Will Radio Really Be Dead in 10 Years?

The Internet will change radio. It already has and it will change it even more in the coming decade. NPR President and CEO Vivian Schiller thinks the change will be so rapid that traditional terrestrial radio will be dead by 2020.

The implications for public radio are staggering whether she is right or not. NPR is the 800 pound gorilla in public radio. Its corporate position and planning dramatically affect policy, funding, spending, and partnerships throughout public radio. NPR itself won’t cause traditional radio to go away but this new posture could accelerate the process and damage member stations and NPR along the way.

The next few RadioSutton postings will explore the implications of NPR’s new position and will test some of the assumptions being made by NPR and others on the future of public radio.

Today -- will radio really be dead in 10 years?

A large part of Schiller’s logic rests on the assumption that bringing the mobile Internet to cars will kill the need for broadcast towers. Built into that assumption:

• By 2010 every vehicle – or at least the vast majority -- will be equipped with the technology to receive mobile web services, even if it’s just a mini jack for a mobile phone
• A vast majority of vehicle users will be willing to pay fees to access the those services in every vehicle
• A vast majority of people will replace the 3 to 5 radios they have in their homes with wireless Internet audio devices
• Portable radio use – such as listening on a walk, at the beach, or at a ball game – will occur completely on mobile Internet devices or go away all together

Let’s do some numbers.

There are 254 million passenger vehicles registered in the U-S today. The median age of cars on the road today is 9.4 years. The trend is for people to hold on to cars longer these days but let’s assume the median age of cars doesn’t change in the next decade.

In 2020, half of all cars on the road will be from model year 2011 or older. Put another way, almost half of all cars expected to be on the road in 2020 are on the road today.

A small fraction of cars in 2011 will come with pre-installed mobile Internet devices. All of them will come equipped with radios. That trend will continue for several, if not many, years.

Implicit in Schiller’s vision is that cars will eventually come without radios at all. Why put a radio in a car if there are no towers? That argument assumes there will be a tipping point when listeners across almost all demographics and all radio formats, commercial and non-commercial, will abandon the free radio on the dashboard for mobile content that costs money in the form of data usage. The argument assumes the same behavior will simultaneously occur in the home over data networks and personal wireless networks.

Based on Arbitron data*, some 228,000,000 people age 12 and older use broadcast radio each week. Billions of time each week, they choose to turn on the radio. They spend more than 3.8 billion hours listening to broadcast radio each week.

How much of that behavior has to change and how much of that consumption has to go away to kill the entire radio broadcasting industry? Technology itself won’t be enough to drive the change. Certainly not in just 10 years. The listening experience has to be better too, worth paying for with at least data costs. That’s not going to happen in the next decade either. The overall marketplace will change some, but not that fast. Radio will still be around.

Public radio stations will still operate their transmitters in 10 years. The question now is whether it will be economically viable to broadcast NPR News over those signals. That is in Vivian Schiller’s hands today. More in the next posting.

* Source: Arbitron Radio Today 2009

And We're Back...

It's been a few months since the last post mostly because it's been an extremely busy fundraising season. Posts will start coming more frequently beginning next week. Among the topics you will see:

1. AudiGraphics analysis for PPM is now available. It's turning out to be a very powerful way to evaluate Arbitron's PPM data for programming. You will see specific examples of this.

2. Why not letting NPR raise money directly from listeners is ultimately bad for public radio.

3. Ideas on creating strong lines of accountability as CPB begins to invest in growing public radio's audience. Recent history shows us that a lot of money will be wasted without that accountability.

4. What DEI Benchmarks tell us about public radio's fundraising future.

5. The Best of Public Radio summer fundraising special.

We'll be at The Public Radio Development Marketing Development Conference in San Diego in a few weeks. Hope to see you there.

Forgive Us Our Deficiencies

Arbitron's Portable People Meter (PPM) shows that public radio's on-air pledge drives cause significant disruption in listening patterns. Daily Cume and daily time spent listening almost always drop, sometimes by more than half.

Early PPM results also show that listening comes back up to pre-drive levels within days of the drive's conclusion. A quick look at commercial radio listening also shows pretty fast recovery times after tune-out events.

Initially, the fast recovery times seem surprising. But they shouldn't be.

Roughly two-thirds of the audience at any given moment are core listeners to a station. They listen to that station more than any other. They obviously like the programming. They became core listeners in spite of pledge drives, commercials, and the occasional bad music selection, talk show guest, or talent miscue.

In short, they have learned to work around or live with the station's deficiencies.

