While some companies are just now adding their stations to Home Speaker platforms like Amazon’s Alexa, Federated Media was an early adopter. In fact Federated Media was the first company to build an Alexa skill, and put its radio stations on the platform, about a year ago. Federated Media has always been one of radio’s innovative companies, never afraid to take chances on new platforms the company can see consumers are heading for. James Derby (pictured) is the Chief Strategy Officer and Director of Programming for Federated Media. We spoke to Derby about the Home Speaker platform, why radio stations should be there and the new skills Federated is building as these devices make their way into the homes of millions of consumers.
Radio Ink: What are you using Amazon Alexa for right now?
Derby: We have 15 signals. There are stations in Ft. Wayne, South Bend, Elkhart, and Warsaw, Indiana. We have all of our music stations up, including their podcasts and music channels. And our news stations like WOWO-FM are building those skills right now.
Radio Ink: Why is it important for Radio to be there?
Derby: It’s about convenience. There’s no question that in-home radio use has been on the decline for years. I’ve struggled with believing the numbers from Nielsen that show home radio usage at 30%. I work in the business and I don’t know people who own radios in their home. We looked at this device and said, “If people are using it in their home, office etc., and audio and music is something they can obtain here, then it’s a huge advantage for us to get back in the home.” Thank goodness they are (Amazon) allowing our industry a place on the device. It’s up to us to put the best product on the device and I think over time that will be our biggest challenge. You have an analog industry sitting on a digital device, and I don’t see that as a long-term solution. It’s great for now, but we have to figure out a way to capitalize on our local content, talent, and brands, and find a way to present them in a digital form on a digital device.
Radio Ink: You said B100 is one of your stations. If I say B100 in Fort Myers, your station will come up first. How can radio stations differentiate themselves on these devices.
Derby: It’s like with domain names. If we weren’t first we would have to be creative and figure a way to do it. Over time, I think — but I am not the expert — you will be able to have multiple B100s because they can identify based on location. We have K105 and our friends in Lafayette, Indiana have a K105 as well. We just got there first. That’s fortunate for us. They have to figure out a way to make an identifier.
Radio Ink: Does this make sense in terms of the cost?
Derby: Some of the different providers of building these things have come out with building skills for some of their app partners, free of charge. To look across the board at some of the developers, we like XAPP Media because we trust them and they have a big development team. Cost and revenue is the big challenge. In larger markets, the reason to be there is that if someone is holding a PPM and they are walking around their house with Alexa on, that translates to ratings. For diary markets like ours, it’s a different deal. The same principles might apply but it’ a little short-sighted to sit here and say that’s the answer to the revenue problem. Our big advantage is we’ve been in these markets a long time. We are trusted. People enjoy our content and talent, but it will be an investment. On any investment you want to have revenue coming in, not just to pay for the investment, but to make something off it. We approach it like we did streaming. When we got started with streaming we could not afford not to be in that space. We feel the same way with this. This is something that by the year 2020 is going to be in 75%-85% of all households. It would be silly for us not to be there.
Radio Ink: Do you have any way of knowing yet, how your listeners are listening? Are they listening on the device or streaming on TuneIn.?
Derby: We are an Eastlan subscriber so we get credit no matter how the person found us. To have information on how they are listening would be nice. There’s a dashboard now through Amazon that allows us to see how many people are using the device. B100, because all the other stations came on board three to four months later and we just started promoting those skills on the stations, is the one with the longest track record. In any week we would have a hundred individual users, which doesn’t sound like a lot, but you don’t need many of them to recall the radio station. We are in South Bend, Indiana not Chicago or New York. As of last year 8- 11% of Americans have an Echo so I’m encouraged by our numbers. It will be a number that grows over time.
Radio Ink: How are you doing with original content and is it important?
Derby: When it comes to podcasting, that’s an on-demand service. When you think of some of the media groups that have had real success in on-demand podcasting, like NPR, ESPN, who have invested a lot, they understand there are a lot of people that have grown up thinking everything should be when and how they want it. Podcasting allows for that. The hardest thing is how do people find it. The more distribution points the better off you are. Alexa and Google Home are adding to those distribution points for podcasts. Our strategy was simple. We went to our PDs and our air talent and said, “We’re looking for people to come forward with a podcast of 20-30 minutes once every two weeks. It can be about anything you’re interested in. It doesn’t have to be about the station or your air shift.” We had people come forward with a hunting show, a beer show, a sports show etc. We’re confident there are people who listen to them and have those same interests. For the jock, we want them excited about it. So if it’s something they enjoy doing it, it makes it easier.
Radio Ink: What is one of the most popular original-content shows for you right now?
Derby: We just had our company awards, and last year we added a category for Best Podcast of the Year. The one that won was the Blue Gold Report. It’s a Notre Dame podcast (LISTEN HERE). Our program director in Ft. Wayne and a local blogger for Notre Dame sports have been hosting the Podcast for about 15 months, doing a great job. You would think there would be a lot of Notre Dame podcasts out there given its size but there isn’t. We think this podcast might have some legs for a bigger reach. One of our repurposed ones that does really well is our morning show in South Bend for our Rock station. The Podcast is called Here’s Your Freaking Podcast. They named it that because they didn’t want to do a podcast and we kept pushing them. It quickly shot to the top in terms of downloads for podcasts.
Radio Ink: Does it worry you that it might be in the car one day?
Derby: I hope it is. If your brands are strong in a community it shouldn’t bother you. If I get in my car and have my phone hooked up on the Bluetooth, I text using voice recognition. But if I could get into my car and not have to pre-program things, and say, “Play B100,” that’s easy. Back in the day, when you were locked into those six buttons but only really used three, I don’t think that changes in the car and its voice. Spotify, Pandora might be there alongside us, but it is up to us to beat them.
Radio Ink: What’s it like working for a company like Federated Media, a company you know is always going to take a chance on new things?
Derby: It is exciting and fun. We have a lot of latitude. We are pretty smart about it. We have a COO Brad Williams who thinks this way. We know we need to be out there with what consumers and clients are doing and working toward what they need and want. I definitely think there’s an advantage to being smaller, more nimble and private. You can go about your business and only be beholden to your clients and listeners. That has served us well. It’s not the only way to get things done, but there’s no question we have ownership investing in the future. That’s something that makes doing this more enjoyable.
Radio Ink: Any advice for other Radio Executives?
Derby: They have to be there. I can’t imagine being in this industry and not wanting to be in homes or at work where your listeners are sitting. Unless everyone is wrong and voice recognition devices don’t take hold like they are projected to, I can’t imagine operating without being in that environment.
James Derby can be reached by e-mail at email@example.com