Curran Pens Open Letter to the U.S. Radio Industry

RADIO ONLINE | Wednesday, August 29, 2018

Andrew Curran

With more news about Spotify surpassing Pandora in the headlines, DMR/Interactive President/COO Andrew Curran (pictured) has written an open letter to the radio industry that provides some additional perspectives. Most notably, as the chart below from Statista points out, both streaming platforms continue to generate massive annual losses, while radio keeps building significant momentum and profits. The last 12 months have seen a variety of significant milestones in and around AM/FM Radio.

Some of the most notable events include:

• iHeartMedia is in the process of massively cutting its debt as it navigates bankruptcy.
• Entercom closed on its acquisition of CBS Radio.
• Cumulus emerged from bankruptcy.
• Nielsen has included radio data in advertiser planning tools including Local Media Impact, a cross-platform resource.
• Procter & Gamble rediscovered the power of radio to sell its premium consumer products to our employed listeners.

"The magnitude of these changes, both individually and collectively, is difficult to fully quantify at the moment, but the significance will be felt for years to come," writes Curran. "Each one serves to enhance the vibrancy and strength of AM/FM radio, the 800# gorilla of audio."

Meanwhile on the digital audio side:

• Pandora, once believed to be a "radio killer," has seen Spotify overtake its lead for Average Active Sessions.

"In fact, "winning" the streaming battle is proving to be a hollow victory. As revenues have grown for both platforms, so have the losses, while spot revenue for AM/FM continues to put billions to the bottom line nationwide," said Curran.

"Spotify has lost nearly $2 billion and Pandora has lost more than $1 billion in recent years. For its part, when talking about Apple Music, CEO Tim Cook said, 'we're not in it for the money.' Meanwhile AM/FM spot revenue puts billions to the bottom line nationwide. In a recent Fast Company article, Cook continued, "Music inspires, it motivates. It's also the thing at night that helps quiet me. I think it's better than any medicine."

"With a perspective like that, it's not much of a surprise that Apple has long been critical of platforms using algorithms to select the music. As their CEO said, 'We worry about the humanity being drained out of music, about it becoming a bits-and-bytes kind of world instead of the art and craft.' The 'art and craft' of song selection sounds very much like a tip of the hat to radio programmers, from the head of the first U.S. based trillion dollar company nonetheless."

"As we embark upon another Labor Day weekend (the unofficial holiday for radio's core, employed listeners), there's ample reason for those working in and around radio to appreciate the current wind at our backs. Let's use this momentum to enhance our core business model and push even harder to drive overall growth for our industry to $20 billion by 2022 (#20x22) as we continue to serve our local communities," concluded Curran.

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