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At 11:59pm Thursday, WBRU-FM 95.5 in Providence will become an internet-only radio station. Yet, “WBRU is not going away,” station GM Kishanee Haththotuwegama said in a release dispatched this week. In her words, the longtime Alternative station associated with, but not owned by, Brown University is “moving to a 21st century platform with greater potential for creative expression and community service. As an organization of young people, we want to lead in platforms that we’re passionate about and future generations are passionate about.”
This suggests that university age students and future incoming freshmen are not, and will not be, passionate about what the radio industry has to offer.
The release on Aug. 30 of a new report from Larry Miller, a professor of Music Business at New York University-Steinhardt Department of Music & Performing Arts Professions punctuates this mindset. He declares that “broadcast radio is struggling to remain relevant as consumers embrace streaming platforms.”
Miller, in addition to his role at NYU, is the founder and host of Musonomics, a podcast launched in January 2009 that focuses on his course curriculum — the business structure of the music industry, entrepreneurship, strategic marketing and music analytics.
Through his business, he advises music, media and technology companies and their financial sponsors on capital formation and growth strategy, digital product/service development, acquisitions and restructurings.
His past experience includes serving as the co-founder and CEO of Or Music, which signed reggae act Matisyahu and Triple A favorites Los Lonely Boys between 2002 and 2007.
Miller also has some interesting radio industry experience, as he was the first Production Manager for WHTZ-FM “Z100” in New York, launching the radio station following its tower move to the Empire State Building from Secaucus, N.J. From 1990 through 1992, he was a Creative Director at WQCD-FM “CD101.9” in New York, a Tribune Broadcasting NAC/Smooth Jazz station.
“I grew up in the radio industry and started my career as a DJ, which gave me proximity to many of the artists I loved and my first visibility into the workings of the music industry,” Miller says in the opening acknowledgements of a 32-page White Paper titled Paradigm Shift: Why Radio Must Adapt To The Rise Of Digital. “During music’s long, technology-driven disruption and transition from shiny things that spin to the dominance of on-demand streaming, music became ubiquitous. Music is everywhere, in everything, as far away as your smartphone and as close as the sound of your own voice. I’ve long wondered about the prognosis for AM/FM radio in general and music radio in particular during this long transition. Writing this paper gave me an opportunity to think about radio’s changing role in the American musical diet, and the sources and effects of that change on music, on radio and on us.”
Some of Miller’s key takeaways should lead some of the industry’s biggest players to shake their heads in vehement disagreement.
First, Miller says, “AM/FM radio has been a resilient medium in the Internet era, but that resilience is weakening. While it was able to survive and adapt to the introduction of television, new digital services are beginning to change the way people listen to music, endangering radio once again.”
He further concludes, “Gen Z music fans, born in 1995 or later, are embracing digital formats at the expense of radio use. Having grown up as true digital natives, this generation is uninterested in AM/FM radio and prefers the increased interactivity and personalization of digital services like Spotify and Pandora.”
Miller also ventures into the testy waters surrounding royalty payments, noting, “Broadcast stations pay no royalties to record labels for the use of master recordings. Digital services, by contrast, are a source of discovery and revenue.”
He then discusses the “dashboard invasion” and abundances of choices that, he says, have led to decreasing listenership.
Miller isn’t done there: He believes that smart speakers like the Amazon Echo won’t give AM and FM broadcast stations the boost many in the industry are already proclaiming. “Without a strong digital presence, and a focus on digital streaming services, traditional broadcasters are going to be left behind in this critical and growing part of the market.”
But wait … there’s more. Miller also assails the “improper measurement” of radio consumption. He says, “Radio’s ratings system can be gamed and fails to deliver on the specifics that advertisers demand. Nielsen’s current system, reliant on Portable People Meters (PPMs) in top markets, fails to take into account the passion a listener feels toward specific stations, under-samples younger and ethnic demographic groups, and has led to the mass format changes by stations devoted to softer music genres that can’t mask the PPM signal in noisier music, and led to a race for technology-driven advantages that allows richer stations to buy bigger ratings.”
