So much of radio listening is taking place in the car, it is why Mel Karmazin once said he felt cell phone usage in the automobile should be outlawed. Not for safety purposes but because it took away from listening to the radio.
Last week I wrote about Sprint and Emmis chief Jeff Smulyan leading the way to having cell phones activate radio chips. This would certainly free broadcast radio to be in your pocket or purse 24-7. Then two new stories hit this week. One is mostly good news for broadcast radio and one is scarier than hellfire. The Radio Advertising Bureau reported that local online revenue grew more than 20 percent in 2012. This is the good news part of the story. The other side is radio is still far behind almost every other media for creating revenue online. This growth still points to more usage of websites and presumably online listening to broadcast radio.
Part of the reason is we are talking about local radio and clusters having their own strategy so there is not really a defined template in place. Clear Channel has its strategy with iHeartRadio. Many other companies have embraced it but, in the case of Cumulus, while they are partners in iHeartRadio, they concentrate much of their efforts on SweetJack. Smaller broadcast companies simply add a page to their sales pitches and hope for the best.
The other story that sends chills up the spines of broadcasters is the news that General Motors will begin offering Wi-Fi in their automobiles by the Summer of 2014. GM is not the only automaker to climb aboard the Wi-Fi express. All of the luxury automakers will be providing it by next year and it will quickly filter down to all cars on the road in short order. One of the questions, of course, is cost. Most new cars come today with Sirius/XM and in many cases the buyer gets free access for 90-180 days. Not every new car owner re-ups for the service once the trial period expires and cost must play some role in that decision. So will new car buyers play $20 or $30 a month to have Wi-Fi access when they already pay for it at home and on their cell phones? Additionally, Sirius/XM users may make the choice to stay with satellite and not move to Wi-Fi, or vice versa. I doubt that many people are going to pay for both. How would you feel about adding $30-$50 a month to your car payment? I know that I won’t do it. For no additional cost, you get 20-80 broadcast radio stations in your car right now.
GM’s partner in this project predicts this could be worth $1B to their company. Folks, that $1B doesn’t grow on trees. It comes from consumers who are today in the midst of figuring out how to pay new fees for health care and sequestration avoidance (politicians like to call taxes fees because apparently Americans don’t know how to use a thesaurus).
I am a broadcast radio guy. My entire work life has been spent in broadcast radio. I like more access to broadcast radio. I am not a Luddite. Wait a minute. Yes, I am. I like traditional broadcast radio. I believe the only way to hold back the charging forces of technological advances in delivery systems is to provide great content and compelling radio every hour of every day. I don’t think enough radio is doing that so we may very well be inviting the competition. And if that is true, shame on us.
(The views expressed in this article are those of the author and do not necessarily reflect those of MusicRow.)
