Apple's New Radio Killer

Apple is up to something and it could spell even more trouble for a radio industry that is firmly entrenched in the past.

About five months or so ago I discussed the potential of an Apple tablet device that could be almost everything an Internet and mobile generation could ask for.

Now there is growing evidence amid many rumors that possibly as soon as September or by year's end, Apple will introduce a mobile device that is larger than its iPod Touch and smaller than its smallest laptop.

But this time there is finally some credibility added to the possibility as the highly respected Piper Jaffray analyst Gene Munster said an Asian parts manufacturer has received orders for components.

The new device, according to the usually spot on Munster, could sell for between $500 and $700 and have a 10-inch touch screen while using an operating system similar to an iPhone.

In my opinion when this device is debuted -- not if -- it will be the most successful consolidation of media ever -- far more successful than radio consolidation.

Apple will likely allow music, movies, email and web browsing. Some call it a potential Kindle killer because it is likely to compete in the book reader category that Amazon's Kindle has started.

This is purely out of the Apple playbook.

Let someone else test the market and they come in with a cooler, more intuitive device with a back structure that includes Apple's massive and growing iTunes store.

I've heard that the new device may also include a PDF reader making it a phenomenal choice for professional people (doctors, lawyers, disc jockeys -- sorry, I'm partial to radio djs) as well as an ideal replacement for student textbooks.

How popular do you think Apple will be if municipalities everywhere could stop ordering textbooks and have students access digital books through the iTunes store? What an fertile market?

What's more, you've been hearing a lot lately about News Corp CEO Rupert Murdoch vs. Chris Anderson (the Wired editor and author of Long Tail).

To simplify it -- Murdoch believes consumers will have to start paying for publications they now get for free online -- advertising not being enough to offset the costs of employing excellent reporters and writers.

Chris Anderson is the author of Free -- a book that sees the digital future as a non-paid model with ancillary forms of revenue delivering the profit not the direct sale of the content. You can read Anderson's "Free" for free on Kindle as he is practicing what he preaches.

Part of me wants to believe Anderson is right on.

Another part believes that when the iPad (or whatever cool name Apple comes up with) arrives, a paid model could work based on micro payments -- a concept I have discussed with you previously.

Want Radio Business Report -- no problem. Pay whatever the publisher wants and read it through your Apple iPad. Download it or subscribe through iTunes. Done! The publisher can set the price and can continue to accept advertising.

I have seen a lot of speculation about how the iPad concept could work for just about everything but radio and music.

I mention music because the 99 cent per song model on iTunes works for Apple and definitely does not for record labels. The major music companies have been schneidered by Apple CEO Steve Jobs who now controls pricing, delivery, discovery -- hell, what does the label do anymore?

This dominance is coming to other media because Apple now controls the front door.

Once the labels lost control of their retailer network, they lost their profit. And once consumers could steal music online, there was no need to steal it from Sam Goody or Virgin -- not that that was ever a real option.

Radio is in worse shape because the loonies running the big consolidated groups have just about denied that there is an Internet let alone offer any content for listeners online.

They have also managed to ignore the mobile space and generational media so if I am correct - are they in for a rude awakening when Apple's new communications commerce device takes off.

Radio consolidators are one-trick ponies.

They just wanted to buy up as many of these free cash flow machines called stations, then maybe get a break from the FCC for a second wave of deregulation, cut expenses, nationalize programming and ultimately sell their stations for a huge profit.

As Aerosmith says, dream on.

That was before the recession and certainly before they ran into debt covenants that render their free cash flow machines a slave to paying bank loan debt.

Moving ahead, the industry that is run by cruel and heartless radio CEOs -- the same industry that now spends nothing on research and development and has gutted its talent pool -- is not ready to compete on the must-have device of the next decade.

Only the cell phone's text messaging option will be more critical to young people than the iPad.

Radio sat out the Internet.

Denied the mobile revolution.

Didn't believe the new paradigm of generational media.

So radio will likely be SOL for the biggest change in media habits in our time.

It's bad enough television operators and networks don't realize they are being eaten alive by online video -- I'll tell you more about this another day because it has implications all across the board.

Let me be blunt.

If radio is not actively engaged in iPad content, it is over even sooner than the ten year life radio has left.


Older consumers will also migrate to the iPad. They showed a willingness to embrace the next generation's new tools when they adopted email, texting, Facebook and iPods to name a few. This will be no different.

The new iPad will be their own personal media device. Their bookstore. Their TV.

And radio's answer to simply stream terrestrial audio won't work here. In fact, radio needs to get video. And I'm not talking about a studio cam aimed at the morning dj (if they still have one).

The iPad is something very exciting and the only industry that has talent in place to occupy that space is the one industry that is firing all its talent.

You know who.

The iPad will be bigger than the iPod and iPhone but for radio and the music business it will be the iPlop if they don't get into the future right.

By the way, I'm thinking of doing a one-day gathering on new media potential for companies, talent looking to enter podcasting and new media and radio stations wanting to avoid the extinction consolidators face. This new Apple product will be on the agenda as will mastering generational media.

If you'd like to do a face-to-face with me, let me know (click on "e-mail the author" below). The more who attend, the more affordable the price. And if you're a new age media company looking to help folks with the tuition for this one-day event, you'll be in the company of people who are heading in the same direction you are. Contact Barry O'Brien if you want a new kind of sponsorship that will help a lot of people understand the digital future ( or (508) 224-4262).

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Thanks for forwarding my pieces to your friends and linking to your websites and boards.
One day, face-to-face with Jerry on the opportunities ahead for radio, entrepreneurs and music industry in new media -- see the future, scope the opportunities, leave with an action plan.