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CMU@TGE 2017: Will It Be Streams That Kill The Radio Star? 

By and | Published on Tuesday 4 July 2017

Kate Holder

Look out for more reports throughout July on key sessions that took place at the CMU Insights conferences at The Great Escape in May. Today, the session in The Media Conference that asked “Will It Be Streams That Kill The Radio Star?”

Taking part in the discussion were Pete Downton, Deputy CEO of 7digital, a company that operates in both radio and streaming; BBC Radio 1 producer Kate Holder (pictured); Matt Deegan of radio company Folder Media and radio station Fun Kids; and Elijah Pailthorpe-Peart from Brighton’s own youth radio venture Platform B.

For all the talk of streaming companies becoming the record labels of the future, with their investment in curation and original programming, at the moment it looks more like the streaming firms are becoming the radio stations of the future. So, should traditional radio firms be worried? Could it be streaming that finally kills off the radio star?

The panel reckoned that on one level streaming was competing with radio, though on another level – for the time being at least – the services were complementary.

“People have only got so many hours in a day and days in a week”, Downton began, which means that “anything that grabs your attention is going to compete with something else that grabs your attention”.

Holder concurred: “Certainly, in terms of time available, streaming is absolutely a competitor to radio. Especially given that the young audience we’re going for at Radio 1 are so on it with technology. Anything that eats into their time is going to eat into the time they would spend listening to the radio”.

Deegan, with stats to hand, confirmed that it was with the youth demographic where streaming was starting to have an impact on radio’s audience figures. Though – as with audiences at large – it’s less about losing listeners outright, and more about having listeners tuned in for less hours each week. “If you look at 15-24 year old demographic” he said, “reach has dropped a little bit, not dropped a huge amount. It used to be 80%, now it’s about 75%. Where the bigger drop’s been is time spent”.

Even if listening hours are down, radio is still reaching much of its traditional audience, Downton reckoned, because – as it currently stands – what Spotify offers and what an FM radio station offers remain distinct.

“The streaming services as they are today, specifically Spotify as market leader, are so fundamentally different to radio that actually I think it’s a little bit early to start drawing really significant comparisons between the two”, he said. “Spotify, for a music fan like me, is amazing. But essentially it’s a utility in that it allows me to find music I want to find, and leverage algorithms and some curation to find something that’s a bit like it”.

For all the talk of streaming firms doing music discovery better, radio still has an edge in that domain, the panel reckoned. “I don’t see streaming as a full on competitor”, Holder said. “Because the sort of people who we are targeting with specialised music content are hopefully discovering new artists with us”. Which is to say, even for full on music fans, radio can provide discovery channels to inform listening on the streaming platforms.

And then, of course, there’s the more mainstream consumer, many of whom are yet to embrace streaming at all. “What really matters is the ‘passive massive'”, Downton agreed. “The mainstream consumers for whom music’s always been a part of their lives but they just don’t have the time to go and figure out how to use these new platforms”.

Despite some interesting innovations, the streaming services still need to evolve to truly engage that more mainstream audience. “I’m incredibly encouraged to find that streaming services are starting to pick up some tricks and pick up some talent from radio”, Downton added. “Anything that makes it more engaging and the experience deeper makes it more likely that people will fall in love with artists and music and spend more of their time doing it”.

Given that the big streaming platforms are in the scale business – and need further significant growth to become truly profitable – that more mainstream audience is of great interest to the digital firms, of course. Which means that the streaming platforms may seek to compete more head on with more traditional radio in the future.

“Some of them replicate what radio does”, Deegan said. “Some of them do it better than others. But they mostly misunderstand what radio is. Apple’s Beats 1 is a brilliant example. It’s a great radio station – the programming’s great, the producers are doing a great job, it’s brilliant. But no one listens to it and they don’t listen to it because it’s very difficult to consume it. It’s difficult to find it even though it’s free to use”.

One of radio’s strengths, Deegan added, is just how easy it is to find wherever you might be. “What a lot of the services forget is that we’re incredibly lucky in radio”, he said. “We’ve got to be careful not to forget what a brilliant position we’re in with devices, because everyone has a radio. Radio is in your smartphone, your TV, your car. So like a virus, we’ve managed to colonise lots of different places and that’s one of the reasons we do well. The difficulty, even for Apple with all of their money and all of their marketing skill, is to find an audience because actually they have poor distribution”.

That said, for millennials, many of whom are constantly connected to their portable devices, the ubiquity of radio is arguably less important. “We’re all connected, we’re all very much plugged in”, Pailthorpe-Peart agreed, speaking for that demographic. “So streaming services inevitably become the thing that you grab for first when you’re searching for new music. We know that YouTube is the number one tool for discovering music for the younger demographic”.

For younger consumers, content on demand can be key. “Millennials have this ‘want it now’ perspective, where we like things to be on demand”. To that end, he reckoned, younger listeners are more likely to connect with radio via its on demand platforms. “So, even if we are consuming FM radio, it might not be that we’re actually consuming it on FM, it might be that we’re consuming it on MixCloud or SoundCloud”.

Despite the millennial challange, Deegan remained optimistic, pointing out that the aforementioned ‘passive massive’ are yet to be convinced by subscription, while also seeking a service that just plays music with minimal involvement from the listener.

“The view is that the ‘passive massive’ aren’t necessarily going to go straight in for a subscription”, he said. “Also, a lot of radio’s audience very much want someone just to spoon-feed them a load of songs they’re familiar with. A lot of commercial radio’s success has been about playing the same songs over and over again to a similar audience. There’s nothing wrong with that. There’s lots of radio stations that do lots of different things of course, but to get that Heart listener, to convert them into a Spotify subscriber, that’s a long journey”.

Actually, Deegan continued, if digital is a threat to radio, the threat is more likely about web giants competing for ad income than streaming firms competing for audience. “People moving budget from spending on radio or telly and moving that to spend on digital and online, that could be an issue”. That said, he added, commercial radio in the UK had its best year last year, “though that’s partly because of what Global and Bauer are doing in the marketplace”.

Either way, and despite the general optimism, the panel agreed that the radio industry needs to continue to innovate – partly by embracing online channels for its content, but also working out how to link those back to its core output.

Holder: “We know that our audience are completely at the forefront of new technology so we have to be there too, we have to be in the spaces where they are. It’s kind of expected that if we have a big guest, or an artist of note, that we wouldn’t just have them on the radio, that’s not really enough in 2017 for a young audience. We’ve gotta have a video to go with it, and some easy way to get that content straight away, without having to click too many times or having to discover it. That is where I think Beats 1 has gone a bit awry, because they’ve got some great stuff but it’s very difficult to find”.

Check out all the reports and resources CMU has published around this year’s CMU Insights @ The Great Escape conferences here.

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