Radio InSights

Face It: Shock Sells.

There’s no such thing as bad publicity.

It’s a cliche' that Rush Limbaugh is testing in his defiant response to efforts to get him fired.

(We’re going to skip a review of the controversy, but if you’ve been living under a rock, go to Google News and type in “Limbaugh Fluke slut” to get up to speed.)

We're also not going to gloat and point out that people who have declared broadcast radio dead, writing it off as totally irrelevant, are the same people who are apoplectic that a host broadcasting on this irrelevant medium can generate such passion on both sides.

As new-media centric Ars Technica observed:

It seems appropriate to make an observation that hardly anyone else has. This latest Limbaugh Eruption indicates that broadcast radio still really matters.

The teachable moment for radio is what interests us. Will the concerted effort to get Limbaugh canned succeed? Will this hobble his show, either creatively or financially?

Does this open the door for Mike Huckabee, who Cumulus was already grooming to compete against Limbaugh?

And if the effort to boot Rush fails, and it instead boosts Limbaugh’s status, what does it say to us about the kind of radio that your listeners want to hear?

A great deal has been made about “no Limbaugh” dictates coming from major agencies and businesses. While the latest dictates have fueled the debate, the truth is that every controversial host attracts similar dictates.

Howard Stern had more than his share. Virtually every controversial “shock jock” morning man has had them.

And what about upset listeners, critical tweets, and organized Facebook efforts to get controversial personalities fired?

With all this aggravation, why do stations hire shock jocks and then defend them?

Because shock sells, and it sells at a premium.

Limbaugh says outrageous things that infuriate his detractors. But he also has a loyal devoted audience that keeps coming back.

In many markets Rush delivers two or three times the audience that his competitors deliver.

“Mike Huckabee is the latest in a long line of those who have attempted to compete with Rush,” was Premiere’s response when the Wall Street Journal picked up on Huckabee’s roll-out.

And they’re right. Bill O’Reilly, television’s most watched political talking head, couldn’t. Dennis Miller hasn’t. No one at Talk Radio Network has.

Which is why 99.9% of Limbaugh affiliates have not cut him loose since the Fluke story broke.

Shock sells.

Which brings us back to Mike Huckabee.

More Conversation, Less Confrontation. That’s the pitch, and that’s Mike Huckabee.

Perhaps America is ready for less confrontation. Perhaps America is ready for a guitar playing alternative to Rush Limbaugh.

The WSJ reports that Huckabee will launch with 140 stations. We wish Mike Huckabee and his 140 affiliates good luck.

This is a battle that every radio station with a controversial pain-in-the-butt personality should watch.

And it could produce an outcome with profound implications for the future of Talk radio.

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.

Radio Alchemists, Butterflies, Pasteur, & Matt Damon

Down deep programming people want to believe that there is some magic formula that guarantees ratings success.

We’d like to think that programming a radio station is like baking a pie. Use the right ingredients, mix and cook it properly, and the station will be a winner.

And not only that. Once we found the secret recipe, we’d hope that the recipe could be duplicated in market after market, a success in everyone of them.

Unfortunately, most efforts to replicate successful stations have failed.

Time and time again a format that succeeds in one market fails in others. Each time a radio group replicates a very successful station across other markets, the results are uneven at best.

But like the persistent efforts of medieval alchemists to turn lead into gold, the search continues for that elusive recipe.

Arbitron and Mediabase recently collaborated in an effort to understand what makes a music station successful.

They analyzed music station playlists in an effort to find a link between playlists and ratings success.

Surely there has to be some difference between the playlists of successful and unsuccessful music stations.

Actually no, it turns out there isn’t any:

The percentage of airplay devoted to the most played songs in individual formats is largely the same–whether a station is ranked first in its target demo or not.

Two stations can play the same music in the same rotations and yet one can be a winner and the other not.

You might be thinking that there must be some overlooked non-music explanation. Maybe the winner has a better morning show. Maybe they market themselves better.

Sorry to disappoint, but even if stations in two markets are identical in every respect, the two stations will not produce the same ratings, or even the same rank.

It’s the Butterfly Effect.

Radio markets are like snow flakes: Every market is unique.

A radio station’s share and rank are the consequence of a complex mix of historical and competitive factors.

Long forgotten historical facts (called initial conditions) like a very popular Top 40 or Rock station can tilt a market more pop or rock.

The strength of an Oldies station can have a big impact on a Jack station. A Jack station can have a big impact on a Classic Rock station. CHR can impact rhythmic formats, and rhythmic formats can impact CHR.

A music format does not have some intrinsic appeal that determines a radio station’s share.

Share is determined by music appeal tempered by market history, market characteristics, competitive pressures, and even where the station is on the dial. And a thousand other factors we can’t control.

The Butterfly Effect refers to the belief that the flapping of a butterfly’s wings can help create a hurricane weeks later.

Initial conditions, nearly undetectable earlier perturbations can dramatically change an outcome.

It’s the stuff of science fiction. It’s Matt Damon and The Adjustment Bureau.

But it’s true.

Many if not most of the reasons one station succeeds and a similar station fails is beyond our control.

Skill, ability, and experience still matter. Louis Pasteur captured this by declaring:

Chance favors only the prepared mind.

Chance will determine what rolls past you. It is your skill, ability, and experience that determines what you do about it.

So stop looking for secrets of ratings success. Stop thinking that if you just copy what some successful radio station is doing, you’ll be equally successful.

Winning begins with understanding the Butterfly Effect. Winning begins by understanding initial conditions, chance, and randomness.

And winning happens when you create the best damn radio station possible when you’re handed all these things.

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.

Is a Hit Song Just an Algorithm?

Is a hit song just an algorithm?

Is there a formula, some special combination of sound codes, that can tell us whether listeners will like a song?

Apparently some people think so. They feel humans are inferior to computers and artificial intelligence in determining what songs you should play.

There’s a tremendous effort going on to build large song databases, coding each tune with such things as tempo, key, and instrumentation.

