DEE-fence

January 20, 2014
By

DefenseSo here we go again.  Another year, and more denial and defensiveness about Pandora.

According to an Inside Radio survey of broadcasters late last year, two-thirds say Pandora (and services like it) poses no real threat to radio.

Are these guys living in the same world we are?  Do they talk to consumers?  Do they conduct research?  Do they listen to what people are talking about in church, school, work, or at tailgates?  Have they talked to their kids?

This is nothing new for the radio business, but as we move into 2014 and see continued changes in the entertainment ecosystem, denying Pandora’s impact isn’t just wrong – it sends a message to everyone from media buyers to advertisers to the press to civilians that radio people just don’t get it.

And as we know from past press articles and speeches, the argument that “Pandora is not radio” has been floated for some time now.  While technically, Pandora has no live DJs (of course, the same thing can be said about many broadcast stations) and is a “playlist” service, it provides some of the same essential attributes to consumers looking for great music.

Our own Techsurvey8 indicated that nearly half of our database-centric survey back in 2012 believes that it is.  A majority of fans of Alternative, Christian, Country, CHR, and Variety Hits believe Pandora is “radio.”

TS8 Is Pandora Radio

We saw this up close and personal in our “Goin’ Mobile” ethnographic interviews back in 2010.  As respondents showed us their smartphones, the Pandora app was omnipresent – to them, it’s radio.

And here’s a news flash – the automakers see it that way, too.  Whether it’s Pandora, TuneIn, iHeartRadio, or SiriusXM, it’s all radio – if it’s in the dash, available to consumers.  What must they think when they hear the constant broadcaster drumbeat of denial?

And yet, the radio industry continues to come across as defensive, defiant, and angry – as if these emotions are positive or could even be considered attributes.  To continue to play the denial card is to make the radio industry look like every politician who simply takes the deny, deny, deny route.  The more denial you hear, the more you know there has to be something there.

This isn’t just the wrong approach, it’s a waste of time and energy that could be better spent changing the subject to what’s good about broadcast radio (and it’s a long list). While we are quibbling about semantics, we should be going on the offensive – making the case for “Why radio?” 

The other night, it was Bill O’Reilly, of all people – not your most progressive thinker when it comes to what is cool when it comes to pop culture.  With musical taste that spans the Beach Boys to Motown, O’Reilly’s “Tip of the Day” advised his viewing audience to turn off their radios and turn on Pandora (almost as if he just discovered it).

Now taking musical advice from Bill O’Reilly makes about as much sense as consulting Bill Belichick on fashion.  But the fact that Pandora continues to make the news – mostly in positive ways – ought to be sending the message to broadcasters that denying its impact isn’t believable.  Nor is it smart.

In recent days, Pandora has announced new partnerships – the most recent one is with Chrysler, making it the 25th auto company they’ve connected with.  They’ve also enhanced their iOS and Android apps, including personalized recommendations, providing more choice and engagement.

Everywhere you look, Pandora is on the offensive.  They’re making deals, adding locations, hiring salespeople, and using rhetoric that is brash and in-your-face when it comes to traditional AM/FM radio.  All the while, broadcasters are parrying these attacks, instantly responding to the Pandora’s rating claims, denying the competitive factor, and trying to hold share.

And yet we also know that Pandora has limitations.  As we have discovered in our last two Techsurveys – and we are repeating the same questions again this year – Pandora has issues.  There are aspects of broadcast radio – when done right – that provide a whole level of engagement, localism, and personality to audio content.

It’s not a matter of telling our story better.  Or denying Pandora’s story.

It is a matter of creating our own stories, our own narrative, and our own big news developments that reminds everyone from consumers to OEMs to TV pundits that radio gets it and is here to stay.  It starts with getting strategic about what broadcast radio brings to the table, and making that case to audiences, advertisers, and the communities are stations serve.

