What fascinates me about audio at the moment is that the strengths, weaknesses, opportunities and threats for each of the different players in the sector, keep revolving and changing. No matter whether it’s Spotify or Apple, Global or the BBC, the audio strategies keep adjusting. There seems little desire to stick to what they're known for.
I think part of the problem for many organisations, audio included, is that they misunderstand the business they're in.
The oft-used example is that Kodak thought it was in the photographic film business when actually it was in the memories business. Through the memories lens, digital cameras would have been an opportunity, rather than a product they developed and quickly buried.
I thought about this yesterday when I saw the details of Bauer's latest re-structure. Stripping down the responsibilities of the three principals, it would seem to be one person each for content, platforms and events.
A functional strategy is a well-trodden path. It historically makes reporting easier and alignment - ie radio programmers reporting to radio programmers - more understandable. It can work very well in large organisations.
In today's cross-platform, fast-moving world, the challenge isn't the vertical functions on their own, it's how the functions work with each other. Who's responsible for a Kiss Festival and mobile app? The answer is everyone. Depending on the environment, this either speeds up delivery - as there's pools of expertise that can make things happen - or slows it down if relationships are sub-par. I'm sure many readers have been in companies where they've seen both sides of that equation.
Taking on the Kodak question - what are commercial radio's key competencies? My first thought is that it's great at packaging, and then selling the package. This might not be very romantic - but it is realistic!
Commercial radio’s very good at creating the right playlist and brand environment for groups of listeners, alongside the right mix of non-music content. It works hard to understand audiences and tweak the product to deliver for them. At the same time it’s developed processes to make the production of that product very efficient. It's other key competency is the sales operation. It generates large, segmentable audiences from its products and then it delivers easy to buy opportunities for advertisers, who it has developed a close relationship with.
It's not that dissimilar for most media companies, just replace radio with a TV channel or magazine.
The danger for media companies is that sometimes this product development process can be stuck in a time where opportunities were driven by scarcity. Back then there was only one radio station you could put on a single frequency. The launch of a newspaper needed printing plants or a new TV channel required vast programme production.
Could the problem for established media companies be that their product skill isn’t actually in development, but in iteration? Being in the scarcity business has caused them to be good at evolving single propositions - to defend their successes and incrementally develop them. Is the problem that these previously scarce platforms - radio frequencies, newspaper publishing operations - are still important pillars of their business and does that therefore stifle the evolution of their product skills?
For commercial radio, much of its brand success is anchored to its past - Heart, Capital, Kiss, Magic - all brands with heritage in the last century. These are definitely not old-fashioned operations. The brand extensions have been unquestionably successful and the operations are now very profitable - but is it sustainable for these businesses to continue to lean into that heritage? Can the required growth come from re-invention of these cash cows?
Radio’s more recent launches probably fit into a number of groups. Absolute Radio was probably the last big launch - significant investment, built off the back of the previous distribution and programming of Virgin Radio - to listeners “the only thing changing is the name”. With an aggressive team it aimed to make a splash, something that only really worked for them when they launched a suite of services - Absolute 80s and 90s etc. A startup mentality and a necessary hunger for success. It had no UK radio group backing to lean into, and was a small operator when compared to the large groups. It had to make a noise, otherwise it would have been crushed.
It ran out of time before it was able to achieve it’s non-broadcast goals and establish a multi-media brand. Its acquisition by Bauer meant access to the more efficient group commercial radio model, but the exchange was a slimmed down operation with little development opportunities outside of its core business.
It could be argued that this focus has reaped dividends for its parent. It’s ratings have continued to grow and I imagine its profitability has sky rocketed.
At Global, XFM re-branded as Radio X with a more mainstream, streamlined format and some talent importation with Moyles and Vaughan. A similar story at Virgin Radio with Evans and Norton. Both have probably under-performed on the promise of what they would deliver. I don’t think there’s anything wrong with the products - but do the groups underestimate the marketing efforts necessary to truly establish a brand?
In a busy multi-platform world, is just being a radio station enough to deliver the engagement necessary to drive impressive growth?
Virgin and X also had heritage to lean on. Bauer’s Scala was trying to invent a new category of station whilst at the same time building an audience from scratch. It’s a good listen, but lacks the non-audio elements and enough of a marketing punch, to land a new brand in consumers’ eyes.
I think this is where heritage remains a problem. Established groups look at the efficient operation of their cash cows and budget a similar way - not recognising their position in the product lifecycle is not similar at all.
The media brands that have cut through in recent years - the Buzzfeeds and Vices of the world - have had hugely aggressive periods of expansion, with ambitious multi-platform endeavours. Now both have experienced financial highs and lows getting there with different types of expansion and contraction - but it has delivered truly new media brands with strong awareness and consumption in the market.
The time maybe different, but its not dissimilar to the original commercial radio launches. They too were all over the place, creatively and financially, but ambitious endeavours that helped define the audio product for years to come.
The danger of incremental growth is that you can be left behind as the world changes. LBC had been in a great position with Global totally delivering on the rebuilding work that Chrysalis started. Switching the station from AM to FM, investing in talent, tightening the focus to politics and going national had given the operation real momentum and audience success. Its visualisation was ahead of the game, making everyone else look rubbish! Its London team combined with Global’s newsroom around the country made its content great too.
But its focus on the radio has meant its missed the boat on creating a different kind of web news product, few successful podcasts outside of catch-up, little newsletter operation and now talkRADIO and GB News basically taking its model and jumping into the TV world. Has its incrementalism left others to expand and choke off its growth?
It is, of course, very easy to decry a company’s operations as it’s impossible to know what would have happened if they took the other road - especially, as mentioned, when the current efficiency-based direction is clearly generating good profits.
I just find it difficult to see how existing radio operators are placed to deal with a double whammy of changes in consumer behaviour and the declining benefits of the momentum from their previously heavily regulated benefits.
I think radio lacks something by not allowing product teams to lead developments of brands, particularly new ones, and instead having corporate functions manage portfolios. It may work for efficiency, but I think it does little for growth.
Using products as the engine of growth isn’t something that just commercial radio or legacy media businesses seem to ignore. Podcasts are often held up as the future of audio content, but in the UK at least there are little examples of shows being particularly consumer-focused, or developing broader businesses out of their successful products.
Most hit podcasts stumble into success, or ride on the coat tails of a celebrity rather than being driven by market insight or solving problems for consumers.
Many podcast business-plans are predicated on dotcom-style acquisitions or super-generous distribution deals, rather than any particular business savvy or thoughts on developing a growing, going-concern.
What product development have most successful shows done other than a live tour and maybe some publishing? There are a few shows that have become break-out Patreon smashes - but who’s creating actual subscription businesses with content in email form or video extensions? Where are the spin-offs of popular shows? Why hasn’t No Such Thing As A Fish or My Dad Wrote a Porno built out new programmes? Content in the podcast sector has a really poor track record in business growth. How many of even the top shows could support many staff outside of their hosts?
Will a lack of development result in the success of some shows being a fad? It’s early days, but I think many hits lack even the incrementalism that commercial radio is focused on.
Of course, there’s nothing wrong with a single show doing what it’s happy with - not everything should become a Megacorp. But it is a bit surprising, fifteen years into podcasting, how little product focus there seems to be?
Audio has never been more accessible and interesting for consumers and advertisers, but are the main audio creators lacking the ability to benefit from this interest?
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