Introduction
Radio has always been part of our lives. It has also been a profitable business since the early days of broadcasting. Today, all sorts of digital devices have combined to create a ‘self-media’ environment that resituates radio, in the face of new challenges. Radio broadcasting is in a process of change. Broadcasters are looking for new perspectives to make the business profitable and face digital media competition. Radio research has reached a two way perspective, with researchers understanding radio both as sound broadcasting and other forms of media, as well as questioning radio as a social institution. Radio broadcasting is a one-way wireless transmission over radio waves intended to reach a wide audience. Stations can be linked in radio networks to broadcast a common radio format, either in broadcast syndication or simulcast or both. Audio broadcasting also can be done via cable radio, local wire television networks, satellite radio, and internet radio via streaming media on the Internet. The signal types can be either analog audio or digital audio.
Major Trends That Will Change Radio Forever
The Democratization of Radio
Right now, we take it for granted that we can only access the radio stations that exist in the places where we live. Local radio is local because we don't have the ability to tune into much else. In as soon as four years' time, experts argue we will see "near saturation" in the connected, Wi-Fi enabled car market. What this means is that the tyranny of geography that defines the current radio landscape will be lifted indefinitely. Listeners will gain access to stations on the web and across the country. The amount of options available will be unprecedented. Given how rigid most single-format, local stations are, those without a connection to their audience will die. The carbon copy, dime a dozen classic rock and top 40 local stations will be disrupted. Those without a voice will lose. Soon, radio will cannibalize itself. All stations will be at war, everywhere; they'll steal listeners from each other.
The In-Car Music App Revolution
In-car radio is a fact of life. The few competitors to challenge the mindshare of traditional radio have been the cell phone, the social phenomenon of the iPod, and satellite radio, i.e...
The connected car will bring forth the availability of apps like Pandora and MOG, as well as, ones that we haven't even anticipated yet. Once traditional radio is just another app, rather than a stand-by, it shifts the landscape. The selling point of radio has always been that it's free, it works, and it's just there. In the future, that proposition won't hold as strongly in the minds of listeners. The notion of tuning into an personally irrelevant and banal local station will seem dated and contrived once listeners have more personalized experiences available to them.
News and weather updates, as well as, celebrity gossip can be delivered more efficiently though other in-car apps. Once the personalized, on-demand music experience takes hold, traditional radio will increasingly lose listener interest.
The Personalized Music Experience
There's nothing better than hearing a personalized music experience while driving. Something about the act of driving – and our built-in expectations of it entails – heightens the pleasure derived from hearing a personalized playlist. Hearing song after song of music that we love has a certain blissful, euphoric feeling to it. We've all jammed out when one of our favorite songs played on the radio, but few of us have had the chance to jam out to every one of our favorite songs. Yes, a person can create a playlist or shuffle their iPod, but the randomness and discovery elements are what make the personalized music experience so special. Our brains have a prediction mechanism and when a song plays that we love, yet hadn't quite anticipated, it's flooded with dopamine. It's like winning at a slot machine. Playlist music doesn't have that effect. There are no pleasant surprises.
The second thing to consider is that the data that can be collected to determine the nature of a personalized music experience is vaster. Voice recognition can pick up on a listener's tone, i.e. mood, GPS knows their location, and in-car apps know what the weather is like. All of this can be used to create a unique playlist. Added to this is also the fact that personalized, ad-supported services will take user profiles into the car and serve up highly targeted ads. Rather than being hit with ads from car dealers and insurance providers, listeners will hear targeted ads that are relevant to them. At present, traditional radio can't offer these things.
E-Commerce on Four Wheels
Everything is for sale. Every song played on radio will be available to be purchased while people drive. It will download directly to their car. No driving to the store, no visiting iTunes. You hear a song you like and purchase it at the moment of discovery.
By the time things get to this point, some have argued that listeners will have shifted from an ownership to access model. By the time everything changes when everything is for sale. When a song can be bought mindlessly with a single voice control or press of a button, listeners will buy. The identity of every song will be known and various types of dynamic pricing can be integrated. When every single listener is a potential buyer, when every recommendation is more personalized, it changes the entire face of music marketing. For a fee, listeners may be able to send songs to their family members and friends during their morning commutes. Once everything is for sale, radio stations could may evolve into the largest, most profitable affiliate marketers ever. All songs are ads.
