Online radio stations are popping up all over the internet. Is this a threat to our Icasa-licenced FM stations?
The emergence of online radio stations can only be a good thing. Choice drives consumer interest, and diversity makes a medium more interesting to more people.
But this is just my view. And there are lots of views on the topic. Everyone with a vested interest mounts logical and compelling arguments to support their position. As is the case with most predictions, most of us will be wrong. These opinions are mostly constructive as voices in an ongoing conversation, one that hopefully will evolve in a way that creates more opportunities for the consumer.
I don’t believe the issue that will occupy us as media owners is necessarily the future of online versus FM delivery models. I believe mostly it boils down to ‘push’ versus ‘pull’ content models, and whether the two can co-exist, and in what proportion, in the next three to five years.
When I look at the players in the music and entertainment delivery space online, they fall into two very broad groups – the essentially linear, ‘conventional’ versions of FM broadcasters, and the more digitally-naive innovations in music that are able to personalise streams. 2Oceans Vibe Radio is a good example of the former, and Simfy or Last FM, examples of the latter.
When FM stations venture into streaming, we often do it along the path of least resistance – so the model that disrupts us the least. Hence most radio stations are publishing linear streams that run parallel to the FM product. Look at Absolute Radio in the UK where the FM signal is one of the choices from others online, like channels dedicated to decades of music (‘80s, ‘90s etc).
I think there’s definitely value in this from a content perspective. We launched a dedicated Afrikaans music channel, ja.fm, to run as a sub-brand to Jacaranda (Jacaranda Afrikaans – Ja – geddit?) that enables us to focus exclusively on Afrikaans music. We don’t believe it cannabalises our FM audience unduly. Scale on FM is much bigger than what is found online, for various reasons related to effort, cost and mobility. But it provides an engaged, active and valuable audience opportunity for advertisers. And most importantly it provides more choice to our audiences.
So often, the disruption at play here is painted as that between traditional media operators and the self-styled renegades who operate online radio. But now that Simfy has entered the market, I’ll bet we’re both looking at their model with the same level of curiosity albeit from the same side of a pretty haphazardly planted fence.
It’s obvious that digital environments provide room for massive innovation in the delivery of content and the matching of this to preference. So these new-breed music options will no doubt attract a fair amount of uptake from those with the devices and (most importantly) desire to consume customised content.
Will it overtake linear options if delivery playing fields were level? I guess it could if the effort to customise and select is as close to zero as possible. The more intuitive it becomes, the better it will do.
But in the next five years? It’s unlikely to come close, given that these metaphoric fields will remain so uneven. FM is still so easy (particularly in the car), so regulated, and for now, at least the interspersing of music with up-to-minute traffic, weather, news and personality is still the territory of the ‘one-to-many’ broadcaster model.
The cold spoon for the rise of consumer choice is the comparative lack of similar innovation in the funding models though. As new platforms and new media models proliferate, I honestly don’t think a single advertising industry can make it worth everyone’s while.
With allowances for normal economic growth, virtually the same number of paying clients will exist in five years time that exist today. Even if consumers decide that paying for content is fair enough, these platforms then stand in line to access individual purchase decisions with all manner of new competing options.
So advertisers will look for consolidated audience options, and that means that the only correct view for media owners in these circumstances is to seek out ways to build audiences, understand those audiences, and we do this by finding them where they want to be. This means embracing every new opportunity to listen to them and reach them. If we keep viewing these opportunities as threats, we will never be a part of the future of radio. n
* For other views on radio’s continued viability for advertisers and listeners, check out the RAB website: www.rab.co.za.
Nick Grubb is Kagiso Broadcasting chief operating officer. follow him on Twitter @nickgrubb
This story was first published in the October 2012 issue of The Media.
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