video title: Transition from FM to Internet Radio
video link:
video source: SacTVnews
uploaded on YouTube March 25, 2012

more info: Playlist
duration 4:31 minutes

Lessons from FM Radio for the Internet "Video of the Day" review by Alex Cosper on March 25, 2012

Tony Cox explains what happened with the radio industry in this video shot twelve years ago. This timeless interview we did at his production studio gives insight as to how the Telecom Act of 1996 resulted in corporate consolidation of radio, handing what was once an important platform for regional businesses over to a short list of big businesses. We actually compare terrestrial radio with internet radio in 2000, before broadband became ubiquitous circa 2004-2005. It's an amazing time piece with valuable lessons for internet radio.

Dennis Newhall opens the video talking about a Beatles show he did on KZAP. Part of the fun was that there was an endless library of Beatles material that was not heard much by the general public, which kept the show fresh. What online resources can learn from this is that shows are fun when you offer unique programming that taps into familiar culture. The video captures nine other lessons that today's new media pioneers can learn from radio professionals who were successful at generating loyal followings prior to the corporate mergers set in motion with the Telecom Act. Read more about Sacramento radio at Playlist Research.

Update: June 23, 2013

Internet radio still has not come close to taking over people's lives, as warned in the early 2000s. But it has grown in influence in many ways. More people listen to internet radio now as more choices enter the picture. Recently Apple finally unleashed its plans for iTunes Radio, which is its streaming version of various free internet music channels, designed to compete with Pandora, Spotify, iHeartRadio and many others. In a sense, Apple is late to the party this time, since the other streamers have been around for awhile. Car radios still have not produced the ultimate internet radio experience. So it's safe to conclude that the terrestrial radio era has survived at least through 2013.

But several indicators point to a dismal future for the radio business. First of all, most small businesses cannot afford to advertise on AM or FM stations, which still command significant audiences in major markets. These same small businesses, however, can afford to advertise on internet radio, but to smaller audiences. The internet, though, is not so much a universe for mass appeal content as it is for niche content. Therefore, it's reasonable to conclude that many niche radio streams will emerge in the years to come to serve audiences of 1,000-10,000 people, whereas major market stations serve up to 100 times as many people. The problem with terrestrial radio is its high cost, particularly for electricity. Many radio companies are still deep in debt, which is one of the key indicators that radio companies will need more downsizing to stay in business.

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