A wave of change is approaching the terrestrial and satellite radio industry—like a tsunami headed for shore. Sirius XM is fighting to retain paying subscribers. Radio conglomerates face plunging revenues, rising costs and eroding listenership. But there are additional, perhaps insurmountable factors undermining radio’s future.
The radio business is largely built upon two foundations.
Scarcity—terrestrial radio is built upon demand for a limited number of FCC licenses.
Barrier To Entry— costs to purchase a frequency plus operate are substantial.
Enter the Internet. Startup costs become basic—a URL web address, some readily available low cost software, content and music royalties. Scarcity and barriers to entry are no longer part of this equation. In this morning’s subscriber-only @MusicRow an article about streaming radio says that over half of teens 13-17 are already using the quickly proliferating number of available online services.
Now imagine that in addition to getting the signal on your computer and mobile devices (iPhone, Blackberry, etc.) Internet is also available on your car radio. As ubiquitous availability becomes reality, virtual Internet stations will mushroom overnight.
Kenny Chesney is surfing this wave of change with his newly launched No Shoes Radio channel (www.noshoesradio.com) which features the artist’s music, plus a diverse sampling of other artists and formats. Demand from fans was so high that over 50,000 streams were served on launch, temporarily freezing the servers in the process. “It’s…knowing that you’re still in sync with the fans,” said Chesney. Commenting upon the launch glitch he said, “When you try something that people tell you is crazy, in the back of your mind you’re glad there was so much demand.”
So where is this going?
Will it change the country music business which is still tied tightly to country radio exposure and the radio charts?
Will a changing radio landscape open up playlists and expand the format’s diversity?
What do you think?
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