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On-Air vs. Online

First it was video that killed the radio star. Now it seems the era of online streaming radio has put a good-sized dent in the way listeners get their music fix as well. It’s no secret that ever since television sets crept into living rooms worldwide, radio has had an uphill battle to stay in the mix of entertainment options. Now, however, it’s streaming music services like Pandora and Slacker that are keeping many stations on their toes.

“Radio has always evolved to meet audience demands for entertainment that is ubiquitous and that provides a companion to other activities,” said Jerry Schnacke, vice president and market manager for Bonneville Chicago Media Group. “In the digital era, radio has adapted by expanding its footprint beyond terrestrial to include online, mobile apps and podcasting.”

Based on recent studies from companies such as Coleman Insights and Edison Research, the amount of people listening to terrestrial, over-the-air radio broadcasts has been on the decline. Coleman found that 48 percent of Americans surveyed, who listen to streaming audio, don’t listen to AM/FM broadcasts. The good news for radio is that “streaming audio” includes the online broadcasts of many terrestrial stations, Schnacke said.

“How people access my radio stations is less important than if they access it,” he said. “One of the big mistakes newspapers made was not becoming the local news source on the Internet. My goal is for radio to not make the same mistake. Radio is capturing even more listeners online that have shifted the delivery device, but not abandoned radio.”

While streaming AM/FM broadcasts have enabled listeners to access radio from their phones, laptops and work computers, the advantage of customization is what has lead companies such as Pandora and Slacker to make new waves in radio entertainment.

Slacker, which boasts a song database numbering in the millions, allows users to choose playlists in various genres or to create their own based on their individual tastes. Much like Pandora, the service then continues to play artists of similar styles and eras. Slacker also employs former and current radio programmers to create playlists.

“We believe that working with the best radio talent and genre experts creates the best possible radio station experience,” said Jonathan Sasse, Slacker’s executive vice president of marketing. “We have extended that not only to over 130 hand-programmed genre stations, but to the overall principles of how we create each station for our listeners.”

The option to pay is another difference between the two. While AM/FM broadcasts have remained free of charge, streaming radio services such as Slacker allow consumers to choose whether they have their radio experiences funded by advertisers or whether they pay to remove ads and gain additional features.

Schnacke feels this will eventually benefit terrestrial radio.

“As [streaming radio service] becomes more cluttered with ads, one of its big advantages as a free service will be gone and users will have to pay for an ad-free space,” Schnacke said.

Fees and advertising aside, Sasse believes that there is a place for terrestrial radio, but streaming radio services cater to a younger generation.

“When it comes to live or local, broadcast radio still has a lot to offer, but when it comes to music the value has been long lost, for me personally,” he said. “Without the element of personalization, radio is increasingly antiquated when it comes to music. Young consumers grew up with Napster and iPods and expect choice and personalization to be a part of the music experience. It just doesn’t make sense to these consumers as to why they wouldn’t have input into their music experience and that is a tremendous limitation with broadcast radio.”

Schnacke, however, maintains that the average listener is looking for more than customized music.

“They want local content, information and entertainment,” he said. “WTMX’s morning show with Eric & Kathy does play music, but they also offer the listener a shared experience that is local, relevant, and interactive. They allow people to be part of the content creation that is then shared with their peers via the radio, and in turn online through social networking and other digital elements. Radio offers connection, while Pandora and other services like it create an isolated experience.”

Slacker radio does offer custom news channels from content providers such as ABC News, and Sasse said they will “continue bringing custom and branded content offerings to the service, both music and non-music alike.”

Schnacke, however, feels it can’t compete with the local community terrestrial radio offers.

“Radio’s online presence is growing and evolving to meet the needs of its listeners,” he said. “What radio has is a local brand and a local shared experience with its end users. The value of this cannot be minimized.”

About Gina Joseph

Gina Joseph is a features writer for Cision Blog, and is also the digital engagement manager for Cision’s marketing department. She’s a book nerd, Detroit sports enthusiast, lover of cats, lifelong Phil Collins fan, and budding snowboarder. Find her on Twitter @gmg912.

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