Where is the radio industry as the digital world transforms the media around us?  And where does radio need to go?

These were just two of the questions I put to Triton Media VP Strategy Jim Kerr this past week.  

Triton, of course, is one of the firms at the forefront of the digital revolution in radio.  That puts Jim in the center of the storm (or is it the eye of the hurricane?).

It's a progress report on our path to revolution.

[Note: If you don't see the video, click the post title]

P.S. I'll frame the interviewer better next time.  Fortunately, you see enough of him.

Let me first say that I positively, absolutely think radio should have many more video elements to their digital strategies, including live-streaming video.

However, nothing is less compelling than the average wide shot of an air talent doing his or her thing, surrounded by a console, with a lame banner draped behind them.

And sadly, that description fits almost all the radio shows that have live-streaming versions.

Watch live streaming video from KREF at livestream.com

When broadcast news transitioned from radio to TV, one of the first things broadcasters figured out is that what it takes for people to watch is different from what it takes for them to listen.

When you put a camera in a studio you are officially in the TV business, whether you want to be or not.

And that means you should create elements worth viewing.

It also means you should strip away as much of the unsightly radio technology as possible - just like the TV guys don't show you their control room.

If, in fact, you do more of a TV show on the radio you accomplish several goals:

1.  You differentiate from your competitor who isn't bothering to do this

2.  You are able to tease elements that need to be seen to be appreciated, thus boosting viewership

3.  You are able to tap into a new revenue source, not to mention the revenue potential from product placement

4.  You are not diminishing in any way the listening experience.  You are simply adding a new way to experience a richer version of the show.

If you know of stations doing all of the above, post their links in the comments.  Let's see some good examples of stations doing live video the way live video needs to be done.

Watch the familiar brand names and their various success stories fly by in this video from Socialnomics: How social media transforms the way we live and do business author (and forthcoming hear2.0 interviewee) Erik Qualman.

Note, of course, that every return begins with an investment, something we would be wise to remind ourselves of next time someone asks you about monetization potential.

The key element, of course, is where social media fits within your broader (and increasingly) digital strategy.

It's not about having Facebook pages and Twitter feeds.  It's about having a strategy that justifies each of its component parts and, in the long run, makes your clients more successful.

Here's a cool interview with Jelli founder and CEO Mike Dougherty about his new service that amps up the game aspect of radio by giving the users (formerly called "listeners") control over the airplay.

I wrote about this in greater depth in this post.

The important thing about Jelli is that it is genuinely gathering some excitement among consumers looking for the Next Big Thing.

This interview is from the gamer and comics culture channel G4.

[Note: McVay New Media has a service similar to this called "Listener Driven Radio"].

Note to G4:  How much is that interviewer paying you guys for this gig?  "Bad" is what the better version of his technique would be called

The bloom may have been shed from the 'bucks, but can the bucks return in a boom?  And what takeaways are there for the radio biz?

Check out how Starbucks CEO Howard Schultz assesses what his company did wrong and what they're doing to make it right:

Every brand experiences growing pains, and Starbucks, which opened new locations at an arguably pathological rate, was no exception. 

Speaking at Thursday’s Ernst & Young Strategic Growth Forum, Schultz felt his brand lost its focus after 15 years of infallibility: “Somehow, along the way, the level of that feeling” – the love inspired by a people-based business – “got somewhat blurred by success.” 

Schultz made some difficult decisions, but they were essential for the brand’s survival. If your brand is in trouble, or isn’t as successful as it once was, you can learn a lesson or two from Schultz’s boldness. 

In February 2008, shortly after returning to the company, Schultz ordered all stores closed for three hours to focus on barista training, a move that subjected the brand to ridicule from its competitors. He shuttered some 900 stores, a very public admission that “we had stretched the brand beyond its demography,” as he told the forum. 

He insisted that the company focus on its core principles, cut waste, and innovate, and when a certain fast-food franchise with even more locations than Starbucks decided to hone in on its core business, Schultz claims it was a blessing in disguise. “McDonald's made us better,” he said, not quite elaborating. The McDonald’s competition and what Schultz called “a death march of people saying Starbucks’ days were over” forced the brand to execute drastic decisions that made it a leaner (by comparison), profitable company again.

So what can radio learn from this?

That nothing is more important than focusing on core principles, assuming of course you have core principles to focus on.

That cost-cutting without innovation is like sucking out your life force and with it the very reason you deserve to live.

