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What PARs Will Mean for Radio

The concept of local storage on a radio is new and could provide golden opportunities.

The concept of local storage on a radio is new and could provide golden opportunities.

Last issue, we began a discussion of the personal audio recorder or PAR, an audio/radio equivalent of the personal video recorder, which is most commonly referenced by the brand name TiVo. As most readers are aware, this is a device that integrates a hard — disk — based recorder with a tuner and timer.

Let’s conclude our discussion of this concept by considering a few pivotal issues that remain unresolved. How these turn out will largely determine the impact of a PAR in the marketplace, and establish radio’s role in that movement.

A common radio EPG

The PAR will not match the complete value of the PVR without a viable electronic program guide, or EPG. Today’s PVRs all fill their EPGs with data provided by their respective service providers, but this data almost always comes from one of two TV — channel schedule — data aggregators. There is no such national — plus — local schedule-data aggregator for U.S. radio broadcast channels; and the high cost of developing such a process, plus the low value of its market, argue against the early emergence of such a vendor.

Therefore PAR vendors would have to create this data for themselves, a far less advantageous starting position than that of PVR vendors in this respect.

Alternatively, the personal audio recorder could be more of a manual device, with users finding schedule data from other sources and scheduling recordings as one would on a VCR – by setting the start time, stop time and channel.

Transport control

During playback, the fast-forward feature would be welcomed by most users, allowing them to skip ahead through undesired content (including ads, of course). Meanwhile, during real-time radio listening on the personal audio recorder, the live-pause buffer could still be a welcome feature. Once enabled, unwanted content could also be skipped until the buffer time is exhausted.

While the fast-forward feature is considered lethal to the advertising model, this is only because radio advertising has exclusively used a sequential interstitial model. Once significant listening is done via time shifting, this model weakens. This doesn’t mean that advertiser-supported broadcasting is terminally threatened; it simply requires another model to be developed and deployed.

Today, some thought leaders in the advertising industry are considering such new models. One of these thinkers, Thomas Morgan of the Digital Media & Advertising Group, offers the concept that “the fast-forward button is the advertiser’s biggest threat, but the pause button is the advertiser’s biggest opportunity.” He infers that while the pause button is engaged, advertisers’ messages can still be presented. Also, if sufficiently engaging content were offered offline, the pause button allows a user to explore this content at leisure without fear of missing the rest of the program.

With this model in mind, advertisers are beginning to explore how to present such value-added or niche advertising, using the broadcast program only to alert users of the content’s availability and location, rather than taking up the scarce broadcast time to present it.

Using the proper platform, audiences can pause the program when such a “pushed” announcement comes along, then seek the advertising via a “pull” request (on the Internet or a broadcaster-provided “walled garden” server, etc.), if a return path is available. If there is no return path, such content can be downloaded in the background to the receiver (via datacasting), then announced to the user when download is completed. If the user is interested, real-time broadcast content can be paused while the downloaded advertising material is played back from storage, after which the user can return to the broadcast where it was stopped.

Alternatively, the user can “bookmark” any such requested content, whereupon the platform can store and assemble all requested content, getting it ready to play sequentially at the end of the broadcast, or whenever the user requests it.

PAR for the Car

While this may seem a bit farfetched, it’s actually quite close to reality, given the direction in which some manufacturers are heading.

By next year, we will see car audio systems with hard drives. These are initially intended for downloading compressed music files, either by direct connection to a PC (using a removable docking radio), or via removable storage media (CompactFlash, SmartMedia, Memory Stick, etc.).

Another approach adds a WiFi connection to the car device, allowing “garage sync” to the mothership PC via wireless home network when the car is parked. This would allow a user to download a file or set of files from the Internet to the PC each night, and automatically transfer the batch to the car device via WiFi, so they are ready to play for the user’s morning commute. Consider how that might affect drive-time audience ratings for radio if it became broadly popular.

On the other hand, if these devices include a radio tuner, and radio stations are producing, promoting and delivering (perhaps even selling) content for such uses, the PAR simply becomes another profit center for the broadcaster.

The back nine

The “hidden” business model of connected devices like the PVR and PAR is the data mining potential that they offer. These devices can store every command that their users enter, so usage patterns and behavior can be downloaded (daily or less frequently) and observed by the service provider.

This aggregated data then can be marketed and sold under the terms of the company’s privacy policy, to which the user agrees up front. (Typically this data is not personalized when sold, so it does not reflect the users’ identity to advertisers; it simply reports aggregated behavior trends, in the manner of focus group sampling or surveys.) In the radio case, this would provide a new type of data that would likely be welcomed by advertisers. If this were successful, these data aggregation back-end systems would really become the core of the PAR service providers’ business.

The ultimate goal for the PVR/PAR is so-called targeted advertising. In this case, advertisements are downloaded selectively to addressable receivers, based on a user’s profile, which can be continually updated by the user (based on personal preference), or by the service provider (based on location, demographics, device-operation behavior, etc.). The device stores these ads in its memory until an appropriate time to play back occurs. This opportunity could be when the user requests the playback, or it could be when the device decides to replace a real-time ad with a stored one (based on the real-time ad being identified by the receiver as a “bumpable” type, which had been purchased by an advertiser at a reduced rate).

For PVRs, location is simply a ZIP code field, but in the radio case, user location could be updated dynamically via GPS return data. This would allow advertising delivered to a mobile or portable device to be optimized for the listener’s exact location (e.g., by neighborhood) at the moment. Once the listener moved from that location, any stored advertising keyed to the location could be deleted, whether it was played or not.

This approach allows the addition of massive new levels of flexibility in radio advertising sales packages. It also would allow the sale to be contingent on whether the ad was ever played, and by how many users. Of course, if rates were based on such data, a third-party auditing process also would be required.

Such a discussion could continue at length, as it does in many corners of the advertising world right now. The radio industry should engage in this dialog so it gets its fair share of this new business. In any case, the broadcast advertising business model is likely to get a lot more complex, so get ready to tee it up.