The Future of Radio Is Online
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As a musician and producer who lives and breathes for new technology in audio entertainment, I am convinced of two things concerning the future of radio:
1. Terrestrial radio is a dead man walking.
2. Satellite and Internet radio are the going to be the new and permanent sheriffs in town.
Now I think we all know why The National Association of Broadcasters is so against the Sirius/XM Merger. Their business model is so outdated it has rust flaking off the chassis. Don't think so? Let's speculate for a minute.
We know that the satellite radio race is in turmoil thanks to our fun loving politicians at the Justice Department and the FCC. Sirius (SIRI) and XM (XMSR) are dangerously close to collapsing without a merger. Well, MAYBE. We can all say that without a merger one will fail and one will not but the truth is that neither stock will fail regardless of the outcome. Here is why.
As a merged company or as separate companies, they will probably be bought out. But unfortunately, Satellite radio itself is limited. 300 channels won't make the cut as soon as auto manufacturers install Internet-ready receivers. This will not only give listeners thousands of channels but will turn your car into its own hot spot so you can use your laptop in your car as well. That is until your car comes with it's own PC or MAC system built in but that's a discussion for another time for the next battle between Microsoft (MSFT) and Apple (AAPL).
This many options are just too good for the consumer to pass up. So Sirius and XM will more than likely be bought out. Not because they can't make it on their own but because there are hungry companies out there with deep enough pockets to make the shareholders an offer they can't refuse. Standard satellite radio will still remain because of content like the NFL and MLB.
Sirius and XM will probably need both satellite and Internet streaming radio to compete but that will only give them more options to make money by expanding their business model to either free radio with advertisers to pay the bill or paid radio without advertising with subscribers to pay the bill. I predict that Internet radio will probably become the top gun in autos within five years. At my house I go to a web site that lets you create your own Internet radio station based on your musical tastes and I can pipe it throughout every room. And as soon as cars roll off the line with Internet receivers built in to them you can wave goodbye to terrestrial radio.
Clear Channel (CCU) has only one chance to stay on the right side of the soil. Stop trying to fight technology and start stroking checks because once this satellite radio merger debacle has cleared the trees, the likes of Microsoft, Google (GOOG) and Apple will be salivating so hard they will need bibs.
Disclosure: None
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This article has 35 comments:
I can live pretty well with the 'dead man walking' terrestrial radio! Why the f*** should I use the Internet for that silly purpose? The web is already overbudrdened with data traffic - transmitting hundreds of radio channels makes matters only worse.
When I get up in the moring, I switch on my normal, traditional radio. I have no intention to start my PC or go online everytime i want to listen to a radio channel. the same is with driving. maybe in the U.S. the truck drivers will like satellite based radio but as for europe, such truck driver radios have so far gone nowhere.
I for my part don't need online radio. It's only slightly more useful than, say, tv via handy - which is probably the most overhyped and absolutely silly and useless mobile application i could think of.
How will internet radio work in rural America and how will I be able to listen to programming cross country ... or across my state?
The last issue remains content and advertising. At least from my perspective, advertising and limited content will still be the bug-aboo to internet radio?
Your thoughts?
Something stinks in Washington, as well as your article.
Here are the 12 Congressmen that are trying to pass a bill to get the NAB off the hook. Please contact them voicing your support for the RIAA and performers and most of all, remember them at election time.
5/12/2008--Introduced.
Declares that Congress should not impose any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over-the-air, or on any business for such public performance of sound recordings.
www.opencongress.org/b......
Sen. Blanche Lincoln [D, AR]
and 12 Co-Sponsors
Sen. Wayne Allard [R, CO]
Sen. John Barrasso [R, WY]
Sen. Samuel Brownback [R, KS]
Sen. Richard Burr [R, NC]
Sen. Charles Hagel [R, NE]
Sen. James Inhofe [R, OK]
Sen. John Isakson [R, GA]
Sen. Lisa Murkowski [R, AK]
Sen. Ben Nelson [D, NE]
Sen. Jon Tester [D, MT]
Sen. Jim Webb [D, VA]
Rep. Roger Wicker [R, MS-1]
Huge prediction using a dozen words without anything to back it up. I have no problem dealing with this being a reality but how? at what cost? who's going to subsidize it? what's the business model? how do you get nationwide coverage?
Aside from Satellite Radio, (because of the satellites), cell phones are the next best solution for coverage of signal. I am not sure but, data is a problem with satellites which is why broadband internet is still a Cable Company competitive advantage. You can put Wind Towers up but you think their going to let enough land line equipment be put up nationwide for internet radio. You can put one up right next to your campsite in the middle of nowhere.
WTF? Is the internet about to collapse? HAHAHA!!!
BTW fxtrader07, Internet radios have been available for years that are just as easy to operate as your traditional radio, without the need of sitting in front of a PC. It's just a matter of time before every car has one a stock equipment. Wake up, it's the 21st century outside.
www.sonos.com/
www.amazon.com/Sangean...
Plowboy - WiMax, 3G cellular service, or something similar could provide access to the internet, so if you can use a cell phone where you live you will be able to access internet radio in your car. Regarding your advertising question - check this out - www.pandora.com/
Local franchises in traditional radio do have value. Satellite and internet radio also have their drawbacks. Here's one, fidelity. Both sound thin. We live in a world of high def, yet when it comes to radio, we're going in the other direction. I don't get it. Ipods have less fidelity and dynamic range than a good traditional fm signal. Pop in a cd, (remember those,) and fidelity jumps. Cars come equiped with sophisticated amplification systems and dozens of speakers putting out sound that you can get of AM radio.
