Online Music Services vs Radio
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The announcement of two new online music services points to what the radio industry is facing.
Given a choice, which way will the public go? Listening to a "local" radio station that's offering plenty of music with little relativity (as the majority of stations do today), or listening to an online music source with plenty of music and little relativity.
We've reached a state where radio has diminished it's local content to a point that's matched by the jukebox delivery of online music sites. Both, radio and these web sites that feature music, play popular songs. Both stay away from additional elements which cost money to produce, and both create a bond with the audience.
Universal Music Group has joined with SpiralFrog to form an online download music service that's to be supported by advertising. The songs will be highly restricted with Digital Rights Management software, but that may prove to be "no big thing" for a generation which has grown up in a high tech world.
AOL has announced adding videos to its online music service. Cost is $9.95 or $14.95, the latter offering unlimited downloads to "compatible music players" (read: not iPods).
The first selection (above) gives its target audience of 13-34 year olds music that's accompanied by advertising. Its deviation from radio's business model, where programmers select the songs, is to let consumers choose which songs they want to hear and then download that selection.
The second option above (from AOL) features a subscription service, and "more than 200 AOL radio stations and XM Satellite Radio."
Clearly, the public now has more choice.
But here's the sign, for me, that this shift in how the public gets its music is gaining traction: Of my four neighbors, two on each side of my house and two across the street, not one has a stereo in the home. Today, all of them listen to music on their computers.
Radio industry execs need to consider this change because it's not only happening in my neighborhood; they need to start thinking about why it's happening at all.
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