800.275.2840 MORE NEWS» insideradio.com THE MOST TRUSTED NEWS IN RADIO TUESDAY, JUNE 9, 2015 Online radio is sitting on a $4.7 billion revenue opportunity. How big is the revenue opportunity for online radio? According to one expert, there’s $4.7 billion in additional money waiting to be plucked – if only the medium can make its share of ad spend roughly equivalent to its share of time spent with media. Internet audio currently commands 12.7% of time spent online but only gets 4.7% of digital ad spend, Xappmedia CEO Pat Higbie said at Mark Ramsey Media’s Hivio conference last week in Los Angeles. “There’s an enormous opportunity in internet audio because there’s a fantastic content consumption experience that’s better than anything else in mobile,” Higbie said. He believes online radio ad dollars under-index their usage because the content consumption experience is misaligned with the content interaction experience. Streaming audio relies on hearing for consumption and touch for interaction. “That’s broken,” Higbie said, because most mobile phones display a blank screen when playing internet audio. When advertising or content plays that the user wants to interact with, they have to fumble for their phone, swipe, and unlock the screen to get to it. “There’s significant friction involved in engaging users by touch because when we’re listening, we’re typically doing other things,” Higbie said. Higbie’s company, of course, is marketing a product that gets around that: voice- activated calls-to-action for streaming audio ads. But it’s just one of several solutions on the market designed to make audio ads more interactive. Improving engagement would only add to the nearly $3 billion that eMarketer forecasts the industry will collect from advertisers this year. A live, global online station is centerpiece of new Apple Radio. Unfurling its freshly launched streaming music service yesterday, Apple’s Eddy Cue articulated a thought that many in radio would agree with. “Internet radio isn’t really radio; it’s just a playlist of songs,” the head of software and internet services said at the company’s Worldwide Developers Conference. To stand out from the expanding online radio pack, Apple intends to use what’s long been broadcast radio’s bread and butter: live personalities. The tech giant has recruited a trio of high profile hosts to staff a live, 24/7 online radio station. Julie Adenuga will broadcast live from London, “Hot 97” WQHT morning man Ebro Darden from New York and former BBC Radio 1 host Zane Lowe from Los Angeles. Dubbed Beats1, the global stream will beam simultaneously to 100 countries around the globe starting June 30. Exclusive interviews, and guest hosts are part of the formula. Beats co-founder Jimmy Iovine said the idea for a global station came from Nine Inch Nails frontman and Beats chief creative officer Trent Reznor, who envisioned a station that plays music “not based on research, genres or drum beats” but has “only has one master, music itself.” Iovine said the station would be a “music lover’s dream” that programs “great music without any restrictions.” It’s the centerpiece of a rebranded Apple Music Radio that will include other stations curated by DJs across multiple genres. “We have great music DJs and artists building real radio shows right now,” Lowe said. Apple says human curation, not algorithms, will take the lead as it looks to “redesign” radio. NEWS INSIDE >> Apple revamps its entire streaming music ecosystem. Radio is only one piece of a Big wins for urban AC, digital music ecosystem that Apple has rebuilt from the ground up, as it plays catch up classic hip-hop struggles in the fast-growing streaming industry. Calling today’s music marketplace “a fragmented [email protected] | 800.275.2840 PG 1 NEWS insideradio.com TUESDAY, JUNE 9, 2015 mess,” Beats co-founder Jimmy Iovine said Apple Music aims to create “one complete thought around music.” The new service offers three points of entry. My Music, which accesses all the music a user has purchased through iTunes or included in playlists, as well as the entire iTiunes library. For You, which asks users what genres and artists they like and combines the answers with their music listening history to create personalized playlists. For You also recommends playlists curated by artists and experts. And New, which showcases new artists and singles. For artists, there’s a Connect feature that lets them upload and share new songs they’re working on, backstage photos and other behind-the-scenes