In the past I have been on both sides of the issue of radio doing a deal with Sprint to include a radio chip in their cell phones. I love the idea of your smart phone becoming a broadcast radio. There is really no reason to exclude a radio tuner from the smart phone except it cuts into the data usage the cell companies depend on for income.
Well Sprint and radio have found level ground on this issue. Sprint needs to do something to help it stand out from Verizon, AT&T and T-Mobile. Radio needs a partner willing to help it get both feet into the online world and on to smart phones. And a partnership is born.
My concern in the past was about the money radio was paying to Sprint in order to get on the phone. I was afraid radio was never going to be able to partner with the other three companies without also having to come up with millions of dollars in advertising for each of those companies. I spoke with Emmis CEO, and the driving force behind this plan, Jeff Smulyan about his ideas and why this is the way for radio to get in the game. Jeff is 100 percent correct that leaving the phone to Pandora, Slacker and Spotify will ultimately leave radio off the landscape and then off the listener’s agenda.
He quickly answered my advertising concerns by going back to the beginning of Wi-Fi in America. Verizon and AT&T were not on board with Wi-Fi when it was first introduced. It wasn’t until the consumer said loudly, “Give me my Wi-Fi” that they got on board. Mr. Smulyan sees the same thing happening with the NextRadio app ready for launch in the coming months. And the advertising supplied by radio is not going to be used to sell the phone or the service, thus not cutting into what is one of radio’s most important categories.
There is no question cell phone manufacturers are as hyper-sensitive to the consumer’s likes and dislikes. If this wasn’t true most cell phones would not look alike. They all do about the same thing and today how many pixels your cell phone camera has seems to be the battleground. This app and it’s associated programming, is really slick and looks like it will be fun to operate. It puts a great deal of information in the listener’s hands and allows a great deal of interactivity. Certainly it will become a cutting edge area if the consumer likes it. And the other carriers will be forced to get on board.
It also creates opportunities to make non-traditional revenue for broadcast radio. Streaming has not been profitable for radio. And certainly it is not profitable for the other streaming companies. Pandora is learning that losing money on increased usage by listeners cannot be made up by increased volume. The hole gets deeper and this is where the NextRadio app has a key benefit.
A significant point to be made about this system, versus the other systems, is the NextRadio app does not use your data plan. That’s right. Today listeners are surprised when they get an email from their carriers informing them that using the streaming music services gobbles up a lot of their, now capped, data plans. You can upgrade most plans for $20-$60 a month. Smart phone users will have to answer. I can tell you I already pay $260.00 a month for my family plan so the odds of me adding to that are slimmer than a Galaxy S4.
As this plan moves forward radio is going to have to get on board and provide spots for network use and spend more air time promoting this service so it doesn’t get lost in all of the cell phone company messages in print and on TV and radio every day. To the artists and record companies, who know radio is the avenue to getting their music to the listeners, this is a win-win. It is another way for you to reach the record buying listener, as the app makes clicking and buying very easy.
Record companies would be served to learn more about this system. They would be smart to encourage it and be there with information the consumer can access to make your artists out in front of what should be the next step for free over the air radio.
(The views expressed in this article are those of the author and do not necessarily reflect those of MusicRow.)
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