Radio InSights

Look What Traditional Nielsen Measurement Misses

Radio isn’t the only medium that Nielsen is under estimating.

As reported in Variety, NBC research chief Alan Wurtzel recently showed that traditional Nielsen TV ratings missed a lot of non-traditional viewing from things like DVRs, gaming consoles, and devices like Roku.

Mr. Wurtzel determined that Nielsen missed a minimum of 27% of one show’s premiere audience. (See graphic below.)

The problem is that both Nielsen’s radio and television audience measurement technologies have not kept up with the new ways people listen to radio and watch television.

Radio listening is now across multiple devices and delivery platforms, yet local radio is measured as if this were still the 1970s.

We’ve annotated the Variety graphic to illustrate the point that we really don't know total radio listening because of these unmeasured digital alternatives to analog radio.

The majority of listening is still by way of analog radio. However, other alternatives are growing.

Office workers listen to streams on their computers. Others listen on their mobile devices.

Consequently, a growing proportion of local radio is not being measured.

We’ve now learned that PPM is sensitive to content and that the nature of content can have an impact on how accurately PPM captures radio exposure.

The problem is that this missed listening is on top of these other issues.

According to Triton Digital, listeners consumed over 240 million hours of streamed broadcast radio in September, and that’s only counting fifteen radio groups.

Yet were Nielsen PPM estimates to be believed, fewer than a dozen stations in PPM markets had enough on-line listening to qualify for the September book.

Nielsen encodes the streams of broadcast radio stations, but that does not mean that the service can accurately measure exposure to these encoded stations.

Streaming and HD Radio both depend on digital algorithms (codecs) to compress content in order to reduce bandwidth. Compression essentially lowers content density.

Less dense content translates into less masking material to allow the encoder to insert codes.

Nielsen acknowledges this by warning broadcasters about aggressive compression. The company’s streaming guidelines warn that excessive compression poses:

Risks from both the streamer and the listener that may detract from the efficiency of the stream’s PPM encoding.

“Efficiency” is an interesting euphemistic term. What Nielsen is saying is that streaming codecs can prevent the encoder from encoding.

It’s an admission that on top of PPM’s programming dependent deficiencies, there can be digital compression deficiencies that reduce the accuracy of PPM estimates.

Do this simple test to better understand what’s happening.

Replace one of your songs with a MP3 copy and watch your Voltair meter. You’ll see all those green bars turn to red. That’s how PPM reacts to a codec.

But the problems don’t stop there.

Over 70% of streamed listening is consumed on mobile devices.

Remember those famous words: “If you can hear the station, the meter can hear the station”?

Is that really true with mobile devices?

To be continued.

 

Is the Digital Basket the Wrong Place for Radio’s Eggs?

Spot revenue flat-lined again in 2013. Radio can’t seem to move the needle when it comes to selling spots on the radio. Thank God for digital.

Digital is the one bright spot for local radio revenue. It was up again in 2013, so it is understandable that everyone from the Radio Advertising Bureau on down would crow about digital:

"Digital continues to gain momentum among advertisers looking to maximize their use of all Radio platforms," states Erica Farber, President and CEO of RAB. "Based on the recent Borrell Associates forecast of a 22% rise in Digital spending on Radio in 2014, this category is poised to surpass the $1B mark."

Everyone seems to agree that digital is the bright spot in radio’s future. Unfortunately, while a digital future may be inevitable, economic success for radio in a digital world is by no means inevitable. Quite the opposite is possible, an issue we raised back in 2009.

Putting all of radio’s eggs in the digital basket may be a trap. Instead of securing radio’s future, it may sacrifice broadcast’s enormous advantage over its digital competitors, leveling a playing field on which radio has always won.

The RAB press release to which Farber alluded in the above quote predicts a bright digital future for radio noting that digital grew 15.9% in 2013, and projecting another 22% growth in 2014.

That might sound like a lot, but as noted in the release digital contributes an anemic 3% to radio’s revenue. Take a look at the graph at left. It illustrates how little digital contributes to local radio’s revenue. That tiny sliver at the top is digital’s contribution.

Even if digital revenue continues to grow at the RAB’s wishful double digit pace, it will take over a decade for digital to approach even half of spot radio’s contribution.

And the RAB’s projections are extremely optimistic verging on the delusional. We need only look at newspaper’s attempt to cross over to the digital world to understand.

Facing precipitous declines in print revenue, the newspaper industry pinned all its hopes on digital. The major newspaper chains predicted that digital would save the medium. We questioned their strategy, and the wisdom of radio following a similar path in 2011.

What’s happened since?

In 2010, newspaper digital revenue grew by 10.9%. However, every year since the rate of growth has declined. Digital newspaper revenue barely grew at all in 2013.

Compare that to radio’s digital growth over the same period. The good news was that radio’s growth rate coming out of the recession was nearly triple that of newspaper. The bad news is that radio’s growth rate like newspaper’s immediately began to slow.

As the table at left shows, after growing 28.1% in 2010, growth fell in each of the next two years. Growth rebounded last year, but still failed to achieve the growth rate of 2010.

The graph at left shows each medium’s digital growth rate indexed to their 2010 rate. Note that with the exception of 2013, the growth rate declines of radio and newspaper seem to be following the same pattern.

Radio critics claim that the industry isn’t moving quickly enough. We’re told that digital revenues will grow faster if only broadcasters tried harder. But what evidence do we have?

Newspapers have been developing a digital strategy much longer than radio. The major chains have reallocated more resources to their digital product than radio has. And the end result appears to be only an accelerated pattern of growth then decline, not a stronger one.

If radio is following the same arc of rapidly diminishing growth in digital revenue that newspaper is tracing, then radio has to rethink its strategy of pinning its hope for growth on digital.

So if digital isn’t the right basket to put all of radio’s eggs, what’s the alternative? That’s the subject of the next Radio Insights post.

Admitting Internet Radio's Failure

After nearly a decade of declaring broadcast radio near death, a touch of reality is beginning to seep into the internet radio discussion.

Digital pundits now admit that local radio is far from dead. And you won’t believe what they think will save internet radio.

Writing at Engadget.com, Brad Hill, former VP of AOL, admits that American use of local AM/FM radio hardly budged between 2001 and 2011:

So it’s evident that people are dipping their toes into various forms of internet radio without abandoning their terrestrial stations.

Dipping their toes?

Mr. Hill is way too kind to internet radio.

As we have repeatedly shown here at Radio Insights, large numbers of people have sampled various streaming services, but the numbers are tiny compared to American consumption of local radio.

But in the digital world, hope springs eternal.

