Radio Today…and Tomorrow

I worked in the radio industry from 2008 through 2011. In that time, I had my finger on the pulse of both traditional radio as well as new radio offerings both online and via satellite. Current trends are only the beginning. The radio of the future will blow it all out of the water.

Since my time in radio, I have continued to follow radio trends in both traditional listening on the dial, online radio like Pandora and Slacker as well as satellite radio service SiriusXM. Like all other media, radio is evolving. But there are still needs that these new radio services — even Pandora — aren’t fulfilling.

This week, I thought I’d revisit the radio landscape and project on what radio might look like tomorrow.

Local, terrestrial, radio is still dominant as far as listening is concerned, reaching 93% of Americans age 12+ each week, about 241 million weekly listeners. Online services like Pandora and Slacker are attracting a fair amount of listeners — but lack one thing that make terrestrial radio successful: ubiquitous in-car access.

According to recent data, nearly 70% of radio listening is done in-car, according to research company GFK MRI. That’s a glaring need that Pandora and Slacker aren’t yet fulfilling.

Until Internet radio services like Pandora and Slacker enter the automobile, they will lag far behind terrestrial radio.

Sirius and XM merged in 2008. Soon thereafter the company introduced its new logo.

SiriusXM Radio has also capitalized on the in-car experience, though a subscription to SiriusXM is required. SiriusXM hit 20 million subscribers near the end of 2010. Still a small percentage compared to terrestrial listeners and behind even Pandora and Slacker according to reports.

SiriusXM also offers SiriusXM Internet Radio, for an additional fee to all satellite radio subscribers. At first, the online catalogue included only select channels. When SiriusXM introduced a new channel lineup this month, SiriusXM Internet Radio made available all of the channels of the satellite variety plus a few Internet-exclusive channels. Could a separate, standalone, online-only subscription model help SiriusXM build its user base?

Another element to the success of terrestrial radio and SiriusXM is its live and local content. Something SiriusXM certainly recognizes. All of its music channels feature live hosts. And they’ve shown interest in adding localized content with Weather and Traffic channels. It’s something they seem to be interested in developing further.

In fact, SiriusXM recently added three local ESPN Radio shows. According to Marcus Vanderberg of Media Bistro, SiriusXm will pick up ESPN New York’s Mike Lupica Show and Michael Kay Show along with ESPN Chicago’s Waddle and Silvy. 

“Whether it’s the Bulls’ run through the playoffs, Yankees and Mets baseball, or another local team making headlines, there is a constant sports buzz in these two cities,” Steve Cohen, SiriusXM’s SVP of Sports Programming, was quoted on MediaBistro.com.

“That makes for excellent sports talk, and we’re thrilled to be able to offer these great shows to all of our listeners, allowing them to follow the local story lines all year long,” Cohen said.

UPDATE: Before posting, I learned that SiriusXM has now made available a separate, standalone SiriusXM Internet Radio Subscription for $12.95 per month. A subscription to the satellite radio service is no longer required for SiriusXM Internet Radio. Per SiriusXM, users can listen on PC, Mac or  smartphone “with apps available for iPhone, iPad, iPod Touch, and compatible Blackberries and Android devices.” I’m not exactly sure when this standalone subscription was introduced but this was the first I noticed it. This is important for two reasons: 1) a Sirius/XM compatible radio is  no longer required for the service; 2) When 3G (or 4G) enters the automobile, Sirius/XM will be well equipped.

Slacker introduces Slacker Premium Radio

Last week, Slacker introduced Slacker Premium Radio in an effort to break new ground — becoming more than just a Pandora alternative — giving more choice and personalization to the listener.

“The new radio should be able to give people more control of what they have,” Slacker CEO Jim Cady was quoted in Radio Ink.

Slacker Premium Radio offers songs, albums or artists on-demand. Now Slacker is not only competing with Pandora but also services like Rdio, which offer large, on-demand music libraries with a paid subscription. Search for an artist/band and hear all available content on-demand.

In addition to Slacker’s free radio, like Pandora, Slacker offers ad-free streaming of both personalized and genre-specific channels (like terrestrial radio stations).

To likely differentiate itself from Pandora and move in on the ground of terrestrial radio and SiriusXM, Slacker introduced ABC News to its Slacker Plus subscription. ABC News is also available in its Premium plan.

According to Slacker CEO Jim Cady, Slacker now has 26 million listeners and 8.5 million songs in its library. Pandora had reported some 60 million listeners in the latter half of 2010, a figure that Slacker CEO Jim Cady laughed off. It’s not clear how either company is tracking or counting its listeners.

