Hanson

iTunes Radio may be an example of Apple's embrace of "disruptive innovation"

Monday, September 9, 2013 - 11:45am

Apple tomorrow will hold its press event at which (most expect) it will unveil its new iPhone models. Shortly thereafter, the new mobile operating system will go live, and with it, the long-awaited iTunes Radio Internet radio service (more in RAIN here).

ITunes Radio represents a shift in direction for Apple's music interests. Apple's most successful musical service, undoubtedly, has been its iTunes Music Store, with which it has become the world's largest music retailer. And while iTunes Radio doesn't mean Apple is abandoning download sales by any means, it likely shows that Apple understands the "disruption" in music consumption, as music moves from a "product" to a "service." Billboard's Glenn Peoples (online, and in further detail, in the magazine) describes Apple's move in terms of Clayton Christensen's influential book The Innovator's Dilemma.

[RAIN publisher Kurt Hanson has written and spoken about applying the book's ideas in Internet radio in the past, like here and here.]

Peoples wrote: "In order to succeed in the streaming marketplace, Apple has to risk killing the music download business it has dominated for the last ten years. With the launch of iTunes Radio, Apple shows it understands the future of music is streaming. iTunes Radio is not necessarily an iTunes-killer -- Internet radio is generally believed to complement music purchases -- but is a first step toward the kind of streaming service that could eventually replace the iTunes Music Store."

Read more online here.

Hanson speaks at (and sends photos from) the New Music Seminar in New York

Tuesday, June 11, 2013 - 12:30pm

RAIN publisher Kurt Hanson is in New York this week for the New Music Seminar conference, and sent along a couple snapshots.

Kurt spoke yesterday on a SoundExchange-presented panel called "The Digital Radio Explosion – The Fuse is Lit." The panel was moderated by Andrew Hampp, Senior Correspondent, Branding, at Billboard. Joining Kurt on the panel were Brian Benedik (Head of U.S. Ad Sales, Spotify), Rick Song (EVP of Digital Sales, Clear Channel), Alex White (CEO, Next Big Sound), John Rosso (President, Market Development, Triton), Steven Kritzman (Sr. VP of Advertising Sales, Pandora), and Sara-Beth Donovan (VP Director of Media Mintz + Hoke).

You can see thumbnail photos of Tommy Boy Records founder Tom Silverman's State of the Industry opening speech; and panel discussions "Music Subscription: Getting To A Billion – Building A Strategy For Success" and "SoundExchange Presents: Radio on the Edge."

Click the thumbnail photos to see the full-size image. Check out the panel descriptions and rosters (so you know who's in the photos) here.

Below: Tom Silverman on stage.

Pictured below: "Music Subscription: Getting To A Billion – Building A Strategy For Success." Pictured left-to-right: Moderator Stephen Bryan (Executive Vice President, Digital Strategy and Business Development, Warner Music Group), Mark Piibe (Executive Vice President, Global Business Development and Digital Strategy, Sony Music Entertainment), Sachin Doshi (Head of Development and Analysis, Spotify), Jim Cady (President & CEO, Slacker), Andy Chen (CEO, WIMP), and Jon Irwin (President, Rhapsody).

Below: "SoundExchange Presents: Radio on the Edge." Pictured left-to-right: Mike Dougherty (CEO, Jelli Radio), Kevin King (Fuzz.com), Stephen Valenta (Reporting/Finance/Ad Ops, 8Tracks), Eric Davich (Co-Founder/COO, Songza), Paul Campbell (CEO, Amazing Radio), and moderator Corey Denis (VP Digital Strategy & Marketing, Toolshed).

Hanson advises Summit on 7 key trends and 7 action items to get us to the year 2020

Monday, April 22, 2013 - 1:10pm

The year 2020 sure sounds like the space-age future, but so did "2000," remember? (If our calculator is to be trusted, it's less than 7 years from now!)

RAIN Summit West attendees heard Kurt Hanson's "'new-for-2013' State of the Industry" address in which he encouraged broadcasters and webcasters to make a plan for 2020, based on seven key industry trends and seven possible "action items" to get there.

Kurt Hanson is CEO of multi-channel webcaster AccuRadio, and publisher of this newsletter. His "State of the Industry" speech is a recurring feature of RAIN Summits.

