A new station launches, and listeners quickly abandon their current stations and switch. Initially listeners think the new format is wonderful. Listeners overlook the bad songs, the weak jocks, and marketing that hasn’t quite jelled.
The station has a brief honeymoon to fix things up, but if it doesn’t, the station’s flaws will become more irritating, and listeners will abandon the new station drifting back to the stations they listened to before.
We believe digital alternatives to terrestrial radio will follow this same arc. Digital audio initially elicited wonderment. People were astonished with all the new digital alternatives to terrestrial radio. Satellite, streaming, and online radio stations were shiny and bright. The expense, the inconvenience, and poor content were ignored.
Over time, however, the novelty wears off. Whether it is the expense, the inconvenience, or poor content, the weaknesses become more apparent and more irritating.
We believe we are well into the second phase of familiarity, and perhaps now moving towards contempt.
Satellite has stalled and is now losing subscribers. New streaming services are not expanding the options, but rather replacing the services that are failing.
Blind confidence that digital audio will succeed has been replaced by serious discussions on whether advertising based services can survive. As we recently noted, British commentators have flatly declared the advertisement based model DOA. Slacker, Pandora, and Spotify have all added pay tiers in hopes of generating additional revenue.
Further evidence that digital has moved well beyond the astonishment phase is the perception of Madison Avenue. Here’s what Jack Feuer recently wrote in a MediaPost blog appropriately titled Eat or Be Eaten:
Digital agencies get the glory, the money, the girls, the business and the media attention. Sooner or later, though, they'll get theirs. Because they know the tech but they don't understand the art. They also talk a good game.
But there's one word they think they've co-opted, which they will soon discover is the technological equivalent of a window. That word is "content."
The digital communicators don't really get content. They act like it's a commodity. It isn't. It's the heart and soul of communication.
With all of radio’s faults, weaknesses, and recent missteps it remains unchallenged in audio content. Despite digital’s huffing and puffing, terrestrial radio remains in the driver’s seat because radio understands content and owns the best.
Listeners are coming to this realization. Madison Avenue is slowly coming to this realization, and unless radio really screws up, there is little digital can do about it.