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Radio’s place in the future of Digital Audio

By now you’ve heard about the Forrester Research study that predicted how much digital audio was going to grow and which type would grow the most.

Based only on the news release summary, there are some hidden items that should alarm us quite a bit, in my view.

The news release notes that “Online Radio (streaming audio) will…reach 30 percent of all U.S. households…by 2010.”

The release fails, however, to do this math in order to give a specific number of households who will be streaming their music via computer (or whatever), thus cannibalizing at least some of what they now go to your radio station for.

I did do the math, however, and the results are frightening. It works out to almost 35 million households who will stream their music. That’s almost double the penetration of Satellite Radio, three times the penetration of Podcasting, and between three and four times the penetration of HD Radio.

Yet all of today’s Radio headlines tout the 20.1 million households expected to subscribe to Satellite Radio. You folks are missing the big story, and the headline is right in front of your face. Your computers (and cellphones and whatever other streaming gadgets come down the pike) are your biggest threat, not Satellite Radio.

What also concerns me is that, as an industry, we tend to view HD Radio as the “Great White Hope” for our future. This Forrester study projects that HD Radio will lag behind every other technology by a sizable margin – even behind Podcasting which is only a few months old! You would think that, powered by the massive and universally distributed Radio industry, HD Radio could do better than a poor fourth place finish. The fact that it doesn’t doesn’t really surprise me, as I’ll discuss later.

All of this points to transformations taking place in our environment which we simply must grapple with in order to assure our industry’s health and vigor in the media landscape of tomorrow.

If you think the answer for us begins and ends with HD Radio, have I got news for you.

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