Content is King but Distribution is King Kong: DBS 2015

In a final session at last week’s Digital Broadcasting Symposium, a panel of experts looked at monetizing new digital developments.
Steve Ahern reviewed Pandora’s success, using its publicly available annual financial statements. He compared the traditional radio business model with the model of emerging music streaming technologies.
Radio companies have these characteristics:

  • Identify a target audience, promote your station to them
  • Play them music they like
  • Mix it with personality, information, advertising, etc
  • Transmit it free to the listener
  • Survey listener consumption habits using sampling methodology
  • Pay the musicians a share of your revenue
  • Pay other costs
  • Keep the profit

While new music streaming companies have some different and some similar characteristics:

  • Identify a target audience
  • Give them a free app and some access in return for their personal information and consumption habits
  • Let them choose music they like
  • Help them with music selection if they want help
  • Advertise to them … or
  • Let them have ad-free listening if they pay a subscription
  • Pay the musicians a share of your revenue
  • Pay other costs
  • Keep the profit

He pointed out that key differentiators between radio and streaming services are the subscription model and the fact that music streaming services can get rich and instant data about their customers’ listening habits, and can potentially monetise that more effectively than radio can.
“Audiences seem happy to rent their music,” said Ahern, because “they don’t have to store it… music is virtual, there is no need to touch or collect it in hard formats such as records or CDs any more, audiences are changing their habits.”
Listeners can get more songs more cheaply by using a streaming collection than from their own collection, and if they desire a song they can get it immediately when they use these new services such as Pandora, Deezer, Spotify and others.
Ahern said that streaming services are seeking to expand across Asia, but warned that there will be a shake out of music streaming services over the next few years, because there is not enough profit for everyone.
He made the point that stations in Australia are experimenting with alliances, but that not all the alliances are leading to success or profits. Nova Entertainment for example, did not renew its partnership with Rdio. In Australia, the one to watch is iHeartRadio, said Ahern. “They are trying innovative things, and they come from the radio industry, so they know both the streaming and radio businesses well.”
In the same session, Les Sabel talked about the opportunities to monetise digital radio transmissions, using a combination of IP and broadcast technologies.
“Digital radio gives stations the opportunity to broadcast more channels, bringing new revenue streams,” he said.
Other opportunities presented by digital radio include click-throughs to sales and promotions from the digital radio screen, using internet connectivity and tagging, where a listener can save the advertising or service information for later use. The tag can take them to a website for further information.
Categorised slide show graphics can also be used to allow listeners to use the screen to drill down for detailed sports results or news details, allowing for deeper engagement. Sabel is also looking forward to the time when digital radio chips are activated within mobile phones so “the value of these services will grow.”

Sanjay Salil, Managing Director of Media Guru, discussed the important of archives to broadcast organizations. As well as preserving a nation’s heritage, making archived radio and tv content available can generate revenue if stations charge for access or monetise replay of the material by including advertising when content is replayed.
“History is worth more than cash,” he said, but also made the point there is cash to be made if broadcasters want to monetise their historical content. Digital archiving is the way to achieve this, an area where Media Guru specializes.
Salil gave some examples of where his company is helping broadcasters to archive their material, which can then be searched and accessed through an automated system by customers.
In India, Radio Mirchi is using the Media Guru system to make old content available and also to automatically archive today’s content “because it will be history one day, so they decided they may as well digitize, index and save it now, for the future.” Mirchi has 28 stations across India.
Other examples included a government agency in Qatar and the Indian national broadcaster’s television division. Once digitized and archived, the content can be transcoded for use on all platforms by the Media Guru system.
“Monetisation won’t happen unless you put the systems in place to store and distribute the content. Content is King, but Distribution of that content is King Kong,” said Salil.

In a good sign that the session went well, participants threw up their hands and cheered at the end of it. Are you here?

Disclosure: Steve Ahern is Managing Director of AMT Pty Ltd, an international media consultancy and training company, and is the founding editor of radioinfo.


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