Alternatives To Broadcast Radio Continue To Grow

From Business Week Online’s Brian Albott:  "Last September, when the wannabe Denver deejay started playing music on the Internet, the term for what he was doing — podcasting — had been around for two weeks. These days the 35-year-old produces a half-hour show of popular songs called Coverville. Some 9,000 devotees download it three times a week to play on — what else? — their iPods (or other portable devices). And if they tire of Coverville, they now have 3,500 other podcasts — and counting — to choose from."

"For all the hullabaloo it’s generating, podcasting is not even close to being a business yet… Regardless, a trend is afoot that could transform the $21 billion radio industry. Consider the basics: With no licenses, no frequencies, and no towers, ordinary people are busy creating audio programming for thousands of others. They’re bypassing an entire industry."

"…The digital revolution took its time getting to radio. Now it’s exploding — and the big bang goes far beyond podcasting. As radio shows are turned into digital bits, they’re being delivered many different ways, from Web to satellite to cell phones. Listeners no longer have to tune in at a certain time, and within range of a signal, to catch a show or a game. As the business goes digital, the barriers to entry — including precious airwaves — count for less and less…"

"Traditional radio powers are already feeling the pain… Whatever the reason, there’s no denying a stark reality: Listeners… are simply tuning out and finding alternatives…"

"The industry tumult comes down to a simple phenomenon. As digital forms of radio proliferate, listeners will enjoy an abundance of new programming — but much of it still lacks a proven business model…"

"For radio to make money, execs must be as innovative with the business model as they are with technology… "

"It’s possible to imagine people paying monthly fees to hear programming-on-demand on the phone, PC, or in the car. Listeners could buy a song they hear on the radio with the click of a button. Companies could sell subscriptions and place ads inside customized traffic information, weather reports, or sports tickers…
"Already the forces of commercialization are circling. Entrepreneurs are offering software and services to help podcasters turn out more polished shows. Advertisers such as Volvo are sponsoring podcasts. And traditional radio stations, such as the British Broadcasting Co. and National Public Radio station WGBH in Boston, are launching podcasts…"  (Hypebot: In LA KCRW has followed suit for all non-music programming.)

"More profound changes lie ahead as the radio majors join the digital fray. Their biggest hope is high-definition, or HD, radio, which provides CD-quality sound… Radio execs are betting that HD will allow them to offer the kind of niche programming already available on satellite radio and on the Web. And in the next few years, HD will feature TiVo-like functions…"

"Even as they gear up for HD, the likes of Clear Channel and Infinity have discovered the Net. By this summer nearly 250 Clear Channel stations in the top 25 markets will introduce ad-supported sites offering radio feeds and studio performances from artists. Yahoo, MSN, and America Online have staked out an early lead by providing subscriptions and free services that allow people to customize music channels, skip through songs, and buy a tune as they hear it."

"’If we don’t do these things online, people will go somewhere else to get it,’ says Evan Harrison, hired from AOL Music to develop Clear Channel’s Web strategy."

"Thanks to the new technology, more people than ever will be creating and listening to audio programming in coming years. But the radio industry, a members-only club for the best part of a century, is turning into a free-for-all."

Read the full Business Week Online story here.