Simon Cole, UBC Media – “Radio As A Retailer”

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- How can commercial radio stations use new technology to augment currently dwindling revenue streams?

- Probably the best presentation of the week. A real battle cry for how the industry should embrace the new digital technologies out there and start to use them to make money. One idea is the ‘Cliq’ music download service that is being built in to numerous new digital radios, more details are in the presentation.

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Simon Cole, UBC Media – “Radio As A Retailer”

  1. 1. Simon Cole, Chief Executive, UBC Media Group Radio AS A Retailer
  2. 2. The need for a changed model <ul><li>Revenues flat </li></ul><ul><ul><li>Impact of internet </li></ul></ul><ul><ul><li>New stations fragment existing listening </li></ul></ul>Source: Radio Advertising Bureau
  3. 3. Rock and a hard place <ul><li>Revenues flat </li></ul><ul><ul><li>Impact of internet </li></ul></ul><ul><ul><li>New stations fragment existing listening </li></ul></ul><ul><li>Costs increase </li></ul><ul><ul><li>New services </li></ul></ul><ul><ul><li>Multi platform world </li></ul></ul><ul><ul><ul><li>FM </li></ul></ul></ul><ul><ul><ul><li>DAB </li></ul></ul></ul><ul><ul><ul><li>Streaming </li></ul></ul></ul><ul><ul><ul><li>DTV </li></ul></ul></ul>
  4. 4. New platforms, new revenue? <ul><li>Fragmented audience on new platforms challenges ad model </li></ul><ul><ul><li>New services need critical mass </li></ul></ul><ul><ul><li>Initial sales at discount </li></ul></ul><ul><li>Ad revenue must be augmented </li></ul><ul><ul><li>Website display advertising </li></ul></ul><ul><ul><li>Music sales via website </li></ul></ul><ul><ul><ul><li>Capital Radio 30,000 downloads per month, 1,000 every day </li></ul></ul></ul>
  5. 5. Where is the new value? <ul><li>New media model values ‘users’ or ‘customers’ </li></ul><ul><li>Radio’s ‘customer base’ is robust </li></ul><ul><li>Radio is powerful at motivating listeners </li></ul><ul><ul><li>This power needs to be harnessed </li></ul></ul><ul><ul><li>Create a new media relationship with listeners </li></ul></ul>
  6. 6. The ‘connected’ radio listener <ul><li>Browser based listeners can currently </li></ul><ul><ul><li>React instantly to a call to action </li></ul></ul><ul><ul><li>Instantly identify and buy music </li></ul></ul><ul><ul><li>‘ Listen Again’ </li></ul></ul><ul><ul><li>Download podcasts and additional content </li></ul></ul><ul><li>This connectivity will soon be available outside the PC/Mac </li></ul><ul><ul><li>Wi-Fi connected radios </li></ul></ul><ul><ul><li>Set top boxes </li></ul></ul>
  7. 7. Value of connected radio <ul><li>Sky Gnome </li></ul><ul><ul><li>Unsuccessful attempt by Sky to create their own digital radio linked to sky box </li></ul></ul><ul><li>Orange Liveradio </li></ul><ul><ul><li>Wi-Fi radio launched in Switzerland, France and now UK </li></ul></ul><ul><li>Apple’s iTunes Tagging HD Radio </li></ul><ul><ul><li>Creates iTunes customers from digital radio in the US. </li></ul></ul>
  8. 8. Creating radio’s own e-commerce platform <ul><li>Cliq means radio gets a buy button. </li></ul><ul><ul><li>From Q3 2008 on new ‘connected’ digital radios from Pure. </li></ul></ul><ul><li>Using music to create a direct relationship with the listener </li></ul><ul><ul><li>Multiple platform access of micro payment account </li></ul></ul>
  9. 9. The Cliq experience <ul><li>Music discovery is a massive driver of adoption </li></ul><ul><li>Price is extremely sensitive </li></ul><ul><li>Music is increasingly expected for free and as MP3 </li></ul><ul><li>Mobile phone platform is technically weak and ineffective </li></ul><ul><ul><li>May be useful as a ubiquitous fill-in </li></ul></ul><ul><ul><li>Standards may improve over time </li></ul></ul><ul><ul><li>Not cost effective now </li></ul></ul>
  10. 10. Mayday Madness <ul><li>Exposed free music to 1.6m radio listeners for 24 hours </li></ul><ul><li>3,500 requests for Cliq application </li></ul><ul><li>100% increase in registered Cliq customers in 48 hours </li></ul><ul><li>65% of customers took 5 tracks or less </li></ul><ul><li>Less than 20 ‘abusers’ </li></ul>
  11. 11. Mayday Madness <ul><li>Total cost of free music offer was less than £10,000 </li></ul><ul><li>Average listening time rose from 1.6 hours to 4.5 hours </li></ul><ul><li>Cost per registration £18.16 </li></ul>
  12. 12. The emerging model <ul><li>‘ Free’ music as a way to engage listeners </li></ul><ul><ul><li>Prompt to open Cliq account </li></ul></ul><ul><ul><li>Could be funded by advertiser </li></ul></ul><ul><ul><li>Will have side benefit of increasing listening hours </li></ul></ul><ul><li>Listeners become customers </li></ul><ul><ul><li>Able to transact directly </li></ul></ul><ul><ul><li>Can use their value to leverage third parties </li></ul></ul><ul><ul><li>Can use relationship to increase listener loyalty </li></ul></ul>
  13. 13. A different relationship <ul><li>Over 5,000 songs sold </li></ul><ul><li>Research of 100 customers </li></ul><ul><ul><li>Most users have no portable MP3 player </li></ul></ul><ul><ul><li>Less than 10% use iTunes </li></ul></ul><ul><ul><li>High usage of mobile phones to play music </li></ul></ul><ul><ul><li>100% of research sample would recommend service to a friend </li></ul></ul>
  14. 14. The choice <ul><li>Radio either begins to create its own interactive commercial relationship with its listeners, or it chooses to be be a portal that earns money creating customers for other. </li></ul>

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