Station Apps for the Bottom Line

August 1, 2012


While researching this article I came across an article in Digital Music News titled “The Smartphone: Where FM Radio goes to die.” The article questioned the logic of the lobbying to force manufacturers to include FM in all smartphones. However, that isn''t the subject of this article, but the title may be better applied to smartphone applications, or more specifically how radio broadcasters will utilize and actually make money with apps.

According to a recent study by the Pew Research Center''s Project for Excellence in Journalism titled “The State of News Media 2012,” terrestrial radio is still the second most dominant medium (after television), but there is cause for concern for radio''s future. A 2011 survey by Arbitron indicates radio is still used by 93 percent of Americans over age 12, down 3 percent from 2001; however, smartphone usage is up 31 percent and online radio is up 28 percent over the same period. I won''t discuss trends in the media landscape, but statistics all seem to indicate people''s use of a smartphone platform for entertainment is far outpacing the use of terrestrial radio. A Nielsen study shows smartphones comprise 54.9 percent of mobile subscribers as of June 2012. They also note that two of three mobile phones purchased are smartphones.

None of this should be a surprise and certainly broadcasters are stepping up by offering online streaming through Internet and custom apps. A recent report by the Radio Advertising Bureau shows online revenues for broadcast stations has trended from $480 million in 2009 to $709 million in 2011. Overall this is good news; however, the same Arbitron report noted that in 2011, 34 percent of Americans listened to either AM/FM or online only (such as Pandora) streaming services. Of the group that listened to both (about 9 percent), listeners to AM/FM streaming stayed level while online-only listenership rose.

It''s not hard to understand the reason for this trend. Most online-only content providers have fewer interruptions from advertisers, offer the ability to tailor and/or give listeners some interactive control over what is played and in some cases there may be some degree of interaction with other listeners through social networking.

The question is how can radio utilize the Internet and smartphones to maintain and enhance their revenue streams for the future? One possibility would be the creative use of apps. I''m not talking about apps to play streaming audio, that was clever in 2010, based on this current research it doesn''t appear radio will stay competitive with the Internet-only services in the future. Programming alone will not compel listeners to your sliver of cyberspace. Let''s explore a concept for the “killer” app that will go beyond streaming audio.

Do what radio does best

I''ve said in past articles that, in my opinion, terrestrial radio has largely abandoned the one thing that made it great: localism. Perhaps even more relevant, it was a catalyst to bring like-minded groups of people together. Within their listener bases stations created the buzz and excitement that would draw listeners to call, write and attend events. I don''t see that energy anymore. Yes, I get that people will still come to an event, but it''s usually to see a particular band perform, meet a celebrity or a giveaway, but only in very few cases does it have anything to do with meeting personalities. This isn''t the same vibe as we saw growing up in the 1950s through the 1970s.

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The word “crowd-sourcing” has only been around for a few years, but in many ways describes what radio used to do very well. The term is generally applied to some Web-based application where users can contribute and share some type of information that is relevant to the purpose of the Web application, i.e. Wiki (general information), Spotify and Ping (music) and Internet forums to name a few.

In the case of radio we can equate the “crowd” to be the listeners, who would call the station to request songs, acknowledge birthdays, possibly sharing something news worthy, reporting traffic problems or weather events. In many ways the station was “fed” relevant, local and current information by this “crowd.” The major difference between these uses of crowd-sourcing is that radio used it by a local audience, where Web applications have few geographic bounds. I see stations making feeble attempts using Facebook or Twitter to keep in touch with audiences, but it is usually nothing more than a billboard to subscribers, hardly an interactive platform.

Waze adds social media to traffic data.

Waze adds social media to traffic data.


I recently discovered a free application called Waze from a company in Israel. This may be one of the most useful applications ever. According to its Wiki page, “Waze differs from traditional GPS navigation software as it is a community-driven application and learns from users'' driving times to provide routing and real-time traffic updates. It is also free to download and use, as it gathers map data and other information from users who use the service. Additionally, people can report accidents, traffic jams, speed traps, police and can update roads, landmarks, house numbers, etc. Waze also helps users find the cheapest, closest gas station around them or along their route.”

There is also a contest-type feature that permits users to accumulate points. This application was made for radio! I don''t understand why broadcasters aren''t all over it. The first requirement of the killer app, make it interactive with not only the station, but other users and acknowledge users as much as possible. Here are my ideas on the killer station app.

Add a retail component: I think Amazon is hands down the best retailer in the world. It is also recognized as the company with the best customer service. One of the most useful features of retail websites are the customer reviews and ratings. I generally look at them to guide my buying decisions for most purchases. Instead of deluging listeners with a barrage of advertising spots for 5 minutes, try a different approach, such as getting information about their age, income levels and buying patterns, then tailoring ads that would be of the most interest. Perhaps create a retail portal inside of the app that permits the listener to buy and review something they just heard? Maybe they could create reviews of any local business. Look at partnering with a retail directory-type site such as YP.com. The second requirement of the killer app, target advertising and make it easy to buy directly from the Smartphone.

Understand the listener''s wants and needs: I''m fascinated that there is still a need for any station to perform music testing when there is a ton free data that will tell you the popularity of songs based on downloading. Giving users the ability to rate music, personalities and even spots would be valuable information. The third requirement for the killer app, let the listeners provide real-time research data.

Give the listeners what they want: Ultimately to compete with Pandora or some of the other Internet only services, you must allow each user to create their personal playlists. Nobody wants to hear the same 30 songs in rotation anymore. I think there is a way to keep the excitement that radio has been able to offer since the 1920s while delivering different content. Last killer app requirement: Let the listener create his own experience.

I''m sure you can think of additional ideas, but the bottom line is, increasing amounts of people will be getting their entertainment from a smartphone and less from the radio in the dashboard. To survive, owners and managers must start thinking like they are a new website start-up and less like a traditional operation.


McNamara is president of Applied Wireless, Cape Coral, FL.



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