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Ignoring Apple Music: Should Terrestrial Radio React? A message

    • 1361 posts
    June 26, 2015 12:48 AM PDT

    From Eric Rhoads' Ink Tank blog:

    Ignoring Apple Music: Should Terrestrial Radio React?

    A message from Radio Ink Publisher Eric Rhoads

    Should you ignore Apple Music? Or should your station react?

    History shows that established companies with first-mover advantage ignored Apple. Phone manufacturers did it before the iPhone, MP3 players were on the market before iPods, digital music services existed long before iTunes, and others were even producing small tablet computers before Apple came up with the iPad. But those manufacturers underestimated Apple's ability to reinvent -- to take something people were already familiar with and make it hip and mainstream. And that meant that many of these companies reacted too late, and most lost a giant portion of their market share. Apple is always disruptive: They look at a product and ask not just how they can make it better, but how they can make it a hundred times better.

    History also shows that radio responds to every threat -- typically long after the fact, and with defensive spots talking about "the power of radio." We did it on the launch of satellite radio. We did it in response to the buzz around iTunes and Pandora. Heck, we've been doing it for decades. Our response is always radio spots, because that's what we do best (and it's free). But, to my knowledge, we're not even doing that over Apple Music. And frankly, with Apple's domination of network and cable TV, and their ubiquitous Facebook and YouTube ads, radio ads alone wouldn't be enough to counter it anyway.

    On June 30, Apple Music is launching. Radio's response, it appears, is more of the same: nothing. That is, until we see it cutting into our advertisers and audiences.

    Why no reaction? It may have to do with defensive statements like....

    "It's not a sustainable business model due to the cost of streaming and data consumption."

    "It's too costly to pay for music licensing."

    "Radio has 93 percent of people listening in an average week."

    "Consumers have deep relationships with local and national radio talent."

    "Radio doesn't have the burden of streaming and licensing costs."

    "There's a radio in every car."

    "Not every consumer has a smartphone."

    "People have been coming after radio for decades, and it's never worked. They said cassettes, CD players, MP3 players, and cell phones would destroy radio listening."

    But what happens when the world's most valuable corporation decides to go after radio?

    What happens when Apple tells the world that it will fund Apple Music based on user experience and it doesn't need to be profitable?

    What happens when a new Apple Music "radio station" launches by dominating national television for the next few months, at the beginning of the high summer listening timeframe?

    No one knows, really.

    But if history is a measure, then radio should be shaking in its boots. Of course, so should Spotify and Pandora, maybe even more so.

    Advice From a Wise Executive

    Years ago Arbitron's Rhody Bosley told me (I'm paraphrasing), "Now that radio has consolidated, they no longer feel the need to promote. Gone are the big prizes, gone are the TV ads and billboards. One day they will find out that the lack of promotion will result in a decline in listening. We've found that promotion does increase listening."

    Though there are rare exceptions, very few radio stations are promoting themselves on television or boards or other outside media. Of course, iHeartRadio is doing a killer job of this nationally, with network television awards programs and loads of publicity, and Cumulus' NASH is doing some of it as well. But what about local stations and brands?

    Your Listeners Will Sample Apple Music

    I've seen two different TV campaigns Apple and Beats (Apple-owned) will be using for the rollout of Apple Music. (Watch them here.) They are emotional, play off of people's love for radio and music, and show the first "world radio station" with the concept that we are all one world, with one love for music.

    They also present Apple Music as the next iteration of radio, as they show the old days of broadcasting, through the '50s and into the present. Apple has made the product hip, and you can be sure that everyone with an iPhone will check it out and play with it. The radio industry can't do a thing to stop it.

    What Happens Next?

    Will consumers stay with Apple Music? Some channels are all music, all are curated (programmed), and some even have top air talent. What does Apple not have that radio has? It has no deep local content -- and no long commercial stop sets.

    We have to assume Apple is counting on consumers experiencing Apple Music and comparing it to their local radio experience. No commercials (or very few) vs. stop sets that run 12 minutes or longer.

    Should Radio React?

    If you're arrogant, believe that nothing can touch radio, and know that your listeners are loyal to a fault and nothing can ever take them away, I suppose you don't need to respond to Apple Music. You'll just have to wait and see.

    But I think every music station should be reacting. Not by mentioning Apple Music or just being paranoid, but by being ready for the summer months when consumers will be flipping between radio and Apple Music during their three-month free trial.

    1. Cut out all unnecessary clutter.

    2. Reduce spot loads, and when possible go commercial-free.

    3. Seek ways to deepen the relationship with your local talent.

    4. Increase and enhance what Apple cannot do (yet): localism.

    5. Promote like crazy now. Get people tuning in and coming back.

    6. Promote outside of radio. Remind people of their love for your station.

    7. Make sure your stream is easy to find, and promote where to find it.

    8. Be talent-centric, but not overly so.

    9. Play the hits. Tighten up your list.

    10. Find ways to draw on listeners' past emotions toward your station and the cool things you've done.


    Last, you need to be prepared as every advertiser sees Apple's promotion and starts asking about how it's affecting your business and listenership. Here's a tip: Don't be defensive. Apple, Pandora, Spotify -- they're each just one more station people can choose from, and consumers will push buttons like they always have. It's believable -- because it's true.

    Is It Over for Radio?

    Absolutely not. Your listeners do love their local stations and talent, and they like Pandora. Apple will either erode some broadcast listening, or it will erode Pandora or Spotify listening -- unless, of course, Apple blows it. It's possible.

    I don't think radio will die because of Apple Music, but I don't think radio should be overconfident, either. Other MP3 players -- from Creative, Diamond, Archos, even Sony -- were gaining traction everywhere when Apple crushed them with the iPod combined with the iTunes library.

    In every business, you should assume a competitor can make even a slight adjustment to its business model and end up crushing you. Newspapers were proactive on the Internet, knew it was coming, and thought they were ready, but they didn't anticipate the strength of Craigslist, and it destroyed them. Never be cocky or arrogant. Assume you can always do more to protect your turf.

    Why the Summer of 2015 May Be Your Most Important Ever

    Radio has always been the soundtrack of summertime. But the new portable "transistor radio" has been rediscovered in the smartphone, and broadcast radio is under direct attack. You need to consider that if you're going to react, the next 60 days are when you should lighten your clutter and commercial load. Will you? When dollars are necessary, probably not.

    Should you? It could make a giant difference. Yes, for your commercial load to feel as light as Apple's, you'll need to air almost no commercials. My guess is no one is willing to take that risk, and everything will go on as usual. And that's exactly what Apple wants. This is no different than when a new FM launches against you with no commercials. After they get your audience, they'll change. The key is not letting them get your audience to begin with, so the best response is to match their consumer promise until it doesn't work anymore. This is risky -- Apple has more cash than anyone and can string this battle out for a long time. Will anyone have the courage to try it?

    Being Pragmatic

    I remain a believer in the power of this great medium we call radio, but I'm also pragmatic. When we're under attack, the guns have to come out and the soldiers must be readied for battle. History has seen many battles lost because of arrogance and lack of preparation. Apple Music's success lies in your hands -- far more than you think.