Thursday, October 1, 2009

Radio: The flap on apps and Spotify spice


The buzz at both the NAB Radio Show and Public Radio programmers convention was the need for stations to have smartphone apps.

Creationists and evolutionists can debate the chicken or the egg but you can’t argue app before content.

So what, besides Fred Jacobs and other brilliant salespeople whispering in your ear to buy, does an app do for a radio station’s listenership if its programming content just plain sucks out loud?

Too many stations are rushing their apps without having the content to back it.

There’s a huge difference between public and commercial radio. Public radio has content people want and can’t get anywhere else.

Let’s do the math. At this moment we have 85,000 apps in 20 different categories. The iPhone’s limit for apps is 148 – spread over 9 pages. What page do you think your radio station will be on?

There’s more. This week iPhone app downloads hit 2 billion. Do competing new app storefronts even have a chance? Android and BlackBerry’s apps aren’t even close to Apple’s tonnage.

Now, ponder this. The money this industry tossed on HD Radio could’ve gone to fighting the RIAA to be on line and able to play music on main and multiple support channels on the Internet and mobile – where everyone lives.

Instead, that money was thrown away on expensive licensing fees, transmitters that overheat and cost a ransom to run, and other miscellaneous costs that will never be recovered.

HD Radio isn’t showing growth. It’s a tumor eating away your revenue.

Here’s iBiquity’s Bob “Booble” Struble trying to snake-oil sell digital delivery by claiming your AM will sound like FM. You can accomplish the same – and reach a real mass audience – with your stream.

You want to get real creative? Put surround-sound on your stream. HD’s never going do that.

The smartest stations are those that didn’t fall for the hype. If you’re counting on that iBiquity IPO, keep counting and counting and counting….

HD Radio, otherwise known as the political machine grafted onto to the radio industry, is AM stereo in drag.

While those in radio best defined as clueless cheered for Apple’s new fifth gen iPod nanoFM radio included – none were aware that Apple also approved apps for RealNetwork’s Rhapsody and the Swedish-based Spotify.

Both operate free, on-demand music-streaming services. Those I polled in radio know of Pandora. Those I talked to who work for CBS Radio have working knowledge of Last.fm. A few knew Rhapsody – but fewer knew what it was – and absolutely no one had a clue about Spotify.

To the radio-radio people; those drinking the Kool Aid and believing everything they read from the NAB and RAB on the "success' of the “Radio Heard Here” campaign, let me explain.

Both Rhapsody and Spotify are fee on-demand music streaming sites. You can hear almost any song you request any time you want to.

Those I know who are not in radio – but know the net were surprised – no, shocked - that Steve Jobs and Apple would allow apps for both services – especially Spotify – even though it hasn’t launched in America yet.

See, 70 percent of all digital music sales come from iTunes. That adds up to around $958 million and change in Q3 alone. 74 percent of all digital music players are manufactured by Apple. And that’s not counting the iPhone. You want figures? The iPhone accounts half as many sales as all iPods combined – but its sales are growing in triple-digit percentages.

So ask yourself the question. Why would Steve Jobs cannibalize his own iTunes store? For the same reason a dog…never mind. Because he can. And because it makes sense.

Yes, initially it may cut into iTunes’ sales – but not really. Users of these on-demand services, which also include Ineem and CBS’s own $280 million acquisition Last.fm, also buy more paid digital downloads than non-users. Some of those instant requests translate to songs consumers buy from iTunes.

Remember, back in the old media days when terrestrial radio could break and sell music? Same thing. Well, not exactly. The one difference is that requests are usually songs you already know and want to hear.

Radio’s added value now and in the future will be to – paraphrase Tom Waitsgive ‘em a little somethin’ they can’t get at home. If I have to explain it, you don’t belong in the radio business – or the entertainment business.

Back to Spotify. This is the one to watch for. It’s a next generation music streaming site. It’s more reliable (it’s less likely to deliver a re-record or different version of an original hit) and can deliver music as fast as most digital music players. It’s already the rage in Europe with 5 million users and scheduled to hit our shores by year’s end. Spotify already collected over 100,000 e-mail requests from potential U.S. users. It’ll come in two versions – free, with advertising and a commercial-free $16/month Premium.

Yes, media are changing rapidly. There is more to learn than any one person can assimilate. Attempts to control this new leviathan are beyond any one person’s capability.

Earlier generations had to master the evolution of old media. Today’s generation will master new media. They’ll need mentoring and guidance.

Therein lies a dilemma in attracting young people to the radio industry. Can we trust the mentoring of the next generation by those running radio today?

If you have to ask….
----

35 comments:

NX211 said...

