Too Comfortable to Compete?

Back in the day - when radio DJs spun vinyl discs on turntables and were key reasons listeners were attracted to specific radio stations, creative and interested program directors often tried to understand what their listeners liked musically.  There were no texts or emails in those days, but request lines and record sales were a good indicator of active listeners' tastes.

In those days that process worked quite well.

Today, programmers of radio stations have much more sophisticated methods of determining tastes in music. Research is more sophisticated. All hail to electronic media, the internet and digital music consumption.

Yet adoption by programmers of the most promising of today's technologies - on-demand music streaming - is very slow.

Why is this?

Comfort = Caution.

I've spoken with hundreds of programmers of music stations in the last twelve months about on-demand streaming. Almost all are excited about the promise of streaming data yet only a small group of forward-thinking programmers are using the data and using it properly. This is a group of programmers whose stations more accurately reflect their listeners' tastes.

There are concerns about the data which I will address in another blog, but in a nutshell the concerns lie with programmers' comfort with the tools they have been using for years: telephone call-out research, auditorium music testing or newer platforms such as Shazam, M-Score and others.

Does it matter to Top 40 programmers that the new Meghan Trainor song "Dear Future Husband" has been one of the most-streamed titles over the last three weeks yet radio has it charted below number 50 this week?

Or to Country programmers, that Luke Bryan's new song "Games" is the hottest Country song streamed over the past three weeks but on the radio charts it's hovering in the 40s?

Are Classic Hits programmers aware that Guns n Roses' "Sweet Child of Mine", "Never Gonna Give You Up" by Rick Astley and "Hooked on a Feeling" by Blue Swede continue to rank in the top 20 most-streamed songs by their audience on-demand?

This is powerful stuff.

And it is very responsive to the real world. When songs become exposed and popularized through TV, movies or commercials the ones that count appear on streaming research giving programmers the chance to mirror interest more quickly than ever before.

According to Nielsen, over 80 percent of music consumption today occurs on-line. That's a convincing statistic in anyone's book for near ubiquity. Yet, the only data that truly reflects this significant consumption of music - on-demand streaming - is not used effectively to reflect tastes in today's popular music.

As discussed in another Bridge Ratings blog, "How On-demand music streaming helps radio programmers", on-demand streaming data indicates that true music consumption today varies from the way radio presents music.

And broadcast radio has a wonderful opportunity - today - to reflect its Unique Purpose in 2015.

Careful attention to and interpretation of on-demand streaming data are at the nucleus of radio's Unique Purpose in 2015.

There are hidden gems in weekly streaming research that confirm radio's long-held purpose of playing the hits and now on-demand data not only shows what the hits are and how long they  truly hold consumers' interest, but it also can easily lead to knowing what new songs to play and how often to play them.

A better indicator than CD sales or even digital downloads, on-demand streaming gets to the root of quantifying song appeal. If a music listener invests time in selecting and listening to songs on-demand, there is legitimate cause to believe they want to hear it.

And on-demand streamies who also listen to music radio (80+ percent) also like to hear the songs they stream on the radio and count on radio to curate songs that may interest them on other platforms.  

One final realization that has come from over a year of studying on-demand streaming metrics: If music radio programmers were to follow the path that this new, important research is providing, their stations will sound more relevant, fresher, stronger and more fun to listen to,

Programmers: if your station's unique purpose is to truly reflect your listeners' tastes, go down this path, study the consumption of your listeners through on-demand streaming and reflect it back to the masses.

It's an exciting time. Technology has given us a gift.

 You may need to put away some old things (call-out or auditorium testing) but this new thing is the greatest new tool in your competitive arsenal and for now your competitor may be too comfortable to be using it.

Dave Van Dyke
President
Bridge Ratings

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The Performance Rights Issue

Despite what you may read or think about the music performance royalty payment debate for terrestrial radio, it is highly likely, in this reporter's opinion, to become a reality soon.

This historic change in music licensing fees could result in at least three potentially significant changes in the radio industry:

#1

Stations paying more for the right to play music - especially new music - will force hundreds of stations to choose to change formats to no music/more talk or radio formats that will take advantage of the wealth of unlicensed, independent artists and groups that are producing some darn fine music.

This move will inspire the rise in acceptance on FM of some current non-music formats such as news, news/talk, the new comedy radio format that was introduced in September and others that haven't been thought of yet.

This will help radio operators in at least two ways:

a) they will not be subject to unrealistic increases in music licensing fees and

b) the move to non-music formats will save stations over 50% in their current music licensing fees (BMI/ASCAP/SEASAC).

What a deal!

#2

More creativity. Added performance fees for stations that continue to program music will force those stations to play fewer songs in order for their business models to function in a positive zone.

And as a very good friend and I were discussing over lunch the other day, playing fewer songs will force/encourage stations to develop other programming content that will not fall within the performance rights category.

In other words, the performance royalty fee increase will force today's programming people to be more creative - to rely less on the easy use of music to fill the space between commercials and actually create new content that will be compelling for listeners.

Imagine being compelled to listen to terrestrial radio because it will be offering exciting, fun, entertaining and interesting content that is proprietary and not available elsewhere.

This is starting to sound pretty OK!

What the industry may lose on the added royalty fee it will surely benefit from with fresh "compelling content" which should generate more audience which should increase advertising billing!

#3

New music formats that take the added royalty into account. There are at least three never-before-heard radio formats ready to go that have been vetted in the field by Bridge Ratings & Research. Maybe some radio companies will find the courage to save themselves some money with exciting new radio programming.

What a concept!

So, ultimately, while the majority of the radio industry stands opposed to or at least doesn't see the fairness of the much-discussed performance royalty agreement, the industry will benefit from this forced "tax" by causing it to work harder to be better.

Perhaps this is the straw that finally pushes terrestrial radio to the point of action after at least ten years of stifled creativity.

Perhaps this will generate more jobs for the creative-minded programmers who have either lost their jobs over the last few years or left the business due to frustration.

And perhaps it will even open the eyes of young music-fans seeking employment who will once again see terrestrial radio as a viable platform to present their ideas and bring fresh blood into a radio industry that has been struggling to find new talent.

Yes, it's quite possible there is a silver lining to this whole new royalty thing...

Who's up for the challenge?