| Technology now
and what we expected in 2000.
In various comments since we started this site we have ruminated
about the future of radio in terms of threats to the current medium
as a whole from technological developments including Internet audio
in various forms and satellite radio: This month we consider a narrower
area, that of satellite radio - currently the only broadcast subscription
audio service in the US - and the threat to it from the development
of Internet and mobile technology.
In our September 2000 comment
we considered Internet audio "Much PR, less performance so
far!" and indeed at the time we were correct in noting that
for a mass audience that it was then a "lot more costly, complicated,
restrictive and often of poorer quality than off-air listening".
Those views were shared by most of the big commercial players in
radio who at the most dipped their toes into live streaming.
Even then though we considered that technology could change this,
writing, "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."
We were wrong about tape as the development of flash drives and
small hard drives proved over the next few years - iTunes were launched
at the start of 2001 followed by the development of the iPod, which
was launched in October 2001 with a 5 GB hard drive. We were ahead
of our time, however, in predicting the development of mobile phone
technology to encompass Internet access and audio storage and playback
but this is now proceeding apace.
The next month in our October 2000
Comment we considered satellite radio, coming out pro but
concluding, "satellite radio, like Internet audio, will be
yet another different and complementary service to that provided
by current terrestrial broadcasters" and suggesting that even
though it might bite into terrestrial radio profitability there
was room for all.
The following month in our November
2000 Comment we considered the strength of an "aural
medium" and suggested that people try every so often to "listen
hard" rather than having audio just as a background for other
activities and concluded " Like being engaged in a book so
as to be oblivious of what is happening around you, you can be overtaken
by the aural. And when you are the experience is worth it -- well
worth it. It's an investment in time and appreciation, not a waste
So how do these comments
stand up after six years?
Fairly well we'd say in terms of both where
the industry is now and where it looks likely to be heading
as technological change moves apace. In terms of the latter,
we are seeing considerable development of mobile devices to
combine functions so that the phone may now also be a camera-
still or movie- audio and video storage and playback device,
simple text device, and Internet linked.
At the same time other technology has moved on with more and
more developments in wireless broadband so that portable computers
- not forgetting that mobile phones are actually fairly powerful
computers in some cases - can be used with Internet wireless
in many more locations and may yet be Internet capable throughout
That capability puts pressure on all players as voice over
Internet capability means the computer can be a cheap or free
way of making phone calls - local or International - putting
pressure on the mobile telecommunications companies, the phone
can be used to receive audio or the Internet, putting pressures
on broadcasters and music companies, and digital broadcast
capability in some countries can already provide TV and audio
to mobile devices.
Add to that the relative cheapness of digital storage nowadays
and it has become practicable to make years of print and broadcast
media available on demand
if a means can be found to
make this pay for itself.
Looking ahead we think the market will
change dramatically with a mix of paid-for and free on-demand
services - think of the various podcasts now on offer with
vodcasts growing and with a similar mix of broadcast services
funded by subscription, licence fees and commercials.
The equipment that can receive these will also develop - it
really can't be that difficult to make a device that can handle
satellite radio, various forms of digital radio and TV, services
from the Internet and receive these via traditional broadcasts,
satellite broadcast, and wireless - or networked - Internet
Some major players are already developing their offerings
on a variety of platforms and we see this trend growing but
our crystal ball is still rather fuzzy on how the smaller,
local players can cope. It may well be that if they really
serve their communities well they can survive principally
on the basis of current broadcasts but we think they would
be foolish to bet on that.
In our view even the smaller players will have to think in
terms of multiple-platform offerings - and advertising if
that is the way they are funded - but we also expect companies
to grow up to offer these services simply and competitively
for stations that don't have the size to justify becoming
technologically savvy: After all that's what happens with
hosting sites for all but the big companies and in many other
areas of business where various elements of operation are
outsourced to specialist companies.
Our concern is that the virtues of some of the smaller operators
could get lost in the formats mass produced by such larger
service suppliers since it is obviously more economic for
them to offer a similar service for all but even then technological
development should make it easier to provide a modular mix-and-match
Overall we rather think the chances are there for more variety
for the audience and that the fears of existing players are
misplaced if they are smart enough to use the new technology.
Certainly some of them are at more risk than others - where
might Sirius be for example if Howard Stern moved to selling
podcasts and a streamed service (OK, Sirius is going to do
this anyway but the opportunities are now there for individuals
to strike out on their own in a way that was not possible
in the past)?
In the end though, as we've noted before, the existing players
have the knowledge, people and infrastructure already in place.
It's up to them to use the advantage to attract the audience:
There may be temptations to try the recording industry approach
of trying to stem the tide but in the long run it makes much
more sense to ride the wave.
What you think? Please E-mail