Perhaps the best known is Pandora’s Music Genome Project (MGP). Musicologists coded Pandora’s 800,000 songs with up to 400 distinct characteristics, everything from chordal patterns to such things as instrumentation and even something called “motion inducing.”

At least Pandora enlisted the help of humans to build their database.

As we highlighted in Want to Build Your Own Pandora? the latest efforts eliminate human input altogether. Computers are replacing Pandora’s musicologists:

A new collaboration between Columbia University researchers and The Echo Nest, a company that tracks online music and delivers listening suggestions to users, hopes to take the human element out of Internet radio. One goal is to deliver better recommendations and more songs through improved artificial intelligence.

Leave it to computer geeks to conclude that the pesky “human element” is hampering song recommendations.

Echo Nest claims to have coded 30 million songs:

Echo Nest has some 5 billion data points for more than 30 million songs in its database, such as artist connections, song similarity, mood, style and acoustic attributes.

You may recall that Clear Channel hired Echo Nest to help create iHeartRadio’s personalizing feature, their version of Pandora.

So is curated radio dead? Will music directors be replaced by computers armed with 5 billion data points to decide what songs to play?

We don’t think so.

IBM’s Watson might be able to win at Jeopardy, a computer might even be able to compose bad poetry, but computers can only mimic. They still cannot create.

Creative music programming is an art, perhaps a dying art, but not a dead art.

The creative part of music programming is finding a balance between the predictable and familiar, with the unpredictable and unfamiliar.

One of the initial complaints with Pandora was that it was too predictable. Every song sounded like the songs that preceded it.

That shouldn’t have come as a surprise. Pandora’s MGP is all about finding songs that match the profile of the seed song.

Of course, the songs are going to sound similar. The very essence of Pandora was to offer up more of the same.

But a listener quickly becomes bored with a string of similarly sounding songs. She needs the right touch of variety. Something that surprises in a pleasant way.

That’s the art that every good music director, every good nightclub DJ understands.

So Pandora responded by adding variety, essentially de-tuning their algorithm.

But it still hasn’t solved the problem. Many Pandora users now just create a new channel every time they sign on in the hopes that the new channel won’t sound as boring as their old channels.

Will computers and artificial intelligence, outperform Pandora’s musicologists and radio’s best music directors?

Will the right algorithm make radio stations sound better?

More likely the opposite. It will make radio stations sound even more predictable and boring.

The trend towards homogenized national playlists has already made local radio stations sound predictable and boring. Layer on top of that an algorithm that makes sure all the songs sound the same.

That will make for some exciting radio.

TV Viewers Multitask. What About Radio Listeners?

Nielsen has just released a new study documenting Americans’ simultaneous consumption of old and new media.

As reported at nielsenwire, 70% of tablet users and 64% of smartphone users use their devices at least several times a week while watching television. A large number (42% and 40% respectively) do it everyday.

The majority of people use their smarthphone or tablet to check their email, but large numbers also use them to kill time during commercial breaks.

The fact that people read their emails while watching television shouldn’t come as a surprise. This is just the latest in a long series of studies that confirm that media consumption is not a zero-sum game.

New-media growth does not have to come from cannibalizing old media. In fact, some studies have shown that new-media can drive increased interest in traditional media.

A 2009 Radio Insights post highlighted an earlier Nielsen study showing that new-media does not take away from traditional media.

Nielsen’s Susan Whiting noted that:

Another misconception among some in the industry is that media consumption is a zero-sum game--with television the potential loser. Yet recent research...confirms what we at Nielsen continue to find: that people keep adding more media to their lives without abandoning their TVs.

This was before the release of the iPad and when feature phones out-numbered smartphones. Now two years later Nielsen finds little has changed. New-media consumption continues to grow while people continue to consume traditional media.

So is that true with radio? Are people using their smartphones and tablets while listening to radio?

It’s a good question, but one that remains unanswered. In a 2009 post we lamented the fact that no similar research had been done looking at radio.

In 2010 we pointed out that while Nielsen continues to fund studies demonstrating the continued strength of television, Arbitron, which makes nearly all its revenue from radio, had yet to conduct similar research for radio.

Arbitron still hasn’t shown any interest in studying the relationship between radio and new media consumption.

The company spent its time on this year’s Radio Show main stage telling us such things as there’s been tremendous growth in car GPS units, and that drivers would love a system that helped them recover their stolen car. Wow.

Now that’s the kind of information every radio station can benefit from.

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.

Rock Dying? Wrong Question. Wronger Answers.

 Is Rock Dying???

That was the Molotov cocktail recently thrown by a trolling editor apparently in search of combustible material (link not provided–no sense encouraging trolls).

He found it in the form of a rock consultant, who predictably wanted to defend rock’s reputation along with the sizeable cash flow it provides.

Unfortunately, two wrongs don’t make a right.

The question was silly, only posed to serve as an ignition source. Worse yet, the defense was misguided, failing to answer the question, or the more meaningful question behind the question.

No format has ever died.

Formats are like bacteria. They evolve faster than they can be killed.

Each format can be traced back through a series of prototypical formats that preceded it. Formats continually evolve while retaining a good bit of the previous formats’ DNA.

It’s just like natural evolution. We all can be traced back to the original primordial ooze, and some like consultants can be traced back with very few intermediate steps.

The only reason we distinguish between bacteria, cheetahs, and ourselves is so paleontologists know what drawer to store the bones in.

They even invented a fancy name: taxonomy. Taxonomy, the Dewey Decimal System of life, divides the natural world into arbitrary unnatural categories.

Not to be outdone, radio divides programming into arbitrary formats.

As far as we can tell, the original purpose of format labels was to help record companies decide which stations to call to work a record.

Format labels don’t help radio stations or listeners. We’ve yet to find a listener who decides to listen (or not) based on what R&R (R.I.P.) called the station.

