INK TANK

I Applaud The Secret Meeting....

but not the secrecy   

When we first learned of the secret "Future of Digital Radio" meeting at the Radio Show, our sources told us they'd been sworn to keep their participation secret. The goal, I was told, was to develop a sound digital strategy for these cutting-edge companies, to combine their resources to develop and launch a robust strategy that puts them at the forefront of the migration to digital, ensuring a strong future for radio content to be delivered in other platforms.

This consortium is smart. It allows these groups to pool their resources and compete against solutions being offered by bigger companies like Clear Channel and Cumulus Media.

But why the secrecy? Clearly these women and men want their privacy to discuss the future they are planning together. It’s understandable that they'd look for a competitive edge -- but to think they could keep something like this under wraps in the middle of a radio convention was probably not well considered.

My e-mail today has been buzzing with insulted parties asking why they were not invited, why they were not asked to present. Every person who's approached me this morning at the Radio Show has been talking about this story, revealed by our editor in chief, Ed Ryan.

This industry is ripe for change -- finally. All signs are that our strength remains our content, not any single form of distribution. Though this very morning RAB CEO Erica Farber reminded me that everyone she talks to listens to radio, including teens, it's my goal as publisher of this 20-year-old magazine to help us keep our competitive edge. Admitting that all industries change, and that listening devices are changing as well, is the first step to embracing our future. I'm thrilled these progressive thinkers who attended the secret meeting are addressing those issues.

This forum is smart, and it's critical that radio to address its inevitable future. Especially if what I wrote recently about the changes ahead comes true. Collaboration is smart, but wider collaboration is smarter. This needs to be an industry-wide initiative, a deep forum exploring where we must go and what we'll need to get there. Frankly, that’s the sole purpose of my annual Convergence conference -- attended each year by many of the leading thinkers who attended this secret meeting at the Radio Show. I encourage everyone to take this dialogue to the full industry at Convergence 2013, where we will be surrounded by the world’s leading digital minds.

Again, though I applaud the creation of a consortium in an age of collaboration, I feel a fully embraced collective industry initiative is critical. Jeff Smulyan tried something like it in 2000 with the Local Media Internet Venture, but it may have been premature, and the venture didn't end well. I hope we'll take the lessons from that visionary attempt and seek full-industry adoption. When it's time to determine the industry's future, we should all be invited to the table.

 

The Day The Transmitter Died

Radio's Best And Worst Day

Imagine for a moment you’re the CEO of a major publishing company, and you see that Jeff Bezos has announced the Kindle by Amazon. What’s your first reaction? It probably sounds like this: “People love books. They love the touch and feel and smell of paper, they like to show them on their bookshelves — plus, they won’t pay for digital words. This Kindle thing is silly, and it will be short-lived. Anyway, Sony tried an e-reader and it bombed.”

In June of this year, e-books outsold paper books for the first time.

Imagine you’re the CEO of Kodak. “Digital isn’t as good,” you say. “People like pictures, and film is better technology. It’s tested, it’s been around for 100 years. Digital photos are a passing fad.” Kodak actually invested $25 billion in digital photography but still failed to control it because they were unwilling to believe film would be superseded.

Maybe you’re a radio executive saying this: “The transmitter is a more efficient means of delivery. We can send a signal to millions of people at no additional cost. Streaming is stupidly expensive and has a cost per user. The model can never work. Plus, who wants to sit at their desk to listen? There are billions of radios, with an average of six per household. We’re in virtually every house in America and in 100 percent of the cars. The transmitter will never go away.”

What if the transmitter were no longer relevant? You say that will never happen? Here’s how it could.

The New York Times says the auto fleet in the U.S. averages 11 years old, and that by 2015 we will see approximately 70 percent of the market buying new cars. Already a high percentage of new cars, including lower-end brands, are Internet-enabled and can receive Pandora, TuneIn, and iHeartRadio. What if, by 2015, all new cars have Internet radio? It’s very possible. It’s also possible that auto manufacturers will decide to stop putting AM/FM radios in cars.

Seem silly? Car manufacturers are some of the biggest advertisers in radio, but they want exact listening data, not estimates. This is a world where Google and others can tell them exactly who saw and heard their ads. Automakers are not required by law to put radios in cars. They could make the Internet the only way to listen. That way they could track exact listening stats. No more estimates. No more panels of 150 people representing listening for an entire city.

Ask the CMO of any giant marketing company and they’ll tell you “big data” is the next big wave. Big data allows data from all places to be combined, creating a depth of information never before available. With radio listening exclusively online, an advertiser could use GPS data to air a spot for their business when you’re a few minutes away. Imagine driving down the road and hearing, “Whole Foods is just a couple of minutes down the road. It’s dinner time, why not give yourself a break tonight and pick up a pre-made meal?” or “You’re just a few minutes away from our new location, why not try it for lunch today?” Big data allows this, and it’s already happening.

Though losing our over-the-air monopoly in the automobile seems like a bad thing, a world of nothing but streamed signals could make for the biggest boom in radio history. If radio could assemble big data and tie it to the car, the biggest advertisers would use radio more than ever.

No, it’s not good for Arbitron, unless the company can insert itself into the middle of the exact-data play, and it’s not good for the transmitter companies (though you’ll probably always need a transmitter to serve the remaining analog units in the world).

Will this scenario play out? I think it almost has to. Though it seems counterintuitive, forcing all radio listening through IP would give us the best advertising environment in radio history. Losing the transmitter would be the best — and worst — day for radio. Best because it allows us to have the real-time, exact audience stats, worst because it forces us to abandon the in-car monopoly. I also think there will come a time when AM and FM spectrum will become so valuable to the government for other purposes that the FCC could force radio off the air and online.

Imagine how that would change everything. Suddenly the FCC is no longer controlling radio. Suddenly that license is no longer a concern. But it would also democratize radio even more, since any Joe can create an online station.

Shooting the messenger here is a natural reaction, and so is denying it could ever happen and defending the status quo, which many will do. I don’t blame you. And I may be wrong. But history says people who denied that such dramatic changes would or could occur were usually wrong. If you catch yourself saying, “That will never happen,” that’s a signal that it probably will.

This is in no way an indication that I don’t believe in radio. I remain our biggest champion, but I also know that change is inevitable, and at the moment, Ford, Toyota, and the other automakers hold all the cards. They know they can change the face of radio and make it exact, measurable media just by removing the AM/FM receiver from the car.

Radio’s survival, your survival, is predicated on great content, great brands, and making sure those brands are everywhere. How we deliver is less relevant than what we deliver, as long as we’re where the consumers want us to be. Call me crazy, but I think that radio becoming 100 percent Internet-based is the one move that can make this industry boom financially again.