken exception to the IAB's figures, arguing that the internet is now mature and diverse and it is inaccurate to collate all the figures as if it is one single medium.
"It is interesting but meaningless to sweep all the money spent on every aspect of online marketing into one big figure and celebrate it," said Lindsey Clay, marketing director at Thinkbox. "Online marketing spend is made up of many things, including email, classified ads, display ads (including online TV advertising) and, overwhelmingly, search marketing. They should be judged individually."
Guy Phillipson, the chief executive of the IAB, reckoned that there is still significant growth potential left in the internet ad market.
"We could absolutely see it grow to being a 30% medium [of share of ad spend], to go past £4bn to even £5bn annually," he said. "Online display advertising has plenty of room for growth."
Despite the seemingly inexorable rise of internet ad spend, a closer examination of the IAB's figures show that the recession has had an impact. In the first quarter £920m was spent on online advertising, representing 8.6% year-on-year growth. However, in the second quarter, spend fell almost £100m to £832m, representing only a 1.1% increase on the amount spent in the same period last year.
Adam Smith, futures director at WPP's combined media operation Group M, argued that the internet's share of total UK ad spend could be close to its peak.
Smith cited factors such as the increasing share of time that users spend on social networking websites, which have not attracted huge advertising spend, and the increasing saturation of internet penetration in the UK as potential limiting factors. "This day was bound to arrive, as the internet has been attracting a huge long tail of advertisers that have not advertised before doing completely new things," he said. "It is a memorable event. However, it is a bit simplistic to make this comparison [and] it is always possible that internet's share [of total UK ad spend] could go backwards if TV has a good year."
The UK is not the first country where internet ad spend has overtaken TV spend, Denmark reached the milestone about six months ago. But it is the first major economy to do so.

The Latest Online Growth Statistics
SSI mobile streaming, online radio, radio ads, radio growth

Some recent online growth statistics make it hard to refute that as a broadcaster, you shouldn’t be taking your online streaming seriously. It’s just not streaming anymore . . . it’s mission-critical. Listeners have come to rely on their ability to access quality, uninterrupted radio streams from anywhere in the world, via their desktop or mobile device.

Almost three-quarters of adults are now online, according to the latest report by HubSpot, with one-third of all consumers spending 180+ minutes a day on the web daily. According to our latest research numbers, the average online listener session for music is 81 minutes, and the average session for talk is 141 minutes. The peak time for these listening sessions starts to pick up around 9 AM EST, hitting a peak between 1 - 5 PM EST. This shows that the majority of online listener sessions are occurring during normal business hours, and not during the traditional morning and afternoon drive times.

Let’s look at the daytime primetime for mobile listeners; also peaking out at pretty much the same, but extending a little farther into the evenings. Again, a lot of the peak times for mobile listeners are occurring on or during business hours. So do you have mobile apps for smartphones? You don’t have apps for the smartphones? Which is it? I think you can tell where you should be on this one too. Chances are, you are streaming in some form or another, but are you set up to take advantage of the new ‘drive’ time? While everyone is ‘driving’ their day from their plushy office or mobile coffee shop WiFi hotspot, are you reaching them with a professional and quality streaming experience?

And look at the average dwell time of an online listener. We spend far more time at our desks (with certain exceptions of course) than we do in our cars. The online listener is also able to respond to multi-media interaction, calls to action, social media and other things that a listener has a hard time doing while driving. Plus, the ability to display media and target specific ads is one of the inherent features of a robust online presence. You have to be streaming online in order to reach these listeners, and you have to be doing it properly to make an impact.

As a matter of fact, many stations have still not broadly accepted the growth in online listening. Together with the right social media presence, you are sending a clear signal to your listeners that you are reaching across all forms of media to embrace them. Don’t forget that the weekly online audience has doubled every five years since 2001. Are you keeping up with that growth? If not, why not? All you need to do is make a few simple changes in what you are doing in the studio and on your website to make your station and stream more attractive and memorable.

More recent research shows that station owners believe that the best choice for making money for their station is online streaming. And the listener? The listener overwhelmingly believes that the internet is going to play a bigger part of radio in the future . . . to the tune of 96%. You need to not only be streaming (if you aren’t already), but you need to be streaming in 1) a quality, ubiquitous format like AAC+, with 2) the ability to engage your listeners with user-interactive features, and 3) monetize the traffic with advertising. Now, if you can do those three things, you will not only keep up with the online listener growth expectations, but be able to profit from it as well, if done correctly.

Online sites top newspapers for Americans—report
By Chris Lefkow
Agence France-Presse
First Posted 09:30:00 03/15/2011

Filed Under: Internet, Newspaper & Magazines, Advertising, Television, Infotech, mobile phones
WASHINGTON—More Americans are getting their news from the Internet than from print newspapers for the first time as audience figures for cable news programs fall, according to a report released on Monday.

The State of the News Media 2011 report by the Pew Project for Excellence in Journalism said that in another first, online advertising revenue topped that of print newspapers last year. Forty-six percent of Americans now get news online at least three times a week, surpassing newspapers (40 percent) for the first time, the report said. "People are spending more time with news than ever before," the report said. "But when it comes to the platform of choice, the Web is gaining ground rapidly while other sectors are losing."

It said only local television news is a more popular platform than online news sites with 50 percent of Americans citing it as their top news destination. The audience for cable television news declined substantially in 2010, the report said, with the median viewership falling by 16 percent to an average of 3.2 million in prime-time. CNN's median prime-time viewership fell 37 percent to 564,000 viewers.

Evening network television news audiences fell by 752,000 viewers, or 3.4 percent, from 2009, but network
TV news still attracted an average audience of 21.6 million people. Print newspaper circulation continued to decline in 2010 with weekday circulation down five percent and Sunday circulation falling 4.5 percent.

Print newspaper advertising revenue fell 6.4 percent in 2010 from the previous year to $22.8 billion while
newspapers made an additional $3 billion from online ads. "For the first time, more money was spent on online advertising than on print newspaper advertising," the report said. Online advertising grew 13.9 percent overall to $25.8 billion in 2010 according to figures from eMarketer. Circulation revenue for newspapers is expected to be flat or down marginally in 2010, the report said, after falling 10 percent from 2003 to 2009.

Despite sliding print ad revenue and circulation, newspapers "generally are still operating in the black," the report said, with profit margins around five percent.

On the job front, the report said US newspapers "trimmed only marginally in 2010" after cutting nearly a third of their staff in the previous decade. "We estimate losses of about 1,100 to 1,500 people, or three percent to four percent," it said.

Online news outlets, meanwhile, are hiring, the report said, citing AOL, Yahoo! and The Huffington Post, which was purchased by AOL for $315 million. Meanwhile, the number of ad pages sold across the magazine industry overall was flat in 2010 (down 0.1 percent) after steep declines in 2008 (11.7 percent) and in 2009 (25.6 percent), the report said. 

While fewer Americans are reading print newspapers, more are using their cellphones and tablet computers like Apple's iPad to get local news and information.  Forty-seven percent of Americans use cellphones or tablet computers to get information on local weather, restaurant listings, local news and sports scores and traffic conditions, the report said.  But only 13 percent of mobile device owners are using applications, or apps, to tap into local information, the report found, and just 10 percent of that group pays for an app -- amounting to just one percent of the total US adult population.

"Many news organizations are looking to mobile platforms, in particular mobile apps, to provide new ways to generate subscriber and advertising revenues in local markets," said Lee Rainie, director of the Pew Research Center’s Internet & American Life Project.