Marketing Music, 2.0: the declining importance of traditional Air-Play (Radio) versus Net-Play

Over the course of the next 5-6 years, the importance of getting Air-Play on terrestrial i.e. traditional, programmed radio will drastically decline, as people are switching to the Internet (and by extension, to each other) as the #1 way of sourcing music programs. We will see a drastic increase in fragmentation as people will do anything from carefully customizing each track in their lists to just listen to 'what's on' - and there will be 100s of permutations in between. From total engagement to total passive consumption, there will be offers covering each - and they will all be connected.

Because of the strong uptake in next generation mobile devices (fka cell phones), the explosive proliferation of social networks and the drastic increase in wireless broadband capabilities at ever decreasing costs (yes, not yet - but give it another 18 months) we will see people use their mobile devices as prime instruments of listening to radio-like music programs - there will be hundreds of radio/music apps available via the various app stores that each device maker AND operator will offer; some paid, most feels-like-free, some sponsored.

The other point is that as the car becomes fully connected and always-online people will shift their music consumption to Net-based offerings while on the road, as well (in addition to the already stiff in-car competition from iPods etc) - this will be a very very very serious challenge to traditional Radio (and TV) broadcasters. Local news, traffic, sports etc will be programmable to interlace with your Internet-based stations - the best of both worlds?  Talk about Change!

More resources: my slideshow on the Future of Broadcasting (NPOX 08), my slideshow on the Future of Radio (2007)

 

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Comments

[Michael]

After mechanicals, there go our performance rights. As layers of revenue fall away, so will the people that rely on them. Will this mean that in 5-6 years, the only people that will be able to afford to remain in the creative side of music will be a handful of professional songwriters that live off advances rather than rights and an army of little bands busy gaming Last.fm or the next equivalent?

[Gerd Leonhard]

Michael, not at all! The key is to license the Net just like we have licensed radio --- with a voluntary collective license. And then collect - and upsell. Read: http://www.slideshare.net/gleonhard/compensation-not-control-music-20-gerd-leonhard-midem-net-2009key-presentation

[Michael]

Hi, actually you know, I agree with you entirely and have quoted you on this. But it just so happens that I'm struggling to find lost sums from PROs from more traditional sources and discovered they are... somewhere. If I can't get them from UK and US TV, what chance do I have from YouTube or Spotify three years from now?

I also see sync fees in free-fall from low-cost websites and shady retitling practices.

These are both different issues from what you're talking about. But just today, I'm feeling a little future-shocked and in the mood for a good moan. There! Done, back to work now!