There is a tectonic shift undermining the very foundation of broadcast radio. Multiple metrics make it clear that serious threatsimposed on the FM/AM platform by new online competitors are escalating exponentially.
For more than 25 years I’ve helped build audiences for some of the radio industry’s most successful brands. But today, as online competitors like Pandora, iTunes Radio and Spotify add fuel to their astonishing rise, it’s questionable whether the strategies broadcasters have chosen can foster healthy growth. Furthermore, it’s obvious that radical change to audio media is already under way.
As change happens all around them, radio broadcasters tout the health of their business and how the competitive threat of Internet rivals is overstated. I understand the need to present their case to advertisers. But their sales narrative, an echo chamber of their own making, cements complacency and fosters lack of innovation.
A new Edison research study warns that among the six most common places where listeners consume audio media, broadcast radio dominates in just two of them (in car, at home); is tied with Internet radio for two (at work, on public transportation); and is defeated by Internet radio in two (while working out, while walking around). Another red flag in the study for broadcasters is that 50 percent of at-work listeners who listen to Internet-radio-only stations/services (that is, stations/services that don’t broadcast on FM/AM) have replaced their FM/AM listening time with Internet-radio-only stations/services.
Broadcasters can’t afford to repeat mistakes made by companies like Microsoft that dismiss competitors and lack cultures of innovation. In 2007, Microsoft CEO Steve Ballmer said, “There’s no chance that the iPhone is going to get any significant market share. No chance.” With the absence of content innovation, the audience and revenue drain forced upon FM/AM stations by formidable competitors will only deepen.
In Google’s “news” search section, query the phrase “content is king.” From Forbes to CNBC, you’ll see a wealth of articles reaffirming that notion, which is of vital importance to executives leading both the Internet and broadcast radio industries. In the words of Steve Jobs, “That’s what makes great products. It’s not process — it’s content.”