NY Post Predicts Demise of Radio

Here we go again. The print press, which has been collapsing all around us, is predicting the demise of OTA radio in the car.

http://nypost.com/2015/03/19/more-streaming-siriusxm-may-mean-the-demise-of-car-radios/


The funny part to me is they say Sirius is one of the reasons. Yet Sirius isn't growing at all. Sure, streaming is growing, but the streaming services they're talking about have more in common with CD players than radio stations. If I was writing this article, the obvious in car device that is being killed by streaming is the CD Player, not the radio. Until streaming services provide original content and not simply retransmission of personal music collections, they're not really competitors in the radio business.

Especially including Sirius as an example, given the rumors of Stern not-renewing his contract next go-around. Some estimates put Sirius losing up to 23% of their subscribers if and when that happens, or another way to look at it, would be 23% loss of an estimated 1.3% satellite radio total-audience.

I could see a small loss of traditional radio listeners attributed to streaming sites like Pandora, Slacker and alike, but it seems like whenever listening numbers to in car streaming increase, they seem fall off just as fast. That being said, there are currently no accurate ways to determine what those numbers are across all platforms.

Kelly A said:

I could see a small loss of traditional radio listeners attributed to streaming sites like Pandora, Slacker and alike,

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But once again, my point is that Pandora, Slacker, and the like are more like a CD player than an FM radio. Streaming stations play YOUR own personal collection, while FM radio plays a curated list of songs built around a format with live presenters. There is no successful streaming competitor to FM. Yes, I'm hearing that Apple is hiring some radio veterans, and may offer a streaming equivalent to FM. But right now, none exists.

The only thing that is comparable to FM is Sirius, and most people refuse to pay the $15 a month fee. That is the primary stumbling block. Certainly, the number of cars with Sirius installed is very high. But the number of cars with it actually in use is very low, and it's not changing any time soon. I think Sirius has peaked, and they know it. The new owners are looking for other ways to use the satellite access they have in cars, with features outside of traditional radio. That could be GPS, although the market for that has dried up too.

TheBigA said:

But once again, my point is that Pandora, Slacker, and the like are more like a CD player than an FM radio. Streaming stations play YOUR own personal collection, while FM radio plays a curated list of songs built around a format with live presenters. There is no successful streaming competitor to FM. Yes, I'm hearing that Apple is hiring some radio veterans, and may offer a streaming equivalent to FM. But right now, none exists.

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I recognize your point and agree. The point I was trying to make (not successfully apparently), was that I would imagine that with automakers pushing things like Pandora connectivity in the car, like Honda as an example, then there could be a reduction of in-car listening to traditional radio. Is it going to be 1.5%? Only time will tell. I do predict however, that when Pandora, Slacker and alike, are backed further into a corner because of not hitting revenue targets, forced to run more ads or forcing subscriptions, etc., listeners will return to good ol' reliable free radio. Like Sirius/XM, they will settle into a small sector of in-car listening which will barely move the needle.

Kelly A said:

I do predict however, that when Pandora, Slacker and alike, are backed further into a corner because of not hitting revenue targets,

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Not only that, but those streaming services have additional pressure from the recording industry to cut back on free services, and emphasize subscription listening, which is far less popular among users. The recording industry is not a friend of free streaming radio, and they'd really like to see it all go away. That really wasn't addressed in this article.

Kelly A said:

Like Sirius/XM, they will settle into a small sector of in-car listening which will barely move the needle.

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I've always felt the main attraction for in-car connectivity will be email and texting. Those two things will outweigh any music listening. And contrary to this article, the music played on OTA radio isn't bad. So the public really isn't motivated towards new media by anything other than technology.

will Sirius---XM eventually give up satellite & move on--line?
or will Sirius--XM just die. ?

Here's a story that relates to what I said in the previous post about the recording industry and free streaming services like Spotify:

http://www.allaccess.com/net-news/archive/story/139583/report-umg-takes-on-spotify-s-freemium-model

This adversary relationship that exists between music companies and streaming services is unique to digital platforms, mainly due to the way the Digital Millennium Copyright Act was written 15 years ago. It basically gave all power to the copyright holders, and the users were mainly paying for the right to use that music.

