A Story

BIA/Kelsey: Radio stations are more than just radio stations

Wednesday, November 13, 2013 - 12:40pm

Local media consultancy BIA/Kelsey released a state-of-the-industry report titled “Local Radio Stations Profiles and Trends for 2014 and Beyond.” The study identifies an 11.5% share of local media revenue going to AM/FM. Vice President and Chief Economist Mark Fratrik, who authored the report, summarized the findings with a positive slant: “Local radio is surviving, and in some instances thriving, and poised to compete will in the new marketplace.”

RAIN spoke with Dr. Fratrik about the digital side of radio revenue, and how radio can thrive in an increasingly Internet-oriented market.

RAIN: Your report is optimistic about radio holding its own in a changing marketplace.

MF: We’re bullish on radio. It takes a different mindset to move into this new [digital] arena. Some radio stations are already thriving. At BIA/Kelsey, we’re very into the whole concept of radio stations being more than just radio stations. [They are] local media companies in many ways, providing access to [new] audiences to their advertising clients. One of the growing ways is certainly online activity, the digital area.

RAIN: The headline metric of the report is the 11.5% percent share of local media going to radio. Is there a breakout of how much is digital advertising?

MF: 11.5% was over the air, and 0.4% was online.

RAIN: When there’s a disparity like that, there are two ways to interpret it. One interpretation is that the online side is underperforming. A more optimistic view is that there’s great upside for digital.

MF: Glass half full, glass half empty, right? It’s interesting to contrast with newspapers. With newspapers you get a larger percentage of their advertising is online. Newspapers started earlier, and are being forced to go online because print is declining precipitously.

I think for radio it’s an opportunity. Radio’s core revenues are solid. It’s not great growth -- one-to-two percent a year. But digital represents great potential. Maybe radio was slow to move into [the digital space], hoping that over-the-air would rebound. But I really do believe that radio has great assets in the local marketplace that can lead to substantial revenues.

RAIN: Are there other challenges with a new medium, in addition to speed of adoption? You might have to develop new creative formats for advertisers, and to educate advertisers about new value propositions.

MF: I agree, but that doesn’t explain why newspapers have been able to make greater inroads into the online game. I would argue another reason: Transforming your entire staff to thinking beyond just over-the-air.

RAIN: Do you think newspapers have been more desperate?

MF: Very much so. [Many local papers have reduced publishing] to just three days a week. Necessity is the mother of invention.

RAIN: Do you have a view about how broadcast radio can build up the digital revenue side?

MF: Streaming is part of it. [Also] getting more traffic to the station websites. There’s no reason why radio stations can’t sell video advertising on their websites.

I also think broadening services to include what is collectively called “digital agency” activities. Being an advisor to small and medium businesses in the local marketplace. Explaining SEO, website development, how to run daily deals, what to do with your Facebook page. Broadcasters, with their local sales staffs, can get into these areas and work with local businesses. Some radio groups are [already] becoming digital agencies, providing other services to their advertiser clients.

RAIN: So the station would act as a local consultancy about digital realities.

MF: Right. And obviously, digital advertising would be part of it. But it’s not the only part. When you walk in as a consultant, you have more credibility. Newspapers are doing it, and some local magazines. Any media company with established local relationships can do it. The only thing limiting radio is creativity, and radio people have a lot of creativity.

Study: Connected car growth driven by diagnostics, not infotainment

Tuesday, November 12, 2013 - 12:45pm

A new, 120-page report has been released by iGR, a mobile market consultancy, titled “U.S. Connected Car Market Forecast, 2012-2017: Infotainment on Four Wheels.” The study predicts a compound annual growth rate of 142 percent for connected cars.

For the purpose of this study, iGR defined “connected car” with a strict meaning of that often-used phrase. RAIN spoke with report author and iGR founder Iain Gillott about what a connected car really is, what is driving its development, and the key question of whether dashboards will ever be standardized again.

RAIN: What does “connected car” mean to you?

IG: There are lots of car systems. Many of them are not truly connected cars. You take a smartphone into the car; you can do Bluetooth and run apps. That’s not what we’re talking about. The way we look at it, the car must have its own connection. The number of cars like that today is relatively small, outside of OnStar.

Having said that, things will change significantly in the next 24 months. We looked at all the car manufacturers, what they’re doing today and where they’re going -- in 24 months it’s going to be very difficult not to get Internet [built into] the car.

RAIN: The truly connected car, one which has Internet built in, is the roadmap of the future?