As an aside, the fluid amoeba-like nature of formats makes the notion that people “create” formats a slippery one. One can author a label (think Mix, Hot Hits, or Jack), but only God can create a format.

Mere humans and consultants can only make Recombinant DNA and give it a name.

In the days before Mr. Mike translators counted, there were 10,000 program directors, all independent, virtually uncontrollable, programming 10,000 fire-breathing RF emitting entities all providing entertainment. At least the PDs thought they were entertaining.

That PD independence meant there were something like 9,999 different sounding radio stations.

Anyone in radio back in the 1960s and out of rehab will back us up on that.

Like taxonomists who worry about what drawer to put the bones in, people like Bill Gavin tried to herd these cats into a few broad format categories.

He never fully succeeded, and as others reversed his efforts, radio started getting more and more formats, perhaps to help create more record rep jobs...and more lavish conventions.

While radio is now down to about five program directors, and an equal number of record reps, we now have 13,000 emitters, even 13,003 if you count successful HD stations, so the taxonomic task remains unsolved. Perhaps unsolvable.

Which brings us back to our bomb thrower and Rock.

First, Rock is not a format. It is a convenient–-some might even say lazy label that loosely describes a body of music lacking a meat-wearing lead singer.

Rock is to a listener what pornography was to Supreme Court Justice Potter Stewart, they know it when they hear it.

More specifically, people know Hard Rock with the emphasis on hard when they hear it.

This notion that we can lump the Eagles, Alternative, and Metal all together, call it Rock, and then debate whether it is dying is as arbitrary as calling Archaeopteryx lithographica the first bird.

The second problem is using Arbitron ratings to assess the health of a format.

How can both stations soaring in the troposphere with double digits and stations clinging to the right side of a one share be assigned the same format? And be given the same health status?

Its like creating an “average” injury report for a bus accident with a couple of deaths, a few people with serious injuries, and many minor injuries.

“How’s everybody on board doing?”

This is the problem with the response of Rock’s defenders. To “prove” that Rock is far from dead, they point to a few highly successful Rock stations:

But if Rock is dead, you're going to have to explain that to Greater Media in Detroit and Philly where their two Rock stations are usually Top 5 25-54 adults and often higher.

A factually accurate statement that says absolutely nothing about the health of Rock-–like highlighting the bus accident’s minor injuries and ignoring the deaths.

Last month WCSX had a 5.1 and WRIF had a 4.5 share (insert Arbitron disclaimers here).

A total of 84 other Rock stations didn’t fare as well. The average station scored a 3.7, and half of the field were below a 3.6. Seventeen stations couldn’t crack a 2 share.

Hell, the leading Classical station beat 39 Rock stations, and the Classical station is found on the left side of the few remaining analog dials!

Ah, the warm glow.

Other rock defenders channeling Mark Twain reminded us that there has always been talk of formats dying. (You post-literates need to Google: “Reports of my death are greatly”)

That defense misses the mark as well. Like Mel Gibson, all formats go in and out of fashion. Even if formats never die, debating the health of a format is legitimate and something the industry should do more often.

To really assess the health of Rock or any other format, we can’t just point to a few highly successful stations. It take a much more thorough examination of all the stations in a format, and over time.

An exercise that we will illustrate in our next post.  

HD Radio’s Latest Successes: This is Awkward.

You’ve probably heard about the HD Alliance’s recent success  in getting additional car  manufacturers to offer HD Radio in their new models.

The latest, the 2012 Kia Soul, joins the redesigned 2012 Toyota Camry and Lexus GS350 as new additions to a growing list.

The total number of badges is 19 including BMW, Bentley, Mercedes, Rolls-Royce, and Tesla.

With such a distinguished list of manufacturers, wouldn’t it be a good idea to have something for buyers to listen to?

According to the Alliance, there are about 1,300 HD2-4 stations in the US.

Back out the AM stations simulcasting on sister station HD channels and we end up with maybe another thousand FM options for the 213 million listeners in Arbitron’s 282 measured markets.

The limited number of new stations still might be enough to motivate some buyers to pop for an HD upgrade if the new options appealed to the typical new car buyer.

Unfortunately, buyers will find mostly specialty and niche stations.

HD Radio has created 17 new options for New Yorker FM listeners, for example. These include a Catholic channel from Seton Hall University, a Caribbean channel from SBS, and a “South Asian” channel offered by Emmis.

There’s certainly a place for Catholic radio, Indian radio, and all the other niche and ethnic stations that serve their communities. That’s what radio has always been about.

But is this the industry’s idea on how to make HD Radio a success? Offer mostly simulcasts and a few niche stations that attract small audiences?

All the work convincing more car manufacturers to offer HD may do more harm than good for the industry because it makes the paucity of HD options that much more apparent.

What are new Kia, Toyota, and Lexus owners going to think when they start looking for an HD station and find mostly the same stations they now find on AM and FM?

What are they going to tell their friends about HD Radio?

Let's not forget that many of the same car manufacturers who offer HD Radio today offered AM Stereo in the 1990s, some as standard equipment. Did that save AM Stereo?

Even if every car manufacturer makes HD Radio standard, the service will still succeed or fail based on the quality and variety of the programming buyers find on it.

Unless broadcasters create compelling programming exclusively available on HD channels, the service is dead in the water.

Music discovery: Shaping up as the New Battleground?

The other day we posted about eMusic Radio, thirty-nine curated new music channels. Now Google has just rolled out Magnifier, a blog devoted to new music.

While there are plenty of new music blogs, Magnifier goes one step further, allowing downloads directly from the blog to Google’s music cloud.

We can expect more streaming players to put greater emphasis on similar music discovery mechanisms.

Broadcast has pretty much abandoned its traditional role of introducing new music to listeners. Even today’s CHRs play it pretty safe.

High profile efforts like that of eMusic and Google could usher in an era of broad new music interest after decades of music conservatism, where listeners favored the familiar over the new.

If music discovery becomes the new battleground, broadcast will have to rethink the cautious hyper-familiarity that has become a hallmark of music radio.

