Radio InSights

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.  

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.

Is This Why NAB Threw Radio Under the Bus?

After years of opposition, why did the NAB and its President and CEO Gordon Smith seem so anxious last Fall to cut a deal requiring radio stations to pay millions of dollars in royalties to record labels?

Think back to October when the NAB Radio Board tried to quickly push through a deal committing radio to pay a 1% royalty with musicFirst, the labels’ front organization.

Coming out of radio’s worst recession that saw $5 billion dollars of revenue evaporate, the last thing radio needed was a new multi-million dollar expense item.

Polls at the time showed overwhelming opposition to the deal by broadcasters, yet the NAB pushed hard for the deal.

The people behind the NAB’s Terms Sheet warned that radio needed to complete a deal before Congress forced a more onerous one on radio.

But was that true? Or was there something more behind the NAB’s interest in giving away millions of radio’s dollars?

Smith’s recent key-note address at the Las Vegas convention suggests it had little to do with radio, and a lot to do with the NAB’s priorities.

Here’s what Gordon Smith now says about the royalty fight:

Last year we stopped the legislation that would impose a performance tax on local radio stations. This was a freight train headed for passage.

The White House was for it. Congressional leadership supported it. Both the House and Senate Judiciary Committees had passed it.

We brought the freight train under control by seeking a good faith, workable agreement with the music industry, while at the same time aggressively opposing the bill as written.

It is an interesting re-interpretation of the events of last Fall.

In truth, 260 House members and 27 Senate members were already on record opposing the radio “performance tax” by March of last year. The bill hadn’t advanced since the Summer of 2009 when the proposal was voted out of committee.

The NAB had already proudly announced the tax proposal dead months before. The royalty deal had no chance of passage.

So why does Gordon now declare the bill a freight train headed for passage? Perhaps in part to gloss over the NAB’s bumbled efforts to ram through the musicFirst deal.

But also perhaps because Gordon had a much bigger legislative problem on his hands, and he needed all the Congressional support he could drum up.

In his key-note address he explained the problem:

Less than two years ago, broadcasters gave up more than 25 percent of TV spectrum and spent $15 billion transitioning from analog to digital television.

Now, less than two years later, wireless companies want ANOTHER 40 percent of TV spectrum.

So we are in full battle mode to protect broadcasters from being forced to give up spectrum involuntarily.

Gordon Smith, a former Senator, is a deal maker. He knows that in Washington you give up something to get something.

The NAB’s influence is fading. The much more powerful Internet and telecom industries want the idle television spectrum space, and Smith needs all the friends in Congress he can find.

Radio is pretty small potatoes for the NAB. A business that generates $17 billion in revenue isn’t going to get the help that a $65 billion industry like television gets.

So perhaps Smith decided that throwing radio under the bus by making a deal with the RIAA could win a few Congressional votes opposing the spectrum give-back.

It is a lot easier for Congress to protect television after it can claim it secured millions of dollars for poor starving musicians.

The performance tax might cost radio a few hundred million dollars, but the television spectrum is worth billions.

Of course now that the scheme has imploded, everyone involved will say that their only concern was getting the best deal possible for radio. Read the links and draw your own conclusion.

Just keep the NAB’s priorities in mind when those membership dues come due.

Radio to the Rescue

Digital Music News reports that superstar artists are having a hard time filling venues:

It looks like Rihanna may cancel a string of upcoming US tour dates. “Ticket sales in big US cities like Boston are so bad, they barely cover basics....Tour managers are begging local radio stations to do giveaways.”

The labels and artists are struggling. They can’t sell CDs. They can’t fill venues.

Yet they tell us radio is an obsolete buggy-whip business. Record company executives tell us radio is dead.

The RIAA tells us that radio is stealing money from poor artists. And artists swoon at the opportunity to do SiriusXM interviews on channels with no listeners.

But when they can't fill a club or a stadium, who do they call? They call radio.

Just maybe they ought to rethink their adversarial attitude towards broadcast radio.  

Is This the Worst Song Ever?

Can a song with over 33 million YouTube hits be the worst song ever? What if the song is also ranks 45th on iTunes?

The song is Friday, sung by 13 year-old Rebecca Black and produced by Ark Music Factory.

 

According to Physorg.com:

As the tune began to attract attention on YouTube, a Yahoo! music blog called it a "mind-meltingly horrific song" and asked readers "Is YouTube Sensation Rebecca Black's 'Friday' The Worst Song Ever?"

