The largest group owner of radio stations in the U.S. is launching an online radio network:
CLEAR CHANNEL RADIO and KATZ MEDIA GROUP have announced a new online radio network. Called the KATZ ONLINE NETWORK, the network is the first to incorporate CLEAR CHANNEL and KATZ’s 1200 affiliates with independent Internet radio stations with the online and mobile streams of leading AM, FM stations and popular syndicated content.
Immediately, the KATZ ONLINE NETWORK delivers 79 million sessions per month and a unique audience of nearly five million listeners per week, as measured by ANDO MEDIA’s WEBCAST METRICS.
This means a couple things to me. First, the broadcast industry has figured out that their competition in the 21st century is streaming WiFi or WiMax audio. Second, satellite radio is dead.
Old-line terrestrial broadcasters are beginning to see that they need to free themselves from the geographic limits imposed by AM and FM transmitters. Their competitors are no longer the guys across town playing similar music or airing different talk shows; terrestrial radio has to find a way to compete against listeners accessing streaming audio on iPods, cell phones, laptops, and even cars. (Chrysler is putting WiFi in all 2009 models.)
Now, here’s where satellite radio takes it in the shorts: In today’s USA, nearly everybody over the age of 11 has a cell phone, an mp3 player, and/or a computer, with one or more able to access the Internet via a broadband connection.
Listening to satellite radio requires dedicated hardware and a service contract above and beyond what most people already have for their phones and computers. Last time I checked, about 7% of Americans subscribed to satrad. That’s a lot of people, sure, but far fewer than the number who access the web one way or another.
As the ease of use increases and people become more familiar with Internet radio, especially as it becomes easier to access the Internet in cars, people will discover that paying extra for satellite radio is a waste of money. The merger of XM and Sirius, which received FCC approval last week, won’t change that.
Unless, of course, we see the launch of a tiered Internet, with the best content and fastest service restricted to consumers who pay extra. That may yet happen.
Still, I believe I left terrestrial radio at a good time. The industry is in for some serious growing pains as it rethinks its business model. And while I don’t pretend to know what that successful new model looks like, I’m pretty well convinced that it doesn’t include HD (the biggest scam since AM stereo) or satellites.
I look for more new, Internet-only networks that don’t have the overhead of traditional broadcasters pumping electricity into the air to serve a few hundred square miles, at most. It’s going to be interesting to see how old-line broadcasters counter the threat — not just on the air and online, but through lobbying efforts and proposed regulation of the new media.