Last Thursday at The Ad Age Digital Conference in New York City, Bob Pittman, Chairman of Media and Entertainment at Clear Channel Radio, the company I work for, called digital the biggest opportunity in the radio industry today.
Pittman’s words were a call-to-arms for an industry that has been slow to embrace advances in digital technology. A similar sentiment was echoed at the RAIN Summit this Monday by CBS Radio President Dan Mason. Mason stated that when it comes to digital, the radio industry focus should be on “re-educating and bringing along our own people and re-positioning this within the industry.” Digital listening, done online and on mobile, has long been considered a niche space by radio. However, the recent flurry of endorsements for digital from radio’s highest ranks suggests that this niche space is making a move towards the mainstream. The radio industry needs to proceed with urgency on this transition for several key reasons.
Media usage has changed and the audience is now firmly entrenched online and on mobile devices. The days of having to seek out specific forms of media are a distant memory. All content, regardless of the medium, is now readily and immediately available to consumers via smartphone. In their recent study “The Infinite Dial 2011: Navigating Digital Platforms,” Arbitron and Edison found that nearly half of today’s much-coveted 18-34 demographic own a smartphone.
That number will continue to grow across all demographics until the smartphone is ubiquitous. Consumer passion for the smartphone is undeniable. The same Arbitron & Edison research found that nearly 6 in 10 people who own one would sooner part with their television than their beloved mobile device. That statistic should come as no surprise considering television programming – along with all other forms of media programming – is increasingly instantly accessible on the smartphone.
Digital platforms provide opportunities to enhance a terrestrial radio company’s core competency. Yes, I’m referring to content! It might be inaccurate to claim that a lack of diverse and compelling content options on the AM/FM radio dial was singlehandedly responsible for the influx of new offerings and platforms as digital was born. Regardless, that perception certainly played a role in the eyes of the consumer.
Satellite and Internet radio found their wide audience, in part, by exploiting terrestrial radio’s reputation of having narrow and repetitive playlists. How? They emphasised the depth and quality of their content offering. Terrestrial radio must now do the same. Inevitably, superior content will merge with superior technology to form the optimal listening experience. That’s where this will all end up. Terrestrial radio must focus on fighting the content war, and digital platforms enhance the user’s experience.
Digital presents an opportunity, not a threat, for terrestrial radio companies. Contrary to what some industry executives might believe, radio listeners consume the same content digitally as when listening on a frequency. All that’s changing with online and mobile listening is the means by which they consume it. “The Infinite Dial 2011” report confirms the finding that online radio listening is a complement to over-the-air radio, not a substitute. The study concluded that 89% of weekly online radio listeners listened to over-the-air AM/FM radio versus 11% those who listened exclusively to online radio, and not AM/FM. While online only stations, commonly referred to as “pureplay” stations, are an effective means of adding depth and increasing listenership on a platform, they don’t do so at a cost to AM/FM streaming.
Finally, and perhaps most importantly, fighting the transition to digital is not a battle terrestrial radio companies can win. Rather than taking the failed record label approach of ignoring, or worse, attempting to force the hand of technological progress (I’m talking to you HD Radio), the radio industry should accept what it cannot change and use digital to its advantage.
Time will tell if the recent call-to-arms for a digital revolution from radio’s top ranks will galvanize the industry to make the transition with meaningful and significant urgency. The future success and relevance of terrestrial radio companies will depend on it.
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