The Radio Week That Was 10/21

The story that stood out was all the changes in the creative teams in satellite radio as XM and Sirius began the meat of the merger. When you stand back and look at the 2 services XM really put up a lot more into the music channels than Sirius. Sirius really ramped up the expenses when they lured Howard away and paid tons for sports rights. The bidding wars for content were mostly to impress Wall Street at any cost and we all know the costs are rather high.

The music channels were really a bargain. Most just had a programmer and maybe a jock here and there. XM was more focused on trying to bring in some unique formats and building on Lee Abrams theory (a well founded one) on 4 types of programming that addressed listeners who were casual to rabid. XM spent a lot on imaging the stations, running special programs and profiles, having artists stop buy, covering live tours, and keeping the music channels pretty active. Sirius pretty much pressed play and ran with 1000 in a row on a group of stations that really just covered the basic format food groups we have in most major markets.

XM felt that the music channels brought in around 70% of the subscribers and a wide range of people. Sirius was a lot more focused on the talk side and 'Howard's World.' The one problems there is where is the growth? How many more Howard Heads do they expect to find willing to pay out for the service? Yes, lots signed up when he moved over, but the fans are either there or not by now. You don't see a bunch of 22 year olds with their first job and car jumping all over signing up for Howard.

The sports channels probably still have growth in them - they have all the major sports covered and there are plenty of fans. The talk channels are OK, but there aren't any big hosts here and in most markets the talk fans have a wide range of choices in many cases on regular radio.

The new programming order with the merged services is mostly living on Sirius' energy. And in the music side it's pretty much just the basics. The huge Washington HQ for XM is probably pretty much a ghost town as the world now revolves around just delivering the hits.

For the terrestrial radio side it's good news. There will still be 2 services to choose from for a long time splitting the effect and now we don't have much on the 'music side' to compete with. No doubt with the slump in car sales and the new opportunities for 'add on gadgets' from sync systems with I Pods to WiFi to navigation aids and more video options. It also looks like the next big deal in cars will be more centered on MPG than so much focus on the dashboard.

You also have the debt issues with the merger and Sirius/XM needing to raise a ton of money in 1st quarter. They really can't really move to just 1 audio service and then use the band width to venture more into video for a new revenue stream - you still have over 1/2 of XM people to service and the receivers are not compatible.

It all adds up to a very tough business model. While Mel may dream of being the leading content provider in audio as he claimed in one of the addresses around the merger - it's not going to happen without some creative people and unique programming.

While satellite radio's impact on terrestrial radio has gotten past the peak it's now going downhill. It's likely that these moves could steepen the slope. For 'regular' radio we still face lots of challenges, but it looks like satellite radio is in the rear view mirror. If you're looking for some really talented people there's even more to choose from.

14-24s Radio's Lost Generation - Under 14s Radio's New Frontier

Remember when you got that long awaited new toy back in your pre-teen days? That extra cool electronic device, maybe a guitar, an Atari game system or a fancy new bike that you just had to have. You shed other interests or gave up other desires for that magic 'thing' that you thought would be the ultimate. Then after you played with it for a week or maybe a few months or maybe even a year somehow the magic just wore off. It sat in the corner or maybe it broke and it just faded into the pile of junk we seem to gather in life. Suddenly something else came along that looked a lot more interesting or perhaps it didn't live up to all your expectations and you moved on.

As we look at all the new media toys like IPods, Internet radio stations like Slacker or Pandora, Satellite Radio, I Phones, the latest Cell phones, social networking, IM, text messaging, video sites and whatever is next on the web that challenges radio for entertainment you can bet that a lot of them could end up just being the new toys for the 14-24s or Millennial generation.

Remember that the Millennial generation (born from the early 80s to 2000) are the first generation that largely grew up in the personal computer age. When they hit elementary school in the mid-late 80s the Apple computer was already in nearly every classroom. Most in the U.S. saw a computer enter the home and have some Internet access in their teens and the younger ones have never lived in a home without a computer, over 50 cable channels, VCRs, DVDs, complex gaming systems, hand held games, cell phones and the web with high speed access at their finger tips. They have embraced all the new technology and shunned the old much like the boomers jumped on TV, instant world communication, and jet travel.

