Wonder why Pandora tanked?

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Permalink Reply by Ken Dardis on June 24, 2011 at 3:04am

Chris:

I'm not sure what your intent is with this comment. First because I'm not aware that "Pandora tanked" and, also, because I look at the "Infinite Dial" report amazed that radio on the internet is getting as much attention as it gets (given that its only been five years since broadband has been in a majority of homes, "mobile" is relatively new, and there's a consumer/advertiser learning curve which is just now being taken seriously).

Pandora is a single company that's capturing the attention of a vast number of internet users. But don't just keep your eyes on it without looking at the ten thousand-plus other internet-only stations that are gaining audience, too.

The comfortable feeling that people in broadcast radio feel because they see a statistic showing "93% of Americans 12+ listen once per week" would feel a little less comfortable when you start divvying up this number - 93%/13,000+ radio stations (which are further splintered by formats) leaves how many listening to each station. What is the reach in your town for your station(s)? I'd bet it's not 93%/week.

There's documented evidence of ad dollars moving into new media. We have a definite showing of youth embracing technology in ways that are being ignored by traditional radio. Ad agencies are just now beginning to understand how to use analytics and metrics available through server logs (and software) that gives instant feedback on not only how many people heard a commercial online but how many responded.

Pandora hasn't tanked. Its the first week of trading and we see profiteers making money off less-savvy investors - which we've seen many times in IPOs. Let's give it six months. Revisit it then and see how many advertiser have moved their money to the Pandora (or another internet radio) platform.

One reason radio's gone from $21 billion/year to $16 billion/year in revenue is because of this industry over-confidence that "everything is fine." "The naysayers are wrong."

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Permalink Reply by Don Collett on June 24, 2011 at 9:02am

Ken,

I'm with you.  I've been running an internet radio station myself for a couple of years now.  It's a small (read: just me) operation, but I've seen increases in audience every month for the past six months.  I'm just a drop in the ocean compared to Pandora's numbers, but I'm happy with it so far.

I started it for two reasons:  first, I was out of radio at the time, and wanted to still be involved in some way.  Second, I knew that someday, maybe sooner than later, that online services would be available everywhere you go, even in the car, and I wanted to be there and established before that happened.  Online radio won't go away, and neither will terrestrial radio (at least for a long time), but ignoring the competition (which, when you get down to it, is ALL media) is not a smart thing to do.

 

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Permalink Reply by Rod Schwartz on June 24, 2011 at 1:03pm

Don,

 

Congratulations on your start-up internet station.  Reading between the lines, I'm guessing that you started it more out of a personal interest in radio than as a revenue-generating business enterprise (whatever the future might hold notwithstanding).  Would love to learn more about how you went about launching it - the hurdles and hoops you had to negotiate - and what your day-to-day operation involves.

 

Ken, as you may know, a year or two ago offered to help displaced radio folks start their own stations by providing a fairly robust turnkey startup package through his company.  Until now I've not thought to follow up on the details of who won his generous awards and what/how they're doing with them, but I'd love to learn more about them, too.   

 

I'm neither an air person nor a programmer; my professional interests are pretty well confined to the sales and advertising aspects of our business.  That said, it's a fascinating time to be in Radio.

 

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Permalink Reply by Don Collett on June 24, 2011 at 5:49pm

Rod,

You guessed correctly that my net station (found here) was -- and still is -- a labor of love. I was out of work in radio for the first time in over two decades, and vowed to leave it all behind.  Well, as it goes with many of us, I really began to miss it after a year of working in retail. I started reading up on what it would take to start a station of my own, because the idea of programming a station without any strings attached really appealed to me.  There's a lot more detail to it, which I'll be happy to share later on.

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Permalink Reply by Chris Rolando on June 26, 2011 at 7:21am

Ken:

Without getting into an entire philosophical debate on the future of the medium  (that is going on in other forums on line and it is quite interesting), the Pandora IPO did in fact take a dive quickly.  Yes there were profit takers, but that showed that there were not as many people lined up to take a part in this as some expected.  Once again, as has been the case with most everything internet, save Netflix, Ebay and a few others.... there was no income model. 

 

Is newspaper and magazine threatened by the Internet?  I think we can see that as we watch countless examples of change that the mediums are trying to implement.  Even television is changing.  But until a delivery method can be developed to reach people in cares with an internet stream, Radio will hold strong.  Og I am sure there will be more attempts at this... cellular technology MAY be employed... but in an age where every carrier is implementing throttling, and unlimited plans are being eliminated... I wonder.  Can it be done though WiFi?  SURE, but under what incom,e model does that kind of build-out make sense?

 

My point, using the Arbitron's OPINION BASED survey is simply this...  that radio remains the highest adopted technology out there with an opt-in rate of 96%.  We will always be threatened, (Cassette players, CD players, MTV, iPods, iPads, Cell Phones....) but the fact is that local radio has an inexpensive delivery method that is 100% scalable, and with easy to obtain end user devices.  It will be very difficult to cath us, much less pass us.

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