November 5, 2014
Not the weather outside, although Fall has arrived in New England. I’m referring to Forecast 2015, coming up on the 19th of November. It’s the annual gathering of broadcasters, investors and financial advisors who provide the capital to keep our industry vital and growing. I am pleased to be the moderator of a discussion with three respected investment leaders. Artie Burns of Citizens Bank, David Bank of RBC Capital and Brian McNeill from Alta Communications will join me for a lively discussion of how our industry is viewed by investors.
This is a significant topic, for I believe that a number of investors are not fully informed of the strides that the radio industry has made to adapt to the ongoing digital disruption of our industry. It is more important than ever that representatives of our innovative radio companies explain what they have done to transform their companies; which experiments are working and which efforts have failed. Too often, our pitch for radio sounds like an effort to put a happy face on a low-growth industry.
While it is true that the past several years have been challenging, the important thing to note is that broadcast radio has fared very well in comparison to other disrupted legacy media such as newspapers and magazines. We are also a natural companion to digital initiatives, complementing their one-to-one engagement with a one-to-many delivery of the message. Broadcast can get customers into the purchase funnel; digital can convert them to purchasers.
Each year for the past five year, radio has shown growth in its digital revenue, proving that we have adjusted our efforts and are now serving our clients with integrated, multi-platform solutions. Certainly, I would like to see more revenues from more clients, but we need to remember that clients have many more of competing sellers to choose from. Radio account executives now compete with a broad spectrum of pure-play digital sellers, digital business directories, self-serve search and SEO platforms and online display ad networks that number literally in the hundreds.
We are optimistic that, as this period of client experimentation evolves, radio can and will leverage its historic advertiser relationships to aggressively retain and expand our relationships to include full digital services. A number of innovative radio companies are moving in exactly that direction; the activity is there and we will see it in the revenue metrics.
The radio industry is in the midst of transforming itself into a trusted, results-oriented media company, and in that process, will create relationships with an entirely new class of local advertisers. Whether we are making sales calls to a traditional broadcast client, an integrated program buyer, or a digital-first advertiser, radio sellers will become more adept and knowledgeable about a very full range of tools that can be brought to bear to solve client challenges. We have a long track record of effective brand-building, promotional integration, and excellent ROI that point to a promising future.
These points are often lost on an earnings conference call, or even in a capital call meeting. It takes time to fully explain how innovative radio has become. We have some excellent broadcast leaders doing great things, and we need to have them on hand to make their case to our investors. It is a necessity and a privilege to have someone invest their hard-earned capital in your business endeavors. To maintain their confidence, we need to share our future vision with them.
October 1, 2014
The evolution of the car radio into an infotainment and communications center continues at a brisk pace. During the past year, we have seen both forward and backward looking decisions as all of the actors in the automotive space jockey for proper position.
AM radio has been banned by BMW from their electric i3 and i8 EV, even though other electrics and hybrids found a way to eliminate the interference. General Motors has removed HD radio from some truck and car models; added it to some others and given off contradictory signals.
What does this mean for radio’s future in the car? Bluntly, probably not that much. These two developments could be a harbinger of bad things to come or they could simply be another bump in the road as the auto companies explore the way forward. The center stack, as it is called, has become the home for so much more than the simple radio that used to take up that space.
In the past year, we have seen the deployment of in-car wifi as well as in car 4G LTE modems. This has opened up a new dashboard function called “advanced driver assist”. That’s technospeak for smart sensors that will activate the brake if there is an obstruction behind you as you back up, or even avoid a rear-end collision by bringing your car to a rapid, safe stop mere feet away from the guy in front of you who slammed on his brakes.
These functions are the foundational elements of the autonomous or self-driving car. No flying cars like the Jetsons yet, but the self-driving car is somewhere out there in the foreseeable future. And why is that significant for radio? Because all of those computer-aided electronics and communications will also run through the center stack.
Automotive engineers not only have to develop an in-dash entertainment system that is easy and intuitive for real people, but they now have to absorb and manage an ongoing stream of data to and from the car, networks and other intelligent cars. The amount of computing power, sophistication and machine intelligence required to do all of this is growing each day.
So, car types have a lot more on their plate than radio reception and ease and safety of use while driving. They have big plans for the center stack, and are in a global competition not only with each other, but with Apple, Google and the big wireless players. How does this all shake out, and what is broadcast radio’s place? Are we now part of a larger universe called “audio”? Should we be streaming? What about time-shifting? Podcasts? How about the Artist Experience in HD Radio?
For all of these reasons and questions, I am making sure that Greater Media is well-represented at the upcoming DASH Conference in Detroit on October 15-16. Last year, it was an eye-opening experience. It is an opportunity to get outside of ourselves and our radio-centric view of the world, hear how the other industries who have a stake in the future of the car dashboard are viewing the last twelve months’ progress, and get an idea of what their priorities are for the next year. When we are all moving quickly, much can be lost unless we take the time to sit in the same room and listen to one another. We need to know what the stakes are and refine our expectations for the future. We cannot take our historic place in the car for granted any longer; the latest estimates are that there will be 10 million connected cars on the highway by 2017. That is only three years from now.
That’s ten million and three reasons why DASH is so important.