Aretha Franklin, the Queen of Soul, perhaps put it best when she asked, ‘Who’s zoomin’ who?” 

Let’s stop kidding ourselves. 2014 would be a good time for radio to get out of the defensive business, and enter the No Spin Zone.

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22 Responses to DEE-fence

  1. Kevin Fodor on January 20, 2014 at 8:39 AM

    Fred:

    I’ve wondered, and said for years that radio should get out and aggressively tell its story.

    Of course, that’s tough to do when radio has to defend 15 minute commercial hours broken into as many as 36 units. And, defense of radio’s engagement of listeners is tough, too when stations seem most aggressive about getting rid of the people who actually engage the listeners on the air…whether that engagement is live or voice tracked.

    Yes, radio does need to better tell its story. It also needs to clean up its back yard and admit to its shortcomings. Any reformed alcoholic would tell you the first step to freedom from the addiction is to admit you have a problem.

    • Fred Jacobs
      Fred Jacobs on January 20, 2014 at 10:23 AM

      Kevin, thanks for the note. That’s why it’s essential for radio to take a strategic approach to its competitive challenges – internally and externally. The “givens” have changed, and adapting to the new realities of consumer infotainment is all part of the process that needs to take place. As we have said many, many times in this space, the competitive arena has grown, moved, and changed – and just as radio retrenched in the ’50s when TV came into everyone’s homes, it is overdue for that same process to occur as the media landscape has changed. Appreciate you taking the time.

  2. DP on January 20, 2014 at 12:38 PM

    Such a good read Fred and the entire topic is just so dumb. It doesn’t matter whether it’s radio or not..ANYTHING that competes with the two sets of ears that humans have is in competition for radio. A comment like “radio isn’t worries about Pandora is like TV guys saying “Don’t worry about Netflix or on demand/digital viewing..it’ll pass.

    DUMB is DUMB and every time I see that reference to Pandora, I just want to scream. Anyone at the DASH conference certainly knows better.

    Denial ain’t a river in Egypt

    • Fred Jacobs
      Fred Jacobs on January 20, 2014 at 2:38 PM

      Right there with you, Dave, and thanks for the geography lesson!

  3. Bob Bellin on January 20, 2014 at 12:40 PM

    This post dovetails nicely with a WSJ article last week detailing how radio’s answer to Spotify/Pansora is less variety and less new music. Radio has its collective head in the sand and its apparent that current leadership is just running out the clock.

    The big elephant in the room for Pandora and the other digital pure plays is that while consumers love and are flocking to them, there is no real, actionable way for any of them to make money under the current royalty arrangement. This could present an opportunity for radio to negotiate a deal that could allow for digital profits, because it’s sitting on terrestrial royalties that it could leverage and add to the mix.

    Radio’s leaders (and I use that term with a certain amount of sarcasm and irony) are clearly not up to the job of staying competitive. Either they know it and feel this is the best way to line their personal pockets, or they don’t and are just truly clueless. My guess is that there is some of both among the $150K car/cut through button hole set.

    Isn’t it time that someone, somewhere (besides Jerry Lee) did something remotely innovative? With even just ONE station in a company full of clusters? A just and merciful God would fire anyone who even broached the subject of whether Pandora is or isn’t radio – and would levy a huge fine against anyone who took sides on it.

    Last week’s post about the Christmas Wish in Des Moines illustrated what radio can do that Pandora can’t. But that requires a live morning show. Any bets on whether the % of voice tracking goes up or down in 2014?

    • Fred Jacobs
      Fred Jacobs on January 20, 2014 at 2:40 PM

      Bob, thanks for not taking MLK Day off. I was also inspired by the Saga Des Moines story. Like you, it tells me we can still do this when we stay with a smart strategy and execute it well. Appreciate the passion and the POV.