Kurt cited several specific, quantifiable changes in consumer behavior that he says are key to understanding where radio might be in 2020. Chief among them is the explosive growth in Americans' consumption of online radio.

Based on the latest numbers from "The Infinite Dial" (Edison Research and Arbitron, read more here and here), 86 million people now listen to radio online weekly. That's a third of the U.S. population, and 253% of what it was just five years ago. Online radio's time-spent-listening (TSL) has nearly doubled since then, to almost 12 hours a week.

Multiplying the number of listeners by the time they're spending listening, and you see online radio listening is almost 500% higher than it was five years ago.

Next, Kurt brought in listening measurements for leading webcaster Pandora from Triton Digital's Webcast Metrics. Pandora is now up to a 1.6 million "average quarter hour" (AQH -- which can be understood as "the number of listeners at an average moment"), which is about equivalent to an eight-share of all radio listening (In other words, in your market, about 8% of those listening to radio right now are listening to Pandora).

"It's an undeniable trend," Hanson said. Looking to a 2020 plan, broadcasters can see this consumer behvavior "as a threat, or as an opportunity."

A second key consumer trend Kurt spotted is the "primacy" of mobile phones in people's lives ("This is basically a full-featured personal computer that is 4 oz and fits in your shirt pocket," Kurt said.).

The remaining key trends include (3) our "world of on-demand variety" (in which consumers are offered 42 types and flavors of Crest toothpaste and at least 12 versions of Cheerios cereal); (4) the rise of the tablet as a media-consumption interface; (5) "open" car dashboards (that is, car makers won't limit Internet and mobile access to a single, select technology vendor), and (6) "near-infinite" bandwidth (ever-increasing connectivity via mobile and wi-fi).

The seventh "reality" professionals should understand in creating their "2020" plan: there are "billion-dollar" opportunities out there, evidenced by the fact that online radio has produced its first billion-dollar brand, Pandora.

The public company's market cap is more than double the combined market caps of the country's top-five biggest "pureplay" AM/FM radio groups (Cumulus, Entercom, Saga, Beasley, and Radio One): $2.1 billion compared to $1.2 billion.

"Again," Hanson advised, "you can see this as a threat, or as an opportunity. You can build a brand like this." As a public company, Pandora's historical financial reports are easy to access. Anyone can "see how they did this," Kurt said.

The matter of sound recording royalties remains the biggest threat to all of this, however. But Kurt offered this: "I believe it's going to be resolved, because in the debate on royalties over the last decade, musicians and net radio have been on opposite sides -- but for musicians, Internet radio is one of the best things that have happened to them."

Given the royalty arrangements in place today, one million "performances" on Pandora would yield an artist about $600. Webcasters lobby for royalty relief, and the record industry calls for higher payouts. But Kurt argues that this tug of war on this price point (should it $500? $700?) misses the far greater value artists get from those plays.

By way of demonstration, Hanson showed how it's possible that one million "performances" of a talented but niche-appeal band like Chicago's Canasta could result in an eventual payoff of $980 thousand over time.

[For go over the math with Kurt, please listen to the audio of his presentation here, at the 22:30 point]

On the matter of Apple's likely entry into webcasting, Kurt suggested "it might be great for all of us." He cited other battles between brands -- like when two CHR stations in the same market go head-to-head -- as being great for the product category.

Looking to create a plan for 2020, Kurt offered broadcasters and webcasters seven "action items" they might incorporate into a strategy.

First, define radio "inclusively." When limited to AM/FM, "radio" does not appear to be a growing industry. But when segments like online and mobile are included, and growing and aggressive companies like Pandora, radio is healthy, growing, and well-positioned for the future.

Second, as you look for growth opportunities in online radio, maximize the value of AM/FM signals. "Be live, local, and linear," according to Kurt. "Linear," in this case, means a focus on content that makes sense in an "in-sequence" presentation (talk, sports, most news).

You'll need to (3) build a great team, and (4) be ready to embrace new business models. "You'll be better off if you can be flexible and embrace new approaches" to ad sales and programming.