Gorman hits it right. An iBiquity IPO is a laugh-and-a half. Struble isn't anywhere close to being self-supporting and problems abound with his tech-no-fiasco in the making. Not to mention it's going nowhere faster than a NASCAR race to the finish-line.

Anonymous said...

Every year at the NAB you expect that those whose products didn't work for you will not be around again to peddle their wares. Not HD Radio though. The funniest point which you should have brought up, John, was Fred Jacobs's latest "study". HD Radio showed almost no growth and was a bad story all the way around. Still, Fred was able to find some promising numbers amid these terrible non-acceptance numbers. That is the true definition of the worst kind of shill. How these people can look at themselves in the mirror and not feel an inkling of shame is beyond me.

Anonymous said...

Maybe some of the old guard is ready to cash out so now they are welcoming young people to the radio industry again. Too late. TFL as a matter of fact.

You said it best about those running radio providing mentoring to the next generation. These idiots don't have a clue. They DESTROYED radio for our generation and generations to come.

rfburns said...

With the millions and million spent iBiquity and their misguided investors won’t give up for a second. Mix that with an FCC that can’t govern the spectrum with any wisdom and we can be assured of a very long and miserable radio experience for years to come. Thank God for Gorman and others that, at least for the moment, continue to call it for what it is - an abject failure demonstrating how not to run an industry

Anonymous said...

John:You are right about Pandora and other "request" services. They are fine and have their place. I like the element of surprise of getting turned on to something new I did not expect. If this were 1963 instead of 2009 but we had all this Pandora, Last.fm technology in place how would anyone ever hear the Beatles or the rest of the British invasion? Sometimes I will hear a song in a store that catches my ear. I l still get off on that feeling of finding something new that I was not necessarily looking for. If radio or whatever its sequel is can bring back that feeling and emotion to media it will be successful. What we don't need is another service that plays what we already know .

Anonymous said...

I have read those pitches to radio on apps by Jacobs and others. A fool and his money are soon parted. There are a lot of fools in radio making Jacobs and other apps providers very rich.

Content was, is, and always will be king. No matter how you slice it. No matter how you apply it.

The radio stations buying the apps hype thinking they don't have to change a thing and Apple and Blackberry will do it for them will just be a few pounds lighter in the pocketbook.

They didn't get HD radio. They will not get this.

HD Radio Farce said...

Booble was up on Wall Street, recently talking with analysts - here's his quote from Twitter:

"Early train to NYC for meetings with analysts. Need to keep Wall St up on all the good HD Radio progress... Good NYC trip... IPO pipeline better... Folks liking HD Radio progress."

http://twitter.com/rjstruble

Could Wall Street be so stupid as to take the word of this clown and con-artist? I thought that Wall Street had given up following radio stocks. iBiquity was supposed to go IPO a few years ago, but with station coversions stalled and HD radios not selling, I can't imagine a successful IPO. Those investors will be stuck holding the bag when iBiquity collapses.

As for interest in anything HD Radio versus Pandora, here's the graph:

http://tinyurl.com/ybxtnez

The Amazon sales rankings for the Zune HDs and the new iPod Nano, with an analog FM tuner, are poor:

http://tinyurl.com/yobdnf

No surprise that consumers do not care about FM tuners on MP3s, or cell phones. What they DO care about is apps for music discovery, such as Pandora, Slacker, and Last.fm. Booble just wants to get on as many portable devies as possible to bring down the costs of his HD Radio chipsets.

One final thing, evidentially Booble has total disregard for the General Public, and even makes light of driving DUI on Ambien:

"Slept well but got off the redeye with lingering Ambien effects. Don't remember the drive home much. Auditioning for the Kennedy Clan... Thank the Good Lord for Ambien."

http://twitter.com/rjstruble

As Booble pointed out on Twitter, he took a survey for which TV show he belongs in and got Smallville - nothing ever happens to that inflated ego, Clark Kent.

Radio Hannibal said...

Kinda stunner that those you polled in the biz were fairly clueless about Rhapsody and Spotify.
Indeed, Spotify is going to be huge in the US.
Still, no matter how good the algorithms are at Pandora, there's something about a human mixing music that can be thrilling. That is if the DJ knows how and more importantly, is allowed. Get that right and a the radio app will sell itself.

HD Radio Farce said...

Running a Compete graph for CC's iheartradio.com, versus live36.com and pandora.com:

http://tinyurl.com/yeku4z9

Very few care about streaming radio stations, versus true music discovery.

Anonymous said...

The national radio programmers sure have huge egos to believe their way to be the only way. When questioned they back it up with research they commissioned which we know to be manipulated to prove their point. What other reason would you give for the dramatic drop in TSL. Cume, hah. That is all radio has anymore, if that.