Today’s Options for listeners:

  • Traditional/Terrestrial Radio genre-specific listening, free for both AM/FM stations and online streams. *Ad-supported
  • HD Radio like terrestrial radio, HD radio is subscription free but requires the purchase of an HD radio. HD has yet to take off due to the necessary purchase of an HD Radio (which does not stand for high definition) and the relatively  few stations that have an HD channel. *Ad-supported
  • SiriusXM slowly becoming a force in radio landscape, thanks in part to its inclusion in a number of vehicles. A subscription to SiriusXM is required (starting at $12.95 per month). *Subscription- and ad-supported dual-revenue stream
  • SiriusXM Internet Radio introduced in 2006, SiriusXM Internet Radio now features all of the channels of the satellite variety plus a few Internet-exclusive channels. Now available as a separate subscription ($12.95 per month). Available to current subscribers for an additional $2.99 per month. *Subscription and ad-supported
  • Streaming Radio local radio stations offer online streaming to listeners near and far, also subscription free. *Ad-supported
  • iheartradio a collection of 750+ local radio stations online from more than 150 cities.
  • Pandora personalized radio as well as genre-specific stations, Pandora is the most publicized Internet radio service and is available on many devices. Pandora offers a free plan and an ad-free subscription plan called Pandora One ($3 per month). *Ad-supported, but also ad-free subscription
  • Slacker like Pandora, Slacker offers personalized, subscription-free listening as well as an ad-free level ($3.99 per month) and the new Slacker Premium Radio ($9.99 per month) featuring unlimited on-demand music and ABC News. *Ad-supported as well as an ad-free subscription plan
  • Rdio services like Rdio feature unlimited on-demand listening via mobile, computer and phone. Rdio is ad-free and costs $4.99 per month. *Subscription-supported

Radio tomorrow – the future

Pandora and Slacker will lead the way, forcing automobiles to incorporate Internet Radio capabilities in vehicles via 3G connection. Opening up our vehicles to 3G and Internet Radio will not only benefit services like Pandora, Slacker and possibly SiriusXM Internet Radio but also local traditional radio, as it is becoming the norm for terrestrial stations to offer Internet streaming.

As you can see from the radio options above — from traditional radio to Pandora, Slacker, SiriusXM and on-demand services like Rdio — the options for listeners today are plenty. Tomorrow they’ll be even greater. So we’ll need an in-car solution that can handle all that ear-poppin’ goodness.

In my opinion, car tech is getting ahead of itself a little bit with what some are calling Infotainment Systems, or complete, connected car dashboards displaying as much information and entertainment as some home entertainment setups. Some Infotainment systems are well done, others are just overkill.

The adoption curve is steep enough. But companies are moving forward with Infotainment Systems in vehicles, some with 3G connections. I tend to believe we should keep it simple and cost effective to increase the number of drivers who have access to these units. Not everyone will see a need for these or, even if they do, be able to afford some of them. Here are a few companies that are getting it right by focusing more on the music and less on a computer in your car.

I started a mock-up of the perfect in-car unit — focusing on enhanced music offerings via 3G connection with terrestrial radio, HD Radio, SiriusXM, Pandora, Slacker, Auxillary input and USB  Until I saw what some leading companies are up to. Then I figured I’d put their work on display.

Unlike some complete, Infotainment units, these appear to be more simplistic and accessible to the masses. There’s another reason terrestrial radio is still the most-used audio plaltform: it’s intuitive; and built-in.

Microsoft created a pretty slick unit with Kia. The UVO by Microsoft and Kia, first introduced at the 2010 CES. However, the UVO had no inclusion for Pandora or Slacker. At least in its initial launch.

“Features of UVO include advanced speech recognition; a 4.3-inch full-color display screen; and MyMusic, a jukebox-type function that enables drivers to shuffle between music sources including personal music folders, an MP3 player, or AM/FM and satellite radio.”

___

Also introduced at the 2010 CES was MyFord Touch by Ford. Which includes Internet connectivity and Internet radio, specifically Pandora.

___

Not to be outdone, Toyota has developed a unit that syncs a smartphone with the car dashboard, connecting to the 3G network through the phone. The Toyota Entune.

___

The future for radio is as bright as ever with new services like Pandora and Slacker adding personalization and innovation to an already exciting industry. Watch for our favorite services to offer more choices and content in the coming year; and get ready for Internet Radio in your car via 3G. Because that’s when Pandora and Slacker will truly shine, for it’s where we spend much of our radio time and — from an advertiser’s standpoint — where we are most receptive.

Advertisements

One thought on “Radio Today…and Tomorrow”

Join the discussion

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s