More streaming; SiriusXM may mean demise of car radios March 19, 2015 – By Richard Morgan – New York Post Video didn’t kill the radio star, but Sirius XM and streaming services like Pandora are taking it apart piece by piece. Terrestrial radio, after years of maintaining its vise-like grip as the dominant in-car entertainment provider, will soon see thousands of motorists turn it off, a Wall Street report on Wednesday forecasted. While terrestrial radio still owns an 80 percent share of car listenership, it will start to lose up to 1.5 percentage points a year of that market share as streamers like Pandora enter the market, the report said. Connected cars — meaning those equipped with 4G wireless broadband technology — are expected to account for 39 percent of US vehicles shipped this fall. But they’ll account for 60 percent by 2018. Radio’s endgame, according to the report by analyst Amy Yong of Macquarie Capital (USA), will be to appeal to increasingly smaller markets. The large markets will eventually belong to Sirius and Pandora, as well as other digital players with strong urban sales teams. Pandora, for instance, currently accounts for just 2 percent of listenership in the car. But its number of active users doubled in 2014 to 9 million. Sixty percent of all radio consumption is in the car, according to Parks Associates. And that makes it prime real estate for all audio entertainment companies — especially those looking for growth outside the home. Yong’s report predicts that Sirius, which already owns about 11 percent of the car-listenership market, will at least maintain if not grow its share through “its exclusive content, commercial-free appeal and sticky subscription-based model.” This means any gains by Sirius — as well as those by Pandora and other streaming services that develop relationships with automakers — will come out of terrestrial radio companies like Cumulus Media and iHeartMedia. Further tuning out the car radio will be what Yong calls “the entry of new deep-pocketed players like Apple CarPlay and Android Auto.” iHeartMedia shares have fallen 36 percent in the last year. Cumulus is off 53 percent over the same period. Pandora has fallen 54 percent over the 12 months.]]>
Year: 2015
The Compelling Case for Radio vs. Streaming
Peter W. Burton, VP/GM, Bonneville International, Los Angeles, in December 2014 wrote about radio’s competitive position vis-à-vis online streaming services, stating that the choice of radio over streaming could not be clearer with an insightful depiction of broadcast radio’s enduring strength as the primary audio medium:
I am sending this to those that I know in the buying community to be thoughtful, intelligent and considerate about where your money is placed. As we approach 2015, I realize you might be encouraged to replace a radio station or two for a pure play radio product. For various reasons, I would simply ask you to consider the following information. As an industry, broadcast radio is losing millions of dollars to pure play radio and I would be remiss if I didn’t defend our position. We have studied, watched and tested the pure play model as an ad vehicle extensively. It is our well thought out fact based opinion that pure play radio is not an appropriate replacement for a broadcast radio station, as the two are very different products.
- The pure play (mainly Pandora) registration process is a non-social login which doesn’t allow for verification of the actual user. Accuracy is not checked or audited in this area. So, verification of age, gender and location is inaccurate. Any claims of accuracy in this area should be questioned. From an overall audience standpoint, Pandora has gone as far as admitting in their annual report that there is duplication in their monthly user numbers. So, they have no idea how many total different listeners they have. Because of this, a cume number is impossible to come by with any accuracy. This would result in an impossible comparison between radio and the pure play streaming products from a total user standpoint.
- Pure plays (specifically Pandora) do not prompt on cell phones which is 80% of their listener base. So, unlike the PPM, they have no idea whether their users are hearing the ads or not. It also makes it impossible to come up with an accurate TSL figure. So, the two figures of cume and TSL used casino online in calculating AQH are derived in a completely different way. This makes the Triton numbers impossible to compare to that of Nielsen radio ratings as the two methodologies are completely different. Any accurate comparison between different mediums must utilize the same methodology to ensure accuracy. Additionally, audience metrics derived by streaming to an IP address is NOT the same as audience metrics that are generated by the Nielsen PPM device. In order for a broadcast radio station to be credited for listening, the device/person must be within actual hearing distance of the radio station signal. This is not the case with current streaming measurement. Pure plays are credited with audience even though the IP address continues to receive the stream while the listener is no longer present in the room.
- These two products are not only different but they should be considered different industries and never replaceable by the other. Evaluating and allowing pure play radio to aggregate all of its individual streams in a specific demographic is analogous to evaluating broadcaster’s aggregation of all its stations within a given market. At a minimum, they (specifically Pandora who has paid Triton Media to rate them) should break down its audience into the 25 major formats to get a truly accurate view of its relative strength in relation to broadcast stations. Radio delivers a message simultaneously to hundreds of thousands/millions of people verses the audio pure plays delivering them one-to-one with no capability of generating simultaneous exposure and reach.
