NOTES FROM THE NAB 2007 Chris Byrnes – ByrnesMedia I recently attended the NAB in Charlotte to check out what’s new and exciting in broadcasting. As is often the case, some of the best ideas were exchanged over a coffee or at venues outside of the conference itself, and Charlotte was no exception with Eddie Van Halen and his band playing to a sold out crowd on the Friday night. Charlotte is also the home of NASCAR and they are building a Hall of Fame which will occupy four city blocks in the downtown area. All the talk at the NAB this year was about PPM, the Web and new technologies. Here is a summary of some of the sessions that caught my interest from NAB 2007.
WiFi: This technology may lead to some growth in online listening. The recent Apple announcement of a software development kit for the WiFi-enabled iPod Touch and iPhone which we can expect to see in early 2008 means developers will be able to build third-party applications designed for the iPod including user-friendly streaming modules. The good news is that radio will once again become portable on the most prevalent mobile device this century. The bad news is that the playing field will be flattened and thousands of choices from across the globe will have equal access to the ears of your audience. It may be that WiMax will ultimately surpass WiFi and become the more popular platform given it’s potential for greater coverage.
HD Radio: While there was lots of optimism on the floor for HD Radio and some in the sessions, I came away with the impression that HD Radio will be about as successful as AM Stereo. Some broadcasters are holding off on investing in this technology because of a concern that consumers will not spend money on another box that doesn’t sound very good.
The Big Marketing Guns: Frank Cooper, VP of Marketing for Pepsi, and Tony Ponturo, VP of Global Media and Sports Marketing for Anheuser-Busch, shared their vision for what works when it comes to radio and its relationship with advertisers today. “What can radio do for big brands to secure budget,” was their big question. Their suggestion: “Be a marketing partner and tell me what your brand will do in 2008 to excite the consumer.” They pointed out that radio was the main social networking tool just a few years ago, but now it’s Facebook and Myspace. They also talked about how the Digital Universe has enabled people to know more and be more involved in the creative process of brands and how quickly companies need to move to keep brands relevant. “Brands have to engage the consumer in meaningful experiences with the brand for it to be successful today.” Their secret to success is based on the premise of, “follow the consumer and connect with the consumer.”
Making Money on the Web: This was a hot topic, as it has been for some years at the NAB. Robert Maccini from Ando Media, who owns Martha's Vineyard and several online ventures, had some interesting observations based on his real life experiences. He suggests online listeners are more likely to be engaged in the content and, therefore, more likely to click on a banner to make a purchase. Further, he says that with more sophisticated “server-based audience metrics”, internet radio is now more measurable than terrestrial radio and advertisers are taking notice. While not new information, Mr. Maccini reminded us of the importance of ensuring there are lots of listener benefits on your station website. “Give them something they cannot get on air or anywhere else. Review your website regularly and have a production meeting exclusively for your website.” His other tip was that for a radio station website strategy to work and have any chance of generating revenue, you need “buy in” from the highest level of your company. If the GM or owner does not believe there is revenue to be gained from the web, then you are pushing water uphill.
Where to Start: This was a question that came up for more than one panel and the answer was consistent based on the experience of those who have some web miles under their belt: “If you are starting out down the path of generating revenue via your website, you are better to up-sell your existing clients using your radio sales reps before you consider creating a web-only sales team” said one panellist. Another good tip from one of the other sessions was to focus your attention on where the revenue is, and not try to take on too much at once. Get one area of your web sales up and functioning properly before you move to the next area.
Tracking Web Revenue: Most of the broadcasters who have been in the web revenue business for some time talked about the importance of creating a clear set of rules to define what is web revenue and what isn’t. Rick Cummings, President of Radio for Emmis, commented, “There is often the temptation to move revenue around to make one area look better than it really is and that does not work.” They also suggested stations should create an income line and an expense line to accurately track and measure this activity.
Who Is Getting the Web Revenue: Based on the most recent tracking figures, newspaper is getting about 40% of all web revenue dollars. This figure is so high because several years ago the newspaper industry saw the internet as a means of survival. Google and Microsoft account for 30% of web revenue while television websites attract 12%. Radio is last at this point and gets 3%, which means there is a lot of room for growth. One of the comments from a speaker was that until radio wakes up and realizes the opportunity, it cannot expect to get much beyond a 5% share of the web revenue pie.
Cyber Remotes: Deborah Esavian, VP of Interactive Sales for Emmis Communications, shared some of her real life experiences with making money on the web. They are generating business by creating and selling “Cyber Remotes” on their sites. Radio ads direct traffic to your station website to see the exclusive offers. Contest pigs do not go to Cyber Remotes because there are no free hotdogs!
Other Suggestions: Allowing listeners to upload photos to win an appropriate desirable prize is a good way to drive traffic and create happy clients. “Pimp My Grill” was an example of an online contest where listeners were asked to upload a photo of their teeth and tell the radio station why they needed the $10,000 total teeth makeover. Then listeners were asked to vote for a winner. Once the winner was anounced and the contest closed, all those who entered were emailed an exclusive offer by the radio station and the client generated some good business from it.
Radio Does Not Have the Respect It Once Did: James McQuivey, Vice President and Principal Analyst for Forrester Research, had both good and bad news for radio. The good news is that their research confirms that more people tune to terrestrial radio than any other medium other than television. But the not-so-good news is that people’s attitudes are changing towards radio and the medium is being taken more for granted than ever before and receives less respect than it once did. You may have read the recent article on our website from Jerry Del Colliano of Inside Music Media™ who says young people are not listening to terrestrial radio in the U.S. because it’s become so consolidated and cookie-cutter that it has lost its relevancy and does not speak to them. “In addition to better content and better delivery systems, radio programmers are going to have to deliver their shows where the next generation lives which may not be near a terrestrial radio.” It seems simple, yet it is not obvious to traditional media companies. They need to go back to hiring the wild programmers who willed their way onto terrestrial signals during the glory days of modern radio. Consolidation has all but ended these creative, hard-to-manage geniuses.
The Streaming Question: There is still real concern about the streaming royalties argument and whether this could still become a retroactive cost for those broadcasters who stream either their terrestrial signal or another web-only signal. However, more and more broadcasters in the U.S. are returning to streaming, or getting into it for the first time because they see it as a way to provide a better service to listeners, and hopefully increase their numbers in the PPM-measured markets. Sandy Smallens of Entercom was one of the panellists in a session called, “The Business of Internet Radio,” and had some interesting statistics on the huge number of people who are tuning into web streams during the workday. His data indicated that stations who stream can expect to see a spike in the 9am to 5pm time period from office workers who are tied to their desks and computers. I was also pleased to see a Canadian company displaying their streaming services at the NAB. Edmonton-based Stream On Fiber offer a plug and play box that uses an Ogg Vorbis encoder to produce higher quality audio at lower bit rates. More information can be found at www.streamonfiber.com.
Who Is Doing What: Figures shown at one session indicate that a personal computer is used by 75% of radio listeners. Online radio stations get 43% of all listening minutes. The rest is split as follows: CD’s 20%, PC files 12%, mp3’s 8%, other online streams 7%, terrestrial radio 6%, others 2%. The suggestion was made that radio plus the web has a bright future. NPR was mentioned as a company that is doing a good job with their web strategy, especially in the area of podcasting.
Conclusion: I’ll write about the PPM in a future newsletter, as that warrants an article on its own. In talking to broadcasters and listening around the dial in Charlotte, it’s clear that most radio stations in Canada sound more local and more dynamic than in a similarly sized market south of the 49th parallel. Even some U.S. broadcasters will admit to this but only after a few beers! |