Comment from Brad Smart
Did someone put a target on the back of commercial radio while I wasn’t looking?
Seems these days there are so many people are out there ready to predict the death of commercial radio at the hands of a digital hitman, that you have to stand in line and take a number just to make a comment.
The way I see it is these panic-merchants as missing the mark by a mile, largely because, they can only see ‘radio’ as it is now; they don’t have the foresight to see it, as it will be, going forward.
Over the Christmas break, you may have caught the Fairfax article predicting that radio will be in big financial trouble by 2021.
Cheery thought for the thousands of us in this business who have long-term mortgages!
The basis for Fairfax claim is that radio is only surviving in this country because the average Australian drives an old car and old cars have old radios, so people are still listening.
Well, you’d probably need to be William Tell or Robin Hood to draw a bow that long. Perhaps, they should have blamed it all on the Aliens!
Nonetheless, the Fairfax story does give us food for thought on the need for radio to start planning to move in a new direction.
Back in the 1920s, when radio broadcasting first began, I’m sure the naysayers would have been just as fervent as Fairfax’s sources in predicting this new fangled invention’s days were numbered.
Yet, we all know that radio survived, and, it has survived through some pretty tough and competitive times during the past ten decades.
This is largely because, it has been able to reinvent itself to meet its listeners’ needs on every single occasion it has come under threat.
Prior to the current threat from digital, radio’s most serious challenge came with the introduction of television.
In the early fifties, everyone with a voice was crying “radio is finished”, and, many of its big stars were jumping ship for the new and more lucrative medium.
Everyone was asking “how could radio possibly survive with such overwhelming competition?”
Sounds eerily familiar, doesn’t it?
Sure, the introduction of television did knock radio ‘for six’ for several years, but whilst licking its wounds, radio’s new guard of trailblazers at the time saw the path to glory ahead of them, evolved from block programming to Top 40, and, started to win back even bigger audiences than radio had had before television.
Each time radio has undergone previous evolutionary phases, it has been at the hands of people, who creatively understood this industry.
From my perspective, today’s ‘merchants of doom’ have simply got it all wrong.
They still see radio as nothing more than a big antenna in a paddock with the signal coming out of it.
However, ‘radio’ can no longer be considered just the technology that carries the signal.
Today, radio, as we know it, is really the content, not the carrier.
The technology, be it AM, FM, DAB+, the internet or whatever may be lurking around the corner, is now simply a temporary transport mechanism, and, as time passes, the dependence on any particular technology will diminish.
Content is portable; you can transfer content anywhere you want; it can move easily from technology to technology.
So, when you take a bird’s eye view of what radio really is, you realise it’s always been one person communicating on a one-on-one basis with many listeners.
In short, it’s human companionship, providing a combination of information and entertainment that cannot be equalled by any other form of mass communication.
Google and Amazon are no dummies; they recognised it.
In the past few months, they’ve both come out with voice-activated devices as a pseudo form of human interaction and companionship.
Sure, these voice-activated devices are likely to become ingrained as part of our daily lives, but do you know the most popular service Google Home and Amazon Alexa currently perform here and in the U.S?
It’s streaming commercial radio.
To me, that’s an indication that the future of radio and digital world services is not necessarily an either/or situation in the ongoing lust for audience and revenues.
Both could happily co-exist in a symbiotic relationship for years to come.
A lot of people are saying these days that Millennials and Centennials don’t listen to radio anymore; they only want to choose their own music from Spotify and other on-line sources.
That’s going to be true for many of them for a period of time in their lives, but as human beings, their needs are likely to change over time.
Although we, in radio, are constantly having this information waved in our faces, in reality, the research tells us that the generalised nature of these claims is not as ‘cut and dried’ as they would lead you to believe.
The number of people subscribing to Spotify and other music streaming services worldwide is very large and is growing. There are, undoubtedly, times when people of all ages want to have direct control of their own music.
But, entertainment and communications are not a zero-sum game.
Unlike the stock market, where for every winner there has to be a loser, that’s not so in media.
Simply because a new player joins the table, it doesn’t necessarily mean that someone else has to cash in their chips and walk away, whipped and beaten.
As we become more sophisticated in our listening and viewing habits, we tend to expand and accumulate the number of sources we have access to.
Look at the way we now watch television.
Most of us have Netflix or Stan or Amazon or all of them, to supplement Foxtel and the free-to-air TV services.
You’ll find it’s becoming pretty much the same with audio entertainment.
While listeners will accumulate subscription services, like Spotify and Youtube Red, the vast majority of people will continue to have that desire for human companionship on the radio when they’re commuting or at home, for as long as it meets their listening needs.
Figures from both the U.S. and Australia show that commercial radio is still the most listened-to form of mobile entertainment, by a significant factor, and the trends associated with that research will be critical in determining where radio goes next.
When new and exciting concepts, like Spotify and other digital services, are introduced, they are always going to take a share the audience, and, over the past five years, they certainly have.
Left unchallenged, these services have the ability to inflict serious damage on the media landscape.
Australian free-to-air television failed to see their competitors coming and are now in real trouble.
Having been run for more than a decade largely under the thumb of accountants, rather than programmers, television operators had tried to maximise profits with cheap game shows, reality programs and trashy soaps, and failed to realise that Netflix had slipped in under their skirts to provide audiences with the content they really wanted to watch.
Radio, on the other hand, has a distinct advantage over television.
It is currently the ‘darling’ of traditional media with a lower operational cost base and reasonably healthy year-on-year profits.
Radio is also nimble and can change direction quickly, if necessary.
Right now, those advantages will buy radio at least enough time to reinvent itself.
Those dire predictions that digital media will soak up most of radio’s revenues do not need to come true, if radio, as an industry, can create strategies that will extend the medium’s value into the next decade and beyond.
It can be done, and, it can be done quickly.
Other creative industries have already set the precedent.
With the collapse of physical CD sales, the skeptics were predicting the recorded music industry was finished; no one could see how they could possibly make a dollar going forward.
Defying the skeptics, ‘music’, as an international industry, reinvented itself within the digital world.
Last year, Big Music set new records (no pun intended) through its licensing of music rights to Spotify, Pandora and the many other music delivery services on the net.
Our own industry was less than amused as Big Music also slipped its hand into the pockets of commercial radio, but their new business model has changed the way they now create revenues in a very positive way.
Radio can follow Music’s example, but, to do so, it must think creatively and ‘out of the box.’
I must admit that I am left with one nagging thought as radio approaches, what will potentially be, its most important evolutionary phase.
Since the introduction of automation, control of many commercial radio networks has moved out of the hands of experienced ‘radio’ executives, into the hands of businesspeople, whose primary focus is not content, but the bottom line.
This is not a dissimilar situation to the problems that beset television, and potentially, it raises a red flag.
No one doubts that the business side of radio plays an extremely important role in driving any network.
However, in the past, when the need for reinvention came, the challenge was always met by experienced hands-on radio people, who creatively lived and breathed the medium.
The haunting question I now have, is “will many of today’s commercial radio operators even recognise this need for change in time, and, if they do, will they still have access to experienced people within their ranks to get the job done properly?”
What we, as an industry, must avoid at all costs, is the temptation to collectively ‘lose our nerve’ through fear of the unknown, or, through constantly seeing adversity, rather than opportunity for radio, in the digital world of the future.
About the Author
Brad Smart previously owned and operated the Smart Radio Network through regional Queensland.
He sold his stations to Macquarie Radio Network, now Macquarie Media Limited.
He has been a journalist, broadcaster and film producer for over 30 years.
Brad’s articles and podcasts are also available through his website www.bradsmart.com.au