Is This Why Classic Hits Does So Well?

A recent analysis of lead singers of the top touring bands may shed some light on why the Classic Hits format does so well.

It turns out that 94% of the top touring artists are over the age of 40. Not only that, 40% are over the age of 60!

Pollstar looked at the top grossing tours of the decade, determined the age of the lead singer, and came up with the proportions shown below, courtesy Digital Music News.

The findings raise some interesting questions for both the music business and radio.

Why are successful tours so old? Is it that only boomers can afford today’s ticket prices, or is there something more fundamental at work?

It takes an investment of something like $1 million to break a new act. Given the poor health of the recording industry, the labels are backing fewer new acts.

Fewer new acts means a smaller chance of finding the next superstars, so the labels continue to work the more reliable established acts–-even as the members grow older.

That’s good news for adult formats, but bad news for young formats.

Formats like CHR and Alternative need a steady stream of new product. And the more product coming out, the pickier music directors can be.

There’s a direct relationship between the quality of product and the success of a format. The stronger the music, the more listeners are drawn to a format.

(This is true for all formats, but adult formats have larger libraries that soften the impact when new hits become scarce.)

Formats that rely on a high proportion of new music have fewer options. When the quality of new music declines, the choice is between playing weaker new product, or playing a higher proportion of older product.

Either solution has a negative impact.Weaker product drives listeners off. Playing older music weakens the station's position.

One frequent criticism of broadcast radio is that it has abandoned young listeners. This isn’t really true.

The absence of young superstars has created a dilemma for potential new music stations. Superstars mold homogenous music tastes, a condition ideal for broadcast radio formats.

Today’s contemporary music is characterized by a tremendous number of niches that each attract small proportions of listeners. There is no homogeneous body of music that large proportions of listeners want to listen to, just the occasional surprise.

This impacts the concert business because there are fewer acts that can fill large venues. This impacts the radio business because it is more difficult to find a cohesive body of music that a station can play.

All this plays into Internet radio’s strengths. Specialized streams make more sense when the hits aren’t really hits. Today an artist can have a top 10 album and sell fewer than 30,000 units.

All these factors add up to a challenge for radio stations targeting younger listeners.

It also raises the specter of Lady Gaga going strong into her 60s. That will be something.

AOL Stumbles: A Teachable Moment for Radio?

Recent stumbles of two early digital leaders is a reminder that at Internet speed, winners can quickly become losers.

The struggles of AOL and Kodak should be a warning to both broadcast and its challengers that success is far from assured for either.

Millions of Americans discovered email and the Web using an AOL account and software. For years, AOL was synonymous with the Internet, but that was then.

Now AOL is struggling. The company has lost half its value in just the past year, 28% in the past few days. Today, Pandora has a higher market cap than AOL, despite a tenth the revenue.

A two year effort to refocus AOL into a content provider has faltered. Even the purchase of the Huffington Post for $315 million has failed to reverse declines in AOL traffic.

The New York Times reports that AOL's share of US display ad revenue continues to decline from 6.4% in 2009 to 4.2% in 2011. In contrast, Facebook has nearly 18% of display ad revenue, with Yahoo! close behind.

Kodak is most closely associated with film photography, but the company essentially invented digital photography, manufacturing the first commercially available digital camera.

Despite its initial technological lead, it faltered badly as it attempted to both keep film alive while at the same time reinventing itself as a digital photography company.

The company has had only one profitable year in the past six, and has watched as its stock price has fallen from $30 in 2006 to today’s $1.77.

Two pioneering companies with enormous strengths and deep pockets both find themselves struggling.

What are the lessons for radio?

First, there is no First Mover Advantage. In digital, the opposite is more often the case. Early entrants into a space help identify opportunities, but generally the companies that follow are more successful.

Google+ launched in June, years after the leading social networks, but it has already become the fastest growing social network, attracting nearly 30 million members in its first month. Analysts expect it to surpass LinkedIn and Twitter in its first year.

Pandora has shown there is a market for personalized radio, but not even a hundred million registered users is an insurmountable lead. Now it is up to broadcast groups to exploit the opportunity Pandora identified by creating their own brands of personalized radio, refining and expanding the category.

While watching immediate threats, keep an eye on the horizon. Personalized radio may be the future of radio, but it's popularity might fade to be replaced by something else.

Crowd-sourced radio like Jelli hasn’t gotten the attention that Pandora has, but broadcast shouldn’t dismiss it. Even while broadcast develops its own personalized channels, the industry should research alternatives such as crowd-sourced radio.

AOL understands that survival will depend on creating original content. However, failed efforts like Patch show that Internet companies don't understand how to create it.

Radio understands how to create unique content, but radio has to ratchet-up its investment in quality content to remain competitive with new threats.

Worry more about the quality of your product than how people listen to it. If the content is good enough, people will find a way to listen to it.

And radio can’t stop evolving. Radio's competitors will continue to grow and evolve, and broadcast has to adapt to remain competitive.

It all boils down to providing what listeners want. Remember, listeners decide what kind of radio they want to listen to, not radio groups.

Listen to listeners and make sure you offer the type of radio they want.

And understand that what they want will change, and that it can change quickly. Don’t be so committed to one approach that it blinds you to other possibilities.

Radio: Still Sounding Like It’s 1999.

The seemingly endless hand-wringing about radio’s digital future is all about peripheral issues.

Social media, web sites, mobile apps and streaming might seem important, but in truth they are worthless unless the product is right.

Radio today sounds pretty much as it did in the 1990s.Yet today’s listener isn’t anything like a listener from the 1990s.

A 1990s listener didn’t have many audio entertainment options. She listened to a handful of AM and FM stations, could play a CD, and now and then maybe watch an MTV music video.

Today’s listener has a seemingly infinite number of options from streaming stations to on-demand services, iPods, satellite, Vevo, social networks, and maybe a couple of HD stations in addition to the same dozen or so AM and FM stations.