How did Miller’s study come together? In his acknowledgements, he thanks SoundExchange “for the idea to crystallize my perspective in this form.” SoundExchange in March 2012 was sued by Sirius XM over its inability to negotiate direct music licenses that avoid payments through SoundExchange and lower the amount to be paid by the satellite radio operator. Specifically, Sirius XM charged SoundExchange with illegally interfering with its music license operations, claiming that SoundExchange, A2IM and other record industry organizations have “orchestrated an illegal boycott” designed to choke off competition by blocking SiriusXM in its efforts to negotiate with individual record companies.
SoundExchange is also one of the organizations in support of H.R. 3301, the Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society Act (the CLASSICS Act). Other groups in support of the CLASSICS Act include the Recording Industry Association of America, Pandora, musicFIRST, the GRAMMYs, SAG-AFTRA, the American Federation of Musicians, the Future of Music Coalition, the Rhythm and Blues Foundation, and the Living Legends Foundation.
The CLASSICS Act, introduced by Rep. Darrell Issa (R-Calif.), seeks to resolve “uncertainty over the copyright protections afforded to sound recordings made before 1972 by bringing these recordings into the federal copyright system and ensuring that digital transmissions of both pre and post-1972 recordings are treated uniformly.”
The CLASSICS Act has six co-sponsors, with North Carolina Republican George Holding adding his name to the bill on July 25.
In determining that radio’s resilience is “weakening,” Miller cites a work from Madalena Oliveira, Gryna Stachyra, and Guy Starkey from 2014, Radio: The Resilient Medium: Papers From the Third Conference of the Ecrea Radio Research Section.
There’s also discussion of how a viral hit, Baauer’s “Harlem Shake,” jumped to No. 1 on Billboard‘s Hot 100 chart thanks to a change in the chart compilation process that included audio streaming, and Vevo and YouTube music video plays. With Pandora data added to the chart in January, it impacted the chart position (in a positive way) for Callum Scott’s U.K. chart-topper “Dancing On My Own.” As streaming is remaking the pop charts, as an NPR Music notes in a June 2015 report used by Miller notes, it is — in his view — driving the music industry to perhaps a greater degree than radio is.
Miller’s White Paper uses blog posts, digital media articles, a MusicWatch Music Monitor survey and other articles to reach his conclusions. No independent research or surveys were conducted by Miller.
However, a BIA/Kelsey report showing how digital dollars are eclipsing those of radio on the revenue front were interpreted as a harbinger of AM & FM’s continuing demise.
While radio industry professionals will likely find that Miller’s White Paper contains many unsubstantiated claims about AM and FM radio’s health, his conclusion does contain some key thoughts that are worth noting to all.
“Although radio continues to reach, engage and retain large audiences and generate annual revenues twice the size of the recorded music industry, the long-term trend is not radio’s friend,” Miller says. Today’s listener has access to virtually unlimited choices for audio and music consumption, of which radio is only one of a constellation of available platforms offering a galaxy of services from linear, lean-back and algorithmically driven to lean-forward, on-demand and self-curated – and everything in between. And while radio consolidated over the last 20 years, the industry under-invested in advanced digital music services and failed to anticipate the emergence and scale of new competitors.”
What can the radio industry do, in Miller’s opinion?
“Unfortunately, it’s easy to describe and hard to do,” he says of the conditions for sustainability and growth. “[U]nless the industry is set to make peace with a long and inevitable decline, radio needs to invest in strong and compelling digital services. If it does, radio can look forward to a robust future built on the strong foundation it already has in the marketplace leveraging the medium’s great reach, habitual listenership, local presence and brands. If it doesn’t, radio risks becoming a thing of the past, like the wax cylinder or 78 RPM record – fondly remembered but no longer relevant to an audience that has moved on.”
RBR+TVBR SOUND OFF: What are your thoughts and opinions on Larry Miller’s White Paper? We want to know! Please offer your comments below. Not enough space? We welcome long-form column submissions. Please send them via e-mail to [email protected] for immediate consideration.
