Telephone industry offers valuable lesson for radio.

[vsa]

Kurt Hanson writes about a story told by Clayton Christensen (author of “The Innovator’s Dilemna”) in his book "Seeing What’s Next" about how the telegraph company Western Union is for all intents and purposes dead today because...it decided to “pass” on the telephone to focus on its highly profitable core business.

In the historical case as described by Christensen, Western Union did see value in the telephone, and even had chances to affordably acquire the technology, but at the time the telephone was practical for local service only, and Westerm Union’s profitable core business was for national (long-distance) communications. So they passed. Kurt writes on to talk about how traditional broadcasters are making their own short-sighted opposite kind of mistake.

http://textpattern.kurthanson.com/k...hone-industry-offers-valuable-lesson-for-rado

When CBS purchased Last.fm in May, 2007, they signalled that they do not plan to make a Western Union style mistake.

 

[Radioman100]

When CBS purchased Last.fm in May, 2007, they signalled that they do not plan to make a Western Union style mistake.

Well, you're right about that. They signalled they're making a dot com boom/bust style mistake instead.

 

[vsa]

When CBS purchased Last.fm in May, 2007, they signalled that they do not plan to make a Western Union style mistake.

Well, you're right about that. They signalled they're making a dot com boom/bust style mistake instead.

The radio people who were calling the Internet a "fad" were proven wrong a long time ago.

 

[clouseau]

The radio people who were calling the Internet a "fad" were proven wrong a long time ago.

I suppose it would be way out of line to ask, but do you have an example of this?

Clouseau

 

[Radioman100]

Of course the Internet isn't a fad. Plowing ridiculous money into companies developing it was a fad.

People did it because they were ignorant. They fell for the buzz and hype. For a small handful of investors it worked out, but others lost big.

Putting blind faith in web radio just because it's on the Internet would be similarly foolish.

Web radio is actually in a much worse position than most dot coms were before the bust. CRB royalty rates are the biggest obstacle to profitability, but there are other issues like long term bandwidth backlash.

Should radio have web involvement? Of course. Should it be the only focus? Only if you want to relive the dot com bust.

 

[radiopilot]

The radio people who were calling the Internet a "fad" were proven wrong a long time ago.

I suppose it would be way out of line to ask, but do you have an example of this?

Clouseau

Gee how the black kettle in all of you HD pro types don't even have a clue, it was YOU, RFburns, Mike Walker, EasyPeezy, Radioman, Lino, David Eduardo, etc., etc. all indicating how internet radio was doomed because of royalty fees, not enough listeners, advertisement sales, etc.

NOW these so called experts that were calling satelite radio a dying industry are the ones touting the Ibiquity nonsense to get HD radio on satelite radios as a condition of the XM/Sirius merger... talk about calling the kettle black... WOW you guys are flip floppers, at LEAST we still have the audacity to continue to rant how bad HD radio is and haven't budged from our position!

IF I were the FCC and SEC I would NEVER have allowed terrestrial radio to ever touch the internet/satelite radio with their web radio or now their insitance that HD be allowed on satelite radios as a condition web radio/satelite radio would not try to get into terrestrial radio!

Now THAT would have been the best approach and then we would see how all you guys would be out of work scratching at XM/Sirius or the thousands of internet radio sites looking for work... a sorry sour bunch you guys are!

Seriously look back at your prior posts before getting into the position where you ask the stupid question above!

Radiopilot

 

[vsa]

The radio people who were calling the Internet a "fad" were proven wrong a long time ago.

I suppose it would be way out of line to ask,  but do you have an example of this?

Clouseau

Back in 2000 and 2001, in terms of the public (some radio people included) in general believing the Internet was a fad:

http://www.bizjournals.com/seattle/stories/2000/12/18/focus7.html


In terms of radio people in particular thinking that Internet radio was over several years ago:

http://www.kurthanson.com/archive/news/033103/index.shtml

I must admit that I have not been collecting evidence gleaned from numerous personal conversations over the years with fellow radio people. It never occurred to me to keep such evidence handy to PROVE what was common knowledge and experience. There were plenty of people who had doubts about the longevity of the Internet. Ten years from now, we'll all be hard-pressed to find anyone admitting to having had any doubts about the future of Internet radio.



 

 

[clouseau]

Gee how the black kettle in all of you HD pro types don't even have a clue, it was YOU, RFburns, Mike Walker, EasyPeezy, Radioman, Lino, David Eduardo, etc., etc. all indicating how internet radio was doomed because of royalty fees, not enough listeners, advertisement sales, etc.

All these issues are faced by net radio today. They threaten it's very existance.

