Talkers spend all their time complaining. They react to new competition by whining about all the reasons the new competitor is going to succeed.
Radio doesn’t get it!
Radio is moving too slowly!!
Broadcasters just don’t understand!!!
Doers, on the other hand, focus on their side’s strengths and advantages. They weigh them against the competition’s weaknesses and vulnerabilities. They then set about implementing a strategy to win, confident of ultimate victory.
We can see the contrast between the Talkers and the Doers in how radio people are responding to Pandora.
The Talkers are radio pundits who have all but conceded radio’s defeat. They point to Pandora’s extremely high awareness, exponential growth, its apparent unstoppable momentum and declare radio hopelessly outclassed.
For pundits, the matter is closed. No room for debate. Anyone who disagrees is a relic of radio’s past glories, a digitally ignorant luddite racing towards an analog abyss.
Bob Pittman is a Doer. He doesn’t buy the fatalistic pundit talk.
He understands radio’s strengths. He believes Pandora is a one-dimensional product. He offers concrete evidence that broadcast’s resources are far greater than Pandora’s. He is confident that Clear Channel can successfully compete against digital pure-plays.
So what is punditry’s response? Apoplexy.
Maybe instead of choosing the denial route about Pandora, broadcast radio operators ought to go to school about this brand and what it means to consumers.
How much more evidence do broadcasters need that time is short, and opportunities are fleeting? Exactly what are you waiting for?
If terrestrial broadcasters are going to survive, it won't be by dismissing Pandora. So many broadcasters are resolutely incurious as to the reasons for Pandora's success (sic), and it is that lack of curiosity that some broadcasters may not live to regret.
Pandora (is) the customizable radio service (that) radio people and Bob Pittman love to underestimate.
So what is it that Pittman says that so infuriates pundits?
Here’s a few comments from his recent Los Angeles Times interview:
"The perception is that radio is somehow in trouble. The reality is that we have the same percentage of the population listening to radio as we did in 1970."
Pundits jump all over this and claim that the real issue is TSL. They make every effort to perpetuate the myth that radio TSL has evaporated, but there is simply no credible evidence that it has.
Arbitron looked at PPM trends and found no decline in TSL during Pandora’s meteoric rise. None. Harker Research analyzed both PPM and diary trends and found no evidence that broadcast TSL had been impacted.
In truth, broadcast radio consumption is increasing, not decreasing. Terrestrial usage has remained steady while broadcast consumption by way of streams has grown, something we proved some time ago.
"Pandora is not really radio in that it's not curated. It's more like a playlist that you put on shuffle. They don't have local information or local personalities."
For a service that pundits claim is light-years ahead of broadcast, Pandora doesn't look very sticky.
Of course, Pandora has a high proportion of mobile listeners. As we recently explained, mobile listening hurts TSL. However, even when mobile isn’t included, Pandora still only has an hour of session TSL.
Longer broadcast sessions could be a consequence of radio’s curation and local content. Lack of curation could be Pandora's greatest vulnerability, a point that we made in 2009.
"We have roughly 30 million unique visitors each month to our online radio stations. Pandora has 25-plus million."
Pandora portrays itself as an enormous service serving vast numbers of Americans.
We’ve shown that in fact consumption of Pandora isn’t particularly high, especially when you consider that Pandora consumption is spread across 1.4 billion streams, while broadcast consumption is spread across only 10,000 stations.
"The good news is that we have billions of dollars in advertising revenue from our terrestrial radio business. We can afford to invest and grow our online audience. We have the deep pockets to wait it out."
Last year Pandora billed $138 million. Local broadcast radio stations billed $16,000 million. This last quarter Clear Channel alone billed $650 million.
Do we really need to debate who has deeper pockets and what deep pockets mean in a competitive battle?
"Later this summer, we'll be adding a feature that will let our users build custom radio stations just like they do with Pandora."
This is the point where the pundits’ true colors show. Critics first complain that radio isn’t moving fast enough, but then belittle Pittman for announcing that Clear Channel are building their own Pandora.
As we noted last year in the post Thanks Pandora, We’ll Take it From Here:
Nothing that Pandora does is proprietary. Every aspect of Pandora can be replicated, and ultimately improved upon.
What’s wrong building your own Pandora? Every broadcast group should have their own music genome project. As we pointed out recently, now there’s even an app for that.
It's a long tradition in broadcast radio to watch the competition, copy key elements of what they are doing better, then improve upon it. It has served radio well. Isn’t that what Pittman is doing?
But to give Pittman credit would be an admission that maybe radio isn't brain-dead. That would screw-up punditry's narrative of broadcast's self-inflicted imminent demise.
Pundits want to appear visionary, so they create false straw-man arguments they can easily win. Only they understand the true threat that Pandora presents to radio. That’s why they are much smarter than we resolutely incurious radio people.
What’s surprising is that we at Harker Research don’t run into these clueless radio neanderthals that the critics see everywhere. We work with radio people who are vitally interested in preparing for radio’s digital future.
It’s just that real broadcasters have to keep an eye on the bottom line while doing it.
What too many pundits fail to understand is that the goal of radio’s digital transition is not to find a way to beat one service that bills 1% of radio’s revenue.
The goal is to find a strategy that first protects radio’s piece of the advertising pie, and ultimately helps grow radio’s share.
On this subject, the talkers are strangely silent.
Talkers versus Doers. Time will tell who’s right. We’re betting on Pittman. In this debate, he's the only one with skin in the game.