10/17

The Rise of “Radio as a Feature”

We are witnessing the dawn of a new age:  The rise of radio as a feature.

That means “radio” isn’t simply a media category run by media institutions.  It is now a feature of other categories – a feature of brands themselves – brands which are capable of monetizing that feature in the same way traditional broadcasters do – with ads.

This is another manifestation of one of my regular themes:  Brands are now media.  Brands are becoming “mediacized.”

In the wake of unconfirmed gossip that Apple is soon to release an Internet radio service across their OS platforms that is ad-supported (next week, perhaps?), into the fray comes Microsoft with their Xbox Music service, which includes – pre-installed and as the default music player for the upcoming Windows 8 operating system – ad-supported Internet radio.

See the demonstration here:

In both cases – Microsoft and Apple – radio would be a “feature” of another brand.

But so what, you might say.  Anybody with an Internet connection can create their own radio station, after all – and they do.  But what differentiates radio itself from everybody who wants to be like radio is primarily scale and convenience and habit and a perfectly passive “lean back” experience.  Only Pandora comes close to this scale, and that scale creates convenience in what can be (and what generally is) a perfectly passive “lean back” experience. Habits don’t grow overnight, however – those take time.  But all the other elements are in place.

Now consider who can achieve scale overnight by integrating their new Internet radio feature into their platforms with already-massive distribution and worldwide scale….  That’s right, Microsoft and Apple.  To say nothing about Google and Amazon, who I strongly suspect will be following suit soon.

When radio is a “feature” of another brand, and that other brand already has massive distribution, it is functionally equivalent to the very radio that these brands and their peers would otherwise buy from traditional broadcasters.  Not only will these brands spend their money on their own radio platforms, they will compete against you for the dollars of other brands, too.

While this has been “framed” by the radio press as a challenge to Pandora, it is really a challenge to all radio since that’s where the obvious dollars are.  Wake up and smell the coffee, radio.

Well, you might say, these services are only one manifestation of radio – the music-centric one.  Where are the other elements of radio – the entertainment – the people on the air?

This is the first inning of the game, folks.  In time, I strongly suspect that these services will become broader in their offerings, create original content, and resemble radio all the more. “Home Box Office” did this when it debuted The Sopranos. Recall that Netflix was once simply a place to download the content of other producers – except now Netflix is in the original content business. Ditto for Hulu, which became famous for streaming other producers’ TV shows and now produces their own, too.  Ditto for YouTube, which is investing heavily in original content that lives alongside your kitty on the piano keys.

Invariably, once a platform achieves scale and usage, that platform recognizes the importance of creating proprietary content.

What’s to keep Xbox Music from launching a series of entertainment shows a la SiriusXM?

This is an easy problem that a large-enough audience instantly solves.

So here’s where we’re headed:  More alternatives to radio that are functionally similar and ad-supported and fit within a growing category called “radio.”  More alternatives to radio that are joined at the hip with some of the very brands who are our large advertisers – many of whom will look to radio programmers or companies like mine to help them get there.

The rise of “radio as a feature” means the “best in the world” content with the “best in the world” ideas will win.  And current radio advantages like distribution and scale and ubiquity will cease to be as decisive as they are today.

How much are you investing in your content and your ideas?

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