content. Siri is in on the act, too. The voice activated personal assistant will respond to commands like, “Play ‘Born To Run’” or “Play the top 10 songs in alternative” or even “Play the top songs from May 1982.” The subscription-based service, which launches June 30, costs $9.99 a month or $14.99 for a family package of up to six people. To encourage sampling, Apple will offer the first three months for free. Apple playing catch up with established streamers. Apple is touting its overhauled music service as a “revolutionary,” one that will deliver “all the ways you love music all in one place.” CEO Tim Cook went as far as declaring it “will change the way you experience music forever.” The grandiose proclamations come as the tech titan plays catch up with on-demand services like Spotify and Pandora and reclaim its place as a digital market leader. Since launching its iTunes service in 2003, Apple has been the dominant force in digital downloads. But music download revenue from Apple’s music store has steadily declined over the past three years while streaming has become a bright spot as subscriptions and revenues grow. So far, though, many subscription services have been regarded as niche products with limited appeal. Apple’s service could position streaming for the masses, analysts say, making digital streaming available to a much wider audiences. iTunes counts 800 million users, a vast trove of potential customers. But Apple will have to entice customers with something differentiated, says analyst Russ Crupnick of research firm MusicWatch. “The question is, what is Apple going to say to the mainstream music fans that shifts the way they’re listening now to paying a subscription?” Crupnick told the Los Angeles Times. Big wins for urban AC in major markets. May came in like a lion for urban AC in radio’s largest markets. The format finished first in Chicago and Atlanta, placed second in Houston and showed up in third place in New York. In Chicago, iHeartMedia’s “V- 103” WVAZ is enjoying a second consecutive month in a row at the top of the heap, trending 6.5-6.9-6.8. In Atlanta, long an urban radio stronghold, urban AC captured both the No. 1 and No. 3 positions CBS Radio’s “V-103” WVEE sprinted 7.8-8.5-9.0 to top the market. Cox Media Group competitor “Kiss 104-1 FM” WALR is also on a multi-book upswing, tracking 5.4-6.4-6.6 to rank third. In Houston, Radio One’s “Majic 102” KMJQ dipped slightly (6.3-6.8-6.5) but remained firmly entrenched in second place. And in New York, Emmis’s WBLS (107.5) added a more than a full share in one month, cruising 5.7-4.9-6.0 to rank third. Classic hip-hop struggles to maintain initial ratings burst. When classic hip-hop exploded on the scene last fall, it brought a fast ratings rush to a handful of stations. But programmers quietly questioned how long the sugar rush would last. “The launch is the easy part,” said Adrian Scott, the programmer credited with introducing the first classic hip-hop station in 2009 on Meruelo Media’s KDAY, Los Angeles (93.5). “What a lot of these stations have to understand is what happens when old gets old,” Scott said. “The hardest part is to maintain it.” Programmers are experiencing that firsthand in three top 10 markets. Radio One’s “Boom 92” KROI, Houston – which started the trend – ranked 24th in Nielsen’s May survey with a 1.6 share. It debuted with a 3.2 last November and has been slowly declining since. Dallas sister “Boom 94.5” KSOC got as high as a 3.4 last December. It has trended 2.8-2.6-2.4 in the last three monthlies, tied for 15th place. “Boom 107.9” WPHI- FM, Philadelphia, which peaked at a 3.9 in the Holiday survey, fell 3.0-2.5 in May. “If it’s going to be successful in the long haul, it will need to evolve,” consultant Tony Gray says of the format. [email protected] | 800.275.2840 PG 2 NEWS insideradio.com TUESDAY, JUNE 9, 2015 L.A.’s KTWV catches a ratings ‘Wave.’ One of the few surviving “smooth” spots on the FM dial marked the month of May by gliding to its best ratings since at least December 2010. CBS Radio’s “94.7 The Wave” KTWV, Los Angeles rolled 3.5- 3.9-4.4 in Nielsen’s latest ratings survey, up almost two shares from one year ago. It’s a fourth consecutive up book for the station that launched the smooth jazz format in 1987 but has more recently stumbled to find its footing. Ranked fifth in radio’s richest market, the station’s ratings ascension comes less than a year after it promoted assistant program director Ralph Stewart to program director.