Time magazine described "Friday" as a "train wreck" and the video as "hilariously dreadful."

The poor reviews only fueled more interest in the video and it has become a viral hit, racking up millions of YouTube views, spawning a slew of parodies on the video-sharing site and making Black an Internet sensation.

A 13 year-old unknown can generate over 33 million YouTube views, but most radio station videos generate views in the hundreds. What does it say about the state of radio and radio morning shows?

Why can't a multi-billion dollar industry that prides itself on its marketing skills create a viral sensation? After all, even a kid can do it.

 

Adapting to Radio's Lost Grip on Music Discovery

It wasn’t that long ago that listeners needed radio to find out about music. Unless radio played a song, people didn’t know about it.

Television variety shows like Ed Sullivan had the occasional pop artist on, but they only booked the superstars, the artists that radio had made popular (think of Elvis and the Beatles). American Bandstand might play a couple of new songs for Rate-a-Record, but most of what they played were also already radio’s Top 40 hits.

Then in 1981, MTV signed on. As a video jukebox, MTV was the first serious threat to radio’s status as the main way people discovered new music.

It was a warning shot for radio. It warned that radio’s unchallenged status as arbiter of new music was not assured. Another medium could break its own artists and create its own stars.

Fortunately for radio, MTV found it could make more money discovering the next Beavis & Butthead than the next Michael Jackson. Radio regained the music discovery crown, and held it for another 18 years.

Napster changed all that in 1999. At its peak nearly 15 million users a month were sharing and discovering music on the web.

Today people are immersed in music discovery. The process of music discovery is diffused across a plethora of options including computer games, movie soundtracks, streaming, playlist sharing, social media, Rhapsody, Mog, YouTube, and on and on.

Oh, and radio too.

Radio still commands a special place for music discovery. Depending on the research, radio is either number one or close to it, but it no longer has a monopoly.

These facts are well known. Most broadcasters realize radio has lost its exclusivity. However, there’s been little discussion about what this development means for choosing what songs to play.

Picking music hasn’t much changed from the days when radio stations relied primarily on the back page of R&R. The trades have changed, but the process hasn’t.

It made sense then, but does this insular approach make sense now with people exposed to so much more new music, in many cases songs radio isn’t playing?

In today’s Call-Out songs with virtually no local radio airplay can make it into the top 10. Familiarity can reach nearly 100% for songs that no one in town is playing.

Yet most stations test and play the same predictable songs over and over.

Radio continues to differentiate music according to obsolete definitions of formats. The typical iPod owner might have hundreds of songs that cross all format lines. A person might listen to country, hip-hop, alternative, and AC songs all in the same session.

To appeal to today’s media-immersed listener, radio has to pay less attention to whether a song fits the format, and more to what the listener wants to hear NOW, regardless of format.

Music directors and programmers must take off the blinders and realize that hits now come from every direction from video games, movies, television award shows, as well as radio play.

No longer should radio play be the only thing that matters. Adds might be important, but only in the broader context of what’s happening across social media, YouTube, and other equally important pop cross-currents.

Arcade Fire’s Suburbs video has been viewed nearly three million times on YouTube alone in the three months since posting. Their older videos have had up to six million views.

Despite their success in other media, many in radio seem surprised the group won a Grammy, and broadcast has been slow to add the group’s music.

Is it any wonder that listener complaints about radio’s predictability and lack of variety are growing? It isn’t that radio is worse than it once was. It’s because today’s listener has different expectations.

Today’s listener is looking beyond formats. She has greater awareness and access to new music and it has raised her radio station expectations. And radio has yet to rise to the occasion.

Programmers can no longer act like radio is still in charge. Today the listener is in charge of music discovery. Time to adapt.

Why Big Radio Dogs Wag Short Tails

Remember the Long-Tail? It was the notion that in a connected Internet world, the tyranny of the majority would be overthrown, replaced by equality for all.

Using Chris Anderson's 2006 book The Long-Tail: Why the Future of Business is Selling Less of More, proponents have argued that the growth of long-tail online radio would destroy commercial radio.

Listeners would no longer be hostages of big commercial radio groups playing the same few songs.They could now break those shackles and find online radio stations that play their favorite music regardless of how obscure their taste in music might be.

