The In-Car Internet

Radio is losing the local and out of home franchises.

Within a few years, radio's last line of defense will likely be penetrated by the new WiFi and WiMax technologies that will allow the Internet to be accessed on the go in automobiles.

Detroit Radio Advertising Group President and CEO Bill Burton came up with the fabulous motto "An Automobile Is a Radio With Four Wheels" many years ago and it is and has been the most dramatic statement of radio's out of home dominance. We mean no disrespect to Bill or his fine organization as we look ahead to changes that may be on the horizon, but an automobile could one day be the Internet with four wheels.

The Internet is here to stay. Internet streaming is growing but not as the boom business it could be because of licensing issues and the difficulty in carrying the Internet around in your car or your pocket.

My radio friends who own WiFi radios rave about them. They would never think of buying a regular AM/FM appliance and most certainly not an HD radio. Some subscribe to satellite radio for their cars. Unfortunately for them, while the WiFi radios operate off of their wireless Internet connection, they can' t take them in their cars or put them in their pockets.

At least not easily -- not yet.

Interestingly, they like to hear terrestrial radio stations from far away places on their WiFi radios. Some have found Internet streams that are special to them. But, it's still terrestrial radio stations that are not in their local markets that interest them. Or, ex-radio people doing what they've always done well on-the-air on the Internet. Certainly radio people are not typical.

The next generation gets its local fix through social networks and increasingly not through radio stations. These folks can stay connected on their laptops and cell phones but the prospect of being able to access Pandora on the fly or that special stream they discovered that speaks to them is exciting.

I believe radio has not only let the next generation get away while it consolidated from 1996 until recently but it is in danger of losing their important local franchise as well.

This will be bad for them because local works even when it isn't local like in your present zip code. If I want to hear a local oldies station in my favorite city, I can access WCBS-FM in New York online. Unfortunately, carrying it with me in the car is still problematic so I have to subscribe to satellite for a sanitized version of the genre.

If I want to check in on what's happening in Philadelphia where I lived and worked in radio and television, just go to KYW Newsradio online. But I live in Scottsdale, Arizona and Los Angeles, California. Does this mean that local radio is overrated? Shouldn't I be listening to stations in the west?

My friend John Rook navigates the nation's best stations on his WiFi radio and he lives in Coeur d'Alene, Idaho. He's also found some non-terrestrial stations that are his special "finds". I think the old master would know a good station when he hears one.

Let me tell you about the next generation.

They are citizens of the world in a way many baby boomers were not back in their day. Since local radio failed to engage them as they matured, the focus of these young people is now beyond their home town.

This is both troubling and exciting.

For radio, the failed love affair with consolidation is leading to divorce today. But who is going to get custody of the next generation? Corporations paid billions to assemble their radio clusters with a hope that they would be a near monopoly for a long time to come. But instead, the stations are proving not to be the investment that bankers and radio CEOs thought they would be.

Now, anyone can start a station and not go to an investment bank for funding. Just do it online.

Someday, when copyright royalties are applied in a fair way, the demand for Internet streams can also lead to a stream of revenue -- not just for Clear Channel or CBS, but for the entrepreneurs of the future. They used to be called "mom and pop" operators when radio was in its hey day. Today, "mom and pop" operators are an extinct breed -- to the disadvantage of terrestrial radio.

But even if the copyright issue was resolved -- and a stable, long-term agreement put into place that would encourage Internet streaming -- the sky would not be the limit until WiFi and WiMax networks were put into place to allow seamless Internet listening in the car and on the go through mobile handheld devices. Yes, there are ways to get some radio streams on Blackberries and smart phones but this isn't going to amount to a revolution. Just a work around for now.

The day is coming when terrestrial operators and the "mom and pop" entrepreneurs of the future will have equal access to listeners via mobile WiFi and WiMax. Except these entrepreneurs will not be mom and pop but young kids who can speak to their generation.

It will stimulate creativity and innovation. Bring life back into broadcasting and will drive the definitive stake into consolidation -- the worst thing to happen to radio at the worst time in history.

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