Web-based radio features programming for all tastes, including '60s psychedlia.

Assault on radio

Webcasters want your ears — and a slice of broadcast pie.

by Pete Kotz
5/10/00

Internet broadcasters think they can take on Goliath.

"You need a warm, comfortable, topical, local voice."

Radio is the latest industry to come under attack by the Internet. Commercially, the winners and losers remain to be seen. But consumers are already on top.

One couldn’t help but notice the defensiveness at the National Association of Broadcasters (NAB) recent convention in Las Vegas.

Fiery speeches contained words like "dot-commandos" and "dot-communists." Though the rhetoric was designed to pump up the troops, who came from 6,700 local radio and TV stations nationwide, the sense of concern was evident.

As it should be.

Compared with most industries, broadcasters have always conducted business in a rather protected climate. FCC licenses are both expensive and few, leaving competition to a minimum. That, however, is changing – rapidly. With the explosion of Internet broadcasting, virtually anyone with an idea can become a competitor.

Local TV is still safe – at least for the time being. Programming remains cost-prohibitive, and the quality of Internet video is often rudimentary at best.

Radio is an entirely different matter.

There are already hundreds of stations on the Internet. Technology is now available to transfer Internet broadcasts to something as mobile as a Walkman. Soon, listeners will be able to download broadcasts via satellite to their car stereos, expanding their current selection of a few dozen stations to the thousands.

And all of these new stations and technologies are aimed at stealing listeners away from traditional radio.

No worries

In Las Vegas, Viacom Chairman and CEO Sumner Redstone was militant in his defense of traditional broadcasting.

"The naysayers have it wrong," he told NAB conventioneers. "Broadcasting is not crashing, not dying, not endangered. I say in the new media world, the advantage belongs to broadcasters."

He is right.

With the loosening of anti-monopoly rules over the past decade, the bulk of America’s radio stations have been consolidated into the hands of a few large chains. These media giants would seem to have an insurmountable lead right out of the gate.

Take Clear Channel Communications, which owns more than 800 radio and 19 TV stations in the United States. (Though it currently has nothing in the Detroit market, a proposed merger with AMFM Inc. would give the conglomerate control of as many as seven Detroit radio stations.) It has the capital, the technological might, and the national sales force to overwhelm even the most brazen of upstarts.

Moreover, it can use its vast offline listenership to promote anything it launches online. The key to Internet survival isn’t simply starting a Web site; it’s drawing customers to it.

Stephen Winzenburg, a communications professor at Grand View College in Des Moines, Iowa, sees far more obstacles for challengers.

First, radio has long been a medium enjoyed on the move, be it in the car or while jogging. Internet broadcasts require one to be near a computer; the technology to receive them while mobile is still in its infancy – and remains expensive.

"There will be a few hardcore listeners who want the new technology and will spend the thousands of dollars on radio," says Winzenburg. But, "It has to be economically viable to the consumer in order to make it a threat to commercial radio. Once it does start to happen, radio is going to have to adapt very quickly."

There is also the matter of listener loyalty. Many people view radio as a friend, says Winzenburg. They’ve developed relationships with announcers. They’ve learned to expect local information like weather and traffic. They’re not about to abandon all that quickly.

Despite these seemingly long odds, Internet broadcasters feel confident they can take on Goliath. They don’t expect to kill him. They do, however, expect to steal away a considerable chunk of his market share.

Aggressors

Precedent suggests that conventional business might not translate to Internet dominance. If it did, MSN wouldn’t be chasing Yahoo!, Barnes & Noble wouldn’t be flailing behind Amazon, and Pacific Bell wouldn’t be sitting in the cheap seats with an envious eye on AOL.

Precedent would further suggest that large media outlets have been slow to recognize competitive threats. Network TV lost huge market share with the advent of cable. Large newspaper chains have suffered a steady, 25-year circulation decline due, in part, to smaller foes and the Internet.

Joe Pezillo finds such theories comforting. In fact, he believes conventional radio’s size, immobility and lack of creative juice will inevitably work against it.

Pezillo is founder of Eclectic Radio, a Boulder, Colo., company with more than 25 Internet stations. Visit Eclectic’s site – gogaga.com – and you may be seeing the future of radio.

Instead of a selection restricted to pop, country and talk, like one might find in Detroit, Eclectic’s offerings range from jazz to blues to alternative to multiple forms of rock. Check back in a month, and you’ll likely find more stations on the menu.

