Lessons From Across The Pond

I've operated for so long inside of the U.S. radio bubble that I really had no idea what I was in store for when I recently toured Europe meeting with clients, industry experts, and colleagues. My "radio is radio" mindset was quickly undone as were the assumptions that I would encounter a very familiar set of opportunities, challenges and personality types.

Oh, so wrong.

What I did encounter was a 'green field' of opportunity, largely unencumbered by the politics and regulations that have us tied up in red, white and blue knots here in the U.S.

With no American Federation of Television and Radio Artists (AFTRA) complications to deal with and a total set of music royalties encompassed in one payment (5-10% depending on the country) based upon total revenue, most European Union (EU) broadcasters simply simulcast the entire broadcast online.

Sounds simple, right?

What is gained in simplicity is more than given back in lost revenue potential. Why? Nobody can accurately say how expansive that digital opportunity really is. Turns out ‘digrestrial’ is not a language spoken in European agencies any more than it is right here in the U.S. The failure to separate digital impressions from terrestrial ones keeps agencies from jumping into the digital upside that's sitting right there for broadcasters in the EU with all its favorable royalty and political dynamics.

Why is that?

A 'total audio measurement' system.

In Spain, for example, "measurement" surveys are conducted via phone interview. Therefore reported listening is attributed to the station brand overall rather than to the broadcast or the online delivery. Consequently, advertising rates are interpreted to account for total listening regardless of distribution platform or device.

Pity. All those euros, pounds and impressions left on the table.

As our largest client in the EU said to me, "why in the hell would I cheat myself and my advertisers of the benefits of digital media?" He's smart. He wouldn't. So he measures what he monetizes. And he is monetizing digital separately.

Not surprisingly, our client is but one of many broadcasters signed up for Webcast Metrics so they can shut off the gravy train and have the flexibility to have advertisers take all the impressions they want but pay for all that they take. I did not meet with a single broadcaster who isn’t in the process of separating out digital and terrestrial audiences for separate monetization strategies.

It just makes sense.

It struck me as quite ironic that while broadcasters in the EU increasingly reject the idea of total audience measurement and the on air/online "happy meal" Arbitron and some U.S. broadcasters are pushing it so hard.

I walk away from my adventure more certain than ever that the path for U.S. radio is to understand and embrace the fact that the audience is moving online and to treat the channel as a separate medium and a separate opportunity.

I also feel it's important to reiterate a position I've taken in prior posts...it is time for U.S. Radio to sit back down with the music industry and cut a fair deal for both sides. While broadcasters in the EU operate with the expense of an on air royalty they also operate with the freedom to invest and pursue an online model without drastic economic consequence. This issue deserves much more of our focus and attention than "happy meals" from Arbitron...the toy always breaks before you get home anyway!