TORONTO – In what turned into a game of we’ll-see-your-swear-word-and-raise-you-two-more, four out of five speakers on a Canadian Music Week panel agreed that mobile radio will be key to the future success of terrestrial radio. At least, once the industry can figure out how to monetize the new business model.
The commentators debated digital radio strategies during a panel at CMW in Toronto on Thursday afternoon.
“I think mobile is probably the most interesting play for radio right now,” said Rob Farina, vice-president of content for Astral Media in Toronto. “I feel like the transistor radio is back.”
However, Farina said terrestrial radio stations must avoid confining their thoughts to a linear manner as they have done in the past. “We really need to put our mindset into what the consumer needs on a mobile platform,” he said.
David Huszar, vice-president and general manager for Corus Entertainment in Toronto, said that his company has been pleasantly surprised by the popularity of “a very, very basic Corus streaming app” that the company launched last year.
“We were encouraged to see that we were expecting 10,000 downloads and we’re at 250,000 now and counting,” Huszar said. “And really, we should have charged $1 per download, but we didn’t do that.”
Huszar said Corus recognizes that it must offer its content across any type of platform where people want to consume entertainment.
“We definitely need to be there (on mobile). It’s a big part of the future,” he said. “But how we monetize that in a big way, the jury’s still out on that.”
As author of The Chaos Scenario, media critic Bob Garfield may have felt it necessary to stir things up at this point in the discussion, because that’s exactly what he did.
“On a transistor radio, in a market this size, your competition in broadcasting was maybe 15 or 20 other stations”, Garfield said. “On a car radio, your competition was five other stations. On mobile, your competition is in excess of 25,000 other stations. And that’s why you’re just totally f-cked.”
Not surprisingly, Huszar and Farina both took exception to Garfield’s pronouncement.
“The weird thing is the streaming audience has grown 75% in the last year at Corus stations. Our hours of tuning toward streaming devices are the same as to our over-the-air signal monthly,” Huszar said, with a hint of sarcasm. “So, f-cked or not, it seems to be working for some odd reason so far.”
He added that the success of radio over mobile will depend on how compelling the content is.
“Whether it’s five stations or 25,000 stations we’re competing with, it really comes down to who’s doing the best job”, Huszar said. “It really comes down to a personal relationship (with listeners)”.
Astral’s Farina pointed out the radio industry as a whole achieved between 20 to 25% profit margin on average during the worst recession in recent memory. During good economic times, those profit margins are usually 30 to 40%, he noted.
“Meanwhile, companies like (Internet radio site) Last.fm are bleeding through cash like crazy,” Farina said. “Yes, they have a great offering, but they haven’t figured out how to make people want to pay for that offering.”
Both Last.fm and Pandora have used subscriber models to limited success, Farina added.
“When you look at Pandora’s overall sales, less than 1% of their revenue comes from the subscriber model. And I think asking people to pay $1.99 a month if they exceed 30 hours of music a month isn’t a big ask, and they’re not able to do that,” Farina said.
“So, I don’t think we’re f-cked,” Farina continued. “I do think we have great challenges and opportunities ahead of us. And, I think it’s incumbent to everybody in this industry to navigate and charter our way through these very uncertain seas.”
Joking that author Garfield would be handing out cyanide pills at the end of the panel discussion for those who wanted them, Hipcricket co-founder and CEO Ivan Braiker said he believes that mobile represents a huge opportunity for terrestrial radio companies. Hipcricket is a mobile marketing company based in Kirkland, Wash.
Braiker said that radio stations can use the mobile platform to be “hyperlocal”.
“You have the ability to let people know when things are going on at your radio station, and to have a contest tool”, he explained. “That mobile phone is always within three feet of them. Take it for what it is and use it as a tool to get your story out to the people you can engage in your tribe. Mobile is a huge device and a hugely helpful instrument.”
Deborah Esayian, founder and co-president of Emmis Interactive, a media consulting company based in Burbank, Calif., said while there is no doubt that people will consume things over mobile platforms, there are challenges associated with making money from a mobile radio business model.
“We are experimenting just now about how to monetize it, learning what advertising campaigns respond well to mobile and which ones don’t,” Esayian said.
She said that one of her main concerns on the technology side is the ability to capture mobile consumer data and to mine it in a meaningful way.
“There are challenges in mobile in that we have a name or a phone number, but we have to be able to link all that together and then be able to attach habits and practices to that data in the back-end,” Esayian added.
At the end of the discussion, given the last word, Garfield said that he wanted to say something positive.
“The next five years are going to create the greatest radio and the greatest music, and the greatest proliferation of both, that has ever been broadcast or sent down the line in all of human history,” Garfield said. “It’s going to be fantastic. I am very excited about the content that’s being produced all over this great world of ours. It’s just not going to make a whole lot of people a living.”
