RADIO’S “LOOK AT THE BIRDIE” SELL: In full disclosure, nobody likes a good radio fight more than me. So when I see an eyebrow raising article like the attached Radio Ink link, I just can’t help myself. While I’ll always respect honest competitive sales pitches, the author’s rationale in this situation is just wrong. Pureplay streamers are winning an ever-increasing share of audio dollars because of specific product advantages. Lower ad clutter allows each clients’ commercials to stand out relative to radio, individual listeners’ registration data allows for precision targeting you can’t get in a broadcast format, and ad delivery is guaranteed by server-side reporting instead of after-the-fact Nielsen ratings estimates. I wonder if any of these points were discussed during the sales call the author describes? And the idea that you can cover 90%+ of the streaming audience with a Broadcast campaign is pure fiction. In order to achieve this reach you’d have to buy a commercial on every AM/FM station in a given market and run an ad on all stations every 15 minutes. Does that sound efficient or realistic to you? Bottom line . . . radio broadcasters should use their time/energy to improve their own product and stop peddling the fallacy of aggregate reach, or expect to see radio’s ad revenue and relevance in the media landscape continue to erode.
CORD-CUTTING INTO TV’s FUTURE: comScore just released an in-depth analysis of OTT TV viewership from households who have cut the cord (no cable subscription), compared to the same OTT consumption from households which still have cable. As a reminder OTT stands for Over-The-Top (Top referring to set top), and is the umbrella term for any digital video delivered via internet. In the Captain Obvious department, the headline of this research study is that cord-cutters watch 60% more OTT than cable households. Viewing hours on the top streaming services are noted in the chart below. But the real and more worrisome headline should be about total TV consumption by cord-cutters. Average monthly linear TV consumption in US households still stands at 225 hours. By comparison cord-cutters are only watching 79 hours of TV per month – so just 35% of the traditional total. TV executives will argue that cord-cutters are more likely to be light TV watchers anyways, which makes them less likely to pay for full-bundle cable services. Regardless, it’s a scary prospect for the TV sector to think that once the cord is cut overall consumption plummets.
GETTING SHORT ON SNAP: Finally today, I usually don’t spend too much time on Wall Street speculation, but there’s an eye-popping development brewing with Snap, Inc.’s stock which is worth noting. The Street is now reporting that investors have bought over $1B is “Shorts” against Snap’s stock. For those who aren’t fluent in Street-speak, a Short is a time-based bet that the stock will go lower than its current market price. So the more Shorts being bought the greater the anticipation that the stock price will go down. Considering that Snap is already down 22% since its IPO just a few months ago it’s pretty amazing to think the stock could fall that much further. The reasons for the pessimism are the usual suspects – worries over continued user growth, a deceleration of ad growth, competitive threats from other Social publishers, etc.. Of course only time will tell if the prognosis is true. But it’s hard to believe the entire investment community could be making a billion dollar miscalculation on this one.
Have a great Tuesday guys!
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