Firstly, let me preface this by saying that while streaming radio is the new kid on the block, traditional radio is still strong. Ad revenue growth figures of 17% since 2009 and averaging 4% growth each year does not a declining medium make.
Traditional radio also blends not just music, but so much more including latest news, traffic reports, specialist shows, entertainment and promotions. It makes celebrities of their DJ’s, who are used to attract new younger audiences, as well as retain loyal listeners. It is a medium that has a personal and intimate touch while still being mass reach. It can be effective for not just building brands but also creating engagement, promoting products and offers. It is a fun medium where people interact with the talent and brands can take advantage of the listener’s yearning for their “15 minutes of fame”.
This is not to say music streaming doesn’t hold its place in the market. In fact the Australian market is ahead of the game when it comes to music streaming. It was the first to experience Google Plays service, and second to market with the launch of iTunes Radio behind the US.
We all like choice, and it appears that when it comes to music and online streaming, we are spoilt for it. There are more than 15 competing services available and looking at the local market we have the likes of Deezer, Google Play, Grooveshark, Guvera, Pandora, Rdio, Spotify, Vevo, and new to market, iTunes radio.
With an overwhelming percentage of the population owning iPhones, iPods, iPads and having iTunes accounts and libraries to hold their back catalogue of music guilty pleasures; iTunes radio was inevitably on the cards. Now there is a service where you can act as your own music adviser. iTunes radio can use your personal catalogue of songs to make suggestions of new music you may have not considered or discovered. Streaming music is ideal for anyone looking to supplement an existing digital collection of music with instant access to a wide variety of tracks, or for users who just want to pick and choose songs where and when they want to.
From an advertisers point of view apple can target users who have an Optus App with a Telstra switch message, or they can build robust profiles of their listeners through other app downloads and history (someone who has a lot of sports apps and interacts with them often can pretty safely be put into a sports enthusiast category for instance). It is a very powerful marketing tool especially when you think about the access Apple has to granular, robust personal/preference data; their ability to overlay micro targeting, and the massive scale that they have which no other provider can dream of.
The other providers (excluding perhaps google) don’t have Apple’s overall scale but many do have loyal (and at least currently) larger music streaming audience penetration. They also have strong platforms and relationships with the music labels or distributors that enable them to have a compelling story to sell to advertisers. They will not just focus on reach, data and targeting as they will lose that battle – so many will look at deeper engagements, custom playlists, bespoke targeting options and larger tie-ins with artists and bands.
The truth is music is a key passion point, and anyone who reaches a certain scale, has an engaged audience and a strong platform to reach that audience with a message, will generate interest from advertisers.
Both traditional radio and streaming services have their place in the market and their own pull for both audiences/users as well as advertisers.
I don’t believe traditional radio will give way to streaming services any time soon but they both have their roles to play.
Ultimately the consumer will decide, and they will vote with their ears. Either they will continue to want the programmed, live radio experience or they will want to plug for a more controlled, data driven music experience.
The likelihood is a blend of the two but only time will tell.
Stuart, I agree with some of these great key points. I also feel the Community based Radio platform is quickly becoming better brand engagement, often seen as the Commercials poor cousin, it is gaining continued strength on a platform that is not saturated and reaches out to a loyal listenership not an ad flickership!