Sunday, June 6, 2010

From Tom Webster at Edison Research

The Focus Of Your Innovation

Written Jun. 1, 2010 by Tom Webster in Content Podcasting Technology +Terrestrial Radio with 1 Comment

Over the past few months I've seen many novel ventures by radio stations to grow their "non-traditional revenue" (or, as I like to call it, "revenue.") Most of these efforts have centered around the creation of local web portals for a variety of verticals (auto dealers, restaurants, lawyers, etc.) The fundamental premise behind these efforts is that the radio station will build/host some kind of web property either for a client or for their own vertical local advertising model, and use their airwaves to drive people to those web properties. This, apparently, is the future of radio, or so I'm told.
The thing is, all of the innovation behind these new revenue-generating models is centered around the web - banners, online video, online promotions, etc. That's all well and good, if we stipulate that radio's skills in these areas are at least on par with what various pure-play ventures are bringing to local markets (and for the purposes of this argument, let's say they are).
All of these efforts to build sites for car dealers and doctors and local restaurants are all predicated around the assumption that radio will use the "power of the tower" as a force multiplier to drive traffic to those web properties. No matter what grand designs your station may have upon local search and local advertising dollars, it's audio that forms the base of this model, and it's audio that will differentiate radio from a hundred other local web plays. Yes, that audio will increasingly be delivered via the web, but distribution alone cannot be the focus of our innovation. Distribution will be table stakes to the game (asJennifer Lane recently put it, if a station’s listener wants to listen online, and that station is not offering its programming online, they will find another station online to listen to.)
As I've noted several times in this space, the value we assign to those towers is based upon scarcity. When ubiquitous distribution of audio content renders those towers valueless, it will be the audio content itself that elevates your radio station and maintains its local audience. With all of the innovation radio is pouring into videos for local businesses and websites for car dealers, we must never forget that radio's strongest competitors online have done none of these things. Some of them are built so that you never have to go to a website at all. The focus of their innovation was audio. Though the business model has changed, and listener expectations of "spotload" have calibrated our expectations of revenue, audio and advertising around audio still work just fine, as long as the audio content is compelling.
I'm truly excited about the future of audio on the web, and radio's potential ability to assume the role of local media powerhouse with an innovative blend of live programming, on-demand programming and podcasts. On-demand audio opens up enormous opportunities to serve multiple niche audiences by addressing local news, issues, tastes and even local music styles and bands in ways that didn't make sense with a singular tower. All of this, however, requires us to continue to innovate around radio's core strength - the creation of compelling audio entertainment.

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