As a result of the explosion of audio options from iPods to Pandora, today’s listener has much higher expectations than yesterday’s listener.

With more options than ever, today’s listener has much less patience for a radio station that falls short of her expectations.

This is radio's greatest challenge preparing for the future. While today's radio station is little changed, today's listener has changed a lot.

Radio’s failure to adapt the product to today’s listener is a far greater issue than worrying about Facebook, Twitter, or any of the other issues that seem to preoccupy the industry.

Take music.

A 1990s listener grew up with radio organized around music formats. Stations stayed within a format “lane” playing only songs that fit the format.

This rather cloistered arrangement meant that the 1990s listener heard a pretty small body of similarly sounding songs. Because of this, a listener accepted predictability and repetition as inevitable and perhaps even felt comforted by it.

Formats have all but disappeared for today’s listener. The ability to hear millions of songs with the click of a mouse has expanded the musical horizon of today’s listener.

Today’s listener downloads a little country, some pop, maybe hard rock, and maybe even a little international, for no other reason than she liked each song at the time and it cost virtually nothing.

Programming her own music she effortlessly segues between country, pop, and rock songs without giving any thought to whether they “fit.”

This means that when she tunes to a radio station, she isn’t looking for a format. She’s looking for songs she wants to hear.

Surprise and variety now share the stage with familiarity and comfort. She wants to hear something familiar, but at the same time wants to hear something different.

We can no longer refuse to play a popular song because it doesn’t fit the format. Today’s listener expects us to break format.

This even has implications for rotations and how songs move on and off the playlist.

When a listener could only hear a new song on one or two radio stations, we might power a song for weeks. However, today’s multimedia exposure to music means that today’s listener will grow tired of music much faster.

Today, a listener might first hear about a new song from friends on a social website, listen to it on Rhapsody, and then see the video on YouTube, all before radio adds it.

As a result of multimedia exposure, the velocity of a new hit is greater today. Radio is often the last place today’s listener hears about new music.

Music research today is more about measuring the trajectory of a song rather than determining the right moment to add a song.

We can no longer power a top testing song for eight or ten weeks even if it keeps testing. Today’s hits are far more perishable. At the speed of digital, a radio hit can quickly become  yesterday’s news.

What we test has to change too. With today’s listeners exposed to a much wider range of songs, music tests have to test a wider range of music, songs that stretch the boundaries of a format.

Adapting our approach to music is just the start. Every other programming element has to change too. We’ll get to those in future posts.

Pandora for Old People

Pandora for Old People. That’s how Fast Companycharacterized the announcement that AARP, an organization generally associated with retirement and Medicare insurance, was rolling out its own Internet radio service.

A spokesman for AARP speaking to the New York Times described the rationale for the service:

We've always been trying to reach this audience, because we know that boomers are so passionate about music. We also feel that because of changes in format and whatnot, a lot of them have gotten lost in terms of how to find their music.

The AARP may know a lot about retiring boomers, but the quote reveals a woefully simplistic and naive view of radio listening.

With so many radio people out of work, this may represent a great opportunity for a former program director to teach the AARP about “formats and whatnot.”

AARP’s launch of their own streaming service also shows the ease with which Internet radio services can be launched.

The free service offers 18 channels supported by advertisers that want to reach AARP’s 37 million members.

And AARP offers something on their free service that even Pandora doesn’t offer--a skip button!

Want to Grow? You Need a Bigger Tent.

In a recent analysis of PPM ratings, we determined that cume has a bigger impact on share than either TSL or occasions. The natural follow-up question is the relationship between cume and TSL/occasions.

Is it true that cume and TSL are inversely related, that stations can't have a large cume and high TSL? More importantly, can a station grow both cume and TSL at the same time, or does one go down as the other goes up?

It’s a much more complex issue than you might think.

Returning to the rating data-set we used in the previous posts, we  plotted cume against TSL. (A graph of cume versus occasions would look very similar.)

 
There’s a clear inverse relationship between cume and TSL. Stations with the largest cumes tend to have the lowest TSL, while stations with lots of listening tend to have smaller cumes.

The key word, however, is tend. While the relationship tends to be inverse, it isn’t absolute. There are stations that have both above-average cume and above-average TSL.

And the chart doesn’t tell the entire story.

In long-term trend analyses, Harker Research has also found that growing stations tend to increase cume and TSL at the same time.

In fact, we have found that a good way to differentiate real growth from the more common month to month random fluctuations is to see whether both cume and TSL are growing.

If you see a spike in TSL without a spike in cume (or vice versa), it is probably a wobble. If you see both TSL and cume moving up, it is more likely to be real.

This is also true with downward trends, but more often with a lag between the two measures.

It stands to reason that TSL and cume would both grow for stations on the rise. The same elements that attract new listeners to a station also encourage existing listeners to tune in more often.

More occasions equal higher TSL. Consequently, cume and TSL grow concurrently.

One Radio Insights reader questioned whether external marketing was the only way to grow cume. It isn’t the only way, but it is an efficient way.

In diary markets, it is particularly difficult to grow an audience without external marketing.

A person typically listens to about five stations, but only writes down two or three stations in the diary. The missing stations make up a station’s phantom cume.

The goal of external marketing is to raise a station from phantom status to reported status by raising the station's top-of-mind awareness. You really haven’t gained a listener. You’ve gained a reported listener.

With PPM, listeners are replaced by exposed panelists. The meters pick up “drive-by” exposure, a few minutes at a time. That’s why cumes are higher with PPM.

External marketing is just as important in a PPM market, but it’s goals are different.

With PPM, every listener is essentially a phantom listener. You never know whether a panelist really listened to the station, or simply came in aural contact with it.

External marketing still works by raising top-of-mind awareness, but less directly.

While the goal in a diary market is to directly influence the diary keeper’s actions, with PPM you don’t care whether the external advertising works on the panelist or those around her.

The goal of external advertising in a PPM market is to grow the tent. The bigger the tent, the more people it can hold.