Real-Time Listener Analytics
Tim Westergren, the founder of Pandora, imagines a day when every car has "Thumbs Up" and "Thumbs Down" buttons installed on the steering wheel. And if you think about it, traditional radio hopes for the same thing too. Not only would such a feature provide real-time listener analytics, but it also would help prevent listener turnover. When a listener puts effort into making a station better and feels like their votes matter, they will be much likely to stick with a station when a song comes on that they don't like.
Instead of calling a station to request a song, voice recognition will analyze a listener's request and send it to a station in real-time. This will be the first time that traditional radio will gain insight into their listening audience. Stations will know more quickly when a song is falling out of favor and when a new one is on the rise. Once traditional radio transitions into a user-controlled format, rather than a data driven spreadsheet, stations will be able to adjust playlists daily.
Infinite Creative Destruction
Once anyone can launch a station from anywhere, make it available on the web, and listeners can access it in their connected cars, the entire landscape of radio shifts. The start-up costs of a radio station plummet. Waves of would-be radicals and entrepreneurs can rethink radio, recreate it.Licensing will be a barrier for some, but with the right strategy, they can rise from the bottom-up. Radio is a legacy institution. It's there because it's there. No one has been able to challenge its dominance. You can't beat radio at its own game, but once the rules change, you can create a new one. Once the barriers fall to offering in-car programming, an era of infinite creative destruction will commence. Clear Channel's monopoly exists due to the curvature of the media landscape.
The rules changed in 1996 and it created a new game. Once those rules change again, entrepreneurs will create a new game and the winners and losers will differ.
Trends for the future of radio
Gathering and organizing listener data becomes priority one
While radio has historically been about broadcast, at the center of current digital development, from mobile to social media to streaming to advertising, is the unique user. That disconnect will start to be addressed by broadcasters in 2011. Gathering, identifying, and communicating with radio listeners at a one-to-one level will be the centerpiece of radios — indeed, all of media’s — future.
Local advertisers start to demand digital accountability
More than anything, this will focus radio’s attention on digital. Because digital publishers and ad networks are saying you don’t need to guess anymore — and local advertisers are listening. They’ll only pay for the half which works. Radio’s shotgun approach to advertising will look more and more inefficient and not worthy of premium rates. For radio, this will require working with their digital assets. This will entail everything from targeted advertising in audio streams to coupon deals presented in similar fashion to Group on.
User-level ad targeting starts to redefine the value of streaming
This is closely related to trends number one and two. Digital agencies have completely ignored streaming through 2010 and traditional agencies offered marginal CPMs (cost per thousand impressions). The addition of user-level ad targeting will take CPMs to compelling levels thanks in part to digital agencies, who will finally be seeing a similar ad environment to what they see in display — ads targeted to specific users based not only on demographics, but their actual interests and behavior.
Digital agencies finally notice radio
As radio embraces more digital strategies to remain relevant to their existing advertisers, a positive side effect will be that digital agencies will turn their attention to radio. This will be a huge boon for the industry as ad revenue continues to erode from traditional agencies and move to digital. Key drivers will be the continued growth of streaming, local digital initiatives like daily deals, improved user-level targeting, and direct digital marketing via things like email and texting. The ability for radio to go to an advertiser and utilize a digital platform to send their huge reach into stores is a huge opportunity.
Conclusions
Two main developments in terrestrial broadcasting will determine the trends in audio and television broadcasting in the coming years:
1. The fast expansion of high capacity data networks, offering consumers broadband Internet access. The Internet will be an increasingly important means of delivery of audio-visual content, including broadcasting.
2. The continuing evolution of digital broadcast technology, resulting in a considerable increase of the capacity in the transmitted bandwidth and enabling more services, better picture quality and improved coverage. A summary of the conclusions and main trends towards to end of the decade is given below.
Broadcasting by the end of the decade
a) Many countries in all regions will have completed the DSO process regarding their television services, or will be in an advanced stage in the process.
b) The number of digital audio broadcasting services, in particular via the Internet, will increase.
c) For cost reasons more analogue LF, MF and HF stations will be closed for which coverage is also provided by FM, digital audio broadcasting or via the Internet.
d) FM will remain an important means of delivery of audio broadcasting. In general switch-off of FM stations lies far ahead, but a few countries may have switched-off analogue radio.
e) Mobile networks will on average provide a data rate of more than 3 Mbit/s (sufficient for good quality pictures at not too large screen sizes) and mobile video will take more than 70 per cent of the total mobile data traffic. Together with fixed broadband Internet access, mobile networks will facilitate the development of broadcasting and multimedia services via the Internet to a large part of the population.