Knowing this isn't a license to abuse the audience. There's probably a fine line between acceptance and intolerance on many programming choices. But this behavior shows the power of programming that resonates with the listener. And it's a excellent reminder that investing in good content and great execution always has a payoff.

The Demise of Age/Sex Demographics?

Arbitron's Portable People Meter (PPM) data reaffirms public radio's appeal to college educated listeners. Public radio's ratings performance is best among people with a college degree or higher.

While college educated listeners are our strength, the majority of college educated listeners don't use public radio on a weekly basis. The data suggest that public radio might still be more a niche medium than we thought.

That niche has served public radio well. That niche will serve public radio well into the future and it might provide an example to all radio stations trying to succeed in a constantly fragmenting media marketplace.

Age/Sex demographics are great for selling radio time as long there are fewer choices for listeners and a substantial audience has been aggregated. But the industry is moving in the opposite direction. Age/sex demographics will be far less useful if HD is the success the radio industry wants it to be, slicing the audience into even smaller cuts. The same holds true as listeners disperse to other sources of radio-like content.

Those who sell underwriting for public radio understand the challenges of trying to explain it to potential buyers. It's not a big format like "country" or "rock." Those big formats have been going away for a while. The process will accelerate.

The niche market of the future will have even more formats and flavors of formats than there are today. There will come a point when naming a format and showing the demos won't be a strong enough sell. It will require explanation and better research to describe the audience.

The question is, will we have that research or will radio be stuck selling in a new market with an old sales model?

PPM and Public Radio Pledge Drives

Earlier today, John Sutton & Associates and Paragon Media Strategies presented the first study on public radio pledge drives using Arbitron's Portable People Meter (PPM) data. The presentation was organized by DEI and presented with the help of the Radio Research Consortium. We'll provide a link to the presentation as soon at it is on-line.

It's early in the PPM game. We expect that some of what we're learning now will change or evolve as we analyze more pledge drives in more markets. This study analyzed Fall pledge drives in Houston, Philadelphia, and New York. Here are some of the highlights:

- AQH (Average Quarter-Hour) audiences during the drive went down as much as 36% compared to the three weeks leading up to the drive. AQH dropped because Daily Cume and Daily time spent listening dropped. Weekly Cume was affected at some stations but not others.

- AQH went up 3.7% during the pledge drive at KUHF in Houston. This was different from audience response to KUHF's Spring 2007 drive, when AQH went down 16%. KUHF made many strategic changes between Spring and Fall, including moving pledge drive producing responsibilities from the Development department to the Programming department. It is too soon to determine cause and effect, if that can even be done, but we plan to research this impressive result further.

- Audience recovery after pledge drives was quick. AQH audiences returned to pre-drive levels or higher at most of the stations almost immediately after the drives ended.

There's much more in the presentation. And we'll post additional findings and insights on the blog.

Questions? Feel free to write me, john@radiosutton.com

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Here's the link to slides from our first study on PPM and Public Radio Ratings. It's at paragonmediastrategies.com

Relationships Are In

New Year's In/Out lists are "In" this year. The RadioSutton list has just one item on it.

Relationships are In.

Of course, relationships have always been in, public radio hasn't given them enough attention.

So let this be the year that hardware and software become less important than the people they serve. And let this be the year to stop congratulating each other on what we make and start focusing on the impact it has in our communities.

I started thinking about this while working with Arbitron's Portable People Meter (PPM) data. The technology is impressive. It shows listeners' real time response to programming down to the minute. It even shows listener tune out during pledge drives.

More impressive is what PPM can reveal about the relationship between a station and its listeners. PPM shows listeners returning after pitch breaks and after pledge drives. It shows listeners to commercial stations returning after long commercial breaks. Why do they do they come back when they do? Why do they come back at all? Their behaviors not only give us insights about the value received, they also show that the listeners have developed a relationship with the station.

After the last few years of trying to figure out what web streaming, podcasting, HD Radio, social networking, and other technology tools mean to radio, it's time to ask the question, "what's meaningful to the people we serve?"

This is the year to better understand and cultivate those relationships.

First Look: Public Radio in PPM

Paragon Media Strategies’ Mike Henry and I presented the first look at public radio audiences in the PPM measurement system at Arbitron’s consultant fly-in on December 13th.

Among the insights gained from the study:

1. Public radio and commercial radio news stations don’t compete as much as one might think.

2. PPM shows that audience flow for public radio isn’t very different from the results reported in the diaries. Even though the Cume, TSL, and AQHs are different, listener behavior is very similar.

PPM is beginning to show how public radio stations can better understand audience response to pledge drives – from disruption to recovery time. More PPM insights about pledge drives will be reported in January.

