Radio, Records & TV in the Next 10 Years

My mother lived to a ripe old age and there are two things I will always remember from her lips to mine.

One, there is no city better than Hoboken, New Jersey, where she and I were born – and that includes Scottsdale, AZ.

And two, she will never pay for cable because TV is free.

After spending four years teaching the next generation, I have concluded that my mother and the next generation have a lot in common.

Gen Y won’t pay for anything that they think should be free, either.

That’s why they steal music – after all, those evil record labels don’t really pay the artists very much anyway, they argue.

Why they begrudgingly pay iTunes 99 cents until they get to Limewire and other access points to download the same songs at no cost to them.

Why increasingly they are watching TV on their laptops – parents, I’m sure you can testify to this one. ABC runs Lost – forces them to watch a pre-roll commercial as payment for the rerun of what they gladly missed on cable TV. They get around it by using the time to check their email.

Apple CEO Steve Jobs knows this is true which is one reason why he is introducing what will be a long line of even lighter and brighter laptops that will eventually make the next generation’s TV ultra portable.

Meanwhile traditional media thinks business is looking good.

Have a good time – while it lasts.

A recent article in The New York Times pointed out how folks are continuing to patronize cable TV even though subscription costs have risen 77 percent since 1996 – about double the Bureau of Labor Statistics rate of inflation, according to the article.

More amazing is that on average, they watch only 13% of the 118 channels available to them.

I guess mom and my students were a lot smarter than these cable customers.

Cable has been a boom because cable companies and show producers are joined in a holy alliance that makes both of them billions. Add to that the fact that cable operators are pros at bundling content to force consumers into paying more and you have the definition of – a good business today ready to go bad tomorrow.

You’ll note that the federal authorities are trying to bully XM and Sirius (as a condition of merger) into unbundling their satellite radio channels and make them available on an a la carte basis – the opposite of the successful cable strategy. So far, the cable companies have resisted such pressure.

Where traditional meets new media we have this tornadic activity where two masses collide to form eventual utter devastation.

Some people have a hard time seeing it. Others don’t want to.

The reality is that whatever is still working in traditional media is really just life-support when they meet the next generation of consumers.

There is anecdotal evidence all around us.

What the radio, television, record and publishing industries are seeing – in various stages – is a business that is increasingly being forced to rely on older demographics.

When they have a success story – such as cable TV – they breathe a sight of relief.

But the next generation will not likely be happy to pay for programming they can steal or see for a meaningless pre-roll commercial.

They won’t buy CDs when their lives are centered around digital devices where downloading makes more sense.

They won’t be listening to radio the way baby boomers before them did – in real time, on the go with a transistor radio or Walkman type devices.

And, Randy and the Rainbows at Tribune won’t be reinventing a newspaper that will still need to be printed any time soon.

It’s not convergence that is the issue – there really is no convergence.

It’s obsolescence that plagues the music business and the media industry.

Deal with that and you’ve got a future.

Fail to deal with it, and you’ve got slow death and it isn’t going to be pretty.

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