Hivio 2016 Day Two Coverage: Commercial Radio's Changing Model. After presenting a full "slate" of activity Thursday afternoon (6/2), San Diego-based media advisor-strategist/research analyst Mark Ramsey returned the following morning (Friday, 6/3) with another packed schedule as part of hivio 2016. Kicking things off was a one-on-one discussion with Panoply Media chief content officer Andy Bowers, who has been working on Slate podcasts since 2005. The former 14-year NPR correspondent joined Slate in April 2003 when it was working on various internet projects. "By magazine standards, we jumped in pretty early," he recalls. "It proved to be one of the most popular things Slate did." By 2014, they realized other magazines would most likely get into the business as well and Bowers opines, "We could either compete [against them] or we could try to form a network and help teach them what we had learned." That was the idea behind Panoply, a full-service podcast network that "connects sophisticated listeners with top publishers and thinkers," which was started approximately 16 months ago. "We are trying to be a 'one-stop shop' for media brands, authors, and people we think should be doing a podcast," Bowers tells Ramsey. "Slate has very robust video and I used to run the audio arm and video arm, but I quickly discovered the two are very different. Videos tend to be short and [that sector] does not usually engender the kind of loyalty that audio does." Echoing what was mentioned several times during the two-day hivio event held (at the Andaz Hotel) on Hollywood's Sunset Strip, Bowers states, "Podcasting is so intimate. At NPR, we used to say that radio was the most intimate media, but podcasting is doing radio one better – it is right there in your ear. You follow people you feel you get to know." One day when "Political Gabfest" was late in its posting, an irate fan registered a "complaint." He said he was annoyed the podcast was tardy because he depends on the show. The person in question is Stephen Colbert, who said he used "Political Gabfest" to help plan the following week's "Colbert Report," the nightly Comedy Central show he was doing at the time. "We got to know him," Bowers notes of CBS' replacement for David Letterman. "He told us that he feels like we are his friends and that the show is a weekly dinner party. People get very connected [on this platform] in a way that I do not think exists in video." According to Bowers, podcast advertising is "uniquely effective." We tend to do host-read ads that are often improvised. The ads are interesting and come from hosts who people trust. It really works for direct-response advertisers – who have been very early in this space. They know exactly how many conversions they are getting from every show. People keep predicting the collapse of podcast CPMs but it has not happened. The audience is 'small-ish,' but it is very dedicated and loyal. Podcasting is a niche medium. You can target the top people in various fields." A big focus of Panoply is to expand the number of brand advertisers. "We have already had a lot of success with that – we did a big program with Acura several years ago," Bowers mentions. "Splashy events have been very interesting to brand advertisers." Its biggest project for a brand to date involves General Electric (GE). "They came to us last year and said they were interested in taking a franchise they had on television in the 1950s ['GE Theater'] and wanted to update it by calling it 'GE Podcast Theater,'" Bowers explains. "They had an idea for an original science fiction drama. Audio drama has been a lifelong passion for me. It has been scarce on the radio in the United States [whereas] it is vibrant in the U.K." Panoply "gladly" took on the production and created an eight-part series, with Bowers declaring, "It became a huge success. GE's name is not mentioned at all – except at the end. We were thrilled at the way it turned out." It is his contention there is "a lot of awareness about the efficacy" of podcasting and "many people are interested in doing it. We have the longest track-record of working with brands." Podcast metrics however are not as complete as Bowers would like. "We know [almost] exactly how many people download a podcast; other information though is controlled by the person controlling the player itself," the Yale grad remarks. "Very few apps – including those of iTunes and Apple – will give us that data. We are a little stuck without having data that are more granular. Only about 20% – 25% of people listen to podcasts – that leaves many people still to come. I come from radio; I love radio; and I do not mean to disparage radio. It is very great for many things and I envy its simplicity, [but] I definitely believe that in 10 years or so, most people will be listening to spoken-word on-demand. It is just inevitable. The old model of commercial radio is going to change. [Radio executives] will have to figure out who the new audience is and adapt their programming to that audience."
