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.

1. 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.

2. 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.

3. 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.

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