In the digital world, pundits believe a major disruption is always just around the corner, just one gadget, one line of code, one algorithm short of a major breakthrough.

The latest digital straw pundits are grasping at is Apple’s iRadio.

While admitting that internet radio hadn’t hurt local radio much yet, he notes that Michael Robertson CEO of DAR.fm, feels that Apple’s recently announced iTunes radio service will accelerate consumer adoption of internet radio:

There’s no question that it will change from 10/90 (digital/analog) to 90/10 because FM cannot compete with the benefits of internet-delivered music.

What’s odd about quoting Robertson is that DAR.fm is a broadcast radio time-shifter. According to the website:

DAR.fm is a service that lets you record radio stations and shows so you can listen whenever you like. Please browse the site to find some radio to record.

The home page lists suggestions that include Rush Limbaugh, Rachel Maddow, Glenn Beck, Sean Hannity, Stephanie Miller, and many other broadcast talk shows.

Noticeably absent are internet originated shows.

Apparently Robertson hasn’t found any internet content worth recording, so he has built a business model around recording AM and FM shows.

After declaring Internet radio flawed, flailing, and failing, Hill finally gets around to the point of his piece. Internet radio can succeed only if it has compelling content!

Yes, Internet radio needs content!

After a decade of watching Internet radio sputter and stall, at least one digital pundit has finally admitted the problem: Internet radio doesn’t have compelling original content! Local radio continues to succeed because of it does.

And Hill has a solution:

It is up to Apple, or Google, or Rhapsody, or Spotify, or Pandora, or Amazon, or another internet player to break down the perceptual walls within which internet radio is trapped, developing content or importing stars that will compel users to commit more of their attention to the platform.

Well that’s simple enough.

Of course, internet radio is now twenty years old. Internet radio isn’t new. It’s not novel any longer.

If any major internet company knew how to create compelling content, it would have already tried.

Remember how Google was going to create original content for YouTube? How’s that going?

Hill’s alma mater, AOL, has been trying to create compelling product for years. So has Yahoo.

Internet companies are brilliant at creating new technologies to steal and repurpose content created by others (like DAR.fm), but they are really lousy at creating original content.

Amazon create original content? Not likely. Apple? Forget about it. iRadio is about selling more tunes on iTunes, not creating original content.

Hill reveals the depth of his naivete when he closes with this:

Technology alone might not be enough to disrupt the nearly 100-year-old technology of terrestrial radio. But technology plus killer content can do it.

Technology has nothing to do with success. It's all about content.

The continuing success of local radio proves that compelling content  trumps technology.

The danger is that local radio is starting to pay more attention to delivery systems than content. Radio is distracted and somewhat intimidated by digital competitors, and is responding in the wrong way.

Too much energy and attention is focusing on platforms. Meanwhile, product innovation is lagging. Radio hasn’t created a new format in decades.

In that sense, Hill has a point. If local radio stops innovating and creating compelling programming, it opens the door for internet radio.

If local radio falls into this trap, broadcast will have lost a tremendous advantage.

On-Line Listening Growth Anemic. Maybe Even Declining.

The latest on-line radio ratings raise serious questions about the future of digital radio.

Aside from a couple of exceptions, on-line listening growth is at best anemic, and in some cases even declining.

Broadcast groups that are betting everything on streaming and an app may be making a very bad bet.

In 2010 Radio Insights introduced Hours-Tuned in order to create a metric that would enable the industry to compare broadcast and streaming listening levels. Hours-Tuned tells us how many hours of listening a station attracts.

Think of it as a measure of the total “consumption” of a radio service.

Hours-Tuned illustrates the fact that when it comes to on-line radio, there’s Pandora and then there’s everyone else.

Pandora alone makes up 75% of listening reported by Triton Digital. Not only does Pandora dominate Triton ratings, the service’s share is increasing, up from 66% a year ago.

But even Pandora’s growth is slowing. The first graph at left shows the monthly year-over-year percent change in Hours-Tuned for Pandora.

After six months of triple digit growth, Pandora growth has dropped precipitously. It’s still considerably higher than most other services, but well off the pace of earlier this year.

On top of that, Pandora is one tide that isn’t lifting any other boats.

The second graph better illustrates what’s happening at many streaming services.

After fourteen months of slow steady growth, AccuRadio went into reverse, losing total hours.

For seven months now, year-over-year Hours-Tuned comparisons have been negative, with the decline accelerating. (Note the difference in scale compared to the Pandora graph.)

Even a brand like ESPN isn’t immune from this trend.

The ESPN graph below isn’t pretty, with twelve of the last 16 months showing negative growth in consumption of ESPN streaming.

Clear Channel is the best performing broadcast group, but it too is showing decelerating growth. It’s growth rate is similar to Pandora’s but with a fraction of its total hours of listening.

Total Hours-Tuned for the top twenty streaming services has increased 54.5% in the past year, but most of this is Pandora.

If we take Pandora out of the picture, streaming hours have only increased 11.9%, not exactly robust growth.

Terrestrial groups have grown 8.3% in the past year, but this too is distorted by one outlier, Clear Channel. Take Clear Channel out, and terrestrial radio stream listening has declined 24%.

One of the problems in analyzing long term Triton Digital trends is the many changes that have taken place within services.

For example, CBS numbers included AOL listening until AOL moved to Slacker. The move led to an immediate decline in CBS numbers, and a gain for Slacker. Since then CBS has added Yahoo.

Interestingly, the combined listening of CBS and Slacker today is 28.4% lower than a year ago.

The September change in Hours-Tuned for several groups are summarized at the left. The numbers do vary somewhat from month to month, so the numbers might be different next month but the trend is unmistakable.

Aside from Pandora and Clear Channel, on-line listening growth is at best anemic, and perhaps even declining.

When we recently noted the precipitous decline in on-line listening spans, new-media pundits and stakeholders rose up to challenge the numbers.

One declared:

In fact, while ATSL is declining as people migrate to mobile, their number of SESSIONS per week is increasing at a FASTER rate, so that total Internet radio listening hours per consumer per week (or per month) -- i.e., TSL -- is INCREASING, not decreasing.

It sounds reasonable, but it isn’t true.

Hours-Tuned takes into account both ATSL (time per session) and Sessions, and total hours are declining for many services.

Pandora and Clear Channel are both growing, but over-all listening growth is slowing, and some services are declining.

The rosy new-media narrative of nearly infinite Internet radio potential might sound great, but the numbers paint a very different picture.

Streaming is becoming a game with many more losers than winners.

Pundits like to point to Pandora and its death-defying success story as proof of Internet radio’s inevitable dominance.