We first raised doubts about the financial viability of long-tail radio in a January post, where we shared the findings of a study that showed that despite access to millions of different songs on sites like iTunes, the majority of people download the same few songs.

Since that post, more and more evidence has surfaced confirming our doubts.

Most people buy the same albums

Recent data on album sales suggest that greater access to a wider range of music doesn’t change the fact that most people buy the same albums.

At the recent New Music Seminar, it was revealed that of the 98,000 albums that sold at least one copy last year, only 2,058 sold 5,000 units, 1,319 sold 10,000 units, and only 85 sold 250,000 units.

In other words, 98% of last year’s albums sold fewer than 5,000 copies.

A very small proportion of the songs released each year are hits. At least one person out there loved each of those 98,000 albums, but only 1% of those albums were popular enough to become mega-hits.

Pandora continues to add users while playing few songs

Streaming services have song libraries in the millions. For example, Rhapsody has a library of over 9 million songs. 

Pandora just celebrated reaching 60 million registered users. It manages to give the illusion that every one of those 60 million users can listen to a personalized music channel, just for them.

They manage to do it with a library of well under one million songs, less than one-tenth of the songs available on Rhapsody. On top of that, the library isn’t much bigger than when the service had half as many users.

A library well under one million songs serving 60 million users means that a large number of users have a personalized station that sounds pretty much like a lot of other people’s personalized station.

While Pandora generates mostly rave reviews, Indie music people are less than excited about their approach, complaining that Pandora doesn’t explore new music very deeply. And it’s true. Most new music submitted to Pandora for addition to their library is rejected.

Rather than exploit the long-tail opportunities of personalized radio, Pandora has taken a very conservative approach, playing the hits. The service’s growth seems to suggest that users don’t miss long-tail songs.

A Hit is a Hit is a Hit

One more confirmation of the myth of long-tail radio is the evidence that radio hits are download hits, which are social network hits, which are YouTube hits.

BigChampagne is a media tracking company. They decided that the traditional Billboard charts based on sales were obsolete. They decided to design a new chart that took into account many more measures of a song’s popularity, things like activity on social networks, YouTube video rankers, and any other place people were exposed to music.

Their Ultimate Chart would break the shackles of 20th century thinking and finally give us a 21st century tool to find out what today’s digital generation really likes. And what does the chart tell us? Did it finally confirm that music tastes are much more diverse than radio exposure would indicate?

According to NPR:

If indie music lovers were hoping that some of their standard bearers carried weight on the web that didn't translate to charts like Billboard, they're out of luck so far. It turns out the Ultimate Chart is not all that different from the actual Hot 100, though for the week ending July 13, Shakira's "Waka Waka" snuck on and Internet King Justin Bieber flexed his way into the top five. You can also search by artist; no surprises there either.

Shakira and Justin Bieber. Couldn't have seen that coming. So no long-tail on social networks either.

Has the Internet proved that tight playlists are a liability? No. Should radio stations continue playing a tight list and ignore those complaints that you play the same songs over and over? Yes.

There’s a reason big radio dogs wag a short tail. That’s what listeners want.

Record Labels' Death Spiral

The graph shown is the trend of U.S. music sales and licensing for the past decade. The graph is from a CNN article entitled Music's lost decade: Sales cut in half. (For comparison, in the same period radio revenues fell about 20%.)

The article quotes Joshua Friedlander, vice president of research at RIAA:

The industry is adapting to consumer's demands of how they listen to music, when and where, and we've had some growing pains in terms of monetizing those changes.

Some growing pains? Seems like a 57% decline in revenue over ten years (with only one single year of growth) is maybe a little more serious than just growing pains. Revenue will have to more than double just to get back to 1999 levels. That's a lot of ring tones.

The trend of the graph is notable because the decline appears to be accelerating. It suggests that rather than adapting, the record labels are headed in the wrong direction.

Aggressively going after downloaders and keeping prices of CDs and downloads high clearly hasn’t worked. Growing friction between radio and the recording industry hasn’t helped either.

One would think that losing half your revenue and an accelerating negative trend would make the labels rethink their strategy. But no. They see the Macmillan Books win over Amazon as an opportunity.

Warner Music Group’s CEO Edgar Bronfman Jr declared:

I think what this signals is that content is going to have more pricing flexibility over time rather than less, because frankly, the only thing that drives iPhones, iPads, Kindles, Zunes and other kinds of devices is content. I think the power of content in that little fracas with Amazon was clearly evident.