IG: Yes, I think so. What the car manufacturers want to do are things like car diagnostics for service and warranty. Engine management software updates. That obviously impacts their warranty and service costs significantly. If you can do an engine software update remotely, instead of issuing a recall and having the customer bring in the car, that’s pretty big. Pandora [and other infotainment apps] are nice, but the car companies are trying to do other things with the built-in connection. That’s the benefit to the car companies, rather than offering apps to the consumer.

When you look at some of the new cars like the Mercedes M-Class, the systems in it are amazing. Mercedes can look remotely at whether the car needs service. As opposed to, “Bring it in, we’ll take a look at it when we get a chance.”

RAIN: In that view, diagnostic apps are driving the connected car. Users and their in-car audio will be dragged along with that imperative.

IG: We surveyed consumers. Herein lies the problem! Knowledge of this sort of technology, and the systems available today, is low. Even navigation, which is highest-used in-car technology today, is used by only 30 percent of drivers. When we asked people to consider their current car and what they liked about it, the top three answers were: safety, reliability, and fuel economy. Infotainment features were just up from the bottom. When we asked people the same thing about buying a new car, we got the same answers.

The manufacturers are throwing infotainment in the car. But there is an education process that needs to happen with consumers, about why it’s good, why they need it. There’s a disconnect between what the consumers perceive, and what the car companies offer.

RAIN: All the car companies seem to be going in different directions. Will we ever get a standardized dashboard that anybody can understand when they first get in the car?

IG: Probably not. [laugh] But I’m not sure the rest of the car is really standardized. Beyond the speedometer and seat belts, there’s not much standardization. I’m not sure the OEMs want standardization in the car. It’s hard to imagine that Mercedes and Jaguar would have the same look-and-feel. They certainly don’t want that.

An inside view of Pandora’s ad production

Monday, November 11, 2013 - 12:20pm

Greg Cutler is a voice-over actor and producer who has been creating audio ads for Pandora since 2011. After a decade in radio (1981-1991), and taking a break for non-profit activities, Cutler returned to voice work in 2001. He operates a home audio studio with a whisper booth and digital recording/editing.

Cutler became involved in Pandora through the Internet’s version of cold calling. “I contacted Pandora by email,” he told RAIN. “Nothing happened right away, but six months later I got a reply saying, ‘You’re one of the voices we’d like to use.’ Suddenly I was producing spots for clients all over the country.

Cutler told us he has made over 100 ads for Pandora, at a pace of three to ten a month. We asked him for a glimpse into the Pandora realm -- specifically, how the company commissions and produces its commercials. We were also interest in the balance of local and national ad spots that Cutler has produced, in light of Pandora’s aggressive build-out of local sales offices. (RAIN coverage here.)

RAIN: Is Pandora a direct client?

GC: They are a direct client, and I am an independent contractor working at home. The days of going to studios and recording with the artistic director, and production guys, and six people watching over your performance, have dwindled.

RAIN: How does the direction work? Do you send multiple takes, and is there some back-and-forth?

GC: With Pandora in particular, they send me an order, with instructions for the type of [acting] delivery they’re looking for. They might say they want it to be upbeat, or subdued, or neutral and professional. It’s one-line direction. They’ll give me pronunciation keys and a link where you can hear pronunciation of a locale or somebody’s name. It is three takes per commercial. It can be 15 seconds, thirty seconds, or just a tagline. I get paid the same, regardless of length, and there’s a graduated scale for additional takes or extra tags.

Once I’m done, I separate the takes into individual files and send them [online]. I don’t have to do any treatment to the audio [after recording]. They do that at Pandora -- they have [in-house] audio producers. I’ve worked with about 10 of them. If I’m lucky, the producer will say, “That’s great,” and I get a notification that the spot has been approved. I send an invoice through Pandora’s invoicing system, and they pay with direct deposit.

In terms of direction, they’ll sometimes come back and ask for it to be re-done in a different way. I’ve been lucky. Maybe two out of ten times what I send isn’t right. I think Pandora is very tuned into the needs of their clients.

Pandora seems to have increased its number of audio producers. I don’t know where these people are, whether they’re working in their homes or in a central office. But the number of people who handle the audio after I’m done has increased. They have all been sensational people to work with. That’s my only interaction with the company, and I think Pandora likes it that way.

RAIN: Do you hear your spots on Pandora?