You can download the presentation at the Paragon Media Strategies web site by clicking here.

Our thanks to Paragon Media Strategies for partnering with JSA on this project and to Arbitron for the opportunity to work on this study.

Resetting Reality

We’re getting a sense of how audience measurement is changing with Arbitron’s PPM (Portable People Meter) system.

If there is one lesson from the early results it is this – PPM is a new reality. Everyone who sees a PPM number immediately compares that number to its diary equivalent. That exercise is interesting for about five minutes and then it hits you that the diaries are ancient history.

The Cumes are the new Cumes. People are using more stations than shown in the diaries. Time Spent Listening per station is down. In some cases, way down. Daily listening patterns are different.

Public radio stations will not be immune to these differences in PPM and diary measurement. Some differences will be good. Others are going to sting at first.

Reality is being reset by PPM. Moreover, it is being adjusted daily. Arbitron is still working out a lot of details in the PPM system. Overall sample targets are being hit but several demographic groups are under represented. Arbitron is working to fix that. We may or may not see changes in PPM results based on those fixes.

The early reports on public radio from the PPM markets will not be the final word on what PPM is telling us about public radio. In some ways, we’re going back to the early-1980s when public radio was really just learning how to interpret audience data. The steepness of our learning curve with PPM will be largely affected by our ability to untether ourselves from the diaries.

Is the Audience Glass Half Full or Half Empty?

There was a time when almost all of the audience news about public radio was good news. The industry was growing in the face of declining radio usage. Public radio was not only attracting listeners, but also turning those new listeners into loyal listeners and, eventually, donors.

Two items published this week demonstrate how times have changed. First, an article in the Sacramento Bee touts the success of Morning Edition since the departure of Bob Edwards. The article states that the Morning Edition audience has jumped from "more than 10 million weekly listeners" to 13 million weekly listeners under the hosting of Renee Montagne and Steve Inskeep.

Well, not really. Here are the actual numbers from NPR's official audience estimates. All audience numbers are in millions:

Fall 2001: 13.0 Cume, 1.9 AQH, 567 stations
Fall 2002: 12.7 Cume, 1.8 AQH, 603 stations
Fall 2003: 12.5 Cume, 1.8 AQH, 616 stations

------ Bob Edwards departs in Spring 2004 ------

Fall 2004: 13.3 Cume, 1.9 AQH, 627 stations
Fall 2005: 12.8 Cume, 1.8 AQH, 635 stations
Fall 2006: 13.2 Cume, 1.8 AQH, 645 stations


First, and most obvious, is that the weekly audience (Cume) for Morning Edition was 12.5 million or higher while Bob was still there. That's a much bigger audience for Bob Edwards than the "more than 10 million" listeners cited in the Sacramento Bee article.

Second, the weekly Cume is up. This is probably a real increase in audience even when you take into account that NPR's audience estimate software inappropriately counts some listeners twice (related article).

The national Cume for Morning Edition is up. The glass is half full.

The AQH, however, has not changed despite the increase in Cume and the increase in the number of stations carrying the program.

AQH is the Average-Quarter Hour audience. It's the average number of people who are listening to Morning Edition at any given moment. Think of it as the average number of people who hear any single story, feature, or national underwriting announcement. That number hasn't grown.

The weekly Cume is up and the AQH is unchanged, which means the average Morning Edition listener is spending less time with the program each week. What's causing this drop in time spent listening (TSL)?

The Radio Research Consortium just released overall Loyalty trends for public radio over the past seven Fall Arbitron surveys and the news isn't so good.

Some of the TSL drop is due to public radio listeners using less radio overall. But there also is an overall drop in Loyalty to public radio stations. That is, our listeners are still using the radio but they are spending a little less of that radio time with public radio and a little more of it with our commercial competition. That glass is half empty.

There's not a lot public radio can do about declining radio usage. Fixing the Loyalty problem is not only possible, it is essential to fill the audience glass again. On average public radio listeners spend two-thirds of their radio listening time with commercial stations. Capturing a few percentage points of that listening would do wonders for public radio's overall audience and donor growth.

To NPR's credit, it is sponsoring workshops (Morning Edition Grad School) to help stations make their local presentations of Morning Edition stronger. That's a start.

Stations, however, have to take a long hard look at the times of low audience Loyalty on their program schedules and find ways to improve. Audiences are too fragile to waste any daypart on under performing programming.

It's all well and good to put on a positive public face when discussing the audience. Public Relations is a fact of business life and public radio's audience success story is a strong one, even with the recent decline in the overall audience and the flattening of the Morning Edition AQH.