NOW these so called experts that were calling satelite radio a dying industry are the ones touting the Ibiquity nonsense to get HD radio on satelite radios as a condition of the XM/Sirius merger... talk about calling the kettle black...

Not at all. HD radio is merely asking for a "Concurrent" changing of the playing field. From an HD standpoint, Radio agreed to the consequences of HD and it's effect on radio as a whole.

However for ONE satellite company to be formed, it requires a change in the "competition" arena. A change in a law that affects radio that RADIO DOES NOT REALLY WANT. because of that, it is reasonable to look for some type of mitigation. Do I lke the mitigation chosen? Not particularly, but it is creative. remember the "NEW "Siriurs/XM will have no national compteitors.

WOW you guys are flip floppers, at LEAST we still have the audacity to continue to rant how bad HD radio is and haven't budged from our position!

I fail to see the change in position. Nothing has changed.

IF I were the FCC and SEC I would NEVER have allowed terrestrial radio to ever touch the internet/satelite radio with their web radio or now their insitance that HD be allowed on satelite radios as a condition web radio/satelite radio would not try to get into terrestrial radio!

While trying to be civil i'll point out this is the reason people with your view don't HAVE that responsibility.

Now THAT would have been the best approach and then we would see how all you guys would be out of work scratching at XM/Sirius or the thousands of internet radio sites looking for work... a sorry sour bunch you guys are!

My God man, why are you so filled with such hate towards radio? Cripes, if ever a post showed true colors....

Seriously look back at your prior posts before getting into the position where you ask the stupid question above!

You do realize this semi incoherant rant by you is in response to a question I asked about "The radio people who were calling the Internet a "fad"". Somehow I'm not sure how you got off on the mother of all rants about everything based on "The stupid question I asked above".

Clearly if you have so little interest in radio, perhaps you should devote a little more time to something a little more meaningful to YOU. But that is you decision.

Either way, dude, honestly. Lighten up.

It's only radio.

Clouseau

 

[clouseau]

The radio people who were calling the Internet a "fad" were proven wrong a long time ago.

I suppose it would be way out of line to ask, but do you have an example of this?

Clouseau

Back in 2000 and 2001, in terms of the public (some radio people included) in general believing the Internet was a fad:

http://www.bizjournals.com/seattle/stories/2000/12/18/focus7.html


In terms of radio people in particular thinking that Internet radio was over several years ago:

http://www.kurthanson.com/archive/news/033103/index.shtml

I must admit that I have not been collecting evidence gleaned from numerous personal conversations over the years with fellow radio people. It never occurred to me to keep such evidence handy to PROVE what was common knowledge and experience. There were plenty of people who had doubts about the longevity of the Internet. Ten years from now, we'll all be hard-pressed to find anyone admitting to having had any doubts about the future of Internet radio.

Fair enough. I think we were looking for different things. If a more accurate staement of

"The radio people who were calling the Internet a "fad""

is

"The people who were calling the Internet a "fad", including some in radio" then I misinterpreted what you said. My apologies.

I believe radio was quicker to adopt the Internet than SOME other businesses And they could have been faster. I would say it isn't fair to say they totally didin't believe. The rant a couple of posts up from a "Mob Member Radiopilot" should substantiate that.

You also said...

I must admit that I have not been collecting evidence gleaned from numerous personal conversations over the years with fellow radio people.

I can see that. I may have actually heard..."We're 12% bekiw budget and you want to screw with the Internet? ? ?"

Hell hath no fury like a GSM who is 2% below budget...

I'm not sure that's really a philosophy...


Clouseau

 

[Mike Walker]

Reality check: internet radio is still threatened by what comes next in royalty fees. EVERY MAJOR NETCASTER CONFIRMS THIS! Most internet stations still operate in the red (it takes advertising to make money...either that, or subscriptions...the only two sources of money for mass-media!) And internet radio (video too) still has the unfortunate propensity to be killed by it's own success. With terrestrial radio, production and distribution cossts are fixed. It costs the same to produce a show heard by 10 people as 10 million. But as audience size increases, cost-per-listener goes WAY down. On the 'net, however, the more people listen, THE MORE IT COSTS! A station breaking even, or making money with 10,000 listeners, could literally cease to exist if suddenly that number grew to hundreds of thousands, or millions of listeners. Odds are bandwidth wouldn't be available for the surprising increase, and if available, it would cost so much the station would likely have to shut down.

THOSE are the sad realities of internet radio (there are, of course, some happy realities as well!) But you can't gloss over these problems. They need to be solved before internet radio becomes what it needs to be to prosper...A PROFIT CENTER! Before one profits, one must first build an infrastructure which actually can support success!

