The threats to terrestrial radio keep on coming...

[davideduardo]

Here is a bit of the article from RAMP this morning...

[FONT=&quot]Attention, terrestrial and satellite radio -- Apple is getting very serious about pumping out the hits across multiple formats, with the launch of two new live global radio offerings on Apple Music, now available in 165 countries. The action begins with the rebranding of [FONT=&quot]Beats 1[/FONT], Apple's flagship global radio station, as [FONT=&quot]Apple Music 1[/FONT], alongside the birth of two additional radio stations: [FONT=&quot]Apple Music Hits[/FONT], celebrating favorite songs from the '80s, '90s, and 2000s, and [FONT=&quot]Apple Music Country[/FONT], which is self-explanatory.[/FONT]

The expansion of Apple Music's curated, hosted services is a major threat to terrestrial radio with good talent, access to artists and special events and more.

http://ramp247.com/category/breaking-news/

 

[TheBigA]

We have another thread on this in the Internet Radio section:

https://www.radiodiscussions.com/sh...le-Launches-Apple-Radio&p=6336517#post6336517

This is mainly a rebrand of Beats Radio. Apple has been offering DJ-hosted music channels to subscribers of its Apple Music service. It has never been very popular. People have certain expectations from streaming, which is no talk, continuous music, and no commercials. That's why they subscribe. If they wanted DJs, they could get them for free.

As I said in the other thread, this is primarily a threat to Sirius, which offers lots of hosted national music channels and artist-hosted stations. This comes at a time when United Stations is offering FM country radio a national nightly show hosted by country stars.

https://news.****************/artic...ions-Launches-Daily-Daypart-Backstage-Country

 

[TheBigA]

One detail I'll add is that Apple Music Radio is not a free service. There is no free option. This requires a $10 a month or $99 a year subscription. There are 60 million people who have done that. But that pricing is comparable to Sirius, which is why I say it's more a threat to them. You know those artist stations at Sirius? There are even more of them at Apple Music. If you're comfortable with the idea of paying for radio, you have many choices. But the problem with this service is someone else controls the playlist. That's why the majority of the people who subscribe to Apple Music generally don't listen to the radio stations. They're hoping that by professionalizing them, that will improve their value to users.

 

[davideduardo]

One detail I'll add is that Apple Music Radio is not a free service. There is no free option. This requires a $10 a month or $99 a year subscription. There are 60 million people who have done that. But that pricing is comparable to Sirius, which is why I say it's more a threat to them. You know those artist stations at Sirius? There are even more of them at Apple Music. If you're comfortable with the idea of paying for radio, you have many choices. But the problem with this service is someone else controls the playlist. That's why the majority of the people who subscribe to Apple Music generally don't listen to the radio stations. They're hoping that by professionalizing them, that will improve their value to users.

That brings up the point that many people have now accepted that they pay for entertainment.

We used to think of cable as a way to better get the local channels, as that is how CATV began in the 50's. But when they added cable only channels, we started paying more and we got used to premium pricing for premium content. That moved to radio with satellite and then paid streams on the web.

The main problem is that it is not available to those with lower incomes or limited resources. Paid services are very class-focused.

As terrestrial radio becomes less and less a part of American's lives, there will be an undeserved segment of the population populated predominantly by Blacks, Hispanics and low income groups.

 

[TheBigA]

As terrestrial radio becomes less and less a part of American's lives, there will be an undeserved segment of the population populated predominantly by Blacks, Hispanics and low income groups.

Hmmm...those groups are still Americans, even if they don't want to spend money for media. Our job is to program to our audience, whoever that audience is. Broadcasters throw around the word "passion" a lot. They don't see a lot of passion for radio the way they used to. But if you study users of streaming services, there's not much passion there either. It's a utility.

 

[davideduardo]

Hmmm...those groups are still Americans, even if they don't want to spend money for media. Our job is to program to our audience, whoever that audience is.

However, in the current atmosphere of inclusion, this may become a political point which could be take advantage of by those in the most progressive liberal groups.

 

[TheBigA]

However, in the current atmosphere of inclusion, this may become a political point which could be take advantage of by those in the most progressive liberal groups.

Sure, why not? Everyone wants an advantage. To that end, the Democrats want to make high speed internet service a right. But it still won't be free. They tried that in some places and it was unsustainable. Unless it's free, it won't make a difference. This is still the game we play every day: People want what they want, and they want it for free. There are a lot of powerful companies that exist to charge people for these services, and they will fight pretty hard to keep the government from giving it away for free.

 

[davideduardo]

Sure, why not? Everyone wants an advantage. To that end, the Democrats want to make high speed internet service a right. But it still won't be free. They tried that in some places and it was unsustainable. Unless it's free, it won't make a difference. This is still the game we play every day: People want what they want, and they want it for free. There are a lot of powerful companies that exist to charge people for these services, and they will fight pretty hard to keep the government from giving it away for free.