Anonymous said...

brilliant article. i've never worked in radio, but listen for about 16 hours a day, and i have to say the availability of sirius, pandora and npr on my iphone has really changed the way i listen.

the biggest complain i have is services like shoutcast, etc just can't provide the production value of what i hear on npr and sirius. i'm sure that some bright shining stars will pop out, but until i can hear something as good as this american life, i can't say i really care.

Anonymous said...

There are similarities between your blogs on Triton and Apps. Triton has become all things to all people provided you are in their club. They will stream you, they will sell you and they will rate you as long as you pay their fees. Jacobs Media will gladly convince you that you need apps and then sell as many as they can. I used to respect the guy until I started hearing about his reputation as a hired shill. Sure enough during his presentation which showed to me little to no interest in HD radio he managed to find all kinds of promise and positive news. Oh man. At that point I was tempted to ask him if he was related to P.T.Barnum.

Anonymous said...

Last thing I'm going to waste an app on is one for a terrestrial radio station.

Anonymous said...

Last thing I'm going to waste an app on is one for a terrestrial radio station.

Anonymous said...

John is right. I filled up my iTouch (don't have the phone yet) with apps galore - free and paid. Guess what? I never get past page 2 or 3. I even have some good internet stations I never get to. Listening to radio on the iTouch is just okay. No great experience. I would rather listen to my own music. When Jobs comes out with an internet radio iWhatever I will get that esp. if its easy to use and preprogrammed.

Anonymous said...

In regard to Jacobs Media's research at the NAB. Yes, I found it to be interesting and informative. There was nothing earthshaking or surprising and it should not have been that way to any real broadcaster or programmer that understands today's marketplace. I was surprised at how many people who should know better seemed dumbfounded by the results. I think had there been more program directors and consultants at the presentation the response would have been different.

Anonymous said...

i have spotify. don't ask how. i love it. it allows me to listen to full songs and the delivery speed is incredibly fast. that survey you published in your blog is exactly the way i use spotify. if i really, really want a copy i will buy it from itunes. if i just want to hear it once or twice i have spotify. as far as being turned on to new music or being reacquainted with older music i think if radio was like it was ten, twenty years ago when i was younger, i would have enough choices and formats. today all i hear is the same old stuff and i am far too old for the "hits". until something better comes along i am hooked on spotify.

Anonymous said...

John,

Ever notice how many more post, when you mention HD Radio? LOL!

Anonymous said...

Let's build a store, name it, promote it and put nothing in it. That is terrestrial radio 2009. An app is just an app. If there is no "stock in the store" people won't buy it.

Radio needs new leadership guided by seasoned veterans, not the puffed ego over their heads silver spoons who are running it (into the ground) today.

Anonymous said...

I don't see why you seem dismissive of iPhone apps. I agree that people only use the first few pages of apps, once they've gotten past the novelty of their iPhone. But there's no reason radio can't be among those most commonly used apps. I'm waiting for the local news station to add an app, and I'll definitely grab it. I also like some of the sports talk in the area, and would love to be able to listen in when I'm out of the car. I'd also add apps if stations negotiated the rights to broadcast games. I also love to keep up with what's going on in other parts of the country where I have lived. An app will be a great addition to the internet for that.

Launching an app, IMO, puts radio right where it needs to be. In the thick of the fight for listeners. Good stations and good programming will prosper and weak ones will not. It's the opposite of HD, which was just a scam to from the start.

Anonymous said...

To Anon 9:05. I agree with you, mostly. In some cases though syndicators don't allow their talent to be heard on line w/out a subscription (like Rush) and stations carrying pro spots games are often blacked out carrying the play by play on line. They prefer you to buy a paid subscription to hear hosts or games. I don't believe either would negotiate with a local station. That is the drawback. Gorman's point is that there are so many stations that play the same 150 tunes and have the same vt talent and no local connection whatsoever with apps. It is a waste of money for these stations to app their radio stations just because they can. Great radio stations, few as there may be, should have an app. Most, meaning most owned by companies that begin with the letter C, should not.

Anonymous said...

I have always said that many of the great broadcasters that sold their stations in the past decade along with the great programmers and sales managers that used to run them should get together a form real broadcast schools to train the next generation. Not these Connecticut Schools and Ohio Schools which are rip offs that place students at Metro traffic or weekend board operating. There is no next generation for radio and the only way there will be is to get qualified people to teach and mentor them and renew their interest in the medium.

Anonymous said...

