Montreal Radio Blog

Sunday, October 17, 2010

The Future of Terrestrial Radio and the Automobile

It seems that more people than ever are tuning into online streaming. It’s great news for a lot of terrestrial radio stations, because it expands their outreach. Unfortunately for the traditionalists, there is a big downside to this: A good portion of the streaming audience is listening to Internet-only programming.

Right now, most online listening is taking place on home computers or laptops, but when streaming radio becomes realistically portable, traditional radio is going to face another huge problem.

Streaming stations are portable to a degree already. However, when they begin equipping Internet radio into automobiles it will change everything. Suddenly, your car will have the potential to play not only almost every terrestrial radio station in the world that is making their stream available online, but also Internet-only radio stations.

Despite everything that radio broadcasting has faced over the decades, one thing they have managed to hold on to is the road listener. Yeah I know, there is satellite radio, but for the most part, terrestrial radio is still winning that battle. People are stuck in their cars during rush hour - and they are a captive audience. The morning show is the most important daily block of programming for a reason. A recent poll down south shows that if given the opportunity to listen to streaming radio in their cars, one in three respondents would abandon their local radio stations.

Another thing to remember is that Internet-only stations are not held to the same federal regulations as terrestrial broadcasters are. That will perhaps become the biggest challenge the medium has ever faced. Time will tell. It may be that there will be attempts made to censor or regulate the online industry. That may prove to be very difficult to enforce without further eroding Internet "freedom".

Is traditional radio planning ahead for this? That is a very good question. It seems they have been more reactionary over the years than visionary. In order to compete with the inevitable, terrestrial radio stations will have to set up diversified streaming versions of themselves. It can’t be understated about how people will still likely be drawn to local content if it includes the entertainment and information they are looking for. This is especially true of the music they are searching for. In the age of MP3s and iPods it will become increasingly difficult to force-feed people the same old formats anymore.

Another problem to factor in is how young people are listening to less traditional radio than ever before. They are spending more time online, and getting their music there too. Again, people have the option to find exactly what they are looking for, and that has to be addressed.

It was about 9 years ago that the iPod was introduced. It was one of those groundbreaking products that literally transformed the way people listened to portable music. It didn't stop at music, as you can now take a lot of your favourite radio shows with you, and listen to them at your convenience.

Now you've got smartphones and tablets and what seems like an endless supply of gadgets that allow you to watch or listen to entertainment on demand. That's the basic difference between broadcast and podcast... Broadcasting is not an interactive medium. At its core, a broadcaster sends out their signal, and if you capture it, you become a viewer/listener. You take what they give you, or at least, that is how it was up until very recently.

People keep saying that terrestrial radio is going to disappear. More recently, some claimed that it would be satellite radio that would be the final nail in radio's coffin. That hasn't happened. I would bet that if you did a little checking, you'd probably find that there are more terrestrial radio stations in existence today than ever before. Whether or not their creative content is at its historical peak is another story altogether.

Aside from the Internet, radio's biggest rival has always been television. TV has been around for quite a while now, but so has radio. Unlike with TV, as mentioned, radio can actually benefit from the Internet. The podcast is best used as an extension of terrestrial radio, just as live streaming is. The concept is the same, but the options are more appealing. If you miss your favourite radio program, it’s not a problem. You can download it and listen to it later... iTunes is the best example of this. The added bonus is that it also allows people to discover your radio program through a podcast query. It is actually a good thing, and it is also financially viable.

Terrestrial radio will always have a place in terms of immediacy. When something big happens locally, your best bet for relevant and instantaneous information is still broadcasting. And then again, that is why it is so important to keep radio local, even more so than for TV. Of course, every market has its own demographical issues to deal with. It is still a business, after all.

It has also been mentioned that some people under a certain age have never tuned into AM radio. It's a little hard to believe, especially since sports radio stations are located on AM, and a big part their key demographic is made up of young people. It was also predicted that FM would eventually kill AM, and that was more than 30 years ago... And here we are again attempting to predict the future! Truth is, the future has actually started to materialize. The way people perceive radio is already changing and that ought to be recognized.

1 comment:

  1. Streaming radio is not the real competition for terrestrial radio, because at this point, the costs of operation of those sorts of stations are too high. The rates these stations must pay to copyright holders is significantly higher than broadcast radio, and as such, are not very viable business models.

    The real risk to radio comes from piracy, illegal downloading, and the use of MP3 / Ipod style players in cars as a replacement for radio. With a bit of effort and time, the average person can collect thousands of songs, set their device to shuffle, and never have a reason to listen to broadcast radio again.

    The Canadian government's subtle (and not so subtle) support for file trading makes this easy and pretty much legal in Canada, such that nobody will be stopped. It is what will kill broadcast radio in the long run.