But we heard similar stories about on-line gaming and daily deals.

Is Pandora another Zynga or Groupon? These are each category leaders with what seemed like limitless possibilities.

Now Zynga is a $2 stock (down 88%) and Groupon is a $3 stock (down 89%). Meanwhile Pandora has fallen to $8, a 60% decline.

Are the declines in listening just confirming what Wall Street has already figured out?

Will iHeartRadio Kill Radio?

Is iHeartRadio an apocalyptic doomsday machine that will ultimately destroy broadcast radio as we know it?

Or is iHeartRadio a gateway to radio’s salvation, radio’s best chance to remain relevant in a digital world?

The rate at which Clear Channel is signing up new radio groups suggests that many believe the latter.

But is iHeartRadio really the answer?

Broadcast radio’s greatest strength is a station's strong link to its community.

Radio’s local link is the medium’s most potent weapon in the battle for a listener’s heart and soul.

That  personal connection between a listener and her radio station is something that national radio (both digital and analog) fails to understand, and can’t duplicate.

Yet iHeartRadio’s very essence diminishes radio’s local roots.

The service neuters local radio, homogenizing radio into interchangeable undifferentiated lumps of similarly formatted radio stations.

Don’t want to listen to New York’s Z100? We’ve got another dozen stations just like it a click away.

Were these choices really different, it might mean something, but the service offers choice without distinction.

Too often one hears the same national playlists, and the same national personalities talking about the same national contests with the same national promos.

The growing interchangeability of stations across the country is all that more apparent with the convenience of iHeartRadio. A listener is just a couple clicks away from hearing the same thing on dozens of stations.

The message of iHeartRadio is that unique local radio is dead. All local radio stations are interchangeable.

The impact of iHeartRadio is to take local radio’s insurmountable advantage, its local connection, and destroy it.

The message to listeners is that local radio is no better than anonymous generic national radio dispensed by an algorithmic driven computer.

In an effort to demonstrate that an aggregation of local stations is just as good as a national service, iHeartRadio inadvertently proves that local radio is just as bad as a national service.

Why else offer a Pandora look-a-like?

Yes, Pandora is the darling of new-media pundits, those people who can’t understand why anyone still listens to local radio.

Yes, Pandora has been growing exponentially armed with an endless array of metrics that suggest seemingly unstoppable momentum.

But the truth is that Pandora is losing money, and shows signs that it might be incapable of making money.

Last year Pandora proudly generated $240 million is sales. Broadcast radio stations generated over $400 million--in digital sales alone.

Why would a leader in an industry currently billing nearly twice the digital revenue of Pandora want to promote a Pandora-like feature, and do it on local broadcast stations at saturation levels?

iHeartRadio is just one of a number of industry actions that claim to be an effort to save radio, but instead may have the opposite effect.

Radio Insights believes this is an important issue that potentially impacts every radio station, and ultimately how local radio is viewed.

We question the wisdom of radio’s obsessive rush to focus on digital platforms, especially when they emulate trendy but failed and failing business models.

The growth of iHeartRadio could metastasize into something quite deadly for broadcast, a possibility that every broadcaster should understand.

That’s why we’ll have more on iHeartRadio and what it says about radio in the coming weeks.

Stay tuned.

Smart-Phone: Radio Salvation or Another Nail in Coffin?

Over half of cell phones sold in the US are now smart-phones like iPhones, Androids, and Blackberry.

If the trend continues, one day virtually everyone will be able to listen to radio where ever they go.

While some have heralded this development as a huge opportunity for radio, the growing use of smart mobile devices may be at best a mixed blessing.

The reason is that compared to listening on a radio or computer, mobile listening-spans are dramatically shorter. And shorter listening-spans makes radio time harder to sell.

Even Pandora is not immune to the impact.

While Pandora regularly crows about all sorts of new records like number of subscribers, or session starts, the service never mentions TSL, the amount of time users spend with the service.

Maybe that’s because while Triton Digital ratings show average sessions and session starts growing, TSL, the average length of time a person listens to Pandora, is headed in the opposite direction.

The graph above traces Pandora’s TSL for the past three years.

In 2009 Pandora TSL was about an hour. At the time only computer listening was included in the ratings.

Then in December 2009 mobile listening was added to the service’s ratings for the first time.

Pandora TSL immediately started dropping. In just four months TSL plummeted to just 46 minutes.

Aside from a few positive months in late 2010, the service’s TSL has continued its steady erosion throughout 2011, even accelerating towards the end of the year.

Today Pandora TSL is down to 38 minutes, a loss of 34%.

The precipitous decline in TSL coincides with a dramatic increase in the number of users listening on smart-phones and iPads.

 As Business Insider points out:

While 88 percent of Pandora's listening hours came from desktop use in Q1 of 2010, by 2012, users spend (sic) 70 percent of their time on Pandora listening on their mobile devices.

On a computer one can listen to their favorite station as they continue to do other work on the computer.

Multitasking on a mobile device is much more problematic than on a computer. And if one is using the phone to make and answer phone calls, listening to radio for any length of time isn’t going to be practical.

So it stands to reason that TSL will decline as more people listen on mobile devices.

Is TSL for broadcast streams following the same pattern? Sure is.

Harker Research tracks broadcast streams measured by Triton Digital, and broadcast streams are suffering a similar decline.

The second graph above reflects the combined TSL of 12 broadcast groups for which we have multi-year trends.¹ In the beginning of 2010 the combined TSL was over 35 hours, nearly three hours per radio group.

By 2011, the combined TSL was down to 24 hours, and today it is down to 16 hours, a decline of over 50%, a decline even greater than Pandora’s.

And what about Bob Pittman’s Clear Channel Communications, leading the digital charge with its iHeartRadio app?

As measured by Triton Digital, Clear Channel is the worst performing streaming service in terms of TSL, and one of the worse performing in terms of its decline.

The third graph tells the story.

Two years ago Clear Channel average sessions consistently lasted over an hour, some months exceeding 82 minutes.

As of August, TSL had fallen to 32 minutes, a decline of 61%.

If the time spent with mobile devices continues to grow at the expense of traditional computer use, we can expect TSL to continue to decline.

And that could cost radio a lot.

For Pandora who started with zero listeners and zero dollars in sales, the growth in audience more than makes up for the loss of TSL per user.

A loss of TSL for broadcast radio can’t help but hurt revenue.

Radio already reaches more than 90% of Americans. There is no more room to grow cume audience.

To grow AQH and revenue, broadcast radio has to increase TSL. And TSL is headed in the wrong direction.

