Your Daily Radio or the Death Star is finally here for Radio.
Updated: Jun 20, 2019
Back when the world was young, and Gods and Monsters strode the earth ( around the mid-nineties) there arose a new thing, called Satellite Radio.
It was largely a response to the awfulness of Radio, which in the throes of industry consolidation was desperately seeking to pay massive debt by increasing spot loads and cutting costs via syndicated programming and centrally generated playlists. Radio got so full of ads, and so generic sounding that listeners hungered for alternatives. And Sirius, then XM, created them.
For those of us then toiling in Public Radio, this was a sobering moment. Hmm--'subscribers' to an ad-free, comprehensive music service and a source of national news...sounds a lot like 'members' who support our ad-free radio service with its musical niches and national news. And their subscription fee is priced just about what our basic memberships costs. Can we create enough value with our local service to compete against this? Or is this the Death Star--hovering above our markets from space, ready to beam a continent-sized signal cone that will compete with and destroy our business model?
Well, those fears turned out to be unfounded. Sirius and XM merged, and now happily run a subscription service with 25 million members, and this happened over the same years that public radio nearly doubled its audience to a 30 million weekly cume. There was room in the world for both. Win-Win.
But Radio's audience has now plateaued, despite the ever more desperately cheerful headlines from Nielsen about "music discovery by teens" and "reach". Even Public Radio faces an aging demographic, struggles to maintain its cume, and only the largest stations can afford to add significant value through news and events. Much of this is from the confluence of smart phones, music streaming, podcasting, YouTube, mobile apps, demographics and fierce competition for ad dollars.
And in this delicate moment of Radio's vulnerability comes: Spotify's Your Daily Drive, a curated mix of your musical preferences mixed with your favorite podcasts and local news updates.
It uses the data mined from your Spotify listening, and the data of 140 million other users, as processed by the some of the planet's leading Machine Learning scientists. And it now has access to not only your music habits, but your podcast listening. Spotify's acquisition of Gimlet and Anchor vaults them to the front of the podcast pack. The UX, while not flawless, is vastly superior to Apple's Podcast app, and getting better as they continue to iterate. In my case, it has locked my listening into the Spotify ecosystem almost to the complete exclusion of my other audio apps.
Spotify's expertise in predictive analytics has been shaped into a sword, and is now thrust directly at Radio's throat: Drive Time, or more specifically, 6 am to 10 am as measured by Nielsen's quarter hour increments. This is where the the majority of radio listening happens, and the cash cow for any radio operation. If Daily Drive can make even a small inroad into this time period, it is not just a flesh wound, it's a nick in the carotid artery.
Will it scale? After all every car has an FM radio, and not every driver uses Spotify. We will see.
But it's safe to say that the Daily Drive UX will improve, and improve at the speed of software development. Spotify doesn't think of its audience in quarter hour increments in order to generate reports every 90 days, like Nielsen does for its radio clients. Spotify looks at its audience in Real Time, and provides updated curated content daily.
Commercial Radio, despite the growing list of threats outlined above, hasn't changed appreciably since FM. Spotify iterates constantly, most recently by expanding into spoken word.
So, while the Satellite Radio scare was a false alarm for Radio, I think the writing is on the wall. Analog Radio is chained to an older, aging audience (notwithstanding teens, trapped in the car until they drive) and its cash cow (the morning drive audience) is facing a full frontal assault. I suspect it will fight a tactical retreat into Sports and ever more generic Pop/Country while adults 18-49 12+ continue to abandon it for better alternatives, led by Spotify. Ad dollars will eventually chase those audiences.
So Radio's demise by Death Star won't come from the heavens. It will come/is coming from a precisely engineered, inexorably spreading virus, and attacking a host that, despite years of warning, has remained woefully unprepared.