That PR story shouldn't be confused with the one that shows public radio needs to take more aggressive action to keep the audience it has. Otherwise, the glass will continue to empty.

PPM and Pledge Drives

Arbitron’s Portable People Meter (PPM) should provide important insights on how listening changes, if at all, during on-air pledge drives. As I suggested in the PPM and Program Analysis post, the big picture analyses will be more important than the microscopic analyses. Here’s why.

Having looked at the currently available PPM analysis tools, it is clear that PPM data should not be thought of as comparable to auditorium dial testing. In auditorium dial testing, survey participants are instructed to listen to programming samples and immediately push buttons on a keypad to indicate whether or not they like what they hear.

People don’t always push the button in the real world. Sometimes they mentally tune-out programming they don’t like. Sometimes they wait it out. Clock radios go off at different times of the morning, sometimes during a compelling “D” segment of Morning Edition and sometimes during pledge breaks that pre-empt the “E” segment at 10 minutes before the hour. People hearing a pledge break might leave in the middle of it because that’s when they always leave the house. It will be wrong to assume that all PPM tune-ins and tune-outs are purely a vote for the programming of the moment. The meter isn’t that sensitive of a research tool.

PPM will be a valuable tool for examining whether or not a station’s weekly Cume and AQH are affected by pledge drives. There is a good chance that pledge-induced fluctuations in daily Cume will show up in PPM. We might get indications about the effects of pledge drive length on listening patterns.

One idea that comes into play is that listeners’ tolerance for pledge drives goes down as the drive progresses. A certain amount of fundraising might be acceptable before listening behaviors are affected. We should also be able to measure whether there are lingering effects from pledge drives. How long does it take to recover from any audience loss due to pledge drives?

The answers to these larger questions can help public radio stations raise more money while further minimizing any negative effects pledge drives have on listening. These are the types of questions PPM will answer, but only after we’ve had a chance to look at and understand the data from several markets. That’s a few years down the road. In the meantime, it will be important to resist the temptation to over-analyze early PPM results, especially those on the microscopic level.

PPM Update

The Portable People Meter (PPM) was the main subject of Arbitron’s December consultant fly-in. The headline from that meeting was the PPM rollout schedule. That schedule includes the “PPM Currency Dates,” which is when your diary data can no longer be used for underwriting sales.

There were several PPM items worthy of note. Today’s post focuses on some of the issues that will affect many public radio stations. Tomorrow’s post will focus on programming analysis in a PPM world.

In-the-Book: Public radio listening will be reported with commercial radio listening. This is one of the reasons PPM will be more expensive than the current Arbitron service. It also means no more flying under the radar for public radio; a point that was made several times during the meeting. PPM should help generate more underwriting sales at public radio stations in Metros.

Metro Only: PPM will measure Metro geographies only. Diaries will still be used in the TSA and DMA. Stations outside of Metros should still encode their signals for the PPM measurement. Stations with a significant number of listeners outside of the Metro are going to be at a disadvantage in a PPM world.

PPM Versus Diary: To sell commercial stations and advertisers on PPM, Arbitron has to point out the weaknesses of the diary, even though thousands of stations will remain dependent on diary data. It seems inevitable that those stations will be perceived as having less valuable data than those with PPM. In addition to the qualitative differences, the immediacy of ratings data will be an issue. There will be 13 PPM books per year. There will be two TSA/DMA books per year. Stations with significant audiences, but not in the Metro, will not be able to deliver the audience data agencies and advertisers want when they want it.

PPM Plus Diaries: TSA, DMA, statewide, regional, and national audience estimates are headed to a mixed-methodology world. Arbitron’s current plan is to simply add Metro/PPM audience estimates to non-Metro/diary estimates for any geography bigger than a Metro. The sales currency of these estimates will be limited. Based on the tools I've seen to-date, it’s hard to imagine the hybrid PPM/Diary estimates will have much value for programming analysis. Hopefully, we can change that, at least for public radio.

The Care and Feeding of Your PPM Encoder: The PPM measurement system depends on your station embedding an Arbitron PPM code in your signal. The good news, Arbitron provides the encoder. After that, it’s up to you to make sure that it is always working properly. As far as Arbitron is concerned, your transmitter is off if your signal isn’t encoded. You won’t be measured. Arbitron is working on technologies that ID your station even if it is not encoded, but they made it clear that there are no adjustments made in the ratings for stations that don’t put out a properly encoded signal. Put another way, engineers have just become more important to your station's Arbitron success.