Radio took a financial hit when AQH ratings dropped in the markets that switched to PPM.

Streaming is likely to be another financial hit as AQH ratings decline even further as people replace their radios with mobile devices.

Think about that next time you hear a promo for iHeartRadio.

¹The 12 groups are Cox, Cumulus, EMF, Emmis, Entercom, ESPN, Greater Media, Hubbard, Radio One, Salem, Townsquare, Univision. Neither CBS nor Clear Channel are included because of their non-broadcast streams.

Dance With the One That Brung Ya

If you ran a company that produced two products, one that delivered more than 95% of your revenue, and a second that delivered less than 5%, which would you give more attention to?

Probably the one that produced nearly all the company’s revenue. Right?

And which product would you invest in more heavily? The one that makes all the money, or the one that doesn’t?

You’d want to invest in the product that makes 95% of your revenue, wouldn’t you?

Then why is radio cutting broadcast budgets to finance its digital follies? Why is the cash cow being sacrificed to compete with digital services that make no money and probably never will?

Revenue figures for the first half of 2012 are in and they look pretty much like the hypothetical company we’ve described. The graph below shows first half revenue.

Broadcast spot revenue came in at $6.8 billion, while digital, that tiny orange sliver on the graph, totaled less than $400 million.

In other words, running broadcast spots generated nineteen times the money radio got from digital.

(And rumors persist that groups are fudging the digital numbers to make streaming look more successful than it is.)

On top of that, digital growth has slowed. Digital only increased an anemic $22 million over the same period in 2011, an increase of only 4.7%.

At this growth rate, digital won’t surpass broadcast spot revenue until well into the 22nd century!

Compare those number to the darling of digital radio, Pandora.

Pandora closed its 2012 fiscal year proudly bragging about its advertising revenue of $240 million. Last year broadcast radio stations generated $709 million in digital sales, nearly three times as much.

Broadcast radio continues to be a huge financial success, generating margins that the NAB’s former president David Rehr once declared obscene.

Pandora, the focus of digital boosters, the subject of countless new-media success stories, has yet to make a profit, and admits it may never make a profit.

Yet broadcast radio is obsessed with growing digital dollars to prove it is just as good as Pandora.

And radio is financing this Don Quixote-worthy effort by diverting dollars that should be invested in the local broadcast product.

Yes, radio may ultimately become a product primarily delivered via computer and smartphone, but if its product is debased in a rush to be just as good as Pandora, then no one will listen to it no matter how it is delivered.

Dance with the one that brung ya is a reminder that no matter how tempting a new alternative might look, one shouldn’t forget the thing that got you there in the first place.

Radio makes those obscene profits by delivering a local product that meets the wants and needs of listeners who live in the same community.

If radio starts to ignore its local roots and historical connection to the communities it serves, then it may succeed in equaling Pandora-–as a failure.

Pandora: Be Careful What You Wish For.

Pandora, be careful what you wish for.

Last year Pandora created a fire-storm by releasing its own home-grown average quarter-hour (AQH) ratings.

The company defended itself by claiming its amateurish effort was the first step in providing media buyers an apples to apples metric, “to help advertisers determine the value of running campaigns on Pandora.”

Now that Triton Digital, a reputable ratings company, has gotten involved, Pandora has finally achieved its goal of having credible listening metrics comparable to broadcast radio.

And the company may come to regret its efforts.

When the company rolled out its first AQH numbers generated by re-purposing music logs, their press release declared:

Radio is radio. Pandora is simply a smart buy for local advertisers as well as national ones.

But the numbers suggest otherwise.

It turns out that the company’s ratings confirm that Pandora isn’t a serious challenger to local radio sales.

The ratings reinforce previous Radio Insights estimates that show despite the service’s dominance in streaming, it is little more than a niche player when compared to local radio.

The first graph at the left compares Adult 25-54 Pandora AQH to the comparable leading station in each of the eleven markets for which we have Pandora numbers.

Local radio beats Pandora in six markets and ties it in a seventh. In A18-49 it's a split decision. Local radio wins in three markets, and ties in two.

Pandora easily wins A18-34, winning in nine out of eleven, and tying in the remaining two markets.

Pandora's near sweep in A18-34 AQH has gotten all the headlines, but tells only half the story.

The purpose of Pandora's local ratings was ostensibly to show why the service is a great advertising vehicle, but when it comes to media buying, AQH is only one component.

Decades of academic research has shown that an effective media buy has two components, reach and frequency.

Reach is the number of consumers who hear a message. Frequency is how often they hear it.

Reach without frequency is ineffective, but frequency without reach is even worse.

Local radio is an effective advertising medium because a buyer can easily place a buy that maximizes reach while minimizing wasted frequency.

The second graph above shows Pandora’s reach (cumulative audience) compared to the same stations shown in the AQH graph.

Note that Pandora has one-half to one-third the reach of leading local stations.

And while the graph is for A25-54, local radio stations beat Pandora in every demo in every market-–even 18-34.

So what? What does it mean?

It means that Pandora is not a good advertising vehicle. It falls well short of local radio when it comes to balancing reach and frequency. The third graph illustrates why.

The graph shows what happens when a local radio station and Pandora run a similar commercial schedule. As Pandora continues running spots, reach climbs until it hits the service’s cume, generally in the mid to high 20s.

In other words, no matter how many times Pandora plays a spot, no more than 30% of consumers will hear the spot even once.

Once the service's cume is reached, the only thing that will happen is that the same people will hear the spot over and over.

(It should not come as a surprise that the number one complaint about Pandora by its users is that they hear the same commercials over and over.)

In contrast to Pandora, as a spot schedule continues to run on a local radio station, both reach and frequency continue to grow until the station’s much higher cume is reached.

It is the relationship between reach and frequency that makes local radio a much more effective vehicle than Pandora.

Despite Pandora’s millions of users, the seemingly competitive AQH rating is a consequence of a relatively small number of heavy users spending a great deal of time listening to it.

For this reason, Pandora isn’t a good advertising alternative to popular local radio stations--unless you’re Kyle Taylor proposing to Maggie.

Pandora & Arbitron: Co-Conspirators in a Lie

Joe Kennedy, CEO of Pandora, recently bragged that virtually all of Pandora’s growth came at the expense of AM/FM listening.

He reasoned that since listening to CDs, iPods, and MP3 players had increased, Pandora listening had to come from broadcast radio.

Pandora has a propensity to twist facts in the company’s favor that verges on the pathological. However in this case, the key twist should be laid at Arbitron’s feet.

Kennedy pointed to an apparent 5% decline in TSL between Arbitron’s Radio Today 2010 and 2011 reports as proof of his claim.