My first introduction to the economic aspects of what Marx and Engels would have called the (material) "class struggle" was when I visited slum homes in San Juan with the ratings company survey team in Puerto Rico in 1970. Homes on stilts over a glorified swamp they called a "lagoon" that had walls and roofs made of discarded building supplies had color TVs that were bigger than mine.

Home Ec used to be taught in school long ago and on a planet far.....

It sure is not taught today. I keep my smart phone 3 to 4 generations. Our gardener and house cleaner have this year's models. I am sure there is a socioeconomic treatise there but I just make observations, not interpretations.

 

[TheBigA]

I just make observations, not interpretations.

We need a lot of people at the bottom of the pyramid to hold up the very few people at the top. P.T. Barnum knew what he was doing.

 

[davideduardo]

We need a lot of people at the bottom of the pyramid to hold up the very few people at the top. P.T. Barnum knew what he was doing.

Yes, there is only one Queen bee and as many as thousands of worker bees.

"All animals are equal; Some are more equal than others".

 

[landtuna]

I realize I am no longer in the target demo but I own 10 devices that are capable of either am/fm (both/either) and digital FM. I cannot remember the last time any of them were powered on (including the ones in my smartphone and autos).

I own libraries of music at last count numbered something around 4,000+ individual tracks. I can listen to any track no matter where I am. I can customize the playlists on all of them. There are no commercials and no monthly costs and no songs I don't like and the sound rendering is beyond anything I can capture OTA.

I once put up with commercial radio because I tolerated the content/commercials in order to listen to interesting and/or funny hosts. All that is now virtually gone so......so am I.

Much the same has happened with TV. My TV sets are now spending their time streaming or playing favorite videos from my video library. I don't think my granddaughter knows how to use the tuner. Aside from live sports (and only a bit of that) my place on the couch is now occupied by my dog. She doesn't seem much interested but knows she'll get lots of scratches. Like a noticeable number of my peers I watch many more of the old shows (50's, 60's, 70's) than anything made after the year 2000 - you know, when the stars were real......and alive!

Only one TV in the house gets a workout OTA and that is on during breakfast. But even that is dying. A quick look at headlines (Coronavirus, yada, yqda, yada), traffic (don't commute any longer so that's useless), weather (which I can get on my smartphone at the touch of a button) and don't have to listen to lame jokes or view the used-car-dealer sports jacket, endless advertising for food joints and pleading for donations to charities. When the weather cools off I'll be out eating breakfast on the pool patio listening to the birds and the occasional car crash and watching my granddaughter swim. Poor girl.....she doesn't know what she'll be missing.

I now know what it was like watching a dinosaur die.

 

[davideduardo]

I now know what it was like watching a dinosaur die.

The issue is that you are the dinosaur.

You are both out of demo and a bit of a curmudgeon. We love your posts, but also like to tear 'em up a bit. (Don't stop, in other words)

Radio has zero interest in reaching you because advertisers have even less interest. Radio has what used to be called "bimodal marketing" in textbooks. Advertisers pay for it, but they are not the consumers. Sort of like life insurance, which does not benefit the purchaser.

Once you are out of the 18-55 demos (18-49 if you are ethnic) there are essentially no major advertisers who want to reach you on local radio. Those who do want to reach seniors use targeted national TV and publications that are easy to buy and have pictures... as most senior target products want or actually need visual presentations.

So don't judge stations targeting people one or two decades younger than you by your tastes and standards. Over 90% of persons 25-54 use radio weekly, off only by 4 points since 1995.

 

[Kelly A]

So don't judge stations targeting people one or two decades younger than you by your tastes and standards. Over 90% of persons 25-54 use radio weekly, off only by 4 points since 1995.

And that's really the bottom line; I remember back in the 70's, portable cassette machines would replace radio because people could make their own commercial-free playlists. Then in the 90's Sirius and XM arrived, and they would spell the end of conventional radio. In the early 2000's the Pandora's, Slacker, and other forms of streaming was predicted to be the end of radio. With the traditional music/record company upheaval, the revenue models switched and split into several different directions and home-spun streamers were driven under because of the SoundExchange and copyright costs.

Even with all the competition over the years, radio has maintained its 90% stake.

 

[Theater of My Mind]

That brings up the point that many people have now accepted that they pay for entertainment.

We used to think of cable as a way to better get the local channels, as that is how CATV began in the 50's. But when they added cable only channels, we started paying more and we got used to premium pricing for premium content. That moved to radio with satellite and then paid streams on the web.

The main problem is that it is not available to those with lower incomes or limited resources. Paid services are very class-focused.

As terrestrial radio becomes less and less a part of American's lives, there will be an undeserved segment of the population populated predominantly by Blacks, Hispanics and low income groups.

I think you made a typo and actually meant "underserved," but please explain.

If higher income Americans shift more to paid services then terrestrial radio would likely serve the lower income groups more, not less, wouldn't it? How would that leave them underserved?