 

[vsa]

The radio people who were calling the Internet a "fad" were proven wrong a long time ago.

I suppose it would be way out of line to ask,  but do you have an example of this?

Clouseau

Back in 2000 and 2001, in terms of the public (some radio people included) in general believing the Internet was a fad:

http://www.bizjournals.com/seattle/stories/2000/12/18/focus7.html


In terms of radio people in particular thinking that Internet radio was over several years ago:

http://www.kurthanson.com/archive/news/033103/index.shtml

I must admit that I have not been collecting evidence gleaned from numerous personal conversations over the years with fellow radio people. It never occurred to me to keep such evidence handy to PROVE what was common knowledge and experience. There were plenty of people who had doubts about the longevity of the Internet. Ten years from now, we'll all be hard-pressed to find anyone admitting to having had any doubts about the future of Internet radio.

Fair enough.  I think we were looking for different things.  If a more accurate staement of

"The radio people who were calling the Internet a "fad""

is

"The  people who were calling the Internet a "fad", including some in radio" then I misinterpreted what you said.  My apologies. 

I believe radio was quicker to adopt the Internet than SOME other businesses   And they could have been faster.  I would say it isn't fair to say they totally didin't believe.  The rant a couple of posts up from a "Mob Member Radiopilot" should substantiate that.

You also said...

I must admit that I have not been collecting evidence gleaned from numerous personal conversations over the years with fellow radio people.

I can see that.  I may have actually heard..."We're 12% bekiw budget and you want to screw with the Internet? ? ?"

Hell hath no fury like a GSM who is 2% below budget... 

I'm not sure that's really a philosophy...


Clouseau

Apology accepted, but not required. Kurt Hanson's 2003 article on the Future of Radio says, alot of radio people were on-board early with the Internet, at least for awhile.

http://www.kurthanson.com/archive/news/033103/index.shtml

That GSM who needs to make the short-term target is understandably not looking several years down the road. He's thinking about maximizing revenue TODAY from radio advertisers via that transmitter, tower, Arbitron, etc. HD radio can easily fit within that framework, so I understand why broadcasting companies are pushing it.

But WHAT IF the public goes in a completely different direction? What if they find exactly what they want when they want it somewhere else? What if advertisers follow them?

It's already happening and looks like it will accelerate. Traditional radio's way of doing things is getting in the way. It's like the old dominant railroad companies thinking they were in the train business, not the transportation business. Why are WE not leading in the Internet space? Why are WE letting non-radio people take the lead? Yeah, I know, it can mean taking on a completely new business model. Tough, if not impossible to do.

Sprint's XOHM (WIMAX) will go live this spring. Some radio people will look at it with trepidation. Others will say "so what." Some are already planning how to take full advantage of it.

"...Speaking at a WiMax panel at CES, Sprint CTO Barry West says that the company is on track for their commercial WiMax launch (aka Xohm) at the end of April. The service should offer speeds between 2-4Mbps for around $40, and the company has promised they won't force customers into long-term contracts or charge early termination fees...the network should be device agnostic..."

http://www.**********.com/shownews/Sprint-Xohm-Late-April-Launch-90831?nocomment=1

More about XOHM here:  http://www.xohm.com/

 

[vsa]

Reality check: internet radio is still threatened by what comes next in royalty fees. EVERY MAJOR NETCASTER CONFIRMS THIS! Most internet stations still operate in the red (it takes advertising to make money...either that, or subscriptions...the only two sources of money for mass-media!) And internet radio (video too) still has the unfortunate propensity to be killed by it's own success. With terrestrial radio, production and distribution cossts are fixed. It costs the same to produce a show heard by 10 people as 10 million. But as audience size increases, cost-per-listener goes WAY down. On the 'net, however, the more people listen, THE MORE IT COSTS! A station breaking even, or making money with 10,000 listeners, could literally cease to exist if suddenly that number grew to hundreds of thousands, or millions of listeners. Odds are bandwidth wouldn't be available for the surprising increase, and if available, it would cost so much the station would likely have to shut down.

THOSE are the sad realities of internet radio (there are, of course, some happy realities as well!) But you can't gloss over these problems. They need to be solved before internet radio becomes what it needs to be to prosper...A PROFIT CENTER! Before one profits, one must first build an infrastructure which actually can support success!

Mike, you make some very good points.

