The terrestrial radio market is steady, with the double-digit growth of audio streaming establishing itself as key for the future of the radio industry.
Unlike many other sectors where the traditional broadcast mediums have suffered cannibalisation at the hands of new digital distribution methods, the terrestrial radio industry has shown that a strong traditional, and growing digital revenue stream can coexist.
The audio sector is being bolstered by two factors: increased supply due to the ability to access streamed audio content via hardware technology like smart speakers and voice assistants in the home, and the data and analytics that streaming services offer advertisers. This allows for insight into the engagement of different personalities and content, the learnings from which drive more effective programming. Additionally, this data allows for more targeted and personalised advertising.
1. Radio businesses become audio businesses
2. Digital streaming platforms engender trust and allow for advanced audience targeting
3. Consumers’ ease of access to audio content is increasing
Traditional radio remains resilient in the face of digitisation. Strong personalities delivering quality content remains a draw for audiences. Cathy O’Connor, Chief Executive Officer of NOVA Entertainment believes that, ‘in an overly curated world, where people have so many choices at their fingertips, sometimes the experience of lean back radio takes the pressure off.1 More rapidly than other sectors in the media and entertainment business, the major players in radio have fully embraced that they are now audio businesses, not radio businesses. They continue to deliver engaging, personality-led content for mass audiences, no matter the medium.
Streaming services have data and analytics capabilities which allow advertisers to reach their intended audience with precision, and subsequently, measure the delivery of activity. This capability will lead to further monetised growth for streaming services.
When monetising the reach of these audiences, the more that is known about their interests, age, gender and behaviour, the more valuable they may be to advertisers. However, with targeting precision comes limitations on available reach. The streaming services must continue to drive service trial and increase their overall available audience in order to compete with mass-reach advertising channels.
Streaming services offer trusted and safe environments for advertisers and users, given that they are closed-platforms. This is a significant competitive advantage given the perceived lack of security and transparency that has plagued the online advertising industry in recent times.
From Spotify to Apple Podcasts, streaming audio platforms enjoy all of the benefits of digital mediums – immediacy, mass reach, data and analytics – without the risks of a user-generated content platform. The content creators are largely professionals, with well-known talent, and well-known brands and advertisers supporting them.
‘The more addressable the audience you have, the more the premium.’²
Smart speakers offer an expanding number of consumer touchpoints as listeners are able to have seamless, immediate, and increasingly personal conversations with their virtual assistants. Consumers can ask for streaming content on command, with the streaming audio experience able to seamlessly follow the listener from the home, to car, to mobile device. With 1.35 million Australians owning a smart speaker in 2018, demonstrating a 200 percent growth in four months to December 2018, 3 expect to see a change in radio usage occasions.
‘Talent-led campaign and a call to action on a podcasting platform yield measurably strong ROI to advertisers.’
While consumer uptake is high, advertisers and marketers need further education in podcasting to grow confidence in the relatively new platform.
Podcasts have also been embraced by journalists with backgrounds in print media, not just radio. The intimacy of the medium, and its ability to tell long form stories without word limits makes it very attractive. Leading storytellers in media are choosing this medium to convey important stories, ensuring podcasts will continue to help reach new audiences in the audio landscape.
Podcasting remains a perceptually novel medium for advertisers and further education is key for podcasting to become seen as a standalone medium in the advertiser’s channel strategy.4
Radio networks have always played an important role in connecting communities in real life, particularly in rural and regional areas, as well as being a conduit between Australian music lovers and international superstars. For example, NOVA’s Red Room, Southern Cross Austereo’s Rooftop and 2DAY FM’s RNB Fridays Live provide fans exclusive and intimate experiences with globally renowned artists including Justin Bieber, Ed Sheeran and Usher. This is a revenue stream that will see more investment over the next five years, as radio networks seek to engender loyalty and brand differentiation with audiences, and local and international artists look to compensate for the loss of income from physical music sales.