In case you missed it, Saga Communication has dispatched their ad insertion streaming apparatus and is now simulcasting its terrestrial programming on its digital streams.
Broadcasters have wrung their hands about this for years – for all kinds of good reasons – but the gnarly issue of talent fees forced broadcasters to insert different commercial content in their streams.
Saga’s Warren Lada, according to Inside Radio, did the research and came to the conclusion that these payments have become a non-issue.
So what does this mean for other broadcasters, many of whom have to be considering following Saga’s move to stop ad insertion?
First, there’s no question that while many of radio’s problems are of the self-inflicted variety, the industry has also been beset by a combination of ironic events and bad timing.
Consider that just as radio consolidation was moving at mach speed in the ‘90s and companies were going public, that Wall Street’s rules made it impractical and arduous for many radio companies to adequately invest in heavy marketing or R&D.
Or that just as radio was coming to grips with the public’s penchant for digital options and expanded choice, PPM comes along, adding more expense and a veil of conservatism for radio programmers.
And then streaming, a logical way for radio to regain its portability and to play even up on the digital gridiron is hampered by the need to cover commercials. And with few exceptions, ad insertion makes radio streams sound messy and inconsistent.
We have blogged about this on many occasions over the past few years. Radio streams uniformly sound like crap. Most stations’ ad insertion systems are clunky, and because most companies and clusters are unable to sell online ads, the fill material is abysmal, repetitive, and a bigger tune-out than actual commercials.
PSAs, bad music, comedy cuts, crickets, and other interstitial material has made the customer experience on radio streams a nightmare – take it from someone who regularly listens to client stations on their streams.
McGruff, the “Crime Dog,” has literally become the poster canine for everything that is wrong with broadcast radio’s streams. Who knew that we would actually pine for Geico and Home Depot spots while listening to a favorite station’s streaming audio?
Now that smartphones and tablets allow stations to “go mobile,” the quality of the streaming product cannot possibly compete with a Pandora or a Spotify.
Of course, the Saga decision runs counter to the companies that offer ad insertion technology, so the debate about whether broadcasters can ultimately make more money by selling this inventory separately or by simply simulcasting its on-air programming will rage on.
Four additional thoughts on dropping ad insertion:
- A pre-roll still makes sense for the stream. This ad format is becoming standard for just about every form of audio and video stream online; it’s a small price for consumers, a great value for advertisers, and an easy way for stations to derive revenue from streaming.
- Registration for the stream is something that more broadcasters ought to institute. I was originally a proponent of seamless access to streams, evading any access hoops. But registration data has great value, and again, consumers are increasingly asked to register for just about everything online. Free access to a station stream should carry a price of a little information.
- The CX will greatly improve. Streams will become more listenable and accessible. There’s still the issue of buffering, bit rate, and other streaming speed bumps, but the commercial clusters in streams have presented the most clunkiness to the consumer.
- Sellers can sell again. Instead of running around selling spots that are cheaper than a grande coffee from Starbucks, reps can focus on what really matters – selling their prime inventory while benefitting from a growing digital audience on the stream.
And none of this means that Ed Christian and other broadcasters can’t change their minds at a later point in time or go back to a different ad model.
In the meantime, hopefully the crime rate won’t start soaring now that those McGruff PSAs start disappearing from radio streams.