What business are you in? Does your business have a future? These seem like fundamental questions radio broadcasters should be asking themselves right now.
Time spent listening to your AM and FM radio stations is declining precipitously each year. This is particularly true among young people. They’ve grown up in a world of visual stimuli and conditioning addicted to “screens”. They love music, but have minimal attraction to or experience with AM and FM radio. Advertising revenue for AM and FM radio is flat to declining.
There are shiny new high-tech competitors everywhere. Mobile phones and the Internet are sucking up massive amounts of consumer time and attention. Pandora, Spotify, YouTube, and other services and apps offer continuous music customized to listeners moods and tastes as well as individual songs on demand. This competition is becoming widely available and easily accessible in cars where the majority of AM and FM radio is consumed.
You’ve had a virtual monopoly on the distribution of audio entertainment since the invention of the radio. The range of content delivered by your radio stations has narrowed considerably with the advent of television. For the past 50 or 60 years music has been the primary form of audio entertainment provided by your AM and FM radio stations.
Two things made radio broadcasting such a great business the past 50 or 60 years. The monopoly on audio entertainment distribution and not having to create the vast majority of the content it distributed. The music industry took care of that at very little cost to radio broadcasters. It was a sweet deal, but technology has changed all that. The distribution monopoly is gone. Now what?
So, back to the big questions. What business are you in? Does your business have a future? Bob Pittman’s decision to rename his company iHeartMedia started an interesting conversation about the answers to these questions. He says the new name “reflects the company’s success in becoming a one-of-a-kind multiplatform media company and our commitment to being the media company that provides the most entertainment to the most engaged audiences wherever they go, with more content and more events in more places on more devices.” Bob and his company backed that up last weekend by staging a huge “event” in Las Vegas called the “iHeartRadio Music Festival”. It featured live performances by many music superstars. Fred Jacobs joined the conversation offering the opinion that “radio broadcasters have simply got to become multimedia content creators and distributors”. So there you have it, the future for radio broadcasters is the business of “multimedia content creation and distribution” as well as the “event creation” business.
This vision for the future seems perfect for radio broadcasters who create precious little content of any kind. It makes total sense to go compete with everyone in the entertainment business. Sure, why not? Go take on Disney and Live Nation. You have all kinds of talent and experience creating video entertainment. You’ll be great at creating and promoting massive concert events. This is the kind of stuff your current customers have come to expect from you. You have lots of resources ready to commit to these enterprises. They’ll no doubt drive lots of additional listening to your AM and FM radio stations. Like Nike says, you should “just do it!”
Yikes! Let’s get real. What’s wrong with the business you’re in right now? What’s wrong with the audio entertainment business? Doesn’t it have a future?
Audio entertainment is unique and powerful. It involves the consumer in creating the experience it provides. Sound generates pictures and emotions in minds and hearts. The effect is deeper and more memorable than anything on a screen. When you hear someone laughing or crying you don’t need to see them to fully experience their joy or sorrow. Music can change your mood instantly. The sound and the lyrics create a vibe. Music is mind altering, heart penetrating, and memory making. Audio entertainment can be consumed while you’re doing other things like walking, running, driving, or making love. Audio entertainment will never go out of style. Americans spend more than four hours per day with audio entertainment according to the “Share of the Ear” study from Edison Research. Audio entertainment has an enduring future as long as great audio entertainment is created.
Radio broadcasters are in the audio entertainment business. Why not stay there? Why not focus your limited resources on creating extraordinary audio entertainment? How about being really good, even exceptional, at something rather than average or mediocre at everything. Your current consumers are predisposed to using and appreciating audio entertainment. Why not concentrate on creating new audio entertainment content that surprises, amazes, and delights them. Hire gifted artists who love creating content for the theater of the mind. Create content in all shapes and sizes and distribute it on the platform that fits it best. That’s a future that makes sense for radio broadcasters.