6-10-2013
The question I hear most frequently from reporters, broadcasters, and those I consult is about the future of the radio industry. Where is the industry going? What should we be paying attention to? It?s natural for people to want to know what?s next. Like many of you, I have my opinions about where things are going ? and that includes the adoption of radio into a digital environment.
For well over a decade, I?ve predicted the world?s move to digital and have told radio stations they need to make sure they are streaming their signals, establishing their brands online, and not assuming that transmitters will always be the only means of distribution. And for decades, some have called me a heretic for not blindly believing that ?Radio will always be fine.?
Clearly we?re seeing the beginnings of digital?s real impact. Even though radio remains very strong, the Pandoras of the world are fierce competitors ? Pandora has at times said it ranks number one in listening in several major cities, though there?s no way to verify that claim.
Right now, much of the focus in online radio is on music stations. But the entire basis of online radio was established by Mark Cuban and AudioNet, which later became Broadcast.com ? the early streaming service that made Cuban a billionaire when it was acquired by Yahoo! And all Cuban and partner Todd Wagner wanted to do was listen to their home sports teams? broadcasts online.
The unfortunate elephant in the room for online music radio is the high cost of operations due to the price of music licensing. The radio industry can?t gain its typically high margins when paying what amounts to a tax per listener hour. I believe that is the primary driver preventing radio from adopting streaming more broadly and pushing for a more digital world (though the investment in transmission infrastructure is another compelling reason).
There is, however, no such elephant in the room for spoken word radio. Talk radio, Sports radio, News/Talk and other forms of talk, not saddled with the high costs of music licensing, will become the great opportunity for the radio industry online, and will become the first streaming opportunity to be genuinely embraced by broadcasters. Spoken word programming offers a unique, defensible position, whereas music stations owned by broadcast companies have a hard time competing with the almost commercial-free environment of many of the online services.
Though anyone can create a podcast, and there are some highly successful podcasts making incredible profits, it?s difficult for most to emulate the strength and experience of radio broadcasters in spoken word formats. Music programming is easy to knock off, but talk presents a unique, defensible position.
There is no motivation better than the need to reinvent. We know the power of the spoken word. And we also know the highly polarizing nature of political Talk radio in a politically correct environment is making it more difficult for some in the Talk sector to find advertisers willing to support those who, in their opinion, cross the line. I believe there is a digital frontier for new spoken word formats, beyond the political, that are yet to be invented.
Change provides opportunity, and the changing distribution model for radio will force us all to reinvent. No one knows what these new, not-yet-thought-of spoken word formword formats will sound like. But it?s certain they will play off our greatest strengths as an industry.
B. Eric Rhoads is the publisher of Radio Ink. He can be reached via the following: bericrhoads@gmail.com, Facebook.com/eric.rhoads, Twitter: @ericrhoads
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