Why Didn't Radio Invent Pandora?

Why didn't broadcast radio invent Pandora?

It wasn’t a radio program director that came up with the idea for Pandora. It wasn’t a broadcast executive. No one in broadcast radio came up with the idea. It was Tim Westergren.

If anyone ought to have created personalized radio, it should have been a radio person, not a musician turned entrepreneur.

How is it that the entire broadcast industry from broadcast group heads to weekend jocks managed to overlook the potential of personalized radio?

All the music research done by radio stations over the years could have created a better algorithm for personalized radio than a bunch of musicologists making the stuff up.

It’s not that radio is unfamiliar with streaming. Radio stations have been streaming for 17 years.

You’d think that over this length of time radio might have experimented with different ideas, different approaches to what radio streams.

Instead, listeners have been treated to nothing more than terrestrial audio feeds with spots replaced with filler. Radio essentially wasted a head start of nearly two decades.

Radio produced no streaming innovation, nothing that might be thought of as the future of radio.

And it’s not like radio put all its best ideas on HD channels.

Let’s be honest. Pandora caught radio completely flat-footed.

Yes, Clear Channel’s iHeartRadio is adding non-traditional radio channels including personalized radio. CBS and other groups have announced similar projects to create their own Pandora-like services.

But radio will still be playing catch-up for some time. Radio will still be recreating what’s already in the marketplace.

Doesn’t it make you wonder?

If radio had used its nearly two decade-long head start to innovate and reinvent radio on it’s own, would Pandora would be as popular?

If broadcast groups had created entirely new streams unavailable on terrestrial stations, would radio be better off today?

We’ll never know, but Pandora’s (perhaps temporary) lead should be a lesson to everyone in broadcast.

To stay on top, broadcast needs to be creating digital radio innovations, not just reading about them.

Comments

[Wm_Tucker]

Innovation -- technological and otherwise -- rarely comes from established industry. Thanks to deregulation, broadcast radio has become particularly non-competitive. When a broadcaster can control 6-7 stations in a given market knowing radio's ubiquitous use by the public, there's very little incentive to change.

Technological development is also cost prohibitive. Again, most companies -- regardless of industry -- aren't inclined to invest significant sums of money in cultivating new technologies ahead of evidence a market exists for the product/service. While both satrad and net radio are exciting technologies, neither have demonstrated a strong economic justification for large-scale investment by the broadcasters.

I agree, however, that the terrestrial radio industry suffers from a considerable lack of creative thinking by its executives.

[Beau Rafferty]

Ron, I think it goes back to the old adage; "It's Not What You Have That Counts. It's What You Do With It." I've worked at stations that were literally "A Toilet, Without One!"

Peripheral Markets with facilities put together with Duct Tape, Heath-Kit, and Radio Shack. Who beat back some of the country's Biggest, Legendary Stations of the day, and dominated some of their ADI's.

And, I have also worked gleaming "Fishbowls", that couldn't even find their way to Mediocrity.

Playing with the latest toys, is fun! Orchestrating a Studio in ways that leave the Engineers baffled & bewildered, is a trip !!! :o)

[Beau Rafferty]

Rich, I agree about the Asymmetrical Music Sourcing. Reminds me alot of the old "Regional Flavoring" that seems to be lacking, today.

Mr. Nuthin... To me, you just hit the Antithetical Button, right on the head! I think the problem is, that most of the audiences have realized that they aren't the customer. They are the Product, and they are looking for respect, elsewhere.

[Richard Harker]

Beau, yes, creative radio people have always experimented with eclectic music mixes. It still continues today.

The reason a radio person didn't invent Pandora is that radio people continue to think of radio as a linear sequential delivery system--just like your Harris system.

Even today the majority of pure-play Internet radio stations just emulate radio's linear sequential delivery systems.

We remain skeptical of the "music genome's" efficacy. Pandora's contribution is showing the potential of a non-linear delivery system.

[Cole]

Nice, thought-provoking article; one which should serve as a lesson and catalyst for not letting this happen again.

Perhaps it's not quite fair to blame our industry for not inventing Pandora. A lot of times, creative destruction comes about from folks not associated with the industry in which they change. Look at Reed Hastings from Netflix. Or Jimmy Wales, the founder of Wikipedia, which wiped out the encyclopedia business. Blame however, can be placed on our industry for not reacting. Steve jobs didn't invent the mp3 player. He just made it better. Radio could have ... actually still can ... make the Pandora idea better.