Radio has always been part of our lives. It has also been a profitable business since the early days of broadcasting. Today, all sorts of digital devices have combined to create a ‘self-media’ environment that resituates radio, in the face of new challenges. Radio broadcasting is in a process of change. Broadcasters are looking for new perspectives to make the business profitable and face digital media competition. Radio research has reached a two way perspective, with researchers understanding radio both as sound broadcasting and other forms of media, as well as questioning radio as a social institution. Radio broadcasting is a one-way wireless transmission over radio waves intended to reach a wide audience. Stations can be linked in radio networks to broadcast a common radio format, either in broadcast syndication or simulcast or both. Audio broadcasting also can be done via cable radio, local wire television networks, satellite radio, and internet radio via streaming media on the Internet. The signal types can be either analog audio or digital audio.
Major Trends That Will Change Radio Forever
The Democratization of Radio
Right now, we take it for granted that we can only access the radio stations that exist in the places where we live. Local radio is local because we don't have the ability to tune into much else. In as soon as four years' time, experts argue we will see "near saturation" in the connected, Wi-Fi enabled car market. What this means is that the tyranny of geography that defines the current radio landscape will be lifted indefinitely. Listeners will gain access to stations on the web and across the country. The amount of options available will be unprecedented. Given how rigid most single-format, local stations are, those without a connection to their audience will die. The carbon copy, dime a dozen classic rock and top 40 local stations will be disrupted. Those without a voice will lose. Soon, radio will cannibalize itself. All stations will be at war, everywhere; they'll steal listeners from each other.
The In-Car Music App Revolution
In-car radio is a fact of life. The few competitors to challenge the mindshare of traditional radio have been the cell phone, the social phenomenon of the iPod, and satellite radio, i.e...
The connected car will bring forth the availability of apps like Pandora and MOG, as well as, ones that we haven't even anticipated yet. Once traditional radio is just another app, rather than a stand-by, it shifts the landscape. The selling point of radio has always been that it's free, it works, and it's just there. In the future, that proposition won't hold as strongly in the minds of listeners. The notion of tuning into an personally irrelevant and banal local station will seem dated and contrived once listeners have more personalized experiences available to them.
News and weather updates, as well as, celebrity gossip can be delivered more efficiently though other in-car apps. Once the personalized, on-demand music experience takes hold, traditional radio will increasingly lose listener interest.
The Personalized Music Experience
There's nothing better than hearing a personalized music experience while driving. Something about the act of driving – and our built-in expectations of it entails – heightens the pleasure derived from hearing a personalized playlist. Hearing song after song of music that we love has a certain blissful, euphoric feeling to it. We've all jammed out when one of our favorite songs played on the radio, but few of us have had the chance to jam out to every one of our favorite songs. Yes, a person can create a playlist or shuffle their iPod, but the randomness and discovery elements are what make the personalized music experience so special. Our brains have a prediction mechanism and when a song plays that we love, yet hadn't quite anticipated, it's flooded with dopamine. It's like winning at a slot machine. Playlist music doesn't have that effect. There are no pleasant surprises.
The second thing to consider is that the data that can be collected to determine the nature of a personalized music experience is vaster. Voice recognition can pick up on a listener's tone, i.e. mood, GPS knows their location, and in-car apps know what the weather is like. All of this can be used to create a unique playlist. Added to this is also the fact that personalized, ad-supported services will take user profiles into the car and serve up highly targeted ads. Rather than being hit with ads from car dealers and insurance providers, listeners will hear targeted ads that are relevant to them. At present, traditional radio can't offer these things.
E-Commerce on Four Wheels
Everything is for sale. Every song played on radio will be available to be purchased while people drive. It will download directly to their car. No driving to the store, no visiting iTunes. You hear a song you like and purchase it at the moment of discovery.
By the time things get to this point, some have argued that listeners will have shifted from an ownership to access model. By the time everything changes when everything is for sale. When a song can be bought mindlessly with a single voice control or press of a button, listeners will buy. The identity of every song will be known and various types of dynamic pricing can be integrated. When every single listener is a potential buyer, when every recommendation is more personalized, it changes the entire face of music marketing. For a fee, listeners may be able to send songs to their family members and friends during their morning commutes. Once everything is for sale, radio stations could may evolve into the largest, most profitable affiliate marketers ever. All songs are ads.
