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Monday, August 22, 2011
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The New Radio Battle

In the past six months, more online music discovery and social sites have sprouted than corn stalks in Ohio. There's no indication that the onslaught of these internet music services is going to slow.

Everyone is looking for the magic bullet in music distribution online, and the radio industry is slowly plodding along repeating the "everyone said television would kill radio, then everyone said cassettes would kill radio, etc...."

"Radio executives were warned about the flight of local advertising dollars when they started to increase commercial loads and decrease local programming."

Now we're hearing that even with the growth in internet music delivery unlike anything in the past, radio should not worry about in-vehicle access of online music and radio. It's bad advice.

There's continued change for all, yet radio continues its 1990s approach to communicating. (There is small movement being made, but it's nothing that's going to work as new media matures.)

The new battle for the radio industry is staying relevant to music fans who are comparing the popular music played on a radio station (in between dozens of commercials) with what's available online from dozens of new music services (with no commercials).

For markets 1-75, it's time to take a long look at how people are finding new music. In a short time, Audio Graphics' own RRadio Music has placed over 600 songs on internet radio stations. Our "Intro to Indie Artists" program has been picked up by 154 online stations, which play 390 variations - and Audio Graphics is an extremely small player in this online music game.

Jamcloud, Soundcloud, Google Music, Facebook Music, Jelli,,, Live365, Pandora - that's a frontal assault on the music radio industry that should not be waived with a simple "others have tried to kill radio and failed."

When television came along (and for much of the cassette tape's growth years), consumers were making a transition from being city dwellers to spending longer hours in the automobile. That was radio's saving grace then.

We now have a push to place smartphone and internet connectivity in vehicles, so there will be no cavalry coming over the horizon to save radio from what's ahead this time.

Radio executives were warned about the flight of local advertising dollars when they started to increase commercial loads and decrease local programming. The latest revenue report shows that these warnings should not have been taken as lightly as they were. "Local" ad dollars are now small enough to not even deserve a separate mention in the report.

Today a warning to the radio industry concerns how youth discover new ways to find and consume music. If those making decisions hold to their myopic stance that it's nothing to worry about and there will always be a place for radio, they'll be right. But, those revenue figures are going to look a lot worse when the online music distribution services move their focus from creating the platform to selling national advertising.

Then network advertising is going to wane from the RAB revenue report, just as "local" did from yesterday's reports. By that time, the radio industry will be too far behind the digital curve to catch up to its new competitors.

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