Radio’s Next Release: Number One with a Bullet?


According to a report released this week by Credit Suisse analyst Michael Klim, radio could and should leverage the Internet to help stem listener erosion and build incremental listeners. What a revolutionary idea! Did you also hear that you can buy books online, and even send letters through something called “e-mail”?

Klim’s report has qualified what many smart radio broadcasters have known for years — tomorrow’s (and many of today’s) listening audience is online — and that they have got to stop looking at themselves as strictly “radio guys” in order to continue build their business. Nearly 5 times more people listen to streaming radio on a regular basis than are satellite radio subscribers. And, with broadband Internet penetration at nearly two thirds of all active Internet users providing a readily accessible audio stream, robust station website and unique interactive content will do more to drive new listenership than any roadside billboard, and will reach a younger, more affluent group of listeners who someday may tire of the lack of serendipity on their iPods.

The promotional aspects of the web for radio shouldn’t even be a topic of discussion in 2006. What should be more pressing is how radio stations can use the web to generate revenue and create a true extension of their core business online. E Marketer analyst David Hallerman predicts that $1.3B will be spent in local online media in 2006, with the number growing to $4.9B in 2010. Where is that money going to come from — and where will it go?

Newspapers, who are still reeling in the face of rapidly declining circulation and the demise of the classified business decided enough is enough and put together extensive strategies to ensure that Google and Yahoo weren’t the only options for news and directory listings. The jury is still out as to whether they acted in time or not. When Monster began to encroach on the classified business in the late 1990’s, many papers thought that the “fad” would subside and that developing their own online classifieds would cannibalize their core business.

We know today that they were wrong, but aren’t we seeing some of the same attitude in radio today, where only 24% of stations are streaming their signal online and many websites are still seen as a step above the bumper sticker in promotional value? Newspaper websites started off to support circulation, but in most cases have also have become profitable extensions of the core brand. Listen to a New York Times earnings webcast sometime . . . when talking about their digital operations (up 24% YTD) it seems like the only time when someone in the room may actually be smiling.

Radio has an exceptional opportunity to leverage its core assets online to not just build a promotional vehicle that reaches the next generation of listeners, but to also build a real money-making business. Video pre-roll spots on streaming audio players, online listener club promotions (there is gold in those databases!), web display ad sales, wireless messaging, and interactive contest sponsorships provide an advertiser-rich online environment for a local radio station that should make any sales manager giddy. And for the less adventurous, there are spots. Lots of :15s and :30s that make it easy to sleep at night. And, with new streaming technology you can even target these down to the individual user.

Radio is in the fortunate position to learn from the past missteps of other “traditional” media that have reacted to the impact of the Internet and to begin to build complementary businesses online. It’s time to embrace streaming, database relationship building and online ad sales — before the only thing that teenagers listen to is Google Radio . . . on their Wi-Fi Ipods.



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