The Case for Online Radio (Continued)

Om Malik responds to my earlier post (aka fisking) of his B2.0 article.

First, thanks Om for engaging in the conversation. This is what this blogging stuff is all about. I can understand the perception of online radio not having taken off from the comScore/Arbitron report you cited. It is a misleading for the following reasons:

1. It measures only the top 4 internet-only networks that have paid big $ for the privilege of being measured. It does NOT measure the entire Shoutcast community, the streaming activities of terrestrial stations (AM, FM, Public, Commercial, College), international webcasters, and basically the other players in the landscape.

2. It's a weekly number. The Arbitron/Edison Media Research report I'd cited earlier was for a monthly number of the entire streaming universe (not just the top 4 entities).

3. It's a US-only panel. For various reasons, they are not using server logs to calculate cume & other measures. I'm not a huge fan of panel-based approaches on the internet because it favors larger players over smaller ones (since there are so many consumer options many of which will probably not register signficantly on a panel). On a side note, this is the niche companies like I/PRO are going after because advertisers are wanting more info about sites that are down the tail so to speak.

At any rate, the nub of Om's argument is that the consumer, not God, is empowered to create their own playlist. I don't disagree though I think there will be room for all flavors. To try to separate the semantics from the substance, consider a 3x2 matrix where distribution mode is on one axis and consumption mode on the other and a rough categorization of the players in each bucket:

_____________________Streamed_______________Downloaded
Complete Control: Rhapsody/Napster________________RhapsodytoGo/NapstertoGo
Some Influence: LaunchCast_______________Skip Button on iPod
No Influence: Radio@AOL, FM Radio_______________Podcast Shows (e.g. Coverville)

(Apologies for the poor formatting. This WYSIWYG editor isn't as WYSIWIG as I thought and it's Friday evening).

I think Om's beef is with the third row where the consumer has no influence on the programming. I don't think this consumption mode will completely go away per se. Rather, I think it'll be like TV. A large number of people will prefer having stuff programmed at them, and they'll appreciate human voices and personalities behind the music. Picking songs for one's own playlist is way too much work for most people. However, like TV, the "radio station" will become atomized into discrete shows that people can roll into their own radio station, just like they do TV with PVRs today. How about some Morning Edition followed by Howard Stern mixed in with Coverville mixed in with playlists I've created (using say Live365, my former company and one I continue to advise in the spirit of disclosure), and playlists of my friends or celebrities.

To use Om's metahpor: I think there will always be a need for God to play DJ because, often times, God will introduce me to music I might like. I just need to choose a God (or Gods) in whose taste I trust!

Comments

[Michael Parekh]

good discussion/debate guys...one big point in the favor of streaming in my view is that it's the lazy person's way easiest way out. I think Rags was more politically correct in calling it "passive listening".

I believe most people really can't be bothered looking up the greatest/latest hits on itunes, meticulously downloading it, burning/or ipodding it to listen on the road, etc. The new streaming services seem poised to be substantially improved in terms of selection, flexibility and convenience vs. downloading and satellite.

In that context, I'm in the process of cancelling several xm accounts in favor of rhapsody and napster streaming via a wireless home network throughout the house. Substantial savings, and lot more music discovery.

curious if either of you has seen any good numbers of how satellite radio listenership breaks down between home/office and car. Intuitively, it would be much higher (say, 60% or more) in terms of commuting auto-based listeners.

Whatever is left, could be threatened by streaming music services.

I'm looking forward to what Yahoo! and MSN announced in this area in coming weeks/months.

[Raghav Gupta]

Michael,

Your comment is spot on. Most people like having things programmed at them. Today, when we don't like what we hear on the radio, we change the channel. In the future, when we don't like what we hear, we'll hit the 'skip' button to forward to the next song in the playlist or the next show/podcast we've downloaded.

Re: breakdown of listening of satellite radio b/w car and home, I haven't seen numbers but think the ratio is much higher than 60% in favor of car. Probably more like 80-90% would be my guess.

Satellite radio and IP-radio (whether streamed real-time or cached locally a la podcasts) are on a collision course when both will be available in the car. Until then there will be battles on the fringes, like your home or office.