Invasion of the Internet Radios

My friend, Joe Benson, whom I am proud to say I had the good sense to employ when I was programming in Philadelphia, sent me an email over the weekend.

In it he said, “You need the Roku (SoundBridge Internet radio) before you need an iPhone. You already know what the iPhone isn't doing for first time buyers at $600 a whack. Let's get you one of these (Roku only) at $300 or for the stylish "tube" that you connect to your stereo for $129. (Go ahead and splurge). I promise you will love this and never turn it off. If it would only take batteries”.

Joe is a consummate radio guy like many of my friends who eat, drink and sleep radio – terrestrial radio!

But Joe’s also a renaissance man. He’s wise to the virtues of the Internet and its power with the next generation.

Now, we're beginning to see the first generation of really serious Internet radios that are not attached to a computer. Here's a recent article in The New York Times that gives a taste of things to come.

Although they are certainly not perfect, the idea of getting the diverse world of Internet stations on a radio -- say, next to your bed or in your office -- is going to be tempting. One model you'll read about (Roku) is pre-set for 100 stations.

No need to look for djs that say "fewer commercials and more music", you'll really get it here.

Plus genres that the terrestrial radio band can't deliver. There's simply not enough room on the dial.

That brings me to HD -- the High Definition misnomer applied to a cheesy radio you can hardly even find at retail outlets. You know, the radio that when you bring it home, disappoints immediately for lack of good programming. If you were nuts enough to buy one, you'd be rewarded with barely a handful of stations that are lukewarm to making HD content exciting.

In other words, HD radios are losers.

Inside Radio recently did a series of stories on the consumers inability to actually buy these things in the very "big box" stores that proponents are bragging about.

The salespeople have no knowledge of the product.

The radios are not prominently displayed if the store has them at all.

And, of course, as I just mentioned there are so few HD stations -- and virtually none -- with programming worth the sticker price of the radio.

But, the advent of Internet radio untethered from a computer gives us a look into what "radio" will be like in the not too distant future. Consider this:

1. Buy an Internet radio today and instantly you have more variety and more choice than a terrestrial radio can deliver now.

2. Internet radios will provide better fidelity (if that's your hot button) and ease of use now that they are available outside a computer. More listening options. More places to listen.

3. When universal WiFi or WiMax (Sprint) is available, portable Internet radios will proliferate.

4. Plans are already afoot to allow listening to Internet streams in cars. Once the public has the choice, they may opt not to choose a terrestrial radio if that doomsday decision is ever offered to consumers.

5. HD radio has about as much a chance of competing with portable Internet radios as you and I have of competing with Tiger Woods on the golf course.

My point: if you're in the radio business right now, I'd be making plans to get out.

Not today.

There's still a lot of baby boomers and Gen X'ers around to make money on terrestrial radio.

But as I have said many times radio will not be a growth industry again in our lifetime.

The latest new projections from the respected Wall Street analyst Jim Boyle are headlined: "Small-Mid Markets Thrash Big Markets, Again and Again; June Radio Overall Drops 3%; Q3E Might be Dismal".

There's a relatively new book by Seth Godin called "The Dip" -- that teaches you when to quit and when to "stick" which I highly recommend to anyone in traditional radio. It's only 80 pages and I'd go to Amazon right now and get it delivered asap.

I hate to say radio has no future. I really do.

But terrestrial radio is in trouble.

Bright guys like CBS Radio President Dan Mason can maximize listening to the available market as he's beginning to demonstrate since he returned to the helm, but it will take a lot more interest in new forms of delivering content for radio companies as we known them to survive.

Internet strategies are going to be needed beyond simply doing the obvious after every one else.

You know I have said this about record labels. Radio is in the same boat.

So, the bad news is what we're reading day after day from almost every trade publication and news source -- radio is declining.

The good news is that the people who made it the exciting medium it once was -- not the "geniuses" of consolidation who ruined radio at the absolute worst moment in time, are out there and available for Act II.

The new portable Internet radios now coming to market are yet another reminder that the changing of the guard is going to happen whether we remain in denial or not.

Why not actually make joining the Internet streaming revolution a strategy that wins significant investment capital and strategic thinking going forward?

Create content where the next generation lives.

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