In addition to his love of listening to podcasts, digital news platform Recode senior editor for media Peter Kafkahosts a Recode podcast. "I listened to Adam Carolla when he was starting out and Bill Simmons as well," Kafka tells Ramsey. "I love consuming media in that way." Recalling "a false start" with it, Kafka explains, "[iHeartMedia chairman/chief executive officer] Bob Pittman told us not to do it and to do radio instead. We did a terrible test show in San Francisco one Sunday night and it sounded like bad radio. It was everything we do poorly in one hour." They quickly pulled the plug on it and opted instead for "what we do well, which is to talk to people. We have great access and we know how to do interviews. One day we will do something that is not a straight interview but that is [our greatest strength]." Mirroring the sentiment of Andy Bowers (see above), Kafka enthuses that he loves "the intimacy" of the actual conversation and that "podcasts allow you to multitask." At the same time though, a podcast "still commands your attention." Citing Facebook and Google as "the two companies that own almost all mobile advertising," the University of Wisconsin – Madison alum maintains that the former "stumbled into it. When Facebook went public a few years ago, they did not have a mobile advertising plan. A clunky thing called a 'mobile install app' really helped to turn things around. That has been powering their business. Facebook would like to figure out how to get television advertisers such as Toyota to put ads on Facebook, but that is not happening yet. There is a big gap of what Facebook would like to have and where they are now." Even so, Facebook is generating billions of dollars and Kafka concedes, "They are doing okay in the meantime." A while back, bloggers could be found everywhere until, as Kafka states, "They realized no one was reading their blog – it is very depressing to create content that no one is going to consume." In his estimation, this is "the best time" to consume media. "Several years ago, Netflix didn't have original content, but now, they are spending billions of dollars on it and they are here for real," the former senior editor of Forbes.com comments. A bit skeptical about Verizon, Kafka opines the company will exit this business "in a few years if they cannot figure it out, but they will pour a lot of money into it for a little while." Predicting Verizon will buy Yahoo!, he quips, "It is that boring and unexciting in the end. They will combine it with AOL and have one big platform that will slowly go away [because] once consumers decide to stop visiting a certain website, they stop going." For Kafka, it is not too "late" to sell podcasts – it might be too early. "More people need to be interested in the idea of podcasts; it is a pretty small audience right now," he evaluates. "There are many pay subscription services out there that work – you just need to deliver value. The music business is still selling CDs. It is very hard to actually go ahead and blow up your business model. For obvious reasons, no one wants to say that a company will take 'a hit' for a year or two as they completely rethink the way they do business. The 'disruptors' tend to make a lot less money than the companies they are blowing up."
Responsible for general management of ESPN Radio, ESPN Deportes, and ESPN local.com, Traug Keller observes to Ramsey that uniform measurement is the "biggest thing" regarding time-shifting programming. "We are taking a lead role in working with some of the major measurement companies to make sure that hurdle gets [cleared]," the former ABC Radio Networks president states. "Whether it is the internet, the phone, or satellite radio, there are more opportunities for people to listen." For that reason, Boston College grad Keller and ESPN made a conscious decision a decade ago that, "We would be audio everywhere." Despite the "doom and gloom" around terrestrial radio, "it has fed a business that has grown successfully." Good audio content that is placed on multiple platforms "just increases your audience," Keller reasons. "Our audience has done nothing but grow and we have seen a good demand for our audio content on television." Coming off 2015 when ESPN had 366 million downloads, the sports network set a record in May with 41.5 million. "That is the third month in a row of record numbers," Keller boasts. "There is no question about it that this podcasting thing is exploding right before our very eyes. We are now having all of our talent do live drop-in ads into the podcasts and we will do more live reads. We see the best results for our advertisers when the folks doing the content uninterrupted for a six-minute commercial block read a commercial live. We will extend that to almost all of our podcasts. We have had good growth in our audio business and that good growth has been fueled by podcasting and digital audio." Candidly noting that ESPN Deportes was "not incredible out-of-the box," Keller emphasizes that, "Like everything else in radio, you have to let things bake. If you give it time and believe in it, [good things] will happen." While convinced that radio is "an effective medium," he nonetheless feels it "has lacked the creativity on delivering the commercials. It is usually relegated to the most junior copywriter at an ad agency. It certainly deserves more attention than that [so] it is incumbent on us in the industry to make a difference there." Many on-air talents can be heard and seen on ESPN. "Some come – some go [but] we are extremely comfortable in who we have on our air," Keller proclaims. "We are quite confident that the number of platforms we offer attracts great talent. Our roster is very strong and we always want the best people." Excited about the ability to evoke listening, Keller recounts the scenario of the 2014 World Series (between the San Francisco Giants and Kansas City Royals). Prior to the first pitch of the seventh game, 15 million people on TuneIn received an alert. "They could click to listen to ESPN's live coverage; 30 million on the ESPN app got that message," Keller notes. "Suddenly, we were able to tell [45 million people] our coverage was one click away. The reason I am so bullish is we could not do this 10 years ago."
Self-described "radio guy" Howard Lapides attributes consolidation – not video – for "killing the radio star." The chief executive officer of Lapides Entertainment and executive producer of VH1's "Celebrity Rehab" puts forth to Ramsey that, "As long as we still have imaginations, we are in great shape." When it comes to content, Lapides says the delivery system does not matter. "We love radio's delivery system because we all got used to it and we all started there; however, radio – as we learned it – is gone." Radio itself though has not vanished and Lapides insists, "There are different methods of doing it" and he invokes the name of the late Arthur Godfrey as hosting one big podcast. The first time Lapides heard Dr. DrewPinsky on radio was extremely memorable. "It was as if he were grabbing me by the throat and making me listen. I became massively addicted and I had to talk to him. I thought there were mountains for him to climb. If he can shout from the top of those mountains, people will know who he is." Not only did the two eventually met, Lapides is managing partner of Dr. Drew Productions. Forecasting that the future of radio is going to be more linear, Lapides cites that, "Podcasting only made $34 million last year – not a lot of money but it is there. Adam Carolla and Dr. Drew are doing extraordinarily well [with their podcasts on Norm Pattiz's PodcastOne]. If you listen to how they do it, it is [different from] listening to the radio. If you transpose that into the other delivery system, there is a future in it. The trick is 16 spots per hour. The model has to change – it cannot look, smell, or feel like radio." From the school of thinking that it should be a shorter pod rather than a longer one, the former executive producer of "The Man Show" and "Loveline" acknowledges, "We know people are consuming the [podcasting] product."