Exclusive, proprietary content is the audience driver and the future financial security of Internet Radio.
Internet Radio is at the flashpoint between the Innovative user who is fascinated by new software, apps and a few artists they must hear constantly and the Early Majority of users who will determine the success or failure of the product category. The entire category. Forever.
Making the technology work is a pyrrhic victory. The technology is SUPPOSED to work. All Internet Radio companies have their DNA in the founding technology and often the technocrats run the company. They are brilliant, but they aren't brilliant showmen and to grow Internet Radio it's time to bring on the show.
The Mom with three kids in the car and one to pick up before she starts her assignment from work has limited interest in the "capabilities" of the software. She wants a show. That show can be information or music or a very funny host. But to get her to go through the experience of downloading an app, signing up online or sharing a credit card, she has to have heard about your show from her friends.
AM Radio was on the decline in1921. After hobbyists and Innovator adopters bought their radio sets, sales started to drop. That was a problem for RCA, a company that, at the time was primarily an aggregator of radio equipment patents. For RCA's patents to have value, Americans had to buy radios.
David Sarnoff, a corporate staff lawyer whose primary job was to make the patent deals, realized that RCA owned stations needed to broadcast radio programs with stronger appeal than their offerings of opera, farm news and economic advisories.
Prize fights then and now drew the biggest crowds. Sarnoff made a deal to broadcast the next Jack Dempsey fight and give loud speakers to hardware and electronic stores all over America. The stores were encouraged to stay open late and put the speakers outside on the sidewalk.
The result was a surge in sales and, more importantly, Sarnoff concluded that:
"Programming made by lawyers, accountants and bankers is not capable of attracting a significant audience."
RCA then started what we could call a "creative hot shop" of talent whose only mission was to produce shows that would SELL RADIOS. That company is called NBC.
RADIO's initial appeal was to customers who liked gadgets or had survival needs. To grow from "Innovators" to "Early Adopters" radio found that it had to broadcast mass appeal entertainment. That single discovery, and the resulting actions, made Sarnoff the CEO of RCA and wealthier than you. If you would like to be as wealthy as Sarnoff read on:
HBO, SHOWTIME, MOVIE CHANNEL, USA Networks, AMC all started as aggregators and then their growth stalled. USA was built on reruns of Murder She Wrote, now it thrives on Burn Notice and that Long Island Doctor show. Tony Soprano kept you from cancelling HBO---or was it the Prize Fights?
The cable networks forced NBC/ABC/CBS to create more original content. Until 1980, the original networks had movie nights, showing a film for the last two hours of prime time. In 1979 NBC had FIVE movie nights. The moment those movies were shown on cable without commercials, they could no longer get a number on commercial TV.
A clever record player is not going to deliver essential demographic growth to Internet Radio.
Initially the appeal of Sirius radio was to listeners with an extraordinary need for uninterrupted music over long distances: Truckers. The most robust displays of Sirius radios are still found at truck stops. To grow from that audience to 20,000,000 subscribers took more than "your favorite songs commercial free."
Consider the process of getting a satellite radio:
If a satellite radio didn't come with the car, a customer has to put a new hole in the dash and break the SEAL in the windshield. Most configurations transmit satellite radio over an existing FM frequency which means the technical quality is not greater than any FM Radio. The install total usually comes close to $800.00 Then they have to deal with a lengthy, on the phone subscription process (…where is the EIN number) or spend computer time and commit money to hearing radio.
WHAT IS GOING TO INSPIRE a person with kids, no time, no money to go through that for radio? Answer: Superior programming.The opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaBizBloggers.com management or associated bloggers. MediaBizBloggers is an open thought leadership platform and readers may share their comments and opinions in response to all commentaries.