The problem is that it’s a lie.

Arbitron started changing the way radio is measured in 2008, and the roll-out continued through 2010.

During this period, Arbitron was forced to mingle audience data from two very different methodologies that produce very different estimates.

National estimates during this period are essentially statistical gibberish.

Arbitron pretty much admits it, declaring: Different measurement methodologies can and do produce different results.

Arbitron analyses at the time showed that TSL drops as much as 30% in markets that switch to PPM.

The first TSL number Kennedy cites is based on mostly diary estimates while the second number is based mostly on PPM estimates. He is comparing apples and oranges.

The fact that TSL declined only 5% during radio's transition to PPM suggests just the opposite of what Kennedy claims. 

His assertion that Pandora's gains came at broadcast radio's expense is just wishful thinking. 

If anything, research shows just the opposite. Pandora's growth seems to have little impact on local radio listening. Online listening appears to be additive radio consumption, not a replacement for broadcast radio listening.

Kennedy's claim that time spent with other audio entertainment is increasing is also demonstrably false, but we’ll save that discussion for another time.

We noted in 2009 that the transition to PPM couldn’t come at a worse time because new-media stakeholders would use the apparent losses as “proof” that broadcast radio is in decline.

Since then, our prediction has become all too true.

Anything You Can Do, I(HeartRadio) Can do Better.

Clear Channel recently started streaming the 24/7 comedy service, continuing to expand iHeartRadio channels.

It just may be coincidental, but Pandora rolled out it’s comedy channel last Spring, hoping to expand its personalized service beyond music.

Two years ago in a post titled Thanks Pandora, We’ll Take it From Here we pointed out that the barriers to entry onto Pandora’s turf were small:

Pandora may have a tremendous lead over its competition, but it remains to be seen whether the service can sustain its lead. As countless Internet companies have discovered, there is no "first-mover" advantage when it comes to new-media.

Nothing that Pandora does is proprietary. Every aspect of Pandora can be replicated, and ultimately improved upon.

Pandora’s lead may seem unassailable, but think about Netscape, MySpace, or AOL. Weren’t they just as dominant?

On the Internet, being first doesn’t prevent someone else from ultimately eating your lunch.

After Pandora’s lovely honeymoon with Wall Street, the investment community is beginning to recognize Pandora’s vulnerability. As we noted recently, Pandora’s stock price is well off its highs.

Writing of iHeartRadio’s growing popularity, Motley Fool recently declared: This is Pandora’s Biggest Nightmare.

Sometimes even fools get it right.

Streaming's Winners or Losers? MOG, Spotify, & Pandora

So much for the predictions that pure-play digital alternatives will come to dominate radio’s future.

After several years of hot money pouring into streaming and Internet radio, the reality is finally sinking in.

First, MOG is in play. Rumor has it that Beats Audio, a division of smartphone maker HTC, has either bought MOG or is in the late stages of buying the service.

Venture capitalists have already invested more than $33 million into the service. MOG claims a half million users, of which perhaps no more than 100,000 actually pay to use the service. (That compares to Spotify’s 3 million paying customers.)

The fact that MOG’s investors are looking to get out isn’t a positive sign.

VC companies invest in a start-up hoping to hit pay-dirt when the company goes public. They only unload a company after they’ve made a tidy profit, or when they realize that there will be no profit.

Ironically, MOG still has a lot of fans. Forbes recently declared: MOG blows Spotify away, but obviously its investors have a different view of the company.

HTC may see value in MOG as the handset’s “in-house” music service, the same way Microsoft packages Zune with its smartphones.

And while Spotify, streaming’s 2011 glamour-boy, is well ahead of MOG in subscriptions and revenue, there are growing questions of even its financial viability.

Michael Robertson, the man behind DAR.fm recently made this point:

I think Spotify is a tremendous service. Their technology is outstanding, their speed to stream is terrific, and users love it. It's just a math problem. Under the math (royalty payments to labels) they're forced to agree to, they will never generate a profit.

Remember this isn't the first wave. Go look at the archive from 3 years ago, 6 years ago, 9 years ago, you will find the iLikes, MySpace Music, Napster. They all paid up front and did the same deals, and they've all gone to heaven.

Pandora is another tremendous service that people love and yet may never make a profit.

The company’s stock got hammered after Pandora announced another losing year and predicted future losses.

The service’s loss widened to $16.1 million from a previous loss of $1.8 million despite nearly doubling revenue.

You’d think that doubling revenue would be good news, but Wall Street was expecting even higher revenue.

More troubling was the similar trajectory of expenses. Expenses increased at an even faster rate than revenues. On top of that, Pandora admitted to a 23% drop in active user growth.

Now analysts are questioning whether Pandora can even get its stock back up to its IPO price, let alone beyond.

Despite rosy predictions for the future of Internet radio and streaming services, the inevitability of pure-play success over local radio seems less certain than ever.

It is becoming even more obvious that broadcast radio is far from dead. Quite the opposite.

Radio groups continue to attract the majority of listeners and consequently the majority of radio dollars.

It is this continuing flow of advertising dollars that will enable broadcast to prevail over pure-plays on the Internet. Broadcast radio simply has much deeper pockets.

And all the hot money chasing radio dreams can't beat that.

Streaming Out to Crush Radio?

A recent Adweek cover with its smashed radio and bent antenna has all the earmarks of another hatchet job on radio.

The screaming title Is Streaming Music Out to Crush Radio Advertising? appears just one more example of the “radio is dead” meme that dogs broadcast radio.

So it is particularly ironic that the story by Erin Griffith is one of the more balanced looks at the battle between broadcast radio and its digital competitors. While most writers gush unfettered excitement over Internet radio’s future, Griffith captures the painful reality:

(Streaming services) pay a hefty rate each time a song is played. The services will never outgrow their costs, an unfortunate arrangement commentators have dubbed a "suicide pact."

Online radio's very survival depends on stealing ad dollars from its traditional counterpart, and it needs to do it fast.

Radio Insights made this point last August pointing out that the clock was ticking for the dozens of streaming services that want a piece of radio. In Is it Time for an Internet Radio Shake-Out? we noted:

Venture capitalists are still pouring money into music services and Internet radio providers. Pandora's successful IPO seems to have fueled even greater interest in the space.

VC money doesn't continue indefinitely, however. At some point, investors want to see a return on their investment, generally through an IPO. And there aren't any more Internet music IPOs in the pipeline.

That means these services are going to have to become profitable soon. That may be difficult.

