Have you heard of “Trajectories of Industry Change”.

Historically, all industries find themselves faced with gut-wrenching decisions related to remaining relevant.

Compare the lifecycle charts below for MySpace and broadcast radio.

The relevance clock for broadcast radio is nearing midnight which means little time remains for the industry to adapt to the times.

According to author and business strategist Anita McGahan, who observes all types of industries and companies, traditional radio may no longer be at a crossroads, but beyond it and should seriously heed the warning signs presented by new competitive media. She explains that broadcasters are misreading growth clues and may be arriving at false conclusions.

The most important thing to understand, she says, is that all business goes through lifecycles during which obsolescence becomes a real threat to the core of the business. New technologies shake up all industries and all companies at some time are faced with ‘defending their turf’.

So, what has really been going on with the broadcast industry?

Radio has been caught in an evolution as a result of Two Types of Threats of Obsolescence from digital media:

1. A threat to its core activities (those activities of attracting listeners with programming, technology and delivering consumers for advertisers), and

2. A threat to its core assets (durable resources such as talent and programming and intangibles such as programming knowledge and brand capital, that have historically made radio effective at delivering audiences).

Based on the nature of these threats, the broadcast industry has been on a growth curve with the following identities:

Phase 1 (1960-2000) – The Stable Trajectory when neither its core assets nor core activities are jeopardized. During this phase the industry was operating effectively and efficiently, it understood its strengths and weaknesses with no significant outside competitive threat(s).

There was a balance between investing in product and sales.

Persons using radio 1980-2012. Click on image to enlarge.

However, this phase began to weaken after an extended period of wealth and profit-taking. The traditional radio industry had been on a Stable Trajectory until around 2000-2001 when a “perfect storm” of weakening economies coupled with the rise of new technologies began to threaten its core.

Phase 2 (2001-2007) - The Intermediary Trajectory – the period after successful times when the industry began to experience new competition generally aided by new technology when either its core activities or core assets started to become threatened – but not both. It was a time when a “tipping point” was approaching and there was still time to adjust and avoid significant damage to revenues, profits and consumers.

This phase is often characterized by short-term profit-taking as a reaction to this new threat while avoiding investment that could later prevent competitive inroads.

According to Dr. McGahan, the traditional radio industry at this point of the trajectory curve should've fended off attacks to either its core activities or core assets by reinvestment in those core strengths. Defensive strategies should've come from company marketing, product, sales and technical innovations which would've refreshed perceived obsolescence.

Phase 3 (2008-Present - A Radical Trajectory, the most serious, occurs when core assets and core activities are both threatened with impending obsolescence. Often considered too late in the lifecyle to recover from severe competitive and technological inroads, industries in the radical phase may never be able to infuse enough funding back into the business to fend off the momentum of on-coming competitors. It is often too late for industries in this phase to offset the negative momentum of consumer attrition.

These three trajectories of industry change can be applied to most industries. Read more here.

With this in mind what path remains for broadcast radio?

I'd be interested in your thoughts.

Your feedback is vital to our company's on-going success. As always, I look forward to hearing from you.

Sincerely,

Dave Van Dyke - President

How On-line Playlisting Can Save Music Radio

For music programmers who have been utilizing on-demand streaming data to properly align their on-air music with true music consumption, here's some news: Playlisting has become the dominant way most music fans listen.

At Bridge Ratings we have been tracking music consumption through on-demand streaming services for over four years. We now share this data with our music radio clients seeking to properly align their on-air song exposure to their listeners' actual consumption.

In a typical year we process and analyze hundreds of millions of streams from across the U.S. and, more specifically, by market and station.

Over the past three years we have undertaken an analysis of music streaming consumption and learned almost immediately in the fall of 2015 that playlisting plays a significant role in the way the average person consumes music through on-demand streaming platforms.

Playlist is a term to describe a list of video or audio files that can be played back on a media player sequentially or in random order. In its most general form, an audioplaylist is simply a list of songs, but sometimes a loop.

Navigate the Future Blog

At the Crossroads....or past it?

The relevance clock for broadcast radio is nearing midnight which means little time remains for the industry to adapt to the times.

Phase 1 (1960-2000) – The Stable Trajectory when neither its core assets nor core activities are jeopardized. During this phase the industry was operating effectively and efficiently, it understood its strengths and weaknesses with no significant outside competitive threat(s).

How On-line Playlisting Can Save Music Radio

Playlist is a term to describe a list of video or audio files that can be played back on a media player sequentially or in random order. In its most general form, an audioplaylist is simply a list of songs, but sometimes a loop.

What We've Learned

Read the full article in the Navigate the Future Blog.