[Editor's note: Rep. Jay Inslee has a role in all this Internet radio business too.]
If anyone truly believes the future in commercial broadcast radio as more than a niche market has a lifespan of more than a few years, I expect they are 40 years or older, live in an area with poor broadband coverage, or have never heard of this thing called the iPhone. Mobile radio—using devices like the iPhone to listen to Internet radio—is going to kill standard commercial formats. It may also bring new life to non-corporate formats like indie, college, alternative, and public radio broadcasters.
Commercial formats rely on a captive audience, one that’s in cars or commuting or running or biking (really, you shouldn’t) or in an office, and doesn’t have an easy way to get access to other music of interest when in those environments. You see where I’m going with this.
Commercial radio, even without payola (which has morphed again and again but never disappeared), comprises what most people want to hear as filtered through the corporate engines of maceration. But listener numbers show that fewer people want to hear the same stuff, and they certainly don’t want to hear it divvied up among obnoxious, frequent advertisements that are the preferred form for the medium.
The Walkman was the first peal of the death knell of commercial radio, early MP3 players were the second, and the iPod was a very loud third that’s still reverberating. The problem with those three bell ringings was that you had to
have enough music on them to make it a worthwhile alternative to commercial AM or FM when you were out and about. (One could argue that recording off radio to a cassette made commercial radio more valuable to Walkman owners, of course.)
An attempt to fix the problem: Several firms offer subscription services to let you load up devices with music, but you still have to choose what you want before you leave the PC with which you synchronize your device. It’s a larger universe, but you can’t decide on the go what you want to hear."
And portable music devices, even those with a subscription behind them, didn’t solve the problem of ubiquitous music on demand outside of one’s own library at the time. Subscription services initially required that you downloaded and synced content at a desktop PC.
Satellite radio was supposed to supplement MP3 players by providing a huge amount of music all the time regardless of what city you were in (and in the spaces between), and be the final blast for terrestrial AM and FM. But I’ll tell you a few secrets. First, even with hundreds of channels, the programming within most channels is niche oriented and doesn’t stand the test of regular listening. There are some exceptions which are useful for markets without indie AM/FM.
Second, satellite radio continues to get short-term boosts in subscribers through bundled deals with automakers, in which a subsidized radio with the capability to pick up satellite signals is part of a car package and 6 to 12 months of a subscription is included.
Third, the term satellite radio is a big joke in the industry. Yes, there are satellites—Rock, Roll, Rhythm, and Blues are the names of those launched by XM Radio pre merger—but in cities, thousands of low-power retransmitters provide signals that can actually be used inside homes and around buildings.
Finally, satellite radio was massively expensive to launch, has been massively unprofitable to operate, and a bidding war among the two merged competitors added to the price tag. The merged Sirius XM Radio has monthly fees to listen to stuff you can get on earth for free or with more flexibility.
If not satellite radio, then Internet radio would, of course, kill the commercial AM/FM stations, right? Internet radio meant that you could stream audio over the Internet from a large number (now nearly all) broadcast stations—including indie, commercial, public, religious, talk, and so on—and tens of thousands of Internet-only programmers.
That certainly took some of the market. Research has shown that millions of hours of broadcast listened shifted to the Internet, but the power-law curve prevails there just as it does elsewhere. That is, most Internet radio listening is of regular AM/FM stations or from programming entities like American Public Media or National Public Radio, because those outfits market themselves well to the listening audience.
Of course, stations can and some do provide multiple Internet streams with alternative programming that might be more appealing to different audiences, and unaffordable to set up as a separate station online. But programmers are programmers; alternate commercial online streams are not much more interesting than the high-wattage broadcasts.
HD Radio was supposed to solve part of that problem, by enhancing AM and FM with crisp digital reception, and giving FM stations the ability to add multiple "subchannels" at lower fidelity than the main broadcast. HD Radio, however, requires new receivers, which 4 years into their availability still sell poorly. About 2,000 stations, including over a dozen in the Seattle-Tacoma area, broadcast in HD, but listenership is likely 1 percent of the analog AM/FM signal. (AM radio sounds really good in HD Radio format, but technical limitations have kept AM broadcasters from investing heavily yet. Or perhaps ever. HD Radio may, in fact, disappear due to a variety of market and technology issues.)
So. What does that leave us with? Mobile radio. Internet radio over mobile devices, using mobile broadband (the 2G and 3G networks that carriers have built across the US and around the world) and Wi-Fi in cafes, airports, colleges, and offices. With smartphones, you can listen to Internet radio everywhere. That requires a little digression as to why that’s happened, too.
The increasing number of Americans who buy smartphones drives this trend. A smartphone differs from a standard, so-called "feature" phone (a great euphemism) by having a full-blown operating system that can typically run all manner of programs. Feature phones have far more limited capabilities; they don’t have enough processing oomphf to do much, in fact, although that’s changed a lot in recent years, too.
The iPhone has driven smartphone sales, and the "$99" iPhone 3G pricing—ignoring the $2,000 2-year minimum service contract for voice and data—was the leading edge. But T-Mobile’s G1 and other upcoming phones with the Android operating system (originated by Google), and the Palm Pre continue that trend. Windows Mobile and BlackBerry smartphones sell in great numbers, too, don’t forget.
Mobile Internet radio is a neat pairing with a smartphone, especially one that has a flat-rate mobile data plan, which is most of them. (Carriers limit laptop mobile broadband to 5G per month, and outside the US, most carriers put a strict cap on mobile broadband with huge overage charges. That hasn’t worked here.)
If you visit the App Store—you can use iTunes to do this if you don’t own an iPhone—and search on radio (limited it to Applications in iTunes), you’ll see well over 100 programs that range from generic programs that can play from a huge list of 1,000s of Internet radio stations, to genre apps like Public Radio Tuner, down to individual station’s programs. Many are free. Sirius XM Radio has its own app (free, but requires an existing receiver-based subscription or an Internet-only $12.95/mo. account).
I don’t want to ignore streaming music systems that aren’t programmed like an Internet radio station, either. Systems like Pandora and Last.fm create custom streams based on artist or other interests, making their money via ads. (Outside the US, UK, and Germany, Last.fm had to start recently charging a modest 3 Euros per month fee.) iPhone apps that access those systems are available, and all the radio and music streaming systems will come to other platforms, if they’re not there already.
So let’s put that all together. If you can listen to any station, a conventional broadcaster or specialized custom one, at any time, anywhere, on a device that has digital sound quality, integrates into your car or uses the same headphones you use for listening to other music: Tell me again why you flip on the radio?
This doesn’t spell doom and despair outside the commercial radio market, I should point out. For stations that have non-pabulum fare—which I should also note includes some commercial stations—mobile Internet radio gives them the chance to expand listenership worldwide. KEXP is reportedly one of the leading stations in the US to capitalize on this.
KUOW, a station that graciously has me on nearly weekly to talk tech , was an early public-radio adopter of both Internet streaming (a second streaming station has become KXOT’s main broadcast), HD Radio, and podcasting. Apparently, I have far more listeners to the podcast version of my segments than to when I’m actually being heard over the air.
But for purely commercial Top 40 or major genre stations, I can only quote the mainstay of Classics stations ("playing the best of the 50s, 60s, 70s, 80s, and 90s!"):
From the tombs of classic rock, I give you Jim Morrison:
Of our elaborate plans, the end
Of everything that stands, the end
No safety or surprise, the end
I’ll never look into your eyes…again