I am with Gorman on this one. In fact I take it one step further. Enough is enough. Stations should pull out of their deals with HD Radio and file suit against them for misleading information and going to market with an inferior product. There are name communication lawyers that want to take this on. Take the money saved by dropping HD Radio and reinvest it in both the physical plant, talent and management. Hire the best, fire the rest. Create product that people will want an app for and will want to listen to for long periods of time. You think high cume and low AQH is just a mistake? No one has a favorite radio station anymore except for NPR users. As long as radio continues on the same path it is on now it will continue to fail. I have been in the radio management and ownership for 30 years. What Gorman is saying in this blog is right. I am pleased to see others in the industry are finally speaking up too. Now walk the walk.

HD Radio Farce said...

"Stations should pull out of their deals with HD Radio and file suit against them for misleading information and going to market with an inferior product. There are name communication lawyers that want to take this on."

I've thought this same thing all along. What are broadcasters waiting for - HD broadcasters could file suit for false claims from Bob Struble. Non-HD broadcasters, like Bob Savage, could file suit for interfrerence and lost revenues - they could sue HD broadcasters, iBiquity, the FCC, the HD Radio Alliance, etc. That is good news that name communication lawyers are just waiting to take this on. As a matter of fact, why hasn't the FBI, DOJ, SEC, FEC taken any action against iBiquity and the FCC? Hopefuly, when Struble gets his FM-HD power increase, that wil be the last straw.

Anonymous said...

Sometimes I will hear a song in a store that catches my ear. I l still get off on that feeling of finding something new that I was not necessarily looking for. If radio or whatever its sequel is can bring back that feeling and emotion to media it will be successful.

I can identify with this post. The last time it happened to me was at Borders in Cleveland, while waiting for Gorman to show up so he could autograph my copy of his book. As I was walking around I heard this absolutely woderful song, which I later found out was "Valentine" by Richard Hawley. I also noticed Arcade Fire used to promote the upcoming "Where the Wild Things Are." It is a great feeling that I almost never get listening to commercial radio anymore.

NX211 said...

Commercial radio is in the crapper. As I tune across the broadcast band all you hear is the same stuff re-hashed over and over and over. And the worst part is every station is trying to outdo every other station. And since they're all doing the same thing they only way they can stand out is to sound louder and talk faster than their competitors. Which, in the end, makes them all sound the same. Thank big business, the corrupt FCC, deregulation and greedy capitalism. HD radio won't change anything. It'll just breed more of the same. Don't believe me? Watch and see.

NX211 said...

....and to continue on. This is why iBiquity, little Booble Struble, Clear Channel, the NAB, NPR and all the others are so repulsive. They're all radio whores. Pimping a crappy product in the name of making huge profits. Why do you think they sunk so much money into digital radio? It's not for the listeners enjoyment. And you can include a dysfunctional FCC with those whores mentioned above. They're all up in DC doing the circle-jerk with each other and their big business cronies. Meanwhile, us little people are sitting here waiting to see what the next screw up will be. Struble is especially sickening. Listening to him with his phony, folksy word playing, pimping his wares and using term's like the "HD radio roll-out" make one want to vomit.

Anonymous said...

"Struble is especially sickening. Listening to him with his phony, folksy word playing, pimping his wares and using term's like the "HD radio roll-out" make one want to vomit."

My favorite Struble quotes are, "strong momentum" and now, "strong forward movement" - he changed quotes because someone on Radio-Info pointed out that momentum doesn't necessarily imply movement. Struble is a simplistic bastard, who wears his emotions on his sleeve - a definate weakness. If there is anyone left, who hasn't seen through his HD Radio scam and lies, I'de be surprised.

Anonymous said...

The best music I hear these days is by accident. Just like the other poster. It is often in a retail store or a restaurant. Radio waits until its research or corporate dictators give permission to play new music which is never. Even older music. AOR music that isn't balls-out-rock does not get played on classic rock stations anymore. Until radio figures out that everything its doing is wrong it will continue to lose audience.

Anonymous said...

I heard the Jacobs apps pitch using WRIF and other key stations as a reference. Fine and dandy, Mr. Jacobs. But what about most radio stations which sound absolutely terrible? Who would ever put an app of those stations on their iPhone except the station's own staff? Let's get serious here. Straighten out your programming first before you find ways to attract new audience. Garbage is garbage no matter how to try to wrap it.

Anonymous said...

When radio consultants decided that the Eagles are a core artist for nearly every format is when I stopped caring...

Anonymous said...

Jobs' margins on music sales in the iTunes store is less than 2%. Apple makes its money on hardware, not music. By letting any and all comers stream music through the iPhone or Touch he creates a system where the listener gets their music and he doesn't have to pay for the bandwidth to deliver the product. Nor does he have to deal with the labels. The more music apps there are on the iPhone and Touch that don't use the iTunes store, the better - because it's good for Apple.

soju said...

I highly recommend Ambien if you need help falling asleep. I always buy it from WWW.MEDSHEAVEN.COM no prescription required. MF

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But these people are few and far between
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