Unsustainable…
Most “civilians” (non-radio employees) think Radio is either dead or in its final death throes, although they almost certainly listen to it at least once a day themselves.
93% of Americans listen to the radio at least once a week, and that’s all ethnicities, all income ranges, all geographical locations and all ages over six.
Still, the pundits and PR people rave about Spotify and Pandora (though lately there’ve been lots of stories — Yikes! — about Pandora declining)
Here’s the thing though, “Spotify may be the world’s most popular subscription music streaming service, but that doesn’t mean it’s anywhere near profitable. In fact, the more music users stream, the more millions Spotify loses.”
“The Swedish company posted a net loss in 2016 of just over $600 million — widening 134 percent from its 2015 loss of $257 million…”
Those quotes are from VICE News and you can read the article HERE.
In case you think someone at VICE News has it in for Spotify, consider THIS from Ad Age: “Revenue jumped 52% to 2.93 billion euros in 2016, but the net loss more than doubled, according to documents filed in Luxembourg. Spotify also acknowledged an accounting error that understated losses in previous years.“
“Spotify has grown from 20 million subscribers to 50 million in less than two years, and now has more than 140 million people using the service between the free and paid options…Yet Spotify has struggled to make a profit and has pursued more favorable deals with its biggest partners — record labels and music publishers — ahead of a public offering.”
And more recently this, from Bloomberg News: Spotify is attempting “…to find a monetization strategy that doesn’t involve recorded music and royalty payments.“
Broadcast Radio has greater reach than any other media, including mobile phones. Hard to believe but true.
And while Spotify and other streaming music services are wildly popular, especially when they are free and don’t make you listen to 12+ minutes of bad ads every hour, they won’t be around if they can’t make real profit.
That leaves the ball in Radio’s court, doesn’t it, because we control how many ads we play.
We control whether or not we force listeners to go elsewhere out of sheer frustration at our clutter and greed.
Turns out we can learn from Spotify — or from the lessons from Amazon — lessons of building customer loyalty and passionate brand evangelism, and we can decide, at least for now, our future viability.
I’m not talking here about Cumulus (already in bankruptcy) and iHeart (technically bankrupt). Their staggering debt leaves no choice.
But for all the rest of Radio, all the other groups and owners? They do have a choice.
It would be a shame to let that opportunity fly by our corporate jets.