In fact, terrestrial radio already does this to a certain degree by targeting the lowest common denominator to achieve the biggest numbers. That's probably why there's such a prevalence of ads for things like credit repair, donating junk cars and things like that on terrestrial radio now.

 

[TheBigA]

That's probably why there's such a prevalence of ads for things like credit repair, donating junk cars and things like that on terrestrial radio now.

Keep in mind you only hear those kinds of ads on certain formats, such as conservative talk. You won't hear them on Steve Harvey or The Breakfast Club. And you hear those ads on those formats because those are the only advertisers they can get. Conversely I've been hearing a lot of ads for Harry's Razor Blades on AM/FM, and amazingly, I heard those exact same ads on several streaming channels. And I heard them on someone else's device, not mine. So it's hard to generalize about advertising and platforms. The most heard ad categories on AM/FM are insurance, home improvement, and medicine.

 

[Theater of My Mind]

Keep in mind you only hear those kinds of ads on certain formats, such as conservative talk. You won't hear them on Steve Harvey or The Breakfast Club. And you hear those ads on those formats because those are the only advertisers they can get. Conversely I've been hearing a lot of ads for Harry's Razor Blades on AM/FM, and amazingly, I heard those exact same ads on several streaming channels. And I heard them on someone else's device, not mine. So it's hard to generalize about advertising and platforms. The most heard ad categories on AM/FM are insurance, home improvement, and medicine.

I don't even listen to conservative talk radio so you're wrong about that . Kars for kids must be one of the biggest advertisers on radio across the board.

 

[TheBigA]

I don't even listen to conservative talk radio so you're wrong about that . Kars for kids must be one of the biggest advertisers on radio across the board.

That may be a local thing. Not sure if low income listeners are a good audience to pitch for car donations. When I was selling to that audience, my top categories were fast food and health care. McDonalds and Coke tend to prefer low income audiences.

 

[davideduardo]

I think you made a typo and actually meant "underserved," but please explain.

Bitten by auto correct. And your assumption is correct.

If higher income Americans shift more to paid services then terrestrial radio would likely serve the lower income groups more, not less, wouldn't it? How would that leave them underserved?

Because, as we are seeing, terrestrial radio is in severe decline with reductions in everything from news coverage to live talent. The reason is that, in inflation adjusted dollars, radio is off 60% in revenue since 2005. This means that the "profit window" is gone right now with the Corona Virus making it even worse.

The problem is that free streaming can not currently be profitable because of the digital rights fees and the reduced buying of advertiser sponsored media. So we will have some kind of transformation in the model of terrestrial broadcast radio to adapt. My suspicion is that we will see "national" radio with local stations just repeating national formats, such as what we see in much of the rest of the world.

In fact, terrestrial radio already does this to a certain degree by targeting the lowest common denominator to achieve the biggest numbers. That's probably why there's such a prevalence of ads for things like credit repair, donating junk cars and things like that on terrestrial radio now.

As BigA said, the predominance of different ad categories is due to the absence of conventional accounts. Stations are taking anything that comes along since, as we have seen from the Q2 financial reports of the public radio companies, all radio is losing money.

Interestingly, in talking with some friends who own very small market stations, they report that revenue is not off by the 30% to 60% seen in bigger, rated markets. It almost seems as if the bigger the market, the more damage has been done in the pandemic. Part of this, of course, is that the bigger markets have much higher agency business and the agencies are not buying as much, and they are not buying radio under the belief that new media is a better vehicle during the pandemic.

Most of the smarter radio groups are tying to move the whole business model to online, leaving AM and FM behind or as a supplement only. But that means that listeners have direct expenses of needing online service providers and optional expenses for subscription services.

 

[TheBigA]

Most of the smarter radio groups are tying to move the whole business model to online, leaving AM and FM behind or as a supplement only. But that means that listeners have direct expenses of needing online service providers and optional expenses for subscription services.

They may be smarter, but they're mainly the biggest companies. Meanwhile there are lots of smaller groups and stations that are still operating as though it's the 1990s. We'll see if they wise up with the establishment of the Independent Broadcasters Association. That group sounds like they want to create a national content and ad platform without national ownership. In other words they like what iHeart is doing, and want to be able to compete.

 

[davideduardo]

Even with all the competition over the years, radio has maintained its 90% stake.

But that figure is deceptive, and I posted it to dispute the idea that "nobody listens any more". Yes, an average of 90% of persons 18+ listen to radio at least for one credited quarter hour a week. But advertisers don't buy cume. They buy actual listenership.

Advertisers buy the audience size when each ad runs. Average Quarter Hour listenership. And AQH listening overall, called PUR or Persons Using Radio, is off by as much as 60% since 2005 in the PPM markets.

Note that revenue is off by about the same, in real dollars.

For example, PUR in Los Angeles in 2005 was around 21. Now it is approaching 7. And that is a loss of over 60% in the number of people listening to radio at any given time. People still use radio, and it has great reach. But they listen a lot less time.