simon cole, ubc media – “radio as a retailer”
Post on 16-May-2015
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Simon Cole, Chief Executive, UBC Media Group
Radio AS A Retailer
The need for a changed model
596 596
550567
621645
603588
Q1
2000
Q1
2001
Q1
2002
Q1
2003
Q1
2004
Q1
2005
Q1
2006
Q1
2007
Rev
enu
e £
'000
Source: Radio Advertising Bureau
• Revenues flat• Impact of internet
• New stations fragment existing listening
Rock and a hard place
AM/FM DAB DTV www
• Revenues flat• Impact of internet
• New stations fragment existing listening
• Costs increase• New services
• Multi platform world• FM• DAB• Streaming• DTV
New platforms, new revenue?
• Fragmented audience on new platforms challenges ad model• New services need critical
mass
• Initial sales at discount
• Ad revenue must be augmented• Website display advertising
• Music sales via website• Capital Radio 30,000
downloads per month, 1,000 every day
Where is the new value?
• New media model values ‘users’ or ‘customers’
• Radio’s ‘customer base’ is robust
• Radio is powerful at motivating listeners• This power needs to be
harnessed
• Create a new media relationship with listeners
weekly reach and average hours by listener
89.5% 90.4% 90.1% 91.1% 91.3% 90.8% 90.1% 89.7% 90.4% 90.2%
23.822.4
24.024.6 24.4 24.7
23.8 23.2 22.824.0
0%
10%20%
30%40%
50%
60%70%
80%90%
100%
Ma
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9
Ma
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0
Ma
r-0
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Ma
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wee
kly
reac
h %
0
5
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av.
ho
ur
by l
iste
ner
The ‘connected’ radio listener
• Browser based listeners can currently• React instantly to a call to action• Instantly identify and buy music• ‘Listen Again’• Download podcasts and additional content
• This connectivity will soon be available outside the PC/Mac• Wi-Fi connected radios• Set top boxes
Value of connected radio
• Sky Gnome• Unsuccessful attempt by Sky to
create their own digital radio linked to sky box
• Orange Liveradio• Wi-Fi radio launched in
Switzerland, France and now UK
• Apple’s iTunes Tagging HD Radio• Creates iTunes customers from
digital radio in the US.
Creating radio’s own e-commerce platform
• Cliq means radio gets a buy button.• From Q3 2008 on new
‘connected’ digital radios from Pure.
• Using music to create a direct relationship with the listener• Multiple platform access of
micro payment account
The Cliq experience
• Music discovery is a massive driver of adoption
• Price is extremely sensitive
• Music is increasingly expected for free and as MP3
• Mobile phone platform is technically weak and ineffective• May be useful as a ubiquitous
fill-in
• Standards may improve over time
• Not cost effective now
100% 100%100%
61%
69%
55%
28%
34%
24%
20% 19% 19%
6% 6% 6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Sent SMS Request App App Installed SMSPurchase
Registered
% Converted (real users) - 07/05/08
All DataBefore Promo
Since 30/04/08
0
20
40
60
80
100
120
140
160
180
200
220
240
0 4 8
30/04
/08 -
12 16 20 0 4 8
01/05
/08 -
12 16 20 0 4 8
02/05
/08 -
12 16 20 0 4 8
03/05
/08 -
12 16 20 0 4 8
04/05
/08 -
12 16 20 0 4 8
05/05
/08 -
12 16 20
Mayday Madness
• Exposed free music to 1.6m radio listeners for 24 hours
• 3,500 requests for Cliq application
• 100% increase in registered Cliq customers in 48 hours
• 65% of customers took 5 tracks or less
• Less than 20 ‘abusers’
0
20
40
60
80
100
120
140
160
180
200
220
240
0 4 8
30/04
/08 -
12 16 20 0 4 8
01/05
/08 -
12 16 20 0 4 8
02/05
/08 -
12 16 20 0 4 8
03/05
/08 -
12 16 20 0 4 8
04/05
/08 -
12 16 20 0 4 8
05/05
/08 -
12 16 20
Mayday Madness
• Total cost of free music offer was less than £10,000
• Average listening time rose from 1.6 hours to 4.5 hours
• Cost per registration £18.16
The emerging model
• ‘Free’ music as a way to engage listeners• Prompt to open Cliq account
• Could be funded by advertiser
• Will have side benefit of increasing listening hours
• Listeners become customers• Able to transact directly
• Can use their value to leverage third parties
• Can use relationship to increase listener loyalty
A different relationship
• Over 5,000 songs sold
• Research of 100 customers• Most users have no portable
MP3 player
• Less than 10% use iTunes
• High usage of mobile phones to play music
• 100% of research sample would recommend service to a friend
The choice
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.
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