All Access Exclusive Commentary

 

Are Headphones “DeadPhones” for Radio?

Let’s imagine for a moment that you are a retailer who owns five stores. The cash flow from those stores is very important to you – it pays your mortgage, feeds and clothes your family, and pays for your kids’ education. Your stores are called Home, Car, Work, Other, and Headphones. Four of your five stores are equipped with electronic scanners which help you ensure that every item sold is tracked and all the revenue is accounted for. But your fifth store, Headphones and Earbud City, doesn’t yet have a barcode scanner – or it has one, but you’re not sure it works very well, and all the sales are cash over-the-counter. You have to take the manager’s word that every dollar gets counted, reported, and deposited. He says he’s working on it, but it could probably be better.

Your manager at that store is pretty good, and you trust him for the most part. But you’d worry that dollars - dollars that are vital to you – are slipping through the cracks at that store, wouldn’t you? And you’d wonder just how much is getting lost.

That’s the situation radio finds itself in right now with measurement of headphone listening. Nielsen has procedures for measuring listening done with headphones, but many people are convinced they are very effective.  Nielsen seems to implicitly agree; when we asked Nielsen for a description of those procedures, their statement ended this way:

“Nielsen is also exploring measurement solutions that would account for all types of listening including headphones.”

If headphone and earbud listening isn’t being fully captured and reported, it would be a serious problem for radio, one that’s likely costing the industry many millions of dollars in revenue and cash flow.  Until this week, no one really had a handle on how important the issue is; that is, just how much listening to radio involves headphones or ‘buds.  Now, based on data from the Alan Burns and Associates/Strategic Solutions Research study of 2000 women nationally, we have an answer – and the answer is “it’s enormous.”

Almost half of the women we surveyed wear headphones or earbuds, in the number is even higher among heavy listeners and women who listen to radio at work. 15% of these women told us that half or more of their radio listening involves headphones. If you subtract half of the quarter hours generated by 15% of women, there goes 7.5 AQH rating points for radio. Boom. And that’s not accounting for any of the “or more” part of the statistic.

The self-reported headphone behavior of women who had actually participated in a ratings survey was even more worrisome: 43% of past panelists spent half or more of their radio listening time with headphones or earbuds on. Imagine the impact on radio if that turned out to be typical of most participants. Even if it turns out not to be, it shows what could happen given the vagaries of random sampling.

 

NextRadio claims its technology solves the headphone problem; Nielsen says they’re working on it. As an industry that needs every rating point and every dollar we can get, we should be enthusiastic about NextRadio and keep the pressure on Nielsen to make progress and be transparent. After all, as my friend Hal Rood at Strategic Solutions Research points out, the potential upside for radio is massive.

As always, your comments and thoughts are welcome: Alan@Burnsradio.com.