In other words, Bronfman hopes to force websites like iTunes to charge more for downloads. That should fix everything.

The Long-Tail Myth

In a post entitled New Study: Internet Radio Plays 800,000+ Stiffs, we suggested that advertising supported Internet radio could not succeed if it chose to play songs that the majority of listeners didn’t want to hear. We noted:

Across the entire (music) spectrum, there are only so many songs worth playing (if your goal is to have a measurable audience). That means there are only so many "marketable" artists that listeners want to hear.

We were taken to task for our comments. Internet radio supporters argued that there is plenty of room for long-tail Internet radio, stations that play songs that the majority of listeners don’t want to hear.

A Billboard analysis of Nielsen Soundscan data raises further doubt about the economic viability of long-tail radio. This is from Nielsen's blog:

For most people, Chris Anderson's 2006 book The Long Tail marked a new way of thinking about selling goods on the Internet. Being free of the physical limits of shelf space, he predicted, would alter what people bought. For music, this would mean the most popular music titles would become less popular as consumers were able to tap into vast online catalogs. In most corners of the business world, and especially in the music industry, The Long Tail was controversial. Would consumers actually start to ignore the hits?

A Billboard analysis of Nielsen SoundScan data going back to 2004 shows Anderson wasn't correct on all points. Hit digital albums have lost market share to far less popular titles. But hit digital tracks have gained market share over the years. The top 200 tracks accounted for 14.5% of sales in 2004 and rose to 15.8% in 2005, 17.1% in 2006 and 2007 and 17.2% in 2008. Through October 25, 2009, the top 200 tracks' share stood at 18.7%.

This is not the first analysis to find that online music’s long-tail appears to be a myth. The U.K.’s Guardian noted the myth of music’s long tail in 2008. Recently they wrote:

The study discovered that, of the tens of millions of tracks available for sale on the web, 80% sold no copies at all - and that 80% of the money spent on the 20% that did sell went on just 52,000 songs. As Andrew Orlowski pointed out in his excellent Register article on the subject, the typical inventory of a conventional high-street record store is around 4,000 CDs, or 52,000 songs.

Rather than create a longer tail, digital downloads appear to be shrinking the tail. This in turn suggests that the Internet may be expanding access to diverse music, but the majority of listeners are rejecting this diversity and instead focusing on an even smaller portion of music.

It would be ironic if crowd-sourcing actually tightened radio stations rather than opening them up.

New Study: Internet Radio Plays 800,000+ Stiffs

A “study” making the new-media rounds illustrates the extent to which Internet radio boosters will go to cast commercial radio in a negative light. The study also inadvertently illustrates why pure Internet radio is failing and will continue to fail to attract any measurable audience.

A monitoring service, streamSerf, claims to have compared the number of artists played on terrestrial and Internet radio stations last month and found that Internet stations played 804,572 more artists than terrestrial stations (defined as commercial plus non-commercial stations).

There are several methodological issues that concern us about this study. We’ll get to those in a moment, but let’s run with the results for a moment. Here’s how audio4cast characterized the results:

It's not shocking to learn that Internet radio is more diverse. There are more choices for the listener, and more determination by the stations themselves to provide alternative music to the basic cookie-cutter formats and playlists provided on broadcast radio. It is stunning to learn that Internet radio's list of unique artists is greater than broadcast radio's by 3600%.

Basic cookie-cutter formats and playlists?

Let’s reflect on that phrase. Remember satellite radio? Beyond AM, beyond FM? We were told that commercial radio had become predictable and stale. Satellite radio with nearly 100 channels of music would reinvent radio, offering more diversity, finding new artists.

The one and only time that Arbitron measured satellite radio, it found that virtually no one listens to the majority of the channels. There are many channels where there are more people in the studio than people listening. The only channels that attract significant numbers of listeners are those that resemble commercial radio stations. There is a listener-driven reason for playlists. There is a listener-driven reason similarly formatted stations sound similar.

There is no reason to expect successful Internet radio to be any different. The vast majority of Internet radio listeners tune to stations that play the same music played by commercial radio stations. We can see this from the study’s own results. Look at the list of the top 10 terrestrial and top 10 Internet artists (click to enlarge).

It is clear that the two lists are very similar. However, that’s not how the results were interpreted:

Also interesting is the list of artists that get the most plays on broadcast stations versus Internet radio stations. While some of the top ten artists are the same on either list, others are very different.

