Radio 2.0 – how the net is disrupting broadcasting

The golden age of radio is long gone. Today, we have cookie-cutter DJs playing more or less the same music and commercials as the next station on the dial.

Music is often selected by a computer program based on the time of day along with a few other parameters few outside the industry get to hear about. Save to say, someone in marketing probably schedules the music you hear.

The broadcaster will also have more than one powerful and expensive transmitter, and pay hefty licence fees to the government for each radio frequency it uses. But are the days of wireless transmission slipping away?

Visit the website of your favourite station and you’ll likely find an option to listen live online or download sections of the week’s shows for your future listening pleasure.

Play on demand (POD) has not only caused TV broadcasters to join the online party, it is quietly seeping across the radio industry too. Helped along by a demand from people who want to listen to what they want, when they want – a thirst for choice that’s quenched by faster, cheaper, broadband.

The traditional radio business model is also being undermined by talented and professional DJs and upstarts who are operating 100 per cent online using a mixture of automated and live broadcasts – often using some pretty basic equipment  (not that the listener would know).

These internet-only stations don’t need a licence to broadcast, the expense of a transmitter, premises to locate it or people to maintain it. All they need is a computer, a selection of MP3 music files and to sign up with a firm that provides internet broadcast services – such as Live365.com.

The cost of entry can be as little as $1000 a month for a serious player, although packages can start at $50 a month for the keen amateur.

Among the dozens of companies that offer people a way to deliver their selection of speech and music to the world include Live365.com, ShoutCast.com and StreamLicensing.com. There’s even a free option at listen2myradio.com (but you do get what you pay for).

The prices these firms charge vary according to the quality of the audio and the number of listeners who can listen to a broadcaster at any one time.

Unlike wireless radio, listening figures can be accurately measured – right down to how many people are logged in to listen at any given moment in time. Advertisers love this transparency.

Make no mistake, this new breed of broadcaster has the power to disrupt the established players in much the same way as the internet disrupted newspapers.

In a way, we are on the verge of a new ‘golden’ era of radio. Internet-based stations play music selected by the DJ (like it used to be) – listeners tune in to hear a particular DJ’s selection of music, or gravitate to online broadcasters who specialise in one particular style of music, be it non-stop trad jazz, 50’s doo wop, 60’s ballads, 70’s rock or 80’s club music.

Smart broadcasters have already adopted their own online radio streaming services and some are even making money by selling ads for online ‘transmission’ only. IHeartRadio.com is also gaining traction.

Despite the fact that listeners ‘pay’ to listen to an internet station with increased bandwidth usage – transferring some of the cost of broadcasting from the provider to the listener – studies show that people are increasingly listening to stations online – at work, in the car, at home and with their smartphones etc.

According to US advertising agency TargetSpot, internet radio listenership is growing every year.

Being internet based has also led to listeners interacting more with broadcasters’ websites. The TargetSpot survey reports that engagement with online audio carries through to websites as listeners search for new music, artist or band information, and playing video clips.

This interactivity is helping stations, even small operations run by a few volunteers, build relationships with their listeners. Advertisers like to build relationships and engage with people who might buy their products.The bottom line is that radio broadcasters the world over are on notice that a quiet revolution is undermining their business model – listener patterns will change and advertisers will go where the [niche] audiences are.

Traditional broadcasters need to understand that the threat to their businesses will probably come from a teenager with a PC in their bedroom.

Feel free to link, but no copying or republishing without written permission from the author. Copyright Steve Hart.