Without question, the hot new gadget on the market is the smart speaker – the Amazon Alexa, Google Home, and the just-released Apple HomePod. This was the hot gift this past holiday season, and there doesn’t appear to be any loss of momentum. A recent study by Canalys projects more than 56 million of these devices will be sold this year, providing consumers with the opportunity to talk to a machine that provides an ever-growing list of functions and services.
Wisely, broadcasters have jumped on board, developing “skills” that allow listeners and viewers to access all forms of content, including news “flash briefings,” audio streams, podcasts, weather reports and more. Television continues to have prominence in homes, but can benefit from these devices, but smart speakers have the potential to be a real boon to the radio industry, which has lost ground with listening at home as fewer AM/FM radios can be found there. (Have you tried to buy a radio at Best Buy lately?)
As technology has proliferated in the past decade through the creation of social media platforms like Facebook, smartphones from Apple and Android, and now smart speakers, it’s been relatively easy for broadcasters to jump on board and take advantage of new – and free – distribution outlets.
But are they really free? Let’s take a closer look at the cost of content distribution on platforms broadcasters don’t own:
- You are just renting. All broadcasters are subject to whatever new rules and restrictions a chosen platform decides to set. Recently, radio and television managers woke up to discover Facebook had changed their algorithm, making it more likely you’ll see posts from friends and family rather than marketing and content from brands and media companies. Facebook’s founder Mark Zuckerberg described the change this way: “You’ll see less public content like posts from businesses, brands, and media.” That’s right. Unlike what broadcasters can do on their frequency or website, which they own, they are only “renting” space on Facebook, Amazon, and Apple. And they’re subject to any changes the “landlord” – Mark Zuckerberg, Jeff Bezos, and Tim Cook – decide to make.
- You have to conform your brand to the platform. Our mobile app company, jacapps, was the first developer to code apps for radio stations on the Apple CarPlay in-dash ecosystem. As we dug into their requirements, it became clear Apple was going to control all aspects of the way content appears in the dashboard: No content other than streams and podcasts. Want to do something else? Tough.
Broadcasters developing “skills” for the Amazon Alexa have learned the painful lesson of thinking up a command name (or “invocation” as Amazon calls it) that passes muster and connects consumers with their desired radio station content. In fact, radio stations that use their call letters immediately get swept away to TuneIn or iHeartRadio because of pre-existing partnership agreements. TV and radio broadcasters have to modify their invocation names, content, and the way they describe it to conform to Amazon’s standards and rules.
- Welcome to your new business partner. Do you want to sell product through your mobile app? Welcome to your new business partner. Apple places strict requirements on in-app purchases. In most cases, they take $0.30 of every revenue dollar off the top. And your marketing approach needs to go through Apple’s approval process before it goes live.
Despite the fact Amazon Alexa is the category leader and has an estimated 75 percent of the smart speaker market, they currently don’t allow advertising on the device (except for ads that appear in-stream and some versions of a pre-roll). When recently asked about advertising in Alexa, an Amazon spokesperson responded, “There are no plans to add advertisements to Alexa. Skill developers are paramount to creating a unique and compelling voice experience, and we encourage continued innovation within our policy guidelines. We will continue to explore ways for developers to monetize their skills in the future while maintaining the best possible experience for our customers.”
In other words, Amazon is really happy to have your station promote their device and send your listeners and viewers to Amazon.com to buy one, but they have no interest in broadcasters profiting from this venture. But they sure do appreciate the free mentions.
TV and radio operators have grown comfortable expanding their digital usage metrics on the backs of these platforms. It’s relatively easy to do. The cost of Facebook posts is virtually nothing, and mobile apps don’t break the bank.
But don’t be fooled. Apple wants to sell iPhones and keep their user experience pristine. Amazon wants to sell you books, groceries, diapers, and everything else under the sun via Alexa and their successful Prime program. Google wants you to use their search engine and Chrome browser. These are their core businesses, and while they truly appreciate broadcasters willing to provide them with free advertising, they are much more focused on their business – not yours.
That’s the trade-off. Broadcasters need to review and understand these arrangements with eyes wide open. Getting to know the “landlord” is always a good idea.
The WBA Digital Hotline is a free service of the Wisconsin Broadcasters Association. To contact the Hotline, call 248-353-9030 or email Paul Jacobs at firstname.lastname@example.org.