We suggested that Internet radio was nearing a peak and that consolidation was inevitable, so it shouldn’t come as a surprise that cnet reports that MOG is being shopped.

Digital Music News notes:

MOG has always been a huge underachiever in the subscription market, though we've heard that the MOG Music Network (MMN) is actually quite lucrative. Either way, it looks like all or part of MOG is now being plumped for sale.

The website points out that the company has received $33 million in funding and has yet to make a profit.

After pumping hundreds of millions of dollars into streaming services, venture capitalists may finally realize that taking a piece of broadcast radio’s $17 billion (let alone becoming profitable) may be more difficult than they thought.

Pandora’s Home-Grown Ratings: Methods & Motives

Pandora claims it has more young listeners than any local broadcast radio station. If 11 million Google hits are any indication, the world seems to believe it.

But is the claim a valid comparison, and is it a trustworthy claim?

The answer is no on both questions. The comparison is meaningless, and worse, the numbers supporting the claim are shaky.

And despite Pandora’s assertion that their efforts are to provide a useful comparison for media buyers, the exercise seems designed to do just the opposite.

Explaining why Pandora created their own ratings, Pandora CRO John Trimble claimed:

Accurately reflecting our audience listenership is critical to our clients....AQH, is the industry standard for buying radio advertising providing buyers with an apples-to-apples metric....AQH comparisons enable advertisers to fully understand the scope and scale of Pandora’s audience. (See here and here.)

But it seems the effort is more for Wall Street than Madison Avenue.

When Pandora first released its AQH numbers inviting comparisons to local broadcast ratings, we pointed out that comparing millions of streams to a single local broadcast signal is meaningless.

An honest apples-to-apples comparison is comparing one corporate audio service to other corporate audio services in the same area.

According to Pandora’s own home-grown ratings, the service has just a fraction of the local audiences of broadcast companies like Clear Channel, Cumulus, Univision, or CBS in any market.

And that is assuming the Pandora numbers are accurate.

The more troubling question is the reliability and comparability of Pandora’s local numbers.

Pandora invites comparisons to Arbitron numbers by using the same terminology, but how comparable are its numbers?

Arbitron weighed in with a carefully worded critique of “recent releases of audience estimates” raising numerous doubts about Pandora’s methods of calculating audience.

Rather than use Triton Digital, Pandora's own ratings provider, and the Media Rating Council (MRC) accredited leader in measuring audio streaming, the service hired a company without ratings experience.

Why didn’t Pandora use the leader in streaming measurement, especially after Triton announced that it would be offering its own local ratings?

On top of that, the company that produced the ratings used a method that is undocumented, and to our knowledge never tested against traditional measurement.

It is not used by Triton nor comScore, the two MRC accredited Internet measurement providers.

The data used to create the ratings came from music logs used by SoundExchange to determine Pandora’s royalty payments.

Perhaps this approach will ultimately prove to be an acceptable method of generating ratings, but what testing has been done? How has it been validated?

Rating providers go through a lengthy and laborious process to gain MRC accreditation. Just ask Arbitron.

The MRC checkmarks tell media buyers that they can trust the numbers media companies provide them.

Cavalierly releasing unaccredited ratings may have created great headlines for Pandora, but with so little known about the reliability and comparability of these ratings, the company has done a disservice to media buyers.

If Pandora is going to get into the home-grown ratings business, it needs to offer greater transparency about the reliability and validity of the numbers it releases.

Otherwise, it ought to leave the ratings business to Triton Digital, comScore, and the other experts.

Pandora Ratchets Up Assault: The Fix is In

Pandora has a long history of confusing its aspirations with reality, presenting guesstimates as fact.

Two years ago we noted Tim Westergren’s seemingly pathological need to denigrate local radio using unsubstantiated unverifiable statistical factoids, confident that no one would question his numbers.

Since going public, Pandora executives have pursued the same wink-filled PR path, offering upbeat predictions backed by shaky statistics nearly always coupled with a solemn reference to broadcast radio’s imminent death.

The pitch of Pandora’s PR drone has recently kicked up a full octave, perhaps a consequence of Wall Street’s skeptical response to the service’s prediction of a bright future.

Pandora’s stock price is stuck below it’s June 15, 2011 debut, barely half of its first day’s high.

Over 40 million shares traded hands that grand day, and all those people who bought the future of radio at $26 can’t be too pleased seeing their investment chopped in half.

So Pandora’s PR machine has changed gears.

The service’s exponential growth in Triton Media ratings is old news. New month, new record numbers. The story has been told with numbing frequency.

Pandora is like the school yard bully that has already beaten up all the kids at school. The bully needs somebody bigger to beat up.

So Pandora has stopped picking on its weenie streaming competitors and instead is taking aim at someone considerably bigger: local broadcast radio.

In July the service released numbers it purported were AQH ratings, for the first time enabling the service to claim it is just as big as broadcast radio.

Pandora’s accomplis in this assault on local radio claimed, “this data demonstrates the significance and scope of Pandora’s audience.”

Like most of the other statistics Pandora releases, the AQH release had a thin shell of credibility.

Citing AQH invites, even begs one to compare Pandora’s numbers to Arbitron’s station ratings. And lest anyone miss the point, Pandora’s CRO John Trimble notes:

AQH is the industry standard for buying radio advertising and providing buyers with an apples-to-apples metric is just one of the things we do to help advertisers.

It didn’t help that Arbitron abetted the crime by allowing the release of broadcast station AQH ratings (KIIS 0.7 Pandora 0.9, WHTZ 0.6 Pandora 0.7, etc), a clear violation of the company’s “fair use” guidelines but then blocked our attempt to provide more meaningful comparisons.

With the duplicity of Pandora sycophants, the announcement and release ricocheted around mainstream media, radio trades, blogs, and then back to mainstream media so that today everyone just accepts the “fact” that Pandora is bigger than any local radio station.

If you Google Pandora beats local radio, you’ll find close to 11 million links. Yet Pandora's number-crunchers indignatly claim with a straight face that they had nothing to do with attempts to compare Pandora numbers to terrestrial radio stations. 

Radio’s giant flywheel of a ratings service finally got around to releasing a well-written thinly veiled response to Pandora’s scribbles, but long after the damage was done.

Arbitron’s paper (PDF) should be required reading by pundits who gush over Pandora, but we doubt few will bother. The fix is in.

Radio, showing vigilance that would make the guardians of Troy blush has finally gotten indignant about Pandora’s made up numbers now that Pandora has announced 13-25% gains in their made-up ratings.

And radio’s slow-motion push-back led to some defensive back-peddling on the part of Pandora’s enablers, but too late.