There are times when a radio listener must have local traditional radio. Other times that same listener will gravitate to a national feed. Circumstances will dictate that choice and given the technical upgrades of autos, consumers will be able to listen to all of them.
Lattarulo
"Plowboy", as far as reaching rural areas and cross country coverage, I think that will all be satellite internet based (coinicidence right?). Right now you can get a satellite internet card for your laptop for about 60.00 per month and have internet access anywhere you go. Sure there are areas with coverage dead spots but sooner or later it will all be blanketed by the satellites.
Lattarulo
s
The best software to accomplish this will be brought to you by a small indie company jamroon.net
proof id in the pudding:
www.canadianmusic.com/...
s
Anyone who thinks terrestrial radio (or what I call "buggywhip radio") is free isn't paying attention. There's nothing free about it. Content isn't so much delivered to listeners as listeners are delivered to advertisers. That's the relationship that matters. Advertisers generally don't give a fig what kind of music is being played so long as the demographics are there in sufficient numbers. For example, if terrestrial broadcaster "A" has a million listeners and 60% of them are within the demographic that buys cars, the Ford Motor Company doesn't care if the content is Country, Rock, Fingernails on a Chalkboard or a 1 KHz tone. What matters is getting the advertising to the victim, er, consumer.
With the recent passing of George Carlin, it's worth remembering that there are far more regulations on which words may be said than on how products may be foisted on the "consumer" public via the public's own airwaves.
Right-wing talk radio is the best example: listen to any of it and see how long it takes before you get a per-inquiry spot for "Buy Gold Now" or a vaccuum cleaner that picks up bowling balls, a patent medicine herbal erection enhancer or baldness cure. These products are placed on these shows because the advertisers have determined that (a) the listeners are dumb enough to fall for the con and (b) the shows numbers are large enough that the mathematical scale alone is guaranteed to deliver them some rubes.
Internet radio has a much greater chance than either satellite or buggywhip radio to get away from the predatory advertising model based upon its multimedia immediacy. While it's a certainty that advertisers will want to get their predatory hooks into the medium, it may be possible to keep them at bay and make them less intrusive into the actual programming. Listener subscription models may actually make it possible for broadcasters to tell the product hustlers to take a hike. How refreshing THAT would be, regardless of format.
Thanks for a great, thought-provoking article, Gino..
Regardless, and quite frankly, CONTENT IS KING as someone else mentioned on another thread. I don't care if you offer me a million channels, crap is still crap, no matter how high it's piled. I haven't listened to FM radio at all since I subscribed to Sirius 3 years ago, and made-to-order Internet radio "stations" are best suited for eclectic musical tastes, a very small niche market at best.
Everyone I know who subscribes to Sirius absolutely raves about the service, and I am (obviously) no exception. It is simply a superior product, and if the goddam government would get out of the way and let the free market work, the results will most certainly bear me out.
Sat.Radio will do the same to "FM" but allot harder and deeper...........
OldGaDawg
Did 85% of American's hate Bush four years ago?
WTF.
Drive around wherever you live, and take a look at the businesses. How are they going to get you to come in the door if you have no specific pre-existing reason? Advertising. There are any number of ways people can advertise to get you through their doors, but traditional LOCAL radio has been one of the most-used methods of getting the word out because it's usually less expensive than most others.
Disclosure: I work for a smaller market radio station (not in sales), and I guarantee you the businesses across the road from our station are not going to shell out big bucks to advertise to a worldwide audience on the web OR satellite radio. They'll continue to spend their advertising money with us because we're reaching their target audience: local shoppers. As long as we continue to provide the area our signal reaches programming that people will listen to (be it of local or networh origin), we'll continue to generate revenue through advertising to those listeners.
I own shares in Sirius and have both Live365 and Shoutcast bookmarked on my computer, so I'm not anti-satellite radio or webcasting. However, I wouldn't write terrestrial radio's obituary just yet.
Lattarulo
We see how the computer itself is becoming more and more integrated in our life and it's just a matter of time until we walk around with small computers that are also cell phones (some of us already do…). by then, the online radio applications would be more popular since it would more easy to play the radio from the desktop or browser (like radio-internet.com).
Satellite is where the real talent is gravitating to. Established, well-known DJ's people have been listening to most of their lives (Carol Miller, Jim Kerr, even Cousin Brucie, etc.) have gone to satellite, and popular DJ's are the ones who made FM what it became. You want music without a talk-up by a real human? That's what CD's, mp3's and iPods are for. Yes, Internet Radio will have it's place, but I just don't see the coronation coming in the foreseeable future.
Sirius will be king.
$4.50 gas, kids dying in a made-up war, the market in turmoil, jobs tanking, people going sick without insurances yet he has the time to thrice lobby the FCC for something fully out of his arena and jurisdication.... why?
Nab Money. Pure and simple!
Ask the Senators how much they received from the NAB over the last three years. These Senators are pond-scum on a good day.
The best Government your Money can buy!
With regard to local radio stations' ability to service local businesses via advertising, there's a kernel of truth to it if the station is actually local. A vast number of so-called local stations are no longer "local." They're owned by a distant corporate conglomerate that beams in programming via satellite, providing very few actual jobs in the radio industry, especially where on-air talent is concerned. There are, to be sure, a few Mom & Pop radio stations left out there, but not a lot. Terrestrial radio is largely a dead letter: a medium hustling pre-screened, focus-grouped, corporatized pablum as the mostly musical equivalent of the sugar in front of the nasty medicine that is sheep-like America's 24/7 "consumer culture" narcotic.
cavessa