Radio, Internet and Mobile Game Changes

By Jerry Del Colliano

I've got some ideas for broadcasters, new media companies and record labels with regard to the growth industries of Internet and mobile content.

1. Don't confuse a terrestrial radio station's Internet stream with Internet radio. Young listeners aren't confused. There is certainly nothing wrong with a branded commercial radio station distributing their signal via Internet radio. It's helpful for at-work listening where FM reception may not be strong. But it is not Internet radio to many in the next generation.

2. Internet radio could be the radio of the future but not without a stable and fair royalty agreement with the record labels. You'll note (or maybe not note) that nothing significant has been done since the labels won the right to overcharge streamers for playing their music. Streamers can't afford to innovate. Popular music services such as Pandora may not even be able to stay in business having succeeded at finding a market but failing to gain a fair royalty deal. If and when such a fair rate is established, there will never be another Clear Channel again. No one will monopolize or sanitize radio programming. In the meanwhile, any terrestrial broadcaster without the ability to field a game plan for that day will be caught flat footed.

3. Record labels should stop trying to win repeal of radio's performance rights exemption and go into the "radio" business themselves. After all, they have the content. I've talked to record labels about this idea. They think I am talking about creating radio stations like the ones consolidators own. I'm not. I'm talking about the kind the next generation would listen to. They may have a personality or jock. They may not. But if the labels had any guts, they'd be radio. Short of that, they'll lose in their efforts to repeal radio's performance exemption even if they win the right to impose it. While radio is not as influential as an opinion maker for new music, this is no time to repeal the performance exemption.

4. Try on an iPhone and see the cool new apps that are available for it. My iPhone is a lot more fun than a radio. I can do a tweet on Twitter. Check Facebook. See the front page of the New York Times at a touch. Keep track of my weight -- always good for an Italian who loves pasta. It's never ending. Now I know what you're thinking. One of those little icons can be added to listen to Pandora and other services that will let consumers hear radio stations on the fly. Game changer: the smart phone has killed the radio star. But consumers, you may find, don't want their phones to be a radio even if they do want it to be an iPod. The difference: they control the iPod (start, stop, delete, listen when they want) and don't have time to hear "radio" in real time.

5. Podcasting will eventually be the new radio. It cooperates with all that young people require of their mobile devices -- all together now -- they start, stop, delete and time-delay their programming. Plus they can subscribe to lots of podcasts. The problem is there are too many problems -- things like lack of royalty agreements to use the music, not enough seamless ways to integrate a mobile device into a car (at this point, at least). But anyone who wants to have a mobile strategy should be all over podcasting. I can promise you most companies will get it wrong because they will fail to study the sociology of technology. We tend to adopt the technology and guess at the sociology. Not true of Steve Jobs. True, of radio and records.

6. One last thought -- radio can no longer be audio without pictures. If you want to start thinking about a strategy in the next entertainment millennium you're going to want to keep in mind that today's youth listen when they want to hear, see when they want to watch video and click when they want to read. So, we can call it radio or call it television or call it newspapers going forward but don't fall for the nomenclature. It's media -- new media.

7. Television will increasingly be challenged by the YouTube mentality. Many of my readers write to me every time I mention that young people watch "Lost" or "Grey's Anatomy" on their laptops not a flat screen TV. And they like it that way. Mobile and portable will be everything. Since technology alone will lead companies to the brink of failure, get at the reason why the next generation would rather watch on a computer screen right on their lap than on a traditional television set. (Hint: then can multi-task, stay in touch, be in control).

8. Five or ten minute "TV" shows may be the future someday. From a sociological perspective, Gen Y has attention deficit like never before. They are smart. Great people. Very social, but they just (as a group) have a shorter attention span. So, study technology all you like, but the reward goes to the company that can understand how to deliver meaningful content to this attention challenged generation in short clips. YouTube is just the beginning.

The most qualified people to be Internet streamers or mobile content providers are radio broadcasters. It's actually in our DNA. Radio people produce performance quality shows on over 11,000 stations every minute of every day (when they are not wimping out and duplicating shows from other markets or from synidicators to save money).

This we can do.

The question is -- is the Internet and mobile space, an unknown black hole to broadcasters -- of interest to us. Enough interest to stop talking and start investing.

We'll have to wait for that answer -- but not too long -- because the next generation has already overwhelming given us their answer.

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