  4. Lee Cornell on January 20, 2014 at 1:21 PM

    Hi FRED, And happy New Year to you and your team! … Building on your sports analogy, it would be even better if radio not only left the spin zone but actually executed some “stunning plays” that just command attention. When BECKHAM or RONALDO executed a stunning play, in that moment they were more than a MAN-UNITED player …they were “BECKHAM” or “RONALDO”, at the pinnacle of talent and creativity in the beautiful game. If radio stations and groups can find and execute such “plays”, consistently and impressively, it transforms “RADIO” into something different, bigger, and relevant… like PANDORA actually does.
    It also gets the medium away from lead stories on “clock radios”, and how many “formats” LORDE is now “NO.1” on. Neither of which has much relevance to the way today’s audience consumes or thinks.
    And please forgive my MAN-U analogy!

    • Fred Jacobs
      Fred Jacobs on January 20, 2014 at 2:38 PM

      I am always a sucker for a great sports analogy, and you have several going here, Lee. Thanks for taking the time to add to our conversation.

  5. James Cridland on January 20, 2014 at 1:48 PM

    I am one of those saying that “Pandora is not radio”: http://james.cridland.net/blog/pandora-is-not-radio/ – and I make no apology for that. Pandora has stolen radio’s brand and is trading under it, because Pandora knows that people love radio far more than people love a soulless music jukebox. We – the radio industry – let them do that. We are fools.

    But don’t confuse that with “We have nothing to fear from Pandora”. We do. We have deliberately taken the localness and personality out of radio. We have stupidly marketed radio as “lots of songs in a row”, as “the best music mix”. We have created the impression with listeners that radio is just another version of Pandora. Except, in this case, someone else’s Pandora, without a skip button. We are fools.

    We have ourselves to blame for redefining radio in this way. But don’t retreat from the facts: that Pandora isn’t worthy to call itself radio; and, increasingly, many radio stations don’t deserve that name either.

    • Fred Jacobs
      Fred Jacobs on January 20, 2014 at 2:37 PM

      James, great thoughts & perspective – and a wonderful reason why we enjoy having this blog. It’s a true window to thought leaders everywhere. Thanks so much for so eloquently stirring it up.

    • Fred Jacobs
      Fred Jacobs on January 20, 2014 at 2:45 PM

      Thanks for throwing another log on the fire with these TV ads. They’re nicely produced and speak to the passion that music can generate. Or in another words a lofty claim: “Pandora will get you laid.” I remember when the radio held that same promise. Appreciate it, Steve.

  6. Jonathan Marks on January 21, 2014 at 6:18 AM

    Here in Europe we’re seeing the same trend. As Pandora like services bloom (usually as part of a package with cable companies/mobile phones) so radio’s response is be less creative, driven purely by algorithms rather than passionate presenters. If no-one disrupts radio’s slumber, then Pandora will simply steal its business model.

    • Fred Jacobs
      Fred Jacobs on January 21, 2014 at 12:20 PM

      Thanks for the perspective from “across the pond,” Jonathan. As Mark Edwards mentions in another comment on this post, Pandora may be well on the way to stealing broadcast radio’s biz model. I love that line, “passionate presenters.” More food for thought in a great conversation. Appreciate it.

  7. Jeff Vidler on January 21, 2014 at 8:30 AM

    Well said, Fred. It’s time to sidestep the semantics and take advantage of the opportunity Pandora is giving us to redefine what broadcast radio does best — namely, the place where listeners can plug into all that’s happening now, and connect with people on the radio and in their community vs. algorithms. Done right, it’s not even a fair fight. All it takes is resources, vision and just enough courage to make it happen.

    • Fred Jacobs
      Fred Jacobs on January 21, 2014 at 12:18 PM

      Thanks for that, Jeff. You are right about radio’s advantages. Now the industry has to live up to its historical potential & excel in this new environment. Appreciate you taking the time.

