September 2000
An Internet Future?

Will the Internet ever really matter for radio?

Much PR, less performance so far!

When you read some of the articles which are proliferating about Internet audio (let's not call it radio for the moment!) you might well think that traditional over-the-air broadcasts are on the way out. Surveys indicate audiences of the tens of millions a month listening to radio stations streamed on the Internet. Add the lure of the new, PR puffery undiluted by much thought by journalists who regurgitate it, and the attractions of what is possible in theory, and it would all seem to indicate a serious threat at the very least. But then you look at the other side. If you're not at a desk or in an office, the devices available so far indicate Internet listening is a lot more costly, complicated, restrictive and often of poorer quality than off-air listening. And when you consider that these millions are per month divided over thousands of streaming channels the effective ratings as we've already reported (RNW July 15) are pretty poor most of the time.

Limited commercial committment by radio moguls.

And then there's the commercial commitment of the big broadcasters. Strip away the public broadcasters who have a different remit and different budgetary pressures and the commercial players don't seem that convinced. Clear Channel has dipped its toe into the water with the move of KACD-Los Angeles onto the Internet (RNW July 17 ) but the circumstances there were unusual in that the frequency was being sold off so it was try or die. The next big US player CBS-Infinity is insisting that Internet operations have to pay before they are launched so it's hardly moving fast.

Comparing the technology!

Like anything else for them though this would change if the figures started looking positive; the question is what is necessary for them to do so. So let's look at some of the advantages of "over-the-airwaves" radio. Unlike streaming which has additional costs of scale, it makes no difference once the transmitter is in operation whether thousands or millions are listening to the broadcast. Obviously technicalities come into this - transmitter power, frequency, other channels nearby - but, broadly speaking, if you can attract them additional listeners don't involve extra costs but do bring in extra revenue (or kudos for the public broadcaster!). Score one for the old technology!

Portability and mobility are the tremendous advantage of radio at the moment. And in-car listening accounts for a substantial part of the audience. So where does this leave the Internet stations?
It may yet be that devices which allow the PC to be used as a short-range transmitter will alleviate the problems Internet audio has in this respect for those who take the signal along cable or phone lines. Or it may be that developments of mobile phones will enable them to be used as a phone combined with an Internet-access device and maybe also combined with Walkman-style CD or tape devices. If these developments move far enough and don't cost too much then there could be a real revolution. So it is possible that technological development in this area could make listening to Internet stations as easy and convenient as tuning in to a traditional radio. Potentially deuce on this one! areas.

So where do we stand?

At present we feel that Internet audio is a useful extra for existing stations and a new medium in its own right which has a part to play.. However we really can't see it significantly threatening existing broadcast technology until it's as easy and cheap to tune into an Internet station as a broadcast one. There's also the question of financing: targeted advertising and so on could take some income away from traditional broadcasters but to us the question here is simply one of how much.
We just don't see it doing the same job but if it took a large enough share there could be something of a downward spiral in the ability of traditional radio investment and development ( a little like the problems Word Perfect faced when Microsoft took just enough of the market to semi-stifle its development).
Even here though we don't see any real chance of a change in the short time in much of the world (when will you get clockwork wind-up Internet radio in Africa where clockwork radio succeeds because people can't afford batteries?) and even in the developed world inertia will hold a lot of the traditional audience unless the broadcasters turn them off by reacting inappropriately (we, for example, would think 20 minutes an hour of adverts comes close to doing this!
Next month we examine the potential of satellite radio:

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