The more people in the tent, the more likely somebody in the tent will be listening to the station and the greater chance that a panelist will be exposed.

This difference between goals means that while external marketing is important in both diary and PPM markets, the messages need to be different.

That will be the subject of a future post.

So is PPM All About Occasions, TSL, Cume, or What?

Arbitron claims that highly successful radio stations share similar characteristics that distinguish them from average stations.

Analyzing top stations in 33 PPM markets, Arbitron concluded that TSL didn’t differ between top performers and average stations, but that top performers had greater numbers of sessions (occasions) than average stations.

The analysis and conclusions were widely reported, and the notion that the key to impacting PPM is increased occasions entered PPM folklore.

Unfortunately, the analysis suffered from several problems raising doubts about the conclusions. A closer look at the relationships between share and the other rating variables suggests that occasions are not as important as Arbitron claims.

We believe that several technical mistakes led to the misguided conclusions. For example, Arbitron simply averaged share, cume, TSL, and occasions. Averaging can be misleading because averages are distorted by outliers, the few stations at the extreme top and bottom of any ranker.

What is the average share for stations in this hypothetical four station market?

Station A     9.7
Station B     2.9
Station C     2.5
Station D     2.0

The arithmetic answer is 4.3, but does a four share average really capture the essence of the market?

The “average” station is in the twos. Yes, there’s a ten share station, but this one “top performer” station has pulled up the market average by nearly two shares.

Understanding how the two share station can beat the 2.9 station is far more valuable than understanding the ten share station.
 
Because many markets have the equivalent of our hypothetical ten share station, rating analyses across markets should use what’s called the median, the station in the middle, rather than the average. In our example, the median would be 2.7, a more realistic view of the “average” station.
 
A second problem with the analysis is the number of markets and stations involved. If one is going to aggregate ratings data for disparate sized markets, the data needs to be “pretreated” to equalize the impact of each market.

To better understand the role of occasions in impacting PPM, and illustrate the flaws in the Arbitron analysis, Harker Research examined a large Midwest market. We began by graphing the relationships between share and cume, TSL, and occasions for each of 30 stations with a 1+ share.

Share is the vertical axis, and the horizontal axis is one of the other three measures. Each station is shown as a marker.

 
 The first graph is cume. Note that there is a strong trend within the cloud of stations. As cume increases, so does share. It isn't a perfect relationship, but a very strong one.

 
The second graph is share charted against weekly TSL. Note that except for a couple of outlying stations, the station cloud is more or less round. This indicates a very weak relationshup between share and TSL.

The circular pattern indicates that TSL is far less predictive than cume of ratings success.There are stations with four shares that have the same TSL as stations with two shares.

 
The third graph is share charted against weekly occasions. Note that the pattern is very similar to the TSL graph. There is no directional pattern to the cloud. Stations with a wide range of share have the same number of occasions.

So neither TSL nor occasions is very predictive of PPM success.

These graphs show what’s called correlation, how share changes as the other measures change. Correlation can be expressed as a percentage, an estimation how much a change in cume, TSL, or occasions impacts share.

Cume explains about 68% of the change of share compared to 25% for TSL, and 21% for occasions.

In other words, occasion is the least predictive measure. It has an impact on share, of course, but increasing occasions has the smallest relative impact on share.

On top of that, there’s no practical difference between TSL and occasions when it comes to impacting share.

 
Take a look at the fourth graph. This shows the relationship between weekly TSL shown on the vertical axis and weekly occasions on the horizontal axis. It is almost a straight line.

What this says is that both total TSL and occasions move in the same direction at the same rate. With PPM they are inseparably intertwined.

Arbitron’s notion that TSL is not the key, but occasions is, is demonstrably false.

At the weekly level (which is what matters most in the ratings), there’s no distinction between TSL and occasions. Both impact ratings equally, and neither have nearly the impact of cume.

Arbitron used daily estimates to reach its conclusions and looked at a narrow demo. The graphs and conclusions presented here are based on weekly all person estimates. This is another reason we believe our analysis is more generally applicable than Arbitron's.

We believe that analyzing daily estimates of a narrow demo involves too few panelists to be conclusive. The difference between the average station and top performers was a one single occasion. 

The bottom line is that cume is by far the most predictive measure of ratings success. If you increase your cume, you have a very good chance of increasing your share. Not so much with TSL or occasions.

Isn’t it ironic that the single most important tool to grow an audience, external marketing to grow cume, was the first thing cut when radio got in financial trouble?

Robert De Niro, Deer Hunter, The Key to PPM Success.

George Orwell declared History is written by the winners. He might as well have been talking about radio.

When’s the last time somebody interviewed the program director of a station that just tanked in the ratings, asking about the keys to the station’s performance?

Radio isn’t interested in losers, only winners, so the stations that get all the press are the ones that are winning.

With over 2000 radio stations competing in PPM markets, each month hundreds of stations will have sizable gains and a handful will have spectacular gains.

And every month, the winners will get all the attention and speculation about why the stations did so well.

The problem is that nobody can really know why a station has a great month. Maybe it’s something the station did. Maybe it’s something the station didn’t do. Maybe it was something some other station did.

In reality, most of the gains from month to month are just by chance, but human nature and radio being what they are, the idea that most rating gains happen purely by chance is too unsettling.

Despite evidence that rating changes from month to month are purely random, radio pays close attention to the explanations of program directors, general managers and consultants in the belief that somebody must know the secret.

Let’s say a station does something like (say) commercial-free hours, has a good month and it makes the news. The following month other stations try commercial-free hours, and some of those stations also have a good month.

Seeing the number of stations doing commercial-free hours grow, the next month other stations try the same thing, and some of them have a good month.

Does that prove that commercial-free hours are the key to winning in PPM?

Not unless the number of commercial-free winners far out-number the commercial-free stations that were flat or went down.

It is called survivorship bias. We tend to only notice the winners. There may be just as many losers as there are winners doing the same thing, but we ignore the losers and pay attention to the winners.