  8. Jim Hughes on January 21, 2014 at 9:29 AM

    Radio stations need to focus on engagement, localism and personality with all of their listener touch-points – on-air, web and social. Allow DJs to speak with the audience (in all day parts); embrace the artists and music you play (this is why people began listening to FM radio in the first place); your on-air and digital presence need to have strong local content to go along with the national entertainment spin (ditto for social); use video/visuals to bring the station to life (web/social/mobile); share story-lines, themes, content seamlessly across all media platform (and cross-promote those platforms); lastly, show your passion and soul (be real).

    • Fred Jacobs
      Fred Jacobs on January 21, 2014 at 12:16 PM

      Local & personality are those two important content “food groups,’ and sadly, they are in shorter supply over time as expenses get cut. Tough decisions are being made, and they impact the industry’s future. Thanks for the comment and the time, Jim.

  9. Mark Edwards on January 21, 2014 at 11:34 AM

    Don’t get me started….

    Any broadcaster who doesn’t think Pandora is “radio” is just delusional. If it plays music and it comes out of a speaker, to most real people, it’s RADIO. Too many broadcasters have forgotten how to think like their listeners, either because they have stopped doing research on their listeners or they are so obsessed with hitting their weekly, monthly, or quarterly “number” that they’ve lost sight of what business they’re in.

    Broadcast radio, Pandora, Spotify, Rdio, and all the other services that provide music to listeners are now parity products. They each can have the same icon space on a smartphone screen or connected car dashboard, so the advantage of it being 1977 and only having AM and FM to listen to on a transistor radio or car radio is GONE. How many TV commercials for cars are talking about their connectivity? Lots. And of those spots, how many mention Pandora by name? Quite a few. Detroit and the people who produce consumer electronics, especially for the car, know people see Pandora as an equal alternative to radio, so why can’t so many broadcasters see it?

    And here’s one other thing I’ve learned while working with non-radio and radio clients as well. Because Pandora can be FREE, it’s perceived as being closer to broadcast radio than the services that require payment to use, including Sirius/XM. Sure, the free Pandora has some commercials, but they still have far less than most broadcast stations, and it could be argued that that serves both the listener and local client in ways that radio won’t (not can’t) do.

    The people who own and run many radio stations just don’t get it. They don’t get that Pandora IS radio, that they’ve stolen the playbook and are running only the best plays, and now they’re going after direct local business in many markets. They also don’t get how important radio’s off air presence is if you want to compete and beat the other services, whether it’s having a robust, multi-platform online presence, using e-mail to stay in touch with listeners, or simply showing up where your audience is.

    I fear that the “Pandora isn’t radio” thinking extends into many other areas of programming and marketing radio stations and broadcasters have nobody but themselves to blame for the declines in usage and revenue that are to come. Have they not learned anything from the newspaper business?

    • Fred Jacobs
      Fred Jacobs on January 21, 2014 at 12:14 PM

      Mark, thanks for the perspective. As you point out, we’re debating the wrong stuff. Your line about Pandora “stealing the playbook” and “parity products” should generate more conversation. As you point out, in the world of “connected cars,” it’s an even playing field – satellite, Internet, and broadcast all share equal positioning in the center stack. May the best content win.

      • Mark Edwards on January 21, 2014 at 1:23 PM

        And if it comes down to content, advantage Pandora. I’m listening to the new Beats Audio today, and I see a future for that. We won’t have all the streaming services we have now in two or three years. As Jerry Butler said, “only the strong survive”. Broadcast has to be stronger than ANYTHING that makes noise out of a speaker or headphones, and I’m not sure that’s going to happen or that most broadcasters will understand or even try to do brand outreach using their assets in the online world, proper database marketing, or in anything beyond their analog signal. And that breaks my heart.

        • Fred Jacobs
          Fred Jacobs on January 21, 2014 at 1:38 PM

          The inevitability of competition impacts every legacy business – radio cannot escape that. But it does have the ability to retrench, adapt, and morph into its next evolution. Sometimes all it takes is one company, one leader to start the trend. Thanks, Mark.

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