The radio of the future: what’s our margin? (4 of 4)

In this series, we’ve investigated how increased mobility and better workflow will empower radio teams to produce better content and therefore increase audience engagement.

As radio broadcasters though, these changes boil down to the value they create for the organisation.

Simply put, there are two main ways to create value (margin): increase revenue and/or reduce costs.

Conveniently, the mobile virtual radio studio allows for both.

Nowadays, moving a radio studio for outside broadcasting implies making a choice between heavy logistics on the one hand, and reduced capability on the other. Benefiting from a light yet comprehensive studio is a game changer.

Revenue can be increased in three main ways:

• getting closer to listeners and being able to produce unique shows lead to better, more relevant content, boosting audience reach and engagement, which in turn increases attractiveness for advertisers.

• with the same level of equipment, radio broadcasters can produce shows more easily because each of them requires less effort, lowering the threshold to go out.

• faster turnaround time, thanks to the inherent lightness of virtual solutions, enables broadcasters to get more use out of the same resources. Since a lot of shows nowadays are being sponsored by third parties, this means higher turnover.

At the same time, the cost structure of the organisation profits from:

• lower capital expenditures, often by an order of magnitude. The money that is not tied up in hardware can either be reinvested into content - or simply directly improve the cost structure, and thus the margin.

• substantially lower TCO (total cost of ownership) is also enabled by dramatically lower operational costs (e.g. logistics, travel expenses, cost of personnel on site, cost of replacement in case of failure, cost of maintenance…).

• side benefits include lower cost of real estate (typically when building new facilities), lower commuting costs as radio can be produced anywhere - including from home – and a lower environmental footprint.

• the subscription or pay-as-you go model shifts scaling and cash-flow risks towards the technology provider.

To answer the question in the title: with virtual solutions, the broadcaster’s margin is higher.

But more importantly, this is not the traditional “cut costs, degrade the quality of service”.

On the contrary: your content is better, and your audience is more engaged than before!