Now that the initial hype has subsided and media users have gained experience with AI applications, it’s time to draw an initial conclusion. One recurring question is, ‘Where is the productivity gain?’ One possible answer is that productivity depends on financial gains and reduced costs. For the media industry, especially in radio business, the key questions are: Are personnel costs actually being saved, and are higher revenues being achieved? As previously discussed, personnel costs account for a significant portion around 50% to 60% of total expenses for radio stations. The editorial department likely contributes a much higher share to this cost block than organization and sales/marketing, which we won’t delve into here.
Let’s take a closer look at the sales and marketing department of a radio station over time. In practice, it’s quite possible that expensive creative minds in sales will be replaced in the future, and a new team equipped with pre-generated sales offers and ad creations through AI will be deployed, following the motto ‘We’ve prepared you better than ever before.’ If it becomes possible to enter the market with new and numerous offerings, resulting in actual revenue growth, then the effort will have been worthwhile – killing two birds with one stone. At the end of this article, there will be a call to action.
Navigating the Next Two Decades
The French government has warned of a drastic change in the media landscape over the next 20 years, driven by digital players. Experts agree that this is likely to happen in most radio markets around the world. The author recommends that radio stations fight back with their own weapons, namely artificial intelligence (AI).
AI as a Key Determinant
Despite the uncertainties surrounding the hype cycles of emerging technologies, experts see AI as a key determinant for the future of radio. Radio, whether state-controlled, supported, or privately organized, is dependent on refinancing. This raises the question of how to optimize processes in the programming area, particularly with a view to opening up new revenue streams. And this goes beyond advertising. This article focuses on the commercial side.
Beyond Advertising: New Revenue Streams
In addition to traditional radio advertising, there are other potential revenue streams:
- Streaming and podcasts: These offer new ways to reach listeners and generate revenue.
- Tapping into new customer bases through new partnerships and content: This could involve collaborating with influencers or creating content for specific target groups.
- Increasing efficiency using AI in 10 steps: This could include using AI to automate tasks such as playlist creation and scheduling.
Recommendations for Radio Stations
The author’s recommendations for radio stations are as follows:
- Invest in AI: AI can help radio stations to become more efficient and reach new audiences.
- Create new content and partnerships: This will help to attract new listeners and generate revenue.
- Train your sales teams: Salespeople need to be up-to-date on the latest AI technologies and how they can be used to benefit radio stations.
And the previously announced call to action is: ‚Create a comparative analysis based on key items such as ‘changes in revenue from acquisitions’ and ‘reductions in personnel costs for sales/marketing/creative/workflow.’ Please conduct this analysis across different Nielsen regions and by station types. Perform a point-in-time comparison now, assuming that you are a serious provider, if it hasn’t already been done. The results promise to be interesting, and best practices can be derived from the insights.