Think about the Russian roulette scene in Deer Hunter. Robert De Niro’s character spins the gun cylinder, pulls the trigger, and lives. Does that mean De Niro has a special gift?

What if a hundred people decide to do the same thing?

One hundred people spin the cylinder, pull the trigger, and only ten people shoot themselves. That means 90 people are winners. They will be heralded and interviewed about the secret formula for winning.

The 90 survivors spin the cylinder again, 9 shoot themselves, but that still leaves 81 winners prepared to offer their key to staying alive.

You can see where this is going.

Most people win at Russian roulette, but who wins is determined purely by chance. There isn’t a secret formula for winning (except not playing).

Every month when the Arb numbers roll there will be plenty of winners. That means there will be plenty of stations that seem to have the winning formula, even if most won just by chance.

Last December even Arbitron got in on the act by presenting a piece called The Ratings Characteristics of PPM Top Performers (pdf).

The presentation was on pretty shaky methodological ground, but that didn’t dampen the excitement in learning PPM’s secrets.

One trade publication flatly declared:

Arbitron found hardly any difference in the length of listening durations among average stations and top performers, but top performers had significantly more daily listening occasions. It's all about the number of listening occasions.

This is how PPM myths are born.

Let’s look at what Arbitron did. They took the top 3 stations in 33 markets, averaged their share, cume, TSL, and occasions, and then compared them to the average station. You can read their conclusions above.

The table clearly shows that the top 3 stations had much higher cume audiences than the average station, slightly more TSL, but only one more occasion.

 

So the biggest difference between the top stations and the average station was cume. If you want to be a top three station you need nearly four times the audience as the average station.

Not an earth-shattering observation, but a useful reminder.

TSL differences were considerably smaller. Top three stations only have 22% more TSL. Not a huge difference, particularly when the cume difference is 247%!

Daily occasions differ by one single occasion. That’s it. One occasion.

On top of that, the top station in each market has no more occasions than the average of the top three. Despite Arbitron's conclusion, the evidence suggests a rather weak relationship between occasions and winning.

Yet we're told that it's all about occasions.

Arbitron released only 18-34 results for some reason. The presentation alluded to a 25-54 analysis, but those results were not shown.

In our next post we’ll continue discussing the issue of PPM winning secrets and show a Harker Research analysis that raises more questions about Arbitron’s Top Performer claims.

In the meantime, be very wary of people claiming to know the secrets of PPM....and stay away from guns.

Will Radio’s Destruction be at Its Own Hands?

Radio people who were in this business before consolidation remember a very different business.

Outside of a few corporate groups in large markets, most stations were part of small groups, maybe in several regional markets.

Many stations were literally mom and pop operations, with pop selling time and mom keeping the books.

Radio was then more of a shoot-from-the-hip business. If you had a new idea, there was a good chance you could find someone to give it a try.

There were 20% fewer stations before deregulation, yet there were far more formats and format variations. Formats would morph as they moved from market to market, so no two stations sounded alike.

Radio was a loose organic confederation, a giant network of people who’s natural urge was to keep changing things, searching for that next share point.

Consolidation, IPOs, and a focus on Quarterly Capitalism changed all that.

Radio began emulating successful public companies outside radio.

Look at successful companies like McDonald’s or Target. Major decisions are made at corporate headquarters.

Large corporations are all about centralized control, centralized decision making. And today’s corporations believe in standardization.

Adapting the approach of successful corporations outside of radio transformed radio stations into little more than McDonald’s franchises. Today formats are standardized just like the size, shape and weight of a McDonald’s beef patty.

We know that centralized decision making works in many other industries, but does it work in radio?

Not well enough to keep radio growing.

Radio has achieved its level of success through continuous, often chaotic, organic evolution and innovation.

Historically, radio programming innovation didn’t come from the cautious major market players. It came from the small market buccaneers who had little to risk, and who were willing to take fliers based on somebody’s crazy sounding idea.

A lot of the crazy sounding ideas turned out to be just crazy, but every once in a while something clicked, and soon others were emulating, and improving on that first person’s idea. The major players were the last to copy a good idea, to do something different.

As long as the buttoned-down suits ran just a handful of major market stations, innovation continued in the hinterlands beyond the reach of those who felt more comfortable doing the same thing over and over.

However, today’s vision of radio stations as McDonald franchises can be found in every market of every size.

Craziness has been systematically bred out of radio’s DNA. Tranformational programming innovation has essentially stopped.

Cisco's CEO John Chambers recently announced that he was reorganizing the company. The company had lost its edge, was losing ground to new competitors.

He concluded that Cisco had too many committees, too much bureaucracy, and as a result, initiative and innovation had suffered:

We have been slow to make decisions, we have had surprises where we should not.

He then laid out his vision of a mobilized Cisco:

• We will take bold steps and we will make meaningful decisions in a timely, targeted way.  
• We will accelerate our leadership. We understand that our competitors are fierce (but) we will not be defined by them. 
• We will simplify the way we work and how we focus our attention and resources.  We will empower our teams, and allow our people to focus on inspiring and important work.

Even Cisco, a $40 billion computer hardware company, can admit to becoming too bureaucratic, too predictable, and unresponsive to new challenges.

Radio, a business built on innovation, unpredictability, and change should do no less.This is the spirit radio needs today.

This is no time for radio to become cautious, afraid of change. We need the crazy buccaneers of the past. We need people willing to try something different, not afraid to fail.

New media is not radio’s greatest challenge. Radio’s greatest challenge is complacency and a growing buttoned-down attitude that stifles creativity.

Against an onslaught of new highly motivated challengers, it will not be new platforms, new delivery systems, or social networking that saves radio.

Radio will survive if those last strands of crazy DNA that still exist in the minds of a few programmers are reactivated and set free to innovate and reinvent radio.

If that happens, those new-media geeks don’t have a chance.

Slacker: The Engine that Thought it Could...but Can’t.