Very different?

The truth is that there is only one artist on the Internet list that stands out. Amin Van Buuren is ranked 6th on the Internet, but 7,811 on terrestrial. The other top ranked Internet artists include Madonna, Metalica, Lady Gaga, The Rolling Stones, and similar mainstream artists.

So having shaken off the shackles of basic cookie-cutter formats and playlists, successful Internet radio stations end up...playing the same artists heard on commercial radio stations.

But these are just the top 10 artists. What about the other 829,961 artists Internet stations play? According to the company, terrestrial radio played only 25,399 artists. Since thousands of radio stations have been testing their music now for nearly three decades, it is a safe bet that we have identified virtually every song that listeners want to hear.

If you have tested your music for any length of time, looking for new and different songs to play, you know that there are a lot more stiffs than hits.

We have found the same thing in every format, from Classical to Hip-Hop. Across the entire spectrum, there are only so many songs worth playing (if your goal is to have a measurable audience). That means there are only so many “marketable” artists that listeners want to hear.

We at Harker Research have been testing music for thirty years now. We find it hard to believe that there are 25,399 artists worth playing on the radio. We can only assume that the inclusion of educational and non-commercial stations ran up the numbers.

The study claims that Internet radio plays 3,600% (actually 3,168%) more artists, and pundits see it as a big plus for Internet radio. What it actually means is that Internet radio stations are playing over 800,000 artists that people don’t want to hear.

Before the Internet, artists that didn’t deserve to be heard beyond their family and closest friends toiled away in garages and empty coffeehouses. Years of practice would separate the good from the bad. The artists that got better found success. The majority went back to their day jobs.

Now anybody at any level of accomplishment can be heard on some quirky Internet radio station someplace. We suspect that the actual number of artists played on Internet stations is considerably higher than the 800K+ that the study found.

Paul Mockenhaupt, founder of the company, declared: It's the new, fresh, undiscovered, local, home grown music that's filling the internet airwaves! One report’s author adding: Internet radio gives voice to the long tail of music, providing entry for many musicians that have never had a platform before. That, he (Mockenhaupt) says, is the "magic" of Internet radio.

The magic of Internet radio is that it operates in a fantasy world. The notion that radio can operate in a “long tail” world is a fantasy as long as radio (whether it be terrestrial, in outer space, or on the Internet) depends on listenership as a measure of success.

But what about those numbers? How can a monitoring service be so precise? The reports are rather vague on the methodology of the study, streamSerf has no mention of the study on their web site, and we got no response to the questions we put to the company.

The web site boasts that it monitors thousands of radio stations:

Our patent-pending technology allows us to listen to thousands and thousands of radio stations at the same time... Satellite, Internet and Terrestrial stations. As a matter of fact, we are currently listening to over 30 MILLION HOURS of radio per year in 65 countries across the planet. If there's a song being played on the radio, there's a good chance we hear it.

It certainly sounds impressive, but let’s do a little math based on some pretty basic assumptions. We suspect that the company is monitoring station streams, not their signals. There are 14,355 licensed radio stations in the US, many of them not streaming. There’s a little less than another hundred on Sirius XM. Those are the easy numbers. How many Internet radio stations are there? Of those, how many are exclusively Internet? There are thousands, if not tens of thousands.

Thirty million hours of monitoring sounds like a lot, but that has to be spread across many radio stations. There are 8,760 hours in a year, so that means the company on average is monitoring 3,425 stations each hour of the year.

Considering that there are nearly 10,000 US FM stations alone, the company can’t be monitoring terrestrial radio stations continuously. It may be monitoring stations for a few hours at a time, or monitoring a handful of stations continuously. In either case, it means the company is taking a sampling. How the sample is chosen can have a major impact on the outcome.

More problematic is how one monitors tens of thousands of Internet stations along with the terrestrial and satellite stations. As with terrestrial stations, the only practical way is to either monitor a random cross-section of Internet stations continuously, or monitor every station known for just a few minutes.

Based on what we see, it appears that the 25,399 versus 829,971 artist comparison is more likely based on an educated guess and wishful thinking than one based on a month long continuous monitoring of all terrestrial and Internet stations.

It is making the rounds because despite its flimsiness, it provides one more opportunity for new media pundits to dump on commercial radio. The good news is that if the numbers are based on crude estimates, maybe terrestrial radio isn’t playing 25,399 artists. We hope not.

