Why Internet Won't Kill Radio

[TheBigA]

I agree with a lot of this article. Even though it's written from an investment perspective, it also makes a lot of sense, and follows with a lot of what we've seen over the last five years. People are cheap. ISPs and record companies are greedy. That combination isn't good. Someone has to be willing to give their product away, and the key players aren't. So while music fans (maybe 10% of the audience) will jump on this, the majority will stick with reliable old technology.


http://www.fool.com/investing/general/2010/05/11/the-internet-wont-kill-radio.aspx

 

[TomT]

The real key to radio's survival is that radio controls it's means of transmission. And that means of transmission is relatively cheap to build and operate, and very robust, compared to the digital services.

Satellite radio depends on very expensive satellites, and, in many cities, local repeaters with uncertain futures.

Think TV--most of the population watches over-the-air TV on cable, or from the satellite providers. Not over the air.

Wireless internet allows the streaming stations to "broadcast"--but only as long as the number of listeners is limited. Any form of streaming is really a one to one transmission mode, limited by the bandwidth capacity of the supplier. And, of course, outside of a limited area it is not really a mobile service.

Cellphones? Half the time I can't make an ordinary telephone call on my AT&T phone in downtown Columbus. Too many gadgets, not enough bandwidth.

 

[Gatekeeper007]

What your saying is very true we live in a limited bandwidth world right now. No matter how satellite, cable, telephone, or any other utility service whether a carrier in between service or an end user service tries to disguise the fact, bandwidth cost money and isn't given away freely and as the need for more and more bandwidth increases in demand so does the cost to deliver that service and if you don't happen to live in a city or outlining area then God help trying to get service in a rural area at a desent bandwidth that you can afford. Example: West Plam Beach, FL-Comcast cable $90.00 per month 3gig down 1gig up speed, verses Orangeburg, SC-NTI Net $300.00 per month 1.5gig down 768k up. This is just one real world example of how limited bandwidth really is in many places.

 

[vsa]

Let me add some additional "wishful thinking" subjects:

Why cellphones won't kill pagers.

Why compact discs won't replace cassettes.

Why digital downloads won't replace compact discs.

Why people will always read newspapers as long as there is news.

Why horseless carriages won't replace buggies.

 

[TheBigA]

Then again, there are quite a few new things that DIDN'T replace old things.

TV didn't replace radio.

Satellite didn't replace broadcast.

Cable didn't replace TV.

Hybrids didn't replace gas engines.

 

[Goat Rodeo Cowboy]

Then again, there are quite a few new things that DIDN'T replace old things.
TV didn't replace radio.
Satellite didn't replace broadcast.
Cable didn't replace TV.
Hybrids didn't replace gas engines.

At least, not yet.

Sometimes we look at these "technology struggles" through a very limited and narrow field of view. Sometimes way out in left field is some technology in some other industry we don't know about that is ready to pounce on our little fiefdom, and forever change history.

The decision of our nation to ramp up and send humans to the moon something like 50 years ago has impacted our lives in ways we don't understand. 50 or 100 years from now historians with an interest in technology may sort it all out for us.

If you and I are both still around 15 years from now, let's review your list of what didn't happen and see it it still holds true.

Last weekend I made a trip to a class reunion. I just moved from a ten year old car to a new car and I am still marveling over the technology changes. As we prepared to return home, one of those technologies reached up and "bit me in the butt" big-time and made my first day of the homeward journey pure hell. But two days earlier I mingled and conversed with classmates from years ago in the toy-palace/workshop of our host in what he calls "The Barn" and drooled over his 1934 Ford Coupe, a tricked-out "California style street rod". I thought about the many hours both he and I have put into making automobiles run. What we grew up driving and repairing has been replaced by something that still has four rubber-tired wheels, but today's cars have more in common with Buck Rogers than Detroit.

In 1,500 miles of driving I tuned around on the radio. I came across one station in Middle Tennessee for a few minutes as I topped Monteagle that I enjoyed. The rest of it was sawdust and robot-droppings from Buck Rogers workshop. Something is replacing radio. Maybe in 50 to 100 years the historians with a knack for sound and technology can tell us what did it in.

 

[nd2023]

10 years from now people will be paying 1 bill for nationwide wireless broadband. 10 years ago people were still on dialup.

 

[TheBigA]

Fascinating article on why success could kill Pandora:

http://techcrunch.com/2010/06/16/tc-teardown-pandora-the-tough-business-of-webcasting/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29&utm_content=Twitter

This is typical of all internet radio operations. The royalty structure penalizes success. The writer feels the problem is "spectrum bias," but that really isn't the problem. As long as music copyright owners continue to insist on increasing royalties, and as long as the Copyright Royalty Board decides the rate, this will kill internet radio.

 

[Gatekeeper007]

BigA a good case in point never let someone charge what they think they are worth because it rarely what it is really worth. When programmers on satellite first scrambled their signals in 1985 they started charging what they thought their programming was worth and needless to say they were way out of line, example: HBO $59.95 per month just their one channel back then, WTBS $19.95 per month, ESPN $29.95 per month ect... By the time you added a decent package together you had $1500.00 per month but the programmers seting their own prices thought that was fair. Soon package prices came out but were not much better till pirates found a way around the scrambling system. Then a 6 year battle set in between both sides until the package prices fell low enough and a new scrambling system was put into place which wasn't worth breaking. This example was in the big dish days when the smaller 18" dish systems started their prices were triple that of big dishes at the time right out of the gate and still are but that another story, point is never let someone charge what they think they are worth just look at gas prices.

 

[radiorob2.0]

It is today's youth that will define the tech future. They use today's portable devices like the kids fifty years ago embraced the handheld/pocket radios, "the now-wow" thing back then. The concept of a linear content delivery system is antiquated to those who can download on demand.

 

[radiorob2.0]

BigA a good case in point never let someone charge what they think they are worth because it rarely what it is really worth. When programmers on satellite first scrambled their signals in 1985 they started charging what they thought their programming was worth and needless to say they were way out of line, example: HBO $59.95 per month just their one channel back then, WTBS $19.95 per month, ESPN $29.95 per month ect... By the time you added a decent package together you had $1500.00 per month but the programmers seting their own prices thought that was fair. Soon package prices came out but were not much better till pirates found a way around the scrambling system. Then a 6 year battle set in between both sides until the package prices fell low enough and a new scrambling system was put into place which wasn't worth breaking. This example was in the big dish days when the smaller 18" dish systems started their prices were triple that of big dishes at the time right out of the gate and still are but that another story, point is never let someone charge what they think they are worth just look at gas prices.

That is an example of cooler heads prevailing.

Musicians did not want their music played on the radio. Record lables had disclaimers prohibiting the recording's broadcast, but cooler heads prevailed and everyone made money.

There is a give and take with "intellectual ownership". Once cooler heads provail, (read: everyone has a revenue stream) all will be well.

 

[TheBigA]

There is a give and take with "intellectual ownership". Once cooler heads provail, (read: everyone has a revenue stream) all will be well.

Based on what I'm hearing, it will take a long time for cooler heads to prevail. Heads on both sides are still very hot. The music industry sees this as their right, and the broadcasters feel they're being dissed.