Remember the children’s story of a railroad engine with low self esteem? It managed to get over a tall hill by repeating I think I can, I think I can, I think I can over and over.

The little engine succeeded. It made it over the hill.

This week’s Slacker announcement that it was once again retooling brought to mind the story of the little engine that could. Not because we think it will succeed. We don’t think it will.

No, the story came to mind because we suspect that the venture capitalists who bankroll Slacker must read the story every night to keep their hopes up.

How else can they explain pouring over $65 million into keeping Slacker afloat, with the service no closer to breaking through than when it was just a concept on a beer-stained napkin in 2004.

       Slacker is a wannabe.

First it was an Apple wannabe. It invested millions into creating its own player. With a price tag of $200 for a 2GB player, it was over-priced, under-featured, and hopeless.

Needless to say, up against the iPod the player never caught on. You can still buy one at Amazon for $17.

Slacker blew-out its CEO, and refocused its energy into becoming a Yahoo Launchcast/AOL Radio wannabe. It offered 150 curated  “radio stations” on a desktop player and mobile app.

There is no more crowded segment of mobile audio entertainment than the generic radio station segment, so you can imagine how that worked out.

Seeing how well Pandora was doing, Slacker again refocused, this time to become a Pandora wannabe, adding music discovery tools to its player.

How’s that doing? Pandora is approaching 90 million registered users, Slacker 26 million.

According to Triton Digital ratings, Pandora has over 230 million session starts a week to Slacker’s 16 million. On average, over half a million people are listening to Pandora compared to Slacker’s 40,000.

You can guess Slacker’s response. Yes, time to retool. Slacker just announced that it will become a Spotify wannabe.

Now for a monthly fee you have access to 8 million songs that you can play on your mobile device. Of course we already have Rdio, Rhapsody, Grooveshark, and MOG, just for starters, and maybe soon the European superstar, Spotify.

There have been more rumors about Spotify coming to the US than Elvis sightings, but if it ever really happens (Spotify, not Elvis returning), then Americans will have another option, all around 10 bucks a month, all with larger libraries than Slacker.

We can guess how that will work out for Slacker.

Slacker is what we call a dabbler. Rather than choose a strategy and focus all its energies in one area-–like Pandora had done until recently, Slacker lives up to its name by dabbling in hardware, curated radio, music discovery, and now unlimited play.

Being a little of everything, it becomes nothing.
 
But the real reason we believe Slacker is brain-dead and only alive because of VC life-support is the convoluted thinking of Slacker leaders.

This fuzzy thinking was recently on display in an interview with the Los Angeles Times.

Declaring that Slacker isn't just going after Pandora, that it is also aiming at traditional radio stations, Jonathan Sasse, senior vice president of marketing at Slacker declared:

If you look at where broadcast radio is going, it looks like they're trying to become what online radio used to be. What we're trying to become is what broadcast radio used to be, which is radio that's expertly programmed and tailored to you.

It used to be that when I came to a new town, I'd find an awesome station with a local DJ that talks about the music in my city, the concerts in my city and play some new music.

Radio done right can be really good. And broadcast radio is really missing out, because they've just turned into generic hit machines.

We suggest you reread Sasse’s comments just in case they made sense to you the first time you read them.

This is the Senior VP of Marketing talking to the Los Angeles Times. If this befuddled gibberish represents the level of strategic thinking within Slacker, the service is hopeless doomed no matter how much money is sunk into it.

First, to belittle a successful industry of over 10,000 radio stations and suggest dismissively that it is vulnerable to a heretofore pathetic me-too service displays a breathtaking level of over-confidence and egotism.

So Sasse thinks Slacker will take on radio with hip DJs that recapture some bygone era in radio?

Did he just rent American Graffiti or something? What’s next? Wolfman Jack posters on the wall?

If this is the best the marketing VP can come up with, what’s the chance Slacker can develop a coherent strategy for becoming something other than an also-ran? Nil.

To win, one has to first identify the competition, learn everything about their strengths and weaknesses, then find means to exploit their weaknesses while leveraging your own strengths in an original and creative way.

Slacker seems to just not get any of this. How else can a company burn through $65 million and still be so hopeless?

Breaking News: Radio Not Dead!

With headlines like Radio Not Dead and Return of radio: Ratings at a record high, mainstream media greeted the latest UK radio ratings with a mixture of shock and wonderment.

Like their US counterparts, British new-media pundits wrote-off radio some time ago, yet the latest ratings showed UK radio broadcasting posting records in both reach and hours-tuned.

Radio’s continued strength surprised no one in the radio business, but seemingly everyone outside the radio business. Tim Davie of the BBC declared:

It is quite brilliant to see radio reaching a record number of listeners in the digital age. These results speak to the unique quality of radio in the UK and reflect our work as an industry to keep innovating to attract new listeners.

Some reporters stuck with the new-media narrative of growth driven by a dramatic increase in Internet listening, but a look at the actual numbers proves that streaming remains a small proportion of UK radio listening, much like in the US.

UK broadcasters have the advantage of measuring all sources of radio listening simultaneously, so they can see how the various platforms contribute to total listening. This makes it easier to refute new-media spin.

In a January post we asserted that to assess the real state of broadcast listening we have to combine terrestrial listening with streaming, a more difficult task in the US.

We reasoned that total listening must be growing because Arbitron PPM trends are flat, measured broadcast streams are growing, and the majority of streams are not even measured.

If terrestrial broadcast listenership is at worst flat (as Arbitron says it is) and listenership to broadcast group streams is growing (as Ando Media says it is), total broadcast listenership has to be growing, even if we don’t have the actual combined numbers.

The January post was met with skepticism because it runs counter to the new-media promoted storyline that radio listenership is collapsing.

Now we have credible methodologically sound numbers from the UK that support our contention that streaming is expanding broadcast radio listening, not hurting it.

So can we finally get beyond this "radio is dying" meme? It is simply not true. Get over it!