GC: I do. I’ve never asked them whether they’ve placed my voice outside of my own market, but I get a sense that they do. I’ve done things for the west coast, like the San Francisco Symphony. I’ve done spots for VISA Signature, Fandango theaters, Mazda. When the spots run nationally, people I know sometimes call up and say, “I think I just heard you on Pandora.” I’ve done a lot of universities all over the country.

RAIN: Do you have a sense of how many of your spots are local compared to national? Do you do more local copy, or more national copy?

GC: Again, I’m an independent contractor, so I don’t have access to their information, and I’m not speaking for Pandora, just for myself. But it seems to me that I’m doing more of local. I don’t know if that’s because of my shortcomings! Some of [the spots] have national scope, but many are hyper-localized. I do a lot of MBA spots for different universities, for example.

RAIN: How fast do you have to work?

GC: It’s usually 24 hours. I’ve done over a hundred spots, and about five have asked for [shorter] turnaround of two or three hours. Pandora is a fantastic client. What they get from me is quick turnaround. Unless I’m on vacation, I’m available to them pretty much all the time. If it’s a Sunday morning, and somebody says, “Can you do this?” -- I’ll do it. The orders come in at all sorts of crazy times.

RAIN: Is working with Pandora different from working with non-Internet based clients?

GC: It’s nimble and fast. My other clients -- we spend much more time. They might rely on me to come up with some of the creative, or I might have input on copy. Or, there’s more time on the phone receiving direction. Pandora uses a numbering system [to keep track of its produced commercials]. When I started in 2011, the numbers were small -- it might have been in the 099 range. Now, the number is 29,000. I don’t know if it’s a whole new system, but if the numbering is sequential, they’ve got to be going gangbusters. Having talent that can turn spots around quickly is a benefit to their advertisers.

RAIN: Do you work with any other streaming platforms?

GC. No. I tried to get in touch with Spotify. They use a lot of national spots, and they seem to have an in-house person who does Spotify promos. I reached out to them as I did with Pandora, and I never heard back.

RAIN: Are you a Pandora One [paid] subscriber?

GC: I’m not, but it doesn’t mean I wouldn’t want to be. The only reason I’m not is that I want to hear myself! [Pandora One subscribers do not hear commercials.]

iHeartRadio announces new head of programming, and discloses audience metrics

Friday, November 8, 2013 - 11:50am

Clear Channel-owned iHeartRadio announced today that Chris Williams, former VP of Programming for Clear Channel Cincinnati, is joining the New York office as SVP of iHeartRadio programming.

According to the press release, Williams will work on some of iHeart’s most-publicized programming ventures, including the live events that are streamed digitally, such as album release parties and the iHeart Music Festival.

On-site programming has been enhanced recently with features such as iHeartRadio Talk, and a concierge-style playlisting section called “Perfect For.” (RAIN coverage here.)

Today’s announcement also discloses audience metrics. The service has 40-million registered users. Registration is not necessary to listen to iHeart stations, so the actual usage footprint is certainly higher. iHeart claims to have reached the 40-million milestone faster than any other digital service except Instagram.

Digital radio infrastructure completed in the Netherlands

Thursday, November 7, 2013 - 11:50am

A press release from Harris Broadcast and Broadcast Partners today announced that the DAB+ (Digital Audio Broadcasting) infrastructure has been completed in The Netherlands. The Dutch government has set 2017 as a deadline for a national switch-over to digital broadcast.

The system uses IP (Internet Protocol) delivery rather than cable, which offers great signal delivery flexibility, according to the notice.

The Radio.nl website reports that some regional stations in The Netherlands might switch to digital by next summer. 

Rdio improves personalization of its iOS app

Wednesday, November 6, 2013 - 12:15pm

In the conforming world of subscription music services, many of which share the same broad features, it is easy to assume that they exist in parity, competing on the basis of design rather than function. But then one of those services will update one of its products, and it becomes apparent that it has lacked an important feature that might have existed on competing platforms for years. That was the case when Rhapsody recently introduced genre stations -- basic, belated, and nicely implemented.

In that context, a new update to Rdio’s Apple app is surprising, but welcome. Rdio now refines its playlist suggestions on the basis of the user’s listening history and social following. This refinement is crucial in any listening service which hopes to retain its users. When the service gets smarter about your taste over time, it plays better music and gains in value. Without that increasing stickiness, retention is more difficult.

Along with the underlying intelligence layer, the iOS app now makes a three-fold display of songs in the playlist. The current album art is surrounded by previous and next selections, enabling the user to swipe ahead to the next track, as illustrated in the screenshot. (You cannot swipe backward, alas.)

Syndicate content