That you exist by the good graces of your advertisers and your consumers and both groups are looking to you for what's next and what's new.

That being ubiquitous - whether its on every street-corner or on every radio dial - does not guarantee you success when conditions change.

That high margins must be earned.  Forever.

That "success" itself is a journey, not a destination.

That radio is, ultimately, about people, not about efficiencies.  It's about connecting one-on-one at the point of purchase.  It's about people connecting with other people.

And here's the surprising thing.

That image comes from our very own NAB.

How do you leverage a business where dollars are generated because "content," not your radio tower, is at its center?

A new IAB and Bain study illustrates the shape of media companies to come.

If, that is, we are to follow the desires and needs of advertisers and marketers (as if we have any choice).

Although this study is directed at (so-called) "online publishers," I would argue that this is the shape for all media-driven marketing to come.

Here are the six steps detailed in the study:

1. Create segmented offerings to meet the separate needs of advertisers who are focused on building brands and those who are looking for direct response 

2. Make brand-focused marketers a priority by building a sales force of category experts who respond directly to those marketers’ specific needs 

3. Develop a full range of solutions with more engaging options and formats, including social networks, video and other rich media 

4. Offer deeper service and support customized to vertical industries, to help advertisers plan, create and measure the brand impact of online ads 

5. Optimize the ways that ad inventories are sold, with a range of approaches from full-service to self-service to partnership with ad networks and resellers 

6. Enhance organizational effectiveness by setting the right priorities, clarifying internal roles and accountability and investing in sales staff skills and incentives 

The report continues:

“Ultimately, marketers are looking for media companies to offer a true triple-play service model from direct response to awareness to high impact brand engagement,” said [John Frelinghuysen, a partner in Bain & Company's media practice and lead author of the study]. “This model is the key to staving off continued price erosion of online inventory.”

What this amounts to is that media companies must orient around the needs of its clients and the interests of its audiences, not simply around its channel(s) of distribution.

This is a structural change of considerable proportions.

If you're still asking "what should we put on our website?" you're asking the wrong question.

Instead try asking "how should we be structured to leverage the value of our consumer relationships and competitive advantages for the benefit of our current and future clients?"

The reach and usage for portable audio media (mp3 players/iPods) is only slightly higher than the reach and usage for online radio.

Specifically, mp3 players had 11.5% daily reach and 69 minutes of daily average use.  Streaming had 9.3% daily reach and 67 minutes of daily average use.

Nobody is really talking about this, but I think this is enormously important:  Not only is mp3 player use less common than we would assume based on the buzz it receives, but online radio almost equals its overall reach!

Further, the reach of online radio is GREATER than that of mp3 players among 35-54's (13.5% vs. 11.5%). To rephrase this, 35-54's are more likely to listen to online radio than to use an mp3 player.

Mp3 players have a big advantage among Men (15.8% to online radio's 10.6%) and 18-34's (20.8% to online radio's 10.9%).

Needless to say, traditional radio is more likely to be used by all these groups.  But that's not the headline, because that's not news.  Unlike traditional radio, mp3 players and online radio must be specifically and actively engaged.  Thus, these listeners are people who choose what to listen to rather than simply listen to "whatever is on."

Better ramp up your online radio strategy!

"Social media, video, and mobile."

"Consumers have much greater leverage over marketers, however marketers can invite consumers to participate, they can create feedback loops."

There's a "new accountability standard put on the table by consumers."

"If advertisers can figure out a way to co-create with consumers, everybody wins."

Watch this video:

1.  Go to Radio Shack or its online store

2.  Spend $80

3.  Download the free HD Radio app

4.  Carry your slim and beautiful iPhone around with a bulky and clunky adapter wherever you go

Another way to get HD Radio on your iPhone:

1.  Download any radio station app since virtually all stations that have them feature their HD channels on them - all for free, no extra gadgets required

2.  Enjoy

In the former case, we're trying to sell audiences (and ourselves) on a technology, all other considerations be damned.

In the latter case we're trying to bring audiences fresh content regardless of any technological obstructions, obligations, or behavioral hoops.

Which would YOU do?

Well that depends on whether you're in the business of selling audiences or the business of selling HD Radio chips.

This is not about what we want, it's about what consumers want.

I don't know about you, but I vote that we do NOT treat our audience - and the thoughtful folks in our industry - like fools.

(By the way, I'm no more excited about the Sirius XM gadget that turns your iPhone into a satellite radio for $120).