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Radio Disruption

March 20, 2014

It was made abundantly clear in the most recent Infinite Dial 2014 presentation by Edison Research and Triton Digital that Internet audio is a real threat to the share of ear that AM/FM has enjoyed for decades. And, it is even clearer that Pandora is currently the leading player in that space, though this segment is constantly evolving.

What might not be as clear to many inside our industry is that Pandora is gunning for your listeners – and they are gunning hard. Just watch this video featuring Heidi Browning, SVP, strategic solutions for Pandora. It’s only 1:14 … I’ll wait.

“We exist because we are disrupting radio.” I don’t now about you but them’s fighting words to me. She did not say that Pandora exists to be a complementary service to what radio already provides or to be another option to radio advertisers. They exist to disrupt.

Combine this with the fact that in market after market Pandora is recruiting and targeting top sellers at every radio group. They are building forces for a protracted battle.

So, what can AM/FM radio do about this? We can talk about the behavioral change mobile has wrought and the multiplication of choices for music discovery and access. We can talk about how the consumer space has changed and that people expect and demand content on their schedules. While these are true sociological facts, they obscure the larger point – consumers, Millennials, Baby Boomers, Gen-X’ers, whatever – want to be entertained. They crave what we label as “content.”

One of the biggest forms of content is music – a space FM owned for decades. Unfortunately, the days of the “better jukebox” are over. FM radio cannot provide more variety than a Spotify playlist nor does it automatically do a better job at music discovery than YouTube or Pandora. The very strengths we owned – even created – are being used against us.

How do we combat this disruption? What can AM/FM radio do to remain a vibrant, vital content deliverer?

Very simply, we can learn from TV, a medium that has been devoured by instant gratification. Yet, it still continues to invest millions and millions into generating fresh content and, as a result, still rakes in the lion’s share of advertising budgets.

Where is radio’s investment? Is building a Pandora-like competitor going to save the sticks? Or, are we better served by being interesting, compelling, and engaging?

The ball is most definitely in radio’s court. We need to do something magnificent with the ball while we still have it in our control. While we are contemplating what to do next, our adversaries – and they are clearly adversaries – are working actively to hasten our demise.

-Steve Allan, Programming Research Consultant