There’s blood in the water. Pandora’s fix is in.

CRO Trimble once declared that, “accurately reflecting our audience listenership is critical to our clients,” but that isn't going to stop Pandora from continuing to release their home-brew ratings.

And we bet they will show dramatic growth.

Did we mention the service is now releasing cume numbers?

Next post we’ll look a little more closely at the back of the envelope Pandora uses to calculate their numbers.

We’ll also explain why radio’s response has so completely missed the mark.

Pandora vs. Local Radio: Second is the First Loser

Have you seen research that says listeners love Pandora more than local radio?

It’s wrong.

Not the answer. The question is wrong–-and misleading.

It’s wrong because people don’t listen to local radio. They listen to local radio stations. The difference is critically important in how listeners answer the question.

If you want to know whether a person prefers Pandora to local radio stations, you have to ask the listener about the specific radio stations he or she listens to.

People only listen to a few local radio stations, and they feel most strongly about just one or two.

Listeners don’t think much of local radio because they don’t like most local radio stations. In fact, even before Pandora and on-line alternatives, listeners thought most local radio sucked.

But a person’s favorite local radio station isn’t like all the others he or she doesn’t listen to. It’s special–-and to that listener much better.

That’s the problem with research comparing local radio to Pandora.

Lump all of local radio together, and of course Pandora is going to look better.

A much fairer comparison is to ask a listener to compare his or her favorite local radio station to Pandora.

Harker Research recently did that, and Pandora didn’t look nearly as strong as the headlines suggest.

We found that listeners rate their favorite local radio station higher than Pandora. And more importantly, one’s favorite radio station would be harder to replace than Pandora.

But that only applies to a listener’s favorite station. While a person’s P-1 station is better than Pandora, Pandora beats a listener’s second favorite. And not by a little, but a lot.

A listener has one local radio station that he or she can't live without, but Pandora does a pretty good job of replacing the rest.

So the good news is that Pandora isn’t better than a person’s favorite local station. The bad news is that it is better than all the others.

There’s been a lot of talk about how PPM is all about cume, that being a listener’s P-1 is less important with PPM.

Even if that were true (and we don’t think it is), it clearly isn’t true if we factor in future competition from personalized Internet radio.

Pandora isn’t going to replace local broadcast radio, but it will make it harder to survive as a mediocre station.

Streaming Economics: Grow & Lose More Money

Once again Pandora was bragging about its growth during the recent Investors meeting.

While user numbers and top line revenue figures paint a rather upbeat picture of the service’s future, the made-up metrics couldn't conceal the real story, the upside-down economics of streaming.

Business Insider recently looked beyond the hype and came to this conclusion about Pandora:

The more users it has, the more advertising it can sell against those pairs of ears. But at the same time, the more ears that listen and the longer they listen, the more songs they hear and the more Pandora must pay out in music license royalty fees.

The analysis includes a number of graphs that illustrate the point. Take a look at one example shown at left. Revenues and expenses are moving in lock-step.

Broadcast radio has efficiencies of scale. It costs the same to reach one listener or a million listeners. Compare that to streaming radio where costs rise with each additional listener.

Pandora’s revenues have doubled over the past year, yet royalties still consume 50% of Pandora’s revenue. On top of that, royalties are scheduled to increase another 37% by 2015.

Making matters worse, Pandora’s user growth seems to be slowing. According to Seeking Alpha, this quarter’s growth rate was the lowest in three years.

Add to that a reluctance for users to upgrade to the $36 Pandora One, and the service has even fewer options for breaking out of the vicious cycle of revenue and costs tracking each other.

Pandora has to raise its advertising rates, or it has to run more ads.

Pandora users are already noticing the increased ads. One of the attractions of Pandora was the clean limited spot-load of the service. That image is already suffering with the increased load.

Loading up on spots will diminish it’s advantage over broadcast.

The only alternative is to raise rates.

The problem is that Pandora’s CPMs are already considerably higher than broadcast radio’s. The service’s ability to directly target users may be worth a premium, but there is a limit to what an advertiser is willing to pay.

While broadcasters can take some pleasure watching Pandora struggle, streaming’s perverse economics apply to broadcast streams as well.

Broadcast radio groups are essentially using broadcast profits to keep unprofitable streaming afloat.

If new-media pundits are right and ultimately most radio listening is done via streams, broadcast will see revenues decline and expenses increase.

Radio’s cost of doing business will look a lot more like Pandora’s.

That’s why it is important to continue to invest in broadcast. A dollar of revenue on the broadcast side is worth a whole lot more than a dollar on the streaming side.

Riding Pandora's Coattails

The continuous stream of Pandora stories and the repeated retelling of Pandora’s near death and phoenix-like rise to Internet radio preeminence has provided those in its shadow a free ride into mainstream consciousness.

Because of Pandora’s meteoric rise, everybody assumes Internet radio use is growing by leaps and bounds. Because of Pandora, everybody knows that broadcast radio’s days are numbered, that soon radios will go the way of typewriters.

And Triton Digital’s streaming ratings prove it. Or do they?

According to RAIN:

While listening to broadcast radio simulcast online is indeed growing, it’s the huge gains made by Pandora (and to a much lesser extent, other “pureplay” Internet radio outlets) that’s powering that growth.

Two years ago, 70% of online listening Triton measured was credited to simulcast streams of broadcast radio. As of September’s numbers, it’s online-only radio that accounts for 70%.

Sounds like Internet radio growth is really coming at broadcast’s expense. Right?

Let’s look at the facts and see what’s really going on.

Unlike Arbitron which measures radio listening to all stations regardless of whether they subscribe, Triton Media only measures streams of clients who pay Triton.

The analysis and story compares September 2009 to September 2011. Triton Digital (then Ando Media) had a lot going on.

Pandora had just become an Ando client. Desk-top listening was first measured in August 2009, but their mobile listeners weren’t measured until January 2010.

Slacker signed up much later. It’s audience wasn’t measured until July 2010. That means the Slacker audience wasn’t included in the September 2009 report.

Like Pandora, Slacker ratings initially included only desk-top listening. Their mobile listeners weren’t measured until December 2010.

These subscriber changes make trending Triton Media ratings extremely misleading.

The first period does not include Slacker at all and does not include Pandora mobile numbers. The second period includes both services and mobile listeners for both.

Just these measurement changes are going to give the illusion of growth. So should there be any surprise that the tables tilted towards pure-play during this time?

There’s genuine growth buried in there, but the growth is inflated.

And Triton Digital ratings raise questions about the assertion that broadcast’s 70% of streaming has fallen to 30%.