Radio's role with the Millennial generation was clearly diminished because Radio didn't pay much attention to this new emerging generation. Spending it's merger and Wall Street diminished programming resources on the older 25-54 generation deemed more instantly rewarding by the forces in command, radio began to fade. But, so did broadcast TV, the record industry, and land line telephones. The Millennial generation had NEW TOYS to play with and try out.

But, how long will the new toys last? Look at the cell phone in your hand. If it's more than 2 years old chances are it's starting to look like a relic. Even if you are a tech savvy person you probably never even figured out all it's toys or uses. Even my daughter's phone has lots of features that she rarely uses or doesn't want to bother with.

Remember all this new media technology is new. While logging on the Slacker Radio looks like an ultimate personalized web radio station programming it to play your favorite songs takes hours and hours of sorting through thousands of selections. Building and maintaining your IPod that holds thousands of songs is a daunting task ripping CDs into I Tunes and spending time every couple of weeks downloading new songs. Then you have to rate them, build playlists, and keep the database up to date so you can find that favorite within the thousands of titles. Building that cool Face Book or My Space site may be fun at first, but maintaining it and keeping up with all the friends, adding new pics, adding video clips and communicating with all these friends that may live on the other side of the country. It could be so complex and time consuming that sooner or later the new toy starts to sit in the corner.

You also have a new generation on the way that's younger than the Millennial generation. Right now they are under 10 years old. Will they be as excited about all this new media as the older generation above them? Or will they more likely establish their own turf starting 5 years from now as the first of them enters high school?

If radio starts thinking and planning now latching on to this new generation could be the 'turnaround wave.' Will they rebel against all the pitfalls of lives on the web and seek more personal and imaginative communication and entertainment options? Could radio's simplicity of use and low cost coupled with links to the new media world be an attraction to younger audiences again? As we look at some of the research done on the younger side and the early PPM results we see radio having an impact in the younger side.

It's a possibility but we'll need some help from the top levels in our industry, music, ratings services actually doing a representative job measuring the new generation, and a realization that this audience has marketing value from the agencies and sales forces. Arbitron is already moving to younger demo measurement in the PPM system moving below 12 year olds. We will likely have more stable samples as we move away from the 1 week diary measurement to longer term behavior data. We will also have new bands (if HD ever happens) and at least opportunities to provide stronger products in the Internet broadcasting field. Hopefully our hunger and need to reinvent ourselves will lead us to entertain and program to have an impact in this emerging generation.

Radio could be HIP again! But, we need to start planning now.

Internet Radio Listening UP 150%!!!!

This week we see in a release from JP Morgan that weekly listening to Internet Radio Stations or streams is up 150% growing from 20 Million weekly listeners at the start of 2006 to a new estimate of 30 Million. Revenue from streaming and the web sites that go along with the streaming stations is also up to 500 Million.

That's very impressive growth and likely to continue as more and more people find out how easy it is to tune in on the lap top or desktop. When you compare this media to all the talk and noise we have from the Satellite Radio camps you can see why there is talk of a merger of XM and Sirius. Right now the best estimates place satellite radio subscribers at 14 Million and the goal is to deliver 20-30 Million by 2010. Internet Radio has been quietly growing and is already past their 2010 goal. At this rate by 2010 Internet Radio would pass 80 million - well over double the Satellite Radio audience.

Now we add the news that the technology is available to turn your car into a WIFI hot spot and be able to full access the web as you drive down I-75 and we can easily imagine being able to tune into the whole spectrum.

Stop moaning! You're great radio brand already has a web site and you can (with a little work) stream if you are not already doing it. The audience is growing and streaming technology is getting easier to deal with every day. Just the other day I was listening to the Score in Chicago and they noted that over 4,000 were listening on the stream that morning.

We DO need to work out a settlement with Arbitron on getting credit for streams even if the commercial content is different due to the voice over compensation. Sooner or later the VO talent has to realize that their 'fight' over this will hinder the whole terrestrial radio industry and that they are being very selfish and endangering their whole lively hood. The ad agencies also need to see this writing on the wall.