M360: 'The car dashboard will be the next battleground in radio wars' warns Carat investment boss
Carat's Chief Investment Officer, Ash Earnshaw, has warned that control over the car dashboard will be the next major battleground in the fight between radio and music streaming.
In a panel discussion at the Mumbrella360 conference on the future of radio, Ashley Earnshaw, chief investment officer of Carat, noted that while music streaming enabled dashboard represented a relatively small number today, that number would grow rapidly in the coming years.
“To me the battleground around the car is so key,” said Earnshaw.
“At the moment it is only a small percentage of cars that have that accessibility (to music streaming) but that will grow and so the dashboard will be key.
“I see what happened with TV and the consumer being able to easily make choices around that and I think you have that with mobile and streaming. But once you have it in the car it will shake things up a bit.”
His comments echo a PwC report released last week which warned that Australia’s $600m radio sector would increasingly come under pressure from the rise of music streaming services such as Pandora and Spotify.
Earnshaw said the conversation was increasingly shifting to a discussion of audio – be it terrestrial radio or digital audio – and cited the success of Southern Cross Austereo as an example of an traditional radio player that whose sales conversation was shifting from radio to audio.
“I think it comes down to what we mean by radio,” said Earnshaw. “If you look at Grant (Blackley) and the breadth of his business at Southern Cross Austereo (SCA) we need to ask what does radio mean in 2016.”
The topic of music streaming has recently been in the headlines with the CEO of Commercial Radio Australia arguing that streaming audio could never replace terrestrial radio as the mobile networks would not be able to take the capacity.
But Blackley said he believed that there would be a future for both terrestrial broadcast and streaming.
“I think we will see both and I think that both perform well and fulfil a different role,” he said. “We are the 10th largest mobile publisher and so I think we operate in a number of spaces and so we coexist well.
“It isn’t by mistake that the space is growing. I speak to analysts a lot as a public company and they all ask the same question: what’s the point of difference for radio as opposed to television, newspapers etc. And it comes back to the fact we are hyperlocal, a well crafted, well told story across multiple platforms.”
Commercial Radio Australia is also in the midst of a tender for the automation of its on-air media buying with Earnshaw urging the body to move quickly on the issue. Mumbrella revealed last month that CRA had told Landsberry and James that it would receive the contract but has yet to confirm this publicly.
“The automation piece has to come quick,” said Earnshaw. “Again if you come back to the TV broadcasters there were some who left it late and are now playing catch up.
“The programmatic space (with its overlay of data) and audiences is absolutely how we want to be thinking about audiences and so the evolution of radio into the programmatic space is going be what propels the industry over the next five years.”
Fellow panel member Jane Huxley, managing director of Pandora, said she believed the space would continue to fragment.
“We have all talked about fragmentation and that there is a lot of complementary uses as well,” said Huxley. “The truth is (consumers) are busy and have a lot of choices and marketers will find their audiences in a 20 or 30 different places.
“What it comes back to for me is that you find more investment in the product than ever. When you competing for an audience it does come down to how good your product is. How well is it solving the problem that it set out to solve? Is it delivering on what it said it would do? Does it tick the boxes of choice, cost and convenience?
“To not be too trite with this, the consumer does win in this. Because it does force a focus back on the product.”
This article originally appeared on Mumbrella.