Next, when entering a new product category, it's best to come up with a new name, and specialize the product to a specific consumer market, Kurt offered. Consumers perceive that "specialist" brands (think McCormick & Schmick's seafood restaurants, or Ruth's Chris steakhouses) are of higher quality in their focused segment.

(6) Be prepared to take that brand global, and (7) have the guts to gamble.

"Don't wait until it's a sure thing to get started," Kurt said. "Don't take the 'wait-and-see' approach to develop your '2020 vision.'"

Listen to Kurt's "State of the Industry" speech (and all thet content from our recent RAIN Summit West) on SoundCloud at KurtHanson.com (look in the right-hand column).

Our next event is RAIN Summit Europe, May 23 at Hotel BLOOM in Brussels. Event information and links to register are here.

IAB brings agencies and Net radio sales pros together for Digital Audio Agency Day in Chicago

Wednesday, October 10, 2012 - 12:05pm

RAIN publisher Kurt Hanson will make the first presentation this afternoon at the IAB Digital Audio Agency Day, here in Chicago. Hanson will give a twenty-minute version of his "The Future of Radio" address before the afternoon's first panel discussion. (Hear the full version of Kurt's "State of the Industry" address on SoundCloud here, or look for the link in the right-hand margin of RAIN.) 

The first of the day's two panels is "Streaming Audio Consumer Experience & Advertiser Environments," moderated by former Katz 360 Sales President Brian Benedik, with AdLarge CRO Eric Ronning, Pandora Regional VP/Sales Gabe Tartaglia, and CBS Local Online president (and recipient of the 2012 Triton Digital RAINMaker Award at RAIN Summit Dallas) Ezra Kucharz.

The second panel, "Beyond the :30 Spot," features Starcom VP/Media Director Cecilia Bizon, Walgreens Director, Media Services Christine Kubisztal, and Luna CMO Jason Pruismann, and will be moderated by Pandora VP/Audio Sales Doug Sterne. Triton Digital COO Mike Agovino will make a presentation called "By the Numbers: State of Online Audio," followed by TargetSpot VP/Marketing Amy Becker, whose speech is called "Digital Audio & the Multicultural Audience," and Colleen Fahey (who is founder and principal of The Idea Haven) on "Audio Branding."

IAB VP Michael Theodore (a RAIN Summit veteran) will host the event at the famous Tribune Building.

And if you're not in Dallas, follow along on Twitter, and later we'll post audio from the Summit

Tuesday, September 18, 2012 - 11:15am

Today we're in Dallas for our annual fall RAIN Summit event in conjunction with the RAB NAB Radio Show (which kicks off here in Dallas tomorrow).

We hope to see you here today. But whether you've made it to Dallas or not, we invite you to follow along on Twitter (use the hashtag #RAINSummit, and you can follow us @RAINTwitter and @RAINSummits). We'll also soon post audio of the day's events, and as usual, look for follow-up coverage here in RAIN in the coming days. 

The speaker list and agenda are on our RAIN Summit Dallas page here. We're in the Wedgwood Room, which is in the tower section of the Hilton Anatole.

Some of today's scheduled highlights include:

  • 12:15pm Show opens
  • 2:20pm RAIN publisher Kurt Hanson's "State of the Industry" address
  • 4:30pm Tim Castelli's (Clear Channel President of National Sales, Marketing and Partnerships, pictured) keynote speech
  • 5:35pm The Triton RAINmaker and RAIN Internet Radio Awards
  • 5:50pm The annual RAIN Reader Cocktail Party (Verandah Shelbourne Room)

If you're able to make it to Dallas, we hope you enjoy your stay, and we're looking forward to seeing you.

Radio Ink's Convergence 12 begins today; Hanson to speak tomorrow

Monday, June 4, 2012 - 8:15am

Radio Ink's digital media-focused conference Convergence 12 begins today. RAIN publisher and AccuRadio founder/CEO Kurt Hanson will speak tomorrow at the event on how new media technologies will ultimately be a boon to broadcast radio, and how radio can best position itself.

Convergence 12 is today and tomorrow at the Santa Clara, CA Convention Center. The first keynote speaker will be Nolan Bushnell, founder of Atari and Chuck E. Cheese Pizza. Follow Convergence 12 via twitter with the hashtag #RCIV. The events agenda is here.

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