I just bought a new car. Just like everyone else who buys a new car these days I am able to receive Sirius/XM. This is nothing new to me because I have been a subscriber since the first year of satellite radio’s existence. I love satellite radio and listen to it frequently. The real change for me is the fact that I can now have Spotify and Pandora in my car!! I was able to do it before by running a cord from my iPhone to a plug in my glove compartment. Being a bit of a “neat freak”, I didn’t like having to drive around with cords everywhere and my glove compartment open.
In my new car I have a setting on my radio for a “Blue Tooth Audio Device”. With no cords I can listen to essentially whatever music I want, whenever I want. I can make a playlist and listen to it in the car. I can create a Pandora station and listen to that as well. Why would I need a radio station, let alone a terrestrial radio station to pick music for me?
For a long time I have believed that terrestrial radio’s future lies in “Talk” formats. After all, we can’t create that anywhere else…yet. In New York, I listen almost exclusively to the sports talk station WFAN. As the ability to get Spotify and Pandora or other streaming services in your car increases in penetration, it makes music radio more irrelevant by the day.
Classic Radio is a popular format. There really is no need for that anymore. With rare exceptions these stations play ONLY older music. Modern Rock and Active Rock, while they play “currrents,” mostly play the hits. They play newer music played in the evenings, weekends and at night, when there are much fewer people listening. Top 40 Radio, Urban Radio and the AC formats mostly play the hits. By streaming music in your car or at home, there is no need for someone else to program your radio station. Or is there?
I believe that the new technology will mandate that radio will have to return to an era where they introduced new music and educated their audience. This is reminiscent of the days of “Progressive Radio” and stations like KSAN, WNEW, WXRT, and many others. These stations would play primarily new music. It would be the first place people would go to to hear new music.
In order for an individual to choose the music they want to stream, they first have to know what music that is. Sure, you can find new music on Pandora, but it is not as fast as turning on a local radio station and hearing a bunch of it all day. In order to find new music on terrestrial radio, you have to listen a lot. New music is always a liability and does not get played frequently until it is popular.
Radio consultants will probably say that I am nuts. They have relied on the premise that people listening to radio want familiar music. That tenet of radio is now obsolete. If radio stations continue to play familiar music, separated by commercials and “talk breaks” they will die. It will take a while for the streaming in your car to penetrate the marketplace. Just as it took a while for satellite radio to reach a critical mass. But these stations are as terminally ill as a cancer patient with an untreatable disease. You can prolong the inevitable, but the end will come just the same.
Broadcast operations such as Clear Channel, Cumulus and Cox will not be able to survive doing this. They will have to find a way to split up the “talk” market. There will undoubtedly be new ways to split up the pie. Probably more stations serving the needs of the Hispanic and other ethnic communities. Probably “gossip” or entertainment formats, more sports stations (maybe split up by the sport) and many other options.
The music stations will resemble the “Mom & Pop” operations that dominated the radio landscape before the 80’s. They will rely on local advertising and great DJs. They will need to survive by serving a niche in their audience and not rely on ratings. They will need good sales staffs.
We won’t know if I am correct or not for at least five or ten years. I believe this is the future. Streaming will change the music landscape forever. It has already changed the lives of artists and record labels. Now it is radio’s turn.