A National Public Radio veteran and a former Apple executive, Pezillo said the idea came to him after studying what Apple workers were listening to while they worked. Their headphones were pumping in music from CDs, not radio.

"I figured a lot of these people are like me. They’re interested in a lot of new music, and local radio wasn’t meeting their needs."

Pezillo readily acknowledges that most radio listeners are happy. An Arbitron study showed that only 20 percent of people are dissatisfied with their local radio selection. But the same study showed that one-third of listeners would embrace stations from outside their market.

In Pezillo’s eyes, that means 33 percent of the market is up for grabs.

Conventional radio has its detractors. As chains grow larger, and programming decisions are further removed from local control, one might be hard-pressed to tell the difference between a Des Moines pop station and one in Detroit.

Moreover, programming is heavily based on consumer research. Those data indicate that the largest audience is gleaned by a tight rotation of perhaps 20 current songs played over and over. Though this may satisfy the majority, a significant minority finds it mind-numbing.

"It’s as if everybody fits some sort of generic," says Doug Mitchell, the supervising producer for NPR’s Weekend Edition.

TV stations and newspapers have already discovered, much to their horror, that people’s interests aren’t nearly this homogenous.

Perhaps most exposed are conventional radio’s local ties. Save for stations such as WWJ-AM, WJR-AM and WDET-FM, local news has been all but abandoned. Many broadcasters have dumped local shows for national programming, proving that fare need not be native to attract an audience. And the Internet already offers far more detailed weather than radio – and it’s available on demand.

For many a station, traffic reports are the lone local trump card remaining.

The horizon

The clear victors are consumers. Hundreds of music stations are already available on the Internet. Whereas traditional jazz and classical music are largely absent from Detroit’s radio dial, it can take less than a minute to download a station that fits any fan’s taste – be it classical, big band, fusion or swing.

At 888telsurf.com, listeners can choose from 1,000 Internet stations. At Digital Club Network, one can hear performances from top clubs around the country. And NPR is working with satellite technology that will deliver stations from across the globe – in case you have a hankering for something Finnish.

Perhaps the most significant threat is individualized radio. Much like one programs a Yahoo! site to meet one’s tastes, My Radio will soon launch a site that allows users to select their favorite bands, thus programming a station just for them.

Even talk radio, which has the strongest local ties, will face stiff competition. At givemetalk.com, anyone can host his or her own show free of charge. And though conservative talk dominates local radio, listeners will soon be able to choose hosts who range from moderate to socialist. The same goes for financial shows, where one can pick an adviser based on compatible investment strategies.

NPR’s Mitchell is jumping on the trend. He’s created a company – freshwav.com – that’s developing a diverse stable of talent for this new world. Visit his site and you’ll find shows like "The GreenScene," which discusses environmental issues; "She Got Game," which centers on women’s sports; and "The Style Hour," an "off-the-cuff dissection of the state of men’s fashion and dressing habits."

Winners, losers

Of course, no one really knows who the winners and losers will be. Like most traditional broadcasters, Alex Tear, program director of Detroit’s WDRQ-FM 93.1, looks at the Internet as "something to make part of our world." His station has introduced a RealAudio feed on its Web site, www.drqradio.com. ABC/Disney owns the station, as well as WPLT-FM 96.3 and WJR-AM 760.

Tear calls the Internet stations "sterile," and lacking in local content. "Personality drives radio," he says. "You need a warm, comfortable, topical, local voice."

"Radio has many competitors," Tear adds. "The Internet, cable radio, satellite radio ... I don’t consider them a threat, but I am conscious of them."

His stiffest competition may actually come from fellow traditionalists. Take New Century Media of Seattle, which is using billboards in Portland to advertise the Internet simulcasts of its four stations. The next logical step: Stations from Minneapolis, Chicago and Kansas City horning in on the Detroit market.

Mitchell takes a different spin. He contends the Internet is about diffusing control. It’s a place where 25-year-olds have repeatedly bested America’s smartest CEOs, where the advantage goes to the little guy who instinctively understands consumer desires, rather than the executive, distant from his clients, who must rely on focus groups and demographic data.

"They’re nervous," says Mitchell of traditional broadcasters, "and they’re justifiably so. Control is basically being turned back to the consumer. When power is spread out like that, there is a lot of concern about what you’re going to do. You will have big dogs, you will have middle-sized dogs, and you will have lots and lots of little dogs."

And that can only be good for consumers.

Pete Kotz is editor of Cityview in Des Moines where a version of this article first appeared. Metro Times copy editor Vic Doucette contributed to this story.