Technologies already exist in an effort to tackle the growing cost issue as audience size grows. Here are links to two of them.

http://www.abacast.com/
http://www.octoshape.com/

How about 98% bandwidth cost savings? The weakness is that they require a free downloadable plug-in, but they can GREATLY reduce streaming costs. FLASH is also a plug-in, so it is a workable solution, particularly if commonly used players include the required code.

Ultimately, IP Multicast will solve the problem of cost.

http://en.wikipedia.org/wiki/Multicast

Why am I not worried about the Internet possibly not being able to support large-scale webcasting of radio? The major push is to make the Internet capable of streaming high-def video/television. Lower-bandwidth Internet radio will easily ride those infrastructure coat-tails.

 

[Mike Walker]

I hope you're right, VSA. Being "pro-hd" doesn't mean being "anti-internet radio". In fact I'm a (very small scale) webcaster, and have been for a LONG time. The fact remains that if everyone who listens to terrestrial radio tomorrow tuned-in on the 'net instead, the 'net would slow to a crawl, and the infrastructure for internet radio would crash, HARD!

Question (about the technologies you mention). Since rather than a direct point-to-point connection for each listener, the stream comes to my computer, then streams on to the next listener, what if I'm also uploading a big file to my website (or client stations), and my upstream slows to a crawl? Doesn't that stop the stream of whoever comes next "down the line"? THAT's what I've always wondered about technologies such as those you describe. If this isn't the problem I suspect, then GREAT! When streaming on a MASSIVE scale becomes truly affordable, terrestrial broadcasters will be among those who benefit the most!

 

[vsa]

I hope you're right, VSA. Being "pro-hd" doesn't mean being "anti-internet radio". In fact I'm a (very small scale) webcaster, and have been for a LONG time. The fact remains that if everyone who listens to terrestrial radio tomorrow tuned-in on the 'net instead, the 'net would slow to a crawl, and the infrastructure for internet radio would crash, HARD!

Question (about the technologies you mention). Since rather than a direct point-to-point connection for each listener, the stream comes to my computer, then streams on to the next listener, what if I'm also uploading a big file to my website (or client stations), and my upstream slows to a crawl? Doesn't that stop the stream of whoever comes next "down the line"? THAT's what I've always wondered about technologies such as those you describe. If this isn't the problem I suspect, then GREAT! When streaming on a MASSIVE scale becomes truly affordable, terrestrial broadcasters will be among those who benefit the most!

Agreed again. Being pro-HD does not mean being anti-Internet radio. Actually, they COULD work together.

HD radio's biggest weakness (aside from the other issues discussed ad nauseum here) is that the purchase of hardware is required. It will take a very long time to replace a majority of about 800 million analog radios - if ever. Satellite radio faces a similar problem. New replacement hardware. Internet radio does not REQUIRE new additional hardware as it rides along on the coat-tails of widespread wired and wireless Internet adoption and use.

Technologies such as Abacast's and Octoshape's re-route streams as needed automatically at the streaming server level. IP Multicast works differently with a similar result. Since Internet streaming isn't a technology controlled by just one company, innovations come from all quarters.

Why do I advocate getting an early (it's already getting a little late in the game) start on Internet radio? Brand-building. It's an opportunity to build new brands in a new space. That takes time. Leadership in anything is usually established by relatively early entrants. Not neccessarily the first, but relatively early. The hurdles "brandwise" are much bigger later on.

 

[Radioman100]

Agreed again. Being pro-HD does not mean being anti-Internet radio. Actually, they COULD work together.

HD radio's biggest weakness (aside from the other issues discussed ad nauseum here) is that the purchase of hardware is required. It will take a very long time to replace a majority of about 800 million analog radios - if ever. Satellite radio faces a similar problem. New replacement hardware. Internet radio does not REQUIRE new additional hardware as it rides along on the coat-tails of widespread wired and wireless Internet adoption and use.

Technologies such as Abacast's and Octoshape's re-route streams as needed automatically at the streaming server level. IP Multicast works differently with a similar result. Since Internet streaming isn't a technology controlled by just one company, innovations come from all quarters.

Why do I advocate getting an early (it's already getting a little late in the game) start on Internet radio? Brand-building. It's an opportunity to build new brands in a new space. That takes time. Leadership in anything is usually established by relatively early entrants. Not neccessarily the first, but relatively early. The hurdles "brandwise" are much bigger later on.

Good grief. Another commercial for streaming audio. Tell me vsa, which streaming audio hosting company do you work for?

Seeing how you've met with congressmen and all to discuss the royalty issues, I have to assume it's pretty important to your livelihood.

 

[vsa]

Agreed again. Being pro-HD does not mean being anti-Internet radio. Actually, they COULD work together.