In Southern California, 94% of the population is reached by radio. This is a larger figure than Cable, Broadcast TV, and print and certainly pure play radio (by a wide margin). Unlike pure plays, broadcast stations provide format purity enabling advertisers to match their messaging with the mindset of the listeners at the time of exposure. What’s going on inside the listeners mind is the most important environment of all. Please understand that we believe that pure play radio products like Pandora and Spotify are good consumer products, but not suitable advertising vehicles. They are especially not suitable when considering the replacement of a radio station as they simply deliver something at a totally different level in a different way. They (specifically Pandora) have had to morph themselves into an ad vehicle in order to survive financially, so accurate measurement of listenership was a necessary afterthought.
Peter concluded by saying he appreciates your consideration on all these points and welcomes a conversation on 323-692-5401 if you have thoughts, concerns or questions.
]]>Piolín: Hispanic Podcasting Breakthrough Talent?
Clay Gibson observed about a story of great potential significance making news this week: Eddie “Piolín” Sotelo, one of the most popular morning talents in America and host of the prior top-rated morning show radio program in Los Angeles, signed to do a daily podcast show with PodcastOne. While this Piolín podcast is likely not quite the kind of turning point that the hiring of Howard Stern was for Sirius Satellite Radio, it has the possibility to greatly raise the profile of podcasting among Hispanics. Until now, podcasting is much better known among Whites and African-Americans than among the Hispanic population. The Infinite Dial 2015 report stated that awareness of podcasting is being significantly held back by the low number among Hispanics. And while Hispanics are slightly less likely to be online or to have smartphones, this does not explain nearly all of the difference in the graph above. The better explanation is a lack of compelling programming, especially in Spanish. The hiring of a Spanish Radio superstar like Piolín for a daily podcast might change things.]]>
Podcast Popularity Leaps
Edison Research finds that daily listeners of podcasts listen to more podcast audio than any other form of audio, as the graph here illustrates.
Those who listen to podcasts spend more audio time with podcasts than any other audio media. A year ago AM/FM radio listening still predominated among this audience, but now podcasts are tops with them. The total share of podcast listening among all Americans increased by 18% over the course of one year, which is a significant jump. Podcast listeners spend an average of 6 hours and 8 minutes each day listening to any form of audio. The average American spends just over 4 hours per day listening to audio. What this means is that while some of the shift in podcast listening has come from other forms of media (in particular, AM/FM Radio,) much of it is simply new additive consumption of audio content.
When tallying the total hours devoted to podcasting, and projecting it across the U.S. population, it shows that at full adoption Americans would be listening to approximately 21 million hours of podcast audio each day – which is a very bullish assessment about podcasting’s future health and its growing place in the market for audio AND advertising.]]>
WSJ Discusses Talkradio’s Advertising Problem
More than 50 million people in the U.S. tune in each week to news-talk radio stations that carry advertising, making it radio’s second-most popular format, behind country music, according to Nielsen.
But many national advertisers have fled from such stations in recent years, seeking to avoid associating their brands with potentially controversial programming. As a result, advertising on talk stations now costs about half what it does on music stations, given comparable audience metrics, according to industry executives…
…Local and direct-response advertisers, such as flower-delivery and financial services, continue to advertise on conservative talk shows. But overall demand has tanked among national advertisers for anything else that could air on the same stations, putting some syndicators and stations in a bind on their programming.
Read the full article – www.wsj.com/articles/talk-radios-advertising-problem-1423011395]]>Radio and Digital Advertising Developments
Here are some radio advertising posts that have caught our eye (and ear) as of late:
Mobile app ‘clips’ radio ads to smartphone – Have you ever heard a great offer advertised on the radio while you’re doing something else and then forget about it later? Wouldn’t it be nice if you could “clip” it and have an interactive version of the information immediately on your smartphone?
Programmatic buying and real-time bidding – the use of software to purchase digital advertising, as opposed to the traditional process that involves RFPs, human negotiations and manual insertion orders.
Radio endures as leading music source – Morgan Stanley Research released a new report that shows that despite all the chatter about the growth of online streaming services like Pandora and Spotify, most music is still heard via traditional AM and FM. Radio accounts for 86% of music consumption and half of that is done while in a car. The report does address future trend expectations by citing that most newer cars come with Pandora, Spotify and iHeart Radio alongside SiriusXM, which enables splintering of the listening across many platforms beyond AM and FM.
iHeartRadio at 60M Registered Users
The tipping point for online streaming appears to be here.
iHeartRadio announced this week that it has surpassed 60 million registered users, and that with the aid of its more than a thousand US radio stations, and a corporate rebranding, it has achieved brand awareness of 75% at the end of 2014, up from 5% the prior year.
Moreover, Edison Research’s The Infinite Dial 2014 reports that over the last month one out of every two US adults has listened to some form of streaming (broadcast streaming or personalized radio).
Streaming offers a whole new world of radio advertising opportunity. National advertisers are just beginning to understand the power and reach of streaming. With a little streaming encoder, you are able to reach potentially millions on mobile phones locally, nationally, and globally.
All the more reason to consider adding streaming to your media mix when considering broadcast and digital advertising options. Media Partners Worldwide is happy to assist, and we have enduring relationships with many of the major streaming leaders.