05/15

Radio’s biggest challenge: The Internet

I don’t always know what to make of Bridge Ratings’ predictions of radio’s future. In part because their sample is gathered from only ten markets, in part because mall intercept is one of their techniques, and in part because they are bold enough to project something as ever-changing as technology all the way to 2020.

They also – like any good research company – have a way of updating their projections so the closer you get to the predicted period the more right they’re likely to be (can’t complain about that!).

But if you take those reservations into account, their latest projections are interesting not only for where the numbers fall but for what their commentary says.

Bridge_3

By 2010 (and that’s as far into the future as I or they should feel comfortable guessing at), they say there will be in the U.S.:

– Less than 8 million podcast listeners
– Just under 9 million HD radio listeners
– About 36 million satellte radio listeners
– About 21 million folks who listen to their “radio” on their mobile phones
– Almost 190 million Internet radio listeners (!!)

And here is their editorial clincher:

According to this updated data, the entire spectrum of digital audio alternatives, and especially Internet radio and its wireless distribution continue to represent the biggest challenge to traditional radio.

And they add:

Internet radio could greatly benefit from pervasive Wi-Max or Wide Area Wireless Access which will bring Internet Radio to portable devices, including car radios by 2008.

Once the Internet can be in cars, it will be. The demand is already organic and profound. There is no sales pitch or explanation required. Everyone knows what it is and what it does. It will likely be a fabled “killer app.”

So what’s the biggest threat? Not satellite radio, not iPods, not the radio station across the street, and not HD.

Isn’t it about time for the hottest topic in the radio industry to be our Internet strategies, not our HD ones or our anxieties over satellite radio and iPods?

Postscript:

Note that regular old-fashioned (if you will) terrestrial radio penetration – even up to 2020 – while down, is still vast. As one reader pointed out to me, the implication is that these new technologies can augment the utility of radio, not replace it altogether.

So where’s the content going to come from on all these pipes? And who owns it?

* = required field
  • George

    To me, the most interesting aspect is that even with 190 million people listening to the internet, terrestrial listenership is down less than 10%. So this says that radio isn’t being replaced by other forms of media. Just augmented.

  • George, that is such a huge point I’m going to amend the post to make it.
    Thanks.

  • Jeff Schmidt

    I’m with ya on predicting the future Mark.
    On George’s observation – it appears that the decrease is in # of USERS.
    But there’s no indication about what happens to the TIME the rest of the USERS spend listening to radio when they have a multitude of other choices.
    A 10% drop in USERS means people abandoned the medium all together.
    That’s pretty huge. Shouldn’t that also be coupled with a expected decrease in the AMOUNT of usage by everyone else still using the medium- even if it’s only very slight?
    I don’t think reasonable people are predicting a wholsesale abandonment of traditional radio – but if in addition to a 10% loss of total USERS – everyone else spends 15 minutes LESS with radio per day/week – to spend time with other sources – the impact system wide is quite large.
    This leads to a vital question IMHO – does radio’s current business model hold up in that universe?
    Does this not also predict a lot more consolidation in radio?

  • I think very few will abandon radio altogether – less than 10%. A lot less.
    And, yes, the TSL will suffer much more markedly. And, no, that’s not good news.
    Such is the nature of choice.

  • Peter Childs

    Stations need to be able to answer these questions:
    – What is your strategy when mobile Internet gives people streamed content from anywhere in the world as easily as they can tune in to your local station.
    – What kind of content stands out in a sea of options so vast that it’s almost individually targeted?
    My personal belief is the answer is rooted in a counter intuitive and tight coupling of online and on-air experience. You simply can’t fight a world of content solely on your content being so distinctive or star focused it stands out. Especially when Stars have a history of shining wherever the audience is brightest – even if your patient investment first showed their luster.
    If I had a station – and didn’t know what to do – I’d start by thinking along the local vs worldwide dimension – because the same tools that bring new competitors to my door let me reach ears my transmitters cannot. But I wouldn’t think greed I’d think what could I offer that no one else can – because it costs them too much to develop it but almost nothing for me. I’d think how do I use an audio medium to make on-line more compelling – and what type of online experience works best with audio. I’d think what emotions do I want to engage – and how – because that’s the key to compelling experience.
    And then I’d start to try things like how can I build traffic, hold traffic, and convert web users to listeners and back again. Can I use content to shift listening and use patterns (after all I’ve got 2 linked mediums to play with now). And so much more
    Most of all though I’d think if I don’t focus attention on it my stations website I can’t bend the medium – and I’m surrendering my one advantage – being able to link licensed and unlicensed transitions into a single experience because I don’t even know the questions to make it happen – let alone the answers.

  • The question of how to convert web users to listeners is moot. Web users are listeners who choose to receive content via the Internet.
    At this moment I’m listening to WCPE, a great classical radio station out of Raleigh Durham, North Carolina. Whether I’m in Wisconsin, Asheville, North Carolina, Austin, Texas or anyplace else as long as there’s a high-speed Internet connection I can “tune-in” my station on the laptop. With a “Squeezebox” type device I don’t need the computer.
    The Internet, more than any previous technological advancement, has given people a means to join worldwide communities of interest – tribes – if you will. MySpace, Facebook and dozens of other websites are facilitating connections in ways we couldn’t have imagined even 5 years ago. WCPE’s tribe includes local “terrestrial” listeners, terrestrial listeners who listen to stations who rebroadcast WCPE’s programming, listeners with satellite dishes and Internet listeners
    As painful as it sounds (considering the millions of dollars invested in terrestrial infrastructure, it isn’t about broadcasting. It’s about figuring out new ways to generate revenue from the “Tribe” no matter where members of the “Tribe” happen to be located. That will take a new business model.

  • George

    Here’s my question: If the internet allows broadcasters to take their station from Raleigh and get it heard in Austin, what is the motivation of a radio station to continue to focus on its local community? If radio’s biggest challenge is international, and being international is part of the audience appeal, shouldn’t traditional radio also seek to appeal to international listeners rather than spend so much time and attention on the folks in Raleigh? They can make more money reaching a larger audience, and attract a wider range of sponsors. It seems that internet listening suggests that the public doesn’t care about local broadcasting anymore.

  • Peter Childs

    The internet can deliver more than audio streams so why should my thinking see it only as another tower delivering audio?
    If it’s not being used for audio then I can convert them from one medium to another & back or they can consume at the same time because they’re not getting the same thing in each medium. Each could stand alone – (and face competition in that medium) but the combined experience could be greater that either – and because on-air has a high barrier to entry – the total experience cannot be easily duplicated by new entrant Internet only stations.
    The issue of tribes or world wide communities is important – but so it the ability to physically connect with the people in your network for a richer more human experience – in fact that may define an important part of the tribe that coalesces around a station. If the only reason to choose a local station is because of its audio – then the question is what audio is best right now. In that scenario maybe local radio is irrelevant but what happens if it’s audio and place & space & people & sharing.
    There are no simple answers – except the status quo looks like a risky proposition.
    Maybe the questions are:
    • Who do I see as my audience
    • How can I leverage my assets
    • What I can talk about on-air that I can enrich online.
    • What can people do online that I can reward on-air
    • How do I get there

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