HD radio's biggest weakness (aside from the other issues discussed ad nauseum here) is that the purchase of hardware is required. It will take a very long time to replace a majority of about 800 million analog radios - if ever. Satellite radio faces a similar problem. New replacement hardware. Internet radio does not REQUIRE new additional hardware as it rides along on the coat-tails of widespread wired and wireless Internet adoption and use.

Technologies such as Abacast's and Octoshape's re-route streams as needed automatically at the streaming server level. IP Multicast works differently with a similar result. Since Internet streaming isn't a technology controlled by just one company, innovations come from all quarters.   

Why do I advocate getting an early (it's already getting a little late in the game) start on Internet radio? Brand-building. It's an opportunity to build new brands in a new space. That takes time. Leadership in anything is usually established by relatively early entrants. Not neccessarily the first, but relatively early. The hurdles "brandwise" are much bigger later on.

Good grief.  Another commercial for streaming audio.  Tell me vsa, which streaming audio hosting company do you work for?

Seeing how you've met with congressmen and all to discuss the royalty issues, I have to assume it's pretty important to your livelihood.

Why do you assume there's an angle? Is that because you have one?

I'm a radio broadcaster and have been in the business for decades. I'm also tired of watching my business shrink every year when it should and can be growing and thriving.

 

[Radioman100]

Why do you assume there's an angle? Is that because you have one?

I'm a radio broadcaster and have been in the business for decades. I'm also tired of watching my business shrink every year when it should and can be growing and thriving.

I assume there's an angle because everything you write sounds like a commercial for streaming audio. Often, those commercials of yours are accompanied by warnings to radio execs that if they don't start streaming, they're done for.

I find it really hard to believe all of your recent claims. I could believe some of them independently, but when you put them together, they don't make much sense for a "radio broadcaster." They do make sense for a streaming audio provider with some radio experience.

First, for someone who's received a paycheck from the radio industry "for decades" you're the most anti-radio person I've ever encountered. Your basic theme is streaming is good in whatever form - terrestrial radio streams or competitors of terrestrial radio who only broadcast online. The latter makes very little sense for someone gainfully employed by terrestrial radio. Why would you be such a good cheerleader for the online competitors of the radio industry if you work in radio?

Second, your recent claim that you've met with congressmen about streaming royalties doesn't make a lot of sense for a traditional radio broadcaster. It makes a lot of sense for a streaming audio provider that stands to lose big if terrestrial radio curtails its streaming efforts though, or could be enriched if terrestrial radio increases its streaming. The only major broadcaster that has really spoken out about the new CRB royalties is NPR. The commercial broadcasters, like Clear Channel, have paid it some lip service, but really haven't done much to try rolling back the rates. If any of the big broadcasters cared enough to send staffers to meet with Congress, the press releases would fly and it would be all over the trades.

Third, if you did work in terrestrial radio and truly believed streaming was the one and only key to riches, would you really be so eager to make sure ALL of your competitors were doing it? I don't know how it works where you live, but here the more people that listen to your station, the more money you make. If all the action were online, that's the last place I'd want my competitors to be, and you constantly preach doom and gloom designed to get as many terrestrial stations online as possible.

So, as a terrestrial broadcaster, how do you explain your constant anti-radio rhetoric, meetings with Congress that the rest of the industry knows nothing about and your strong desire to help your competitors with their online efforts?

 

[vsa]

Why do you assume there's an angle? Is that because you have one?

I'm a radio broadcaster and have been in the business for decades. I'm also tired of watching my business shrink every year when it should and can be growing and thriving.

So, as a terrestrial broadcaster, how do you explain your constant anti-radio rhetoric, meetings with Congress that the rest of the industry knows nothing about and your strong desire to help your competitors with their online efforts?

Pretty stupid, aren't I, for caring about the radio business I've loved for so many years. It's all about what's in it for me isn't it? I know that precious few will listen. There's nothing to lose if one or two people take heed.

 

[Radioman100]

Pretty stupid, aren't I, for caring about the radio business I've loved for so many years. It's all about what's in it for me isn't it? I know that precious few will listen. There's nothing to lose if one or two people take heed.

Nice dodge. It might be somewhat believeable if you hadn't posted SOOOOOO many threads where you championed non-terrestrial radio streamers.

 

[vsa]

Pretty stupid, aren't I, for caring about the radio business I've loved for so many years. It's all about what's in it for me isn't it? I know that precious few will listen. There's nothing to lose if one or two people take heed.

Nice dodge.  It might be somewhat believeable if you hadn't posted SOOOOOO many threads where you championed non-terrestrial radio streamers.

That's your spin.