The relationship between OTA radio and the record labels is very different. First of all, there is no payment to record labels. That makes things a lot simpler. If there was, they'd be arguing for more money all the time. Our only relationship is with songwriters and publishers, and its handled by the RMLC. They negotiate a blanket deal that covers all music licensed by BMI, ASCAP, and SESAC. Much simpler, and it allows us a lot more freedom to play what we want. Of course, the recording industry doesn't like that, but they have no choice.

What this means is that looking forward, streaming services will always be at the beck & call of the recording industry, and the recording industry will always want a bigger share of the revenues from digital platforms. That either translates to less money for streaming companies, or higher costs passed on to consumers. Since more streaming companies are beholden to investors who expect a profit, I'm expecting that will mean the relationship between consumers and streaming music will be changing in the future. It might mean a monthly fee tacked on to any ISP bill, it might mean another bill from your streaming service (the problem being that most people use multiple streaming services and might not want to pick one as their exclusive music provider), or it might mean you send a check to the recording industry for access to their music. In any case, the situation we have now with streaming is not going to stay the same. However, broadcasting will continue to be free, easy, and available everywhere.

Agreed. Artists, songwriters and (what's left of) labels, still hold radio airplay as default ladder steps to success. I've yet to hear any groups or artists hoping to launch or grow their career via play on Pandora or Slacker. It's always about getting radio airplay. With DMCA well in place, I don't see that changing anytime soon. Even artists are pushing back against streaming companies. Just look at what Taylor Swift recently did to Spotify.

I think it is interesting (and maybe frightening) that the music industry seems to be hell-bent on radio paying a performance fee in addition to the royalties we already pay (which can be substantial). If radio is "stealing their product," then why do I get multiple requests from music promoters urging me to play their clients records on the radio? Somehow I don't believe they would be doing that if they thought radio didn't help sell their music.

Chuck said:

Somehow I don't believe they would be doing that if they thought radio didn't help sell their music.

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Keep in mind that all but one of the labels are foreign-owned, and their motivation comes from their foreign owners. They don't understand the American system, and they don't understand American payola laws. When the US labels talk about the royalty, they basically are quoting corporate talking points, not expressing their personal opinion. In the meantime, they continue to budget millions of promotional dollars to encourage OTA airplay of their music. And privately the artists know their touring business, where they make the bulk of their money, is a lot more profitable because of OTA radio.

The SAME newspaper that was worried about it going out of biz due to TV and radio??>? MMM I think they need to worry about themselves first!!!

I once heard that before radio got involved, the recording industry was a multi-thousand dollar industry. Can anyone confirm that?

semoochie said:

I once heard that before radio got involved, the recording industry was a multi-thousand dollar industry. Can anyone confirm that?

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Depends. Keep in mind that several major record labels, like Columbia and RCA, were owned by the same companies that owned the radio industry. It's my opinion that when that changed in 1988, and the labels became foreign-owned, the recording industry lost its way.

What's the percentage of people who listen to the radio at some point during the week? Pretty sure it's still in the 90s. What's the percentage of people who pick up a newspaper? I'm guessing 50% or less.

My local newspaper yesterday proudly declared that it reaches 73% of adults saw either the newspaper or its affiliated web site at least once a week.

PTBoardOp94 said:

My local newspaper yesterday proudly declared that it reaches 73% of adults saw either the newspaper or its affiliated web site at least once a week.

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Interesting statistic. I'd love a break-down of the web vs. hard copy, and how the multiple web views skews that "once a week" number.

Bottom line: Newspapers make substantially less money from their web site (s) than the print edition. Web ads sell for less, there are fewer of them, and fewer sellable features. The reality is the Sunday paper is generally the only one that gets read. But people might check the web site several times a day. By the same token, streaming an air signal makes almost no money. If that's the future of radio, something will have to change.

TheBigA said:

Interesting statistic. I'd love a break-down of the web vs. hard copy, and how the multiple web views skews that "once a week" number.

Bottom line: Newspapers make substantially less money from their web site (s) than the print edition. Web ads sell for less, there are fewer of them, and fewer sellable features. The reality is the Sunday paper is generally the only one that gets read. But people might check the web site several times a day. By the same token, streaming an air signal makes almost no money. If that's the future of radio, something will have to change.

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The reason most papers make no money online is they are stuck on the paywall model.