Real-Time Listener Analytics
Tim Westergren, the founder of Pandora, imagines a day when every car has "Thumbs Up" and "Thumbs Down" buttons installed on the steering wheel. And if you think about it, traditional radio hopes for the same thing too. Not only would such a feature provide real-time listener analytics, but it also would help prevent listener turnover. When a listener puts effort into making a station better and feels like their votes matter, they will be much likely to stick with a station when a song comes on that they don't like.
Instead of calling a station to request a song, voice recognition will analyze a listener's request and send it to a station in real-time. This will be the first time that traditional radio will gain insight into their listening audience. Stations will know more quickly when a song is falling out of favor and when a new one is on the rise. Once traditional radio transitions into a user-controlled format, rather than a data driven spreadsheet, stations will be able to adjust playlists daily.
Infinite Creative Destruction
Once anyone can launch a station from anywhere, make it available on the web, and listeners can access it in their connected cars, the entire landscape of radio shifts. The start-up costs of a radio station plummet. Waves of would-be radicals and entrepreneurs can rethink radio, recreate it.Licensing will be a barrier for some, but with the right strategy, they can rise from the bottom-up. Radio is a legacy institution. It's there because it's there. No one has been able to challenge its dominance. You can't beat radio at its own game, but once the rules change, you can create a new one. Once the barriers fall to offering in-car programming, an era of infinite creative destruction will commence. Clear Channel's monopoly exists due to the curvature of the media landscape.
The rules changed in 1996 and it created a new game. Once those rules change again, entrepreneurs will create a new game and the winners and losers will differ.
Trends for the future of radio
Gathering and organizing listener data becomes priority one
While radio has historically been about broadcast, at the center of current digital development, from mobile to social media to streaming to advertising, is the unique user. That disconnect will start to be addressed by broadcasters in 2011. Gathering, identifying, and communicating with radio listeners at a one-to-one level will be the centerpiece of radios — indeed, all of media’s — future.
Local advertisers start to demand digital accountability
More than anything, this will focus radio’s attention on digital. Because digital publishers and ad networks are saying you don’t need to guess anymore — and local advertisers are listening. They’ll only pay for the half which works. Radio’s shotgun approach to advertising will look more and more inefficient and not worthy of premium rates. For radio, this will require working with their digital assets. This will entail everything from targeted advertising in audio streams to coupon deals presented in similar fashion to Group on.
User-level ad targeting starts to redefine the value of streaming
This is closely related to trends number one and two. Digital agencies have completely ignored streaming through 2010 and traditional agencies offered marginal CPMs (cost per thousand impressions). The addition of user-level ad targeting will take CPMs to compelling levels thanks in part to digital agencies, who will finally be seeing a similar ad environment to what they see in display — ads targeted to specific users based not only on demographics, but their actual interests and behavior.
Digital agencies finally notice radio
As radio embraces more digital strategies to remain relevant to their existing advertisers, a positive side effect will be that digital agencies will turn their attention to radio. This will be a huge boon for the industry as ad revenue continues to erode from traditional agencies and move to digital. Key drivers will be the continued growth of streaming, local digital initiatives like daily deals, improved user-level targeting, and direct digital marketing via things like email and texting. The ability for radio to go to an advertiser and utilize a digital platform to send their huge reach into stores is a huge opportunity.
Conclusions
Two main developments in terrestrial broadcasting will determine the trends in audio and television broadcasting in the coming years:
1. The fast expansion of high capacity data networks, offering consumers broadband Internet access. The Internet will be an increasingly important means of delivery of audio-visual content, including broadcasting.
2. The continuing evolution of digital broadcast technology, resulting in a considerable increase of the capacity in the transmitted bandwidth and enabling more services, better picture quality and improved coverage. A summary of the conclusions and main trends towards to end of the decade is given below.
Broadcasting by the end of the decade
a) Many countries in all regions will have completed the DSO process regarding their television services, or will be in an advanced stage in the process.
b) The number of digital audio broadcasting services, in particular via the Internet, will increase.
c) For cost reasons more analogue LF, MF and HF stations will be closed for which coverage is also provided by FM, digital audio broadcasting or via the Internet.
d) FM will remain an important means of delivery of audio broadcasting. In general switch-off of FM stations lies far ahead, but a few countries may have switched-off analogue radio.
e) Mobile networks will on average provide a data rate of more than 3 Mbit/s (sufficient for good quality pictures at not too large screen sizes) and mobile video will take more than 70 per cent of the total mobile data traffic. Together with fixed broadband Internet access, mobile networks will facilitate the development of broadcasting and multimedia services via the Internet to a large part of the population.
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