Looking at Triton’s monthly rankers, broadcast streams made up about a third of Average Active Sessions (AAS) in their September 2009 report. The September 2011 report shows broadcast streams making up about 20%.

So the drop is much smaller, and Pandora is virtually the only reason broadcast dropped.

Over this period, Pandora increased their AAS by about 600,000, an increase of over 400%.

Yes, hats off to Pandora. That’s a tremendous growth story. But this is one tide that has raised a single boat.

When Slacker became a Triton client it added nearly 30,000 AAS to pure-play’s side of the ledger. Then a few months later when Triton started including their mobile audience, it increased Slacker’s apparent audience by 83.3% in just two months.

At first glance it would seem that Slacker took off just like Pandora, but that’s not the case.

Since Slacker has been consistently measured, its audience has barely grown, certainly nothing like Pandora’s. In the last nine months they’ve only added a little over three thousand listeners, a very modest 12.2% increase in AAS.

Hardly a rocket.

The story acknowledged that broadcast streams have also increased over the past two years, but the claimed 70/30 flip-flop seems to suggest that growth is sputtering.

It turns out that broadcast listening has increased nearly 50% over the period, not a bad performance given Pandora’s momentum.

Pandora is to pure-play streaming what Apple is to tablet computers. Each is not only the category leader, it is the category.

Slacker and other pure-play services are the HP Slate and Blackberry Playbook of streaming, also-rans riding the coattails of Pandora’s success.

They only wish a rising tide floats all boats.

An Open Letter to Ford

In a recent open letter to radio Jim Buczkowski, a Ford Research and Innovation director, accused broadcasters of dragging their feet regarding HD Radio, declaring:

HD Radio technology can provide this look and feel (of dashboard consistency), but analog radio cannot.

Perhaps the Ford Research and Innovation department should worry more about the dangers of their MyFord Touch system rather than condescendingly complain about analog radio.

In January we reported that Ford buyers were so confused by the system that dealers were putting on 45 minute sessions to explain how to operate MyFord Touch.

Now Consumer Union takes Ford and the other manufacturers to task in Connected Cars: A New Risk. Devoting five pages of their annual car issue to the subject, they declared:

The control systems in many models–-the way you operate the audio, climate, navigation, and other systems–-are becoming needlessly complicated.

Consumer Reports concluded that:

Any system that requires drivers to take their eyes off the road for too long or engage in unnecessary distractions can be dangerous.

And voice recognition systems don’t seem to be the answer. University of Utah researchers found that even systems using speech increased driver reaction time by 30 percent.

In a side-bar called Controls Gone Wild, Consumer Union points out that for a parked Ford Focus it took a trained human-factors engineer six steps and 11 seconds to just launch an iPod.

On a BMW it took the engineer six steps and 10 seconds to manually tune the radio.

On a Hyundai Equus it took the engineer only five steps and 5 seconds to choose a radio station preset. (Click on box at left.)

In other words, the safest audio task you can do with these complicated infotainment centers is tune to one of your regular analog radio stations.

And of course its safer, takes even fewer steps, and less than 2 seconds to do the same thing on a regular radio, a point made by Consumer Reports.

Maybe instead of complaining about analog radio, Ford ought to redesign their Touch system so that it’s as easy as changing your (analog) station. Now that would be innovation.

Think Streaming will Replace Radio? Think Again.

Do you think soon streaming on a smartphone will be the primary way people listen to radio?

A lot of broadcasters at the recently concluded Radio Show thought so. Before you agree, better look at how much a listener is going to pay.

A story in this month’s PC World points out how quickly a smartphone can run up against data plan limits.

According to the author, streaming Pandora consumes about 24MB an hour.

If you’ve got AT&T’s $15 200MB plan and you’ve maxed out your plan watching Hulu or YouTube, uploading pictures to your Facebook account, or sending emails with your latest Hipstamatic creation, listening to Pandora is going to cost you $1.80 an hour, a little less if you use their lower quality settings.

Smartphone radio listening during the daily commute could cost more than the Starbuck’s Iced Latte you picked up on the way.

When Pandora recently eliminated the 40 hour per month limit on free listening, many users cheered, but they must not have been 3G listeners. Now Pandora will allow you to spend up to $320 on their "free" plan.

If your boss won’t let you use the company WiFi to listen during the day (many companies are starting to ban Pandora in the office because it chokes networks), you could rack up $200 a month using your smartphone at work.

If you’re smart and sign up for the $45 4GB plan and watch no videos, upload no pictures, and otherwise minimize your data consumption, you’ll be able to listen to streamed radio up to 140 hours a month and not incur any data overage costs. That's not much more than four hours a day.

That’s more than the typical person listens to radio now, but who can resist the occasional YouTube or Hulu video? Who can resist the occasional download or email attachment?

If the smartphone does become the Swiss Army knife of information and entertainment, are people really going to spend their bytes on radio when they can get it for free?

AT&T provides a useful online tool to estimate how much data you are going to consume. Give it a try and see what you come up with.

The notion that soon we’ll all be watching Netflix movies, playing games, listening to the radio, and placing video calls from our smartphones assumes that data rates are going to go down, but the opposite is happening.

One by one, the carriers are eliminating unlimited plans. Most people are going to have to budget their data and watch their consumption.

The bottom line is that the belief that most listeners will switch from broadcast to streaming is a pipe dream. But AT&T, Verizon, and Sprint hope you’re right.

Did Radio Get Its Mojo Back?

Last week’s RAB/NAB Radio Show could well be remembered as the moment that radio got it’s mojo back.

The mood at this year's convention was several notches above the apocalyptic doom of the last few years. Determination and steely resolve have replaced fear and anxiety of the recent past.

RAB President Jeff Haley's upbeat keynote address set the tone, and that tone echoed throughout the meetings that followed.

The previous fatalistic attitude regarding the threat of new-media was replaced with an upbeat assessment of broadcast’s ability to match and even better the digital initiatives of digital pure-plays.

Broadcasters seem to have found a mental sweet spot rejecting both a nostalgic hope that the happy days of the past will return, and the belief that radio’s digital evolution will be pain-free.

Discussions focused less on the threat of digital, and more on practical ways to exploit digital.

The zealous new-media true-believer panelists of previous conventions were replaced by more practical realists willing to acknowledge new-media’s challenges and limitations.

In past broadcast gatherings, any talk about radio’s ability to survive digital's onslaught was met with skepticism and derision. This Radio Show showed more balance, without either pollyannasim or chicken-littleism regarding broadcast radio’s future.

It was refreshing to see the industry emerge from the bunker.  Looks like broadcast radio has its mojo back.