But the industry has to change. This isn’t easy. Reinventing yourself requires letting go of what it is you identify as core to what you do today. Not easy in the best of times. Particularly difficult in not-so-good times. I feel there are several areas of change in which radio must embrace to not only prevent another Pandora scenario from happening, but to get back in front as innovators.

Creating vs operating. Radio needs to get away from the just get by environment from which they are operating today. Just getting by is no longer going to cut it. Radio needs structural shift. Re-think everything. If a process can be performed in a more cost efficient or streamlined manner, dump it. It’s not a core competency.  Why waste a further thought on it? Re-invest those gains back into the company. This needs to be done now because while you’re standing still your competitors, even those you don’t yet know about, are improving. Some are completely redefining our entire industry.

Invest more in our youth. They have great ideas. Tim Westergren was 34 when he created Pandora. Mark Zuckerberg was 20. Bill Gates was 19. Greater Media's Peter Smyth wrote an excellent article ( http://www.greatermedia.com/?p=1188 ) on this topic entitled 'New ideas need new blood'.

Seek out agents of change and take some calculated risks. The new ideas & new blood people are out there. Radio needs to do a better job at finding them and stepping out of their comfort zone. You might fail at first. You might fail period. But isn't it better to burn out than fade away? No pain .... no gain.

[Richard Harker]

>You're asking why the radio industry didn't invent a service you've spent the last six months trashing?<

Bob, we've written extensively about the company, much of it critically, but we've also pointed out the things they've done well.

In this post we're discussing personalization, not the company nor its actions. Don't confuse the company with the product.

The company has played loose with the facts repeatedly. The company has seemed obsessed with knocking radio rather than letting the product stand on its own.

In writing about the absence of any first-mover advantage, we've suggested that radio watch the marketplace, identify opportunities, and then exploit them.

This post is consistent with that message.

We've also praised Pandora's user marketing, which is far more positive than their message to the press.

[Iknow Nuthin]

There are many people in radio who have brilliant ideas about a multitude of things to serve the listener.

That is where the ideas inside the companies stop.

The execs for all the companies have said, and we have heard them say,
"Radio's most important function is to serve the advertiser."

Sometimes when people come up with really good ideas, the inspiration doesn't spark from the root thought of "How do we monetize this?".

When there isn't a budget for billboards, television commercials, concert tickets, t-shirts, or a LIVE Jock, why in the world would there be a budget for R&D on ventures whose profit margins may not even exist?

[Bob Dobalina]

You're asking why the radio industry didn't invent a service you've spent the last six months trashing? As I understood it from reading this blog, Pandora is hype, "WKRP," and any concern about it overblown.

Here's a question: Why didn't RADIO CONSULTANTS invent it?

[Ron Roberts]

In essence, radio has always neglected to be forward-thinking with regards to online listening. It's an after-thought in almost every building of every radio station not in the top-tier markets. Since the Telecom act, radio owners have stopped investing in their product and working to improve upon it, and have instead worked to (in their minds) "trim the fat" and out-sell their competitors with lower spot rates. There's been no re-investing in radio stations. Walk into your typical Cumulus or Citadel cluster building and check out the equipment they're running off of. I was in a top 75 market Citadel cluster three years ago, and they're still running on original Scott Studios software. Original. Circa mid-1990s. Cumulus? Please; bailing wire and duct tape are key "tools" in an engineer's toolbox. If radio were truly looking to remain relevant, they'd embrace what MTV's left by the wayside - music videos. I can walk into any nightclub now and witness a VJ spin from one song to another, complete with a video, and yet radio won't invest in upgrades to be able to do the same (which would drive traffic to their sites and give a visual presence to their stream, plus give them programming that would/could land them on a local cable channel, as well).

[Beau Rafferty]

We did! (sort of...)

I've known scores of Jocks, Programmers, but primarily Music, and Production Directors from all over the country who have had a tremendous Library of what now, is commonly known as "Mix-Tapes". 7"-10" Reels & cassettes filling shelf after shelf.

We just played with Gates/Harris 9000 systems, Profit, Scott Studios, and Oakwood-Media Touch. Selector, Music Master, "Format 51", Now... ???

I always got a kick out of the people who used to hear one of my tapes and demand to know what station it was, and why none of the "Locals" were playing most of it. Stuff they been wanting to hear for years!

We've always have been the Proto-Pandora, for decades! The only difference? The audience can now, finally get the music THEY really want. Not what they're spoon-fed by vested interests.