Station Apps for the Bottom Line

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While researching this article I came across an article in Digital Music News titled “The Smartphone: Where FM Radio goes to die.” The article questioned the logic of the lobbying to force manufacturers to include FM in all smartphones. However, that isn’t the subject of this article, but the title may be better applied to smartphone applications, or more specifically how radio broadcasters will utilize and actually make money with apps.

According to a recent study by the Pew Research Center’s Project for Excellence in Journalism titled “The State of News Media 2012,” terrestrial radio is still the second most dominant medium (after television), but there is cause for concern for radio’s future. A 2011 survey by Arbitron indicates radio is still used by 93 percent of Americans over age 12, down 3 percent from 2001; however, smartphone usage is up 31 percent and online radio is up 28 percent over the same period. I won’t discuss trends in the media landscape, but statistics all seem to indicate people’s use of a smartphone platform for entertainment is far outpacing the use of terrestrial radio. A Nielsen study shows smartphones comprise 54.9 percent of mobile subscribers as of June 2012. They also note that two of three mobile phones purchased are smartphones.

None of this should be a surprise and certainly broadcasters are stepping up by offering online streaming through Internet and custom apps. A recent report by the Radio Advertising Bureau shows online revenues for broadcast stations has trended from $480 million in 2009 to $709 million in 2011. Overall this is good news; however, the same Arbitron report noted that in 2011, 34 percent of Americans listened to either AM/FM or online only (such as Pandora) streaming services. Of the group that listened to both (about 9 percent), listeners to AM/FM streaming stayed level while online-only listenership rose.

It’s not hard to understand the reason for this trend. Most online-only content providers have fewer interruptions from advertisers, offer the ability to tailor and/or give listeners some interactive control over what is played and in some cases there may be some degree of interaction with other listeners through social networking.

The question is how can radio utilize the Internet and smartphones to maintain and enhance their revenue streams for the future? One possibility would be the creative use of apps. I’m not talking about apps to play streaming audio, that was clever in 2010, based on this current research it doesn’t appear radio will stay competitive with the Internet-only services in the future. Programming alone will not compel listeners to your sliver of cyberspace. Let’s explore a concept for the “killer” app that will go beyond streaming audio.

Do what radio does best

I’ve said in past articles that, in my opinion, terrestrial radio has largely abandoned the one thing that made it great: localism. Perhaps even more relevant, it was a catalyst to bring like-minded groups of people together. Within their listener bases stations created the buzz and excitement that would draw listeners to call, write and attend events. I don’t see that energy anymore. Yes, I get that people will still come to an event, but it’s usually to see a particular band perform, meet a celebrity or a giveaway, but only in very few cases does it have anything to do with meeting personalities. This isn’t the same vibe as we saw growing up in the 1950s through the 1970s.

- continued on page 2

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