The Audience Is Changing. Can Radio Keep Up?
In our previous two columns we've been considering the future of radio in a multi-platform environment. This implies that radio broadcasters may deliver their services over multiple delivery paths, including but not limited to traditional over-the-air broadcasting.
To summarize, two major points need to be understood in this effort: 1) Content can flow over numerous, simultaneous real-time services (e.g., on-air and online); 2) Content can be delivered in both real-time and on-demand modes.
Both of these concepts are understood and in use by some broadcasters today, so this is nothing brand new. But it will become increasingly important that these concepts move beyond corporate posturing to permeate the very DNA of broadcasters' technical- and business-model strategies in coming years.
Three (or more) dimensions
From an audience-centric perspective, the multi-platform use of radio services should first be considered in terms of place. The three traditional venues for audiences' broadcast content consumption are fixed, mobile and portable, with the fixed venue further subdivided into "home" and "workplace" environments. A listener's choice of platform will depend strongly on which of these venues the listener occupies at the moment. For example, off-air listening might be preferred by a listener while at home, but online listening might be chosen by that same listener at work, and so on.
For terrestrial broadcasters, a fourth "modern" venue option can be added, which we could call remote or distant, in which a listener who lies beyond the reach of over-the-air reception can access broadcasters' (and others') streaming audio services via online service (including through wireless means). This is sometimes referred to as expat (for "expatriate") listening - i.e., former local listeners seeking a favorite station from elsewhere.
Each of these venues must be weighed by broadcasters when considering multi-platform distribution. Audience metrics and cost-per-listener-hour can vary widely among them, of course, making such comparisons occasionally complex. Also the competitive environment will likely differ in each (e.g., there are far more potential competitors in the Internet radio world than in any local over-the-air environment).
Importantly, consider also that this mapping of listeners' platform choice to their locations will be a fluid one as time and technology progress. For example, while listeners in today's mobile and portable venues will almost always choose real-time, over-the-air delivery, this may not be the case tomorrow. New products already on the market can allow a car audio system to sync via WiFi to a home media server when parked within range of the home network access point, allowing podcasts to be transparently delivered to the car. In the near future, converged wireless/broadcast systems could allow access to real-time streaming services on car or handheld devices, which will radically change the competitive landscape for terrestrial (and satellite) radio operators.
How to compete
Of course, any such new service will gather audience gradually, as Internet and satellite radio are doing today. The key distinction here is that if operators of these new delivery methods choose (or are constrained through regulation) to act as "pure" service providers, then their offerings will be treated as commodities, and chosen only on the basis of availability and price. In that respect, it's hard to beat over-the-air broadcasting's value in its local markets.
Yet if the pure service provider can provide better availability/price to certain audience segments, broadcasters may choose to make arrangements to offer their content on the service, and then use their legacy channels (i.e., over-the-air signals) to cross-promote the new service's offerings.
Today's Internet radio is an example of this, in which a broadcaster's streaming content can thereby be delivered to a limited amount of additional audience. Podcasting does the same thing, by extending both the spatial and temporal axes of selected broadcast content's availability.
On the other hand, if a new service provider also generates its own new and competitive content, a wholly different analysis must follow. Rather than the "if you can't beat 'em, join 'em" approach used above, broadcasters should take a "fight fire with fire" methodology here, taking on the competitor head to head, and offering equally or more compelling content and value than the new entrant. An example of this is satellite radio, where terrestrial radio should react with more content, increased localism and fewer commercials, as some forward-thinking broadcasters have begun to do.
There will always be a period in which the critical mass of audience already assembled by incumbent terrestrial broadcasters can be leveraged, but this time window is always ticking away, and its ultimate length is determined by the popularity and "buzz" of the new service. The latter is often short-lived, however, and the onus of maintaining it is usually on the new entrant (and its checkbook). Nevertheless, complacency of the incumbent can be dangerous, and market forces render that time-to-critical-mass window dynamic; it can shorten or lengthen quickly as the "buzz balance" for or against new or legacy services changes.
Finally, although buzz is driven by promotional efforts, much of it can also come simply from the industrial design of consumer terminal devices, as we've recently seen with the iPod and similar products. Broadcasters have no direct hand in this component of the media ecosystem, but they should marshal any possible forces at hand to promote the incorporation of IBOC - and any other new reception systems that they might wish to leverage for delivery of their content - into desirable new devices. (For example, several new car audio units will bundle IBOC reception with MP3 and WMA playback capabilities.)
Along these lines, however, broadcasters should also realize that because many of these new devices will include increased convergence (i.e., incorporating numerous reception systems and playback formats), even the handheld device will become a more competitive environment than ever before. Promotional efforts should be tuned to compensate appropriately.
Radio has shown resilience before, reinventing itself on numerous occasions. Now is just another one of those opportunities for the medium to shed its old skin and revitalize. Competitive threats have never been stronger, but new venues of access to audiences have never been more exploitable.
The Audience Is Changing. Can Radio Keep Up?