For Release: Monday January 1, 2007
"Bad News for Old News"
With so much doom and gloom in the media business - you'd think it would be tough to find anyone who thinks optimistically about the future. The fact is, consumers' passion for media is alive and well, but they're doing it on their own terms. Whatever else is uncertain, this much is clear about the future of media - and radio in particular: Consumers are in control. With this in mind, here are our 7 predictions for the media landscape for 2007 and beyond:
1. Traditional media companies will continue to struggle to maintain their audiences
Consumers of media are turning to less-established sources to access news and entertainment and anyone with a keyboard and server can distribute content. We really need to think about what it means to be in an interactive environment and have an audience that wants to communicate with us. One of the solutions is to become much more community-focused. Traditional radio has been awakened from a sleep-state and should maintain an aggressive strategy toward making their brands relevant to the digital generation. This means expanding its reach on as many platforms as possible, including video (see #4).
Traditional radio listenership trends
Satellite Radio Subscriber Trends
2. TV's, computers, and other digital devices will begin to morph.
We've been talking about convergence for years but 2006 was the year that consumers really started to use their computers in ways that resembled television and DVR's offered TV audiences the control they were seeking. The only difference between TV and your PC is the size of the screen. 2007 will see more of these convergent devices as video and audio devices bring together all of the options.
Internet Radio (Unique) Listeners Trends
3. Technology will make it easier to find, access and manage content.
Though Google has made it possible to track down your high school sweetheart or the lyrics to a song, it still takes some effort to find things using existing navigation and search tools. Search technique will continue to be refined over the next two years so that it gives consumers more ways to manage and access content.
HD Radio Sales Trending
4. Digital video will drive the growth of on-line advertising.
Traditional radio should heed this development. Just because radio has specialized in audio content for 100 years, doesn't mean it can't and shouldn't develop video to complement their brands. And with that will come a new stream of revenue. CPM's are much more lucrative with video on the net.
5. Advertising in digital venues will become more contextual.
To some extent on-line advertising already takes into account who's viewing or listening to online content and in what context, but the ability to target ads will greatly improve in 2007. Ads based on where the consumer is, what they are doing and what they are expecting will enhance the consumer's use of the Internet.
6. Small-screen devices will have limited appeal as a media platform.
Cell phones and other handheld digital devices aren't quite ready to break out as media platforms due to a lack of standards in the wireless industry and lack of interest from consumers. It will all boil down to where people would prefer to watch their content. We know there is a personal audio experience - the iPod has proven that point. But music is not a high-focus activity - watching video is. This will likely lead to higher quality and larger hand-held screens.
7. Marketers will make some mistakes as they move into new digital spaces.
Corporate profit goals will struggle with the more natural process by which internet communities develop likely resulting in many immature media concepts that will have been stunted because large corporate operators wish to turn them into a profit center. This is likely to be the most difficult part of corporations moving into digital spaces now occupied by the garage-development geeks who understand the "whys" of the spaces in the first place. News Corp.'s trashing of MySpace is an example - they've junked it up with banners which is turning off the generation that is precisely the audience they are trying to reach. 2007 will be a year where this sort of "trash-and-burn" approach will be shared with some patient and innovative companies who understand how the marketing approach in digital spaces requires considerably more finesse than it did in traditional media.
- Apple will likely introduce a unique iPod/cell phone made out of titanium in the next 90 days - possibly without a typical calling plan.
- Talk of a merger of the two satellite radio services will continue to heat up. With all the good intentions of such a merger, it is our belief that this would not be in the best interest of the consumer. Why? most notably because the cultures of the two services are light-years apart. While Sirius, under Mel, has certainly made amazing strides and will be focused on commercial revenue which is Mr. Karmazin's strength, XM is more of a cultural phenomenon. Ever take the tour of these two businesses? You get off the elevator at XM and it's like an amusement park for music lovers. The feeling at Sirius is pure business. These two cultures could mix and it is likely that Mel would inevitably end up as CEO of this newly formed entity. But then what would happen to the XM culture which for many passionate XM subscribers is the reason to sign up at all.
- Digital music sales will continue to gain momentum creeping ever-closer to overtaking hard sales for CD's.
- The amount of money spent on Internet advertising will outstrip that of traditional radio by this time next year.
Bridge Ratings is a ratings and research company based in Glendale, California. We are dedicated to providing on-going, immediate, reliable, useable and affordable audience measurement services for the radio industry. Our methodolgy is based on sound consumer research principles. We are in the business of tracking listeners - not listening. Because we are a true research company we offer flexibility to our clients.