People Still Listening!

As we’ve demonstrated several times, the trades seem to delight in reporting critical comments about radio. Terry McBride, co-founder/CEO of Canada’s Nettwerk Music Group, gave R&R Today an opportunity to take a swipe at both music labels and radio. R&R summarized McBride’s criticism of the labels this way:

Music labels have depended on radio airplay for so long, they have never learned the art of effective and relevant marketing, a scenario that has contributed to the current industry slump.

R&R then quotes McBride linking the labels’ troubles to what he believes is radio’s declining status:

They (the labels) based their strategies around radio, press coverage, and [point-of-sale] advertising. Everything came after that. But radio and traditional media have been thrown out the door. Consumers now ignore the radio and print media, and they no longer go into stores.

So radio has been thrown out the door and consumers ignore us? If Mr. McBride has anything more definitive than his opinion to prove this, he didn’t share it with R&R. We suspect that Mr. McBride is just repeating what new media people want us to believe. New media people can’t accept the possibility that radio can coexist with new media. They seem to need to believe that radio is dead. The fact that study after study proves that radio is alive and well is something they just can’t accept. So they ignore the accumulating research and keep spouting off about how people just don’t pay attention to radio anymore.

JupiterResearch has just released the latest study to proves radio’s continuing relevancy. It turns out that radio is the top media source for discovering new music. The Jupiter study found that nearly two-thirds of the survey’s participants listed radio over word of mouth, videos, TV, and alternatives as their favorite means to discover new music and artists. Word of mouth was a distant second. Even among those active online, radio ranked number one.

It is easy for us to fall into the trap of believing all the hype surrounding new media and alternatives to radio. The potential threats to radio are growing exponentially, but somehow radio keeps coming out on top in these surveys. Radio requires no effort and no subscription. You turn it on, and it’s there. It may not be the hottest thing right now. It doesn’t come with a touch screen, but it sure is convenient. And that’s very important to a lot of people.

R&R noted that Mr. McBride was off to London to host "Face to Face With the Millennials," an industry forum. We hope that someone in the audience will ask him about the Jupiter study.

The World has Changed. The Industry has Not.

New York Times Magazine in its September 2 issue featured a profile of Rick Rubin, co-head of Columbia Records. If you want to understand why the record business is in free-fall (and why radio may well follow it into the abyss), the article is well worth reading.

The most telling quote is not from Rubin, but from David Geffen. “The music business as a whole has lost its faith in content....It’s no longer about making music, it’s all about how to sell music.” Substitute radio for record and the observation is just as accurate.

As part of the company’s attempt to figure out how to sell music, Columbia invited 20 college students to work on digital marketing and promotion projects over last summer. At the end of summer, they conducted focus groups with the students, “to try to take the pulse of the elusive music audience.” Mark DiDia, head of operations at Columbia summarized what they learned:

They confirmed what we already knew....The kids all said that a) no one listens to the radio anymore, b) they mostly steal music, but they don’t consider it stealing, and c) they get most of their music from iTunes on their iPod.....The biggest thing in their life is word of mouth. That’s how they hear about music, bands, everything.

If this is an example for what passes for research at the labels, it’s no wonder the business is in trouble. Having a couple dozen college students work at Columbia for the summer and then having them participate in research that purports to measure the pulse of a whole generation rivals focus groups done in station conference rooms. Worse than providing worthless information, this kind of research provides misleading and distracting information.

Cume ratings in college age demos have declined from 96% in 1998 to 92% this year. TSL has declined from 21 hours to 18 hours. So the notion that “no one listens to radio anymore” is obviously false. Since this is apparently something that DiDia already knew, one wonders whether the observation was something these students believed before hand or something they learned at Columbia. Equally telling is another comment by Rubin:

There was a time when if you had something that wasn’t good, through muscle and lack of other choices, you could push that not so good product through those channels. And that’s how the music business functioned for 50 years. Well, the world has changed. And the industry has not.

As with the earlier quote, we could replace music with radio and the assessment would be as valid. When listeners had limited options, we could produce not so good programming and do ok. Today that doesn’t work. People now have options. They don’t have to put up with a dozen radio stations. They can now shop around. If they can’t find what they want on the radio, there’s satellite, there’s streaming, and there’s downloading. The world has changed. And the (radio) industry has not. Unless we want to become just as irrelevant as the record industry, we have to change.