If you want to know the very first place where the Internet will utterly transform the traditional communications industries, get up tomorrow and listen closely to your clock radio. The barely perceptible wheezing you'll hear is the sound of a medium that's dying -- and about to be reborn.
Having wandered out upon a short limb the week of Jan. 3 with my prediction that Y2K will be to broadband what 1999 was to e-commerce, I'll now plop my derriere on the farthest branch and state that radio is the place where broadband's influence will be most immediately felt.
And is being felt--because if a middle-aged, middle-class, middlebrow geezer like myself can find his entertainment habits already altered, then it's a good bet the under-thirties who turn patterns into profits in the infotainment world are way into this new new thing.
With the proviso that only a fool extrapolates broad predictions from personal experience, I'd like to explain. A few months ago, my apartment building was hooked up to Roadrunner, Time Warner's cable-modem service. Installation was a simple affair. A couple of ur-geeks came over, put a splitter on the existing cable, ran a new cable off to a fancy modem and thence to my computer, loaded some software, and voila!--I had Internet service that made my office T-1 line seem like a lumbering water buffalo. Better yet, the Web is always on--no dialing up, no hisses or hacks.
The speed and availability immediately changed our household usage patterns. My wife, who, outside of work, used the Internet only under duress, has become an avid recreational surfer, especially to real estate and design sites. But it wasn't until I downloaded Realplayer 7, the latest version of Real Networks' breakthrough streaming media player, and hooked my computer to our stereo, that the big change took place. In the comfort of my living room, I now have some 300 stations. Maybe it's 300,000. But who's counting?
These are not scratchy variants on the shortwave experience, but high-quality stereo channels that give new meaning to the term "fine-tuning." For those who recall the trauma when New York lost WQEW and its big-band format, reducing the jazz capital of the East to a mere two offerings (one of which specializes in Kenny G), Spinner.com offers no less than 26 niche jazz and blues channels. One is devoted to "Ellingtonia;" another to Hoagy Carmichael. You like singers? Take your choice from "Crooners," "SinatraStyle" or "Jazz Vocals."
Similar niching holds in every category. Classical music, all but banished from the air throughout most of America, gets five channels on Spinner. Don't even ask about rock.
These Web radio services and their burgeoning competitors aren't perfect. Netradio's quality strikes my ear as a trifle hollow; I've also caught it repeating playlists after a three-day passage. Via cable modem, Spinner comes in at a bit rate that provides superb CD-quality sound but, for technical reasons, on a Macintosh is prone to blacking out in the middle of a song, while Netradio can go for hours without interruption.
Glitches aside, it's easy to see where this is heading. Radio, a relentlessly local medium, can now go global, yet without the enormous costs associated with assembling a large network of stations. Absent those costs -- which drive station groups into a handful of rigid, crowd-pleasing formats -- programmers can offer something more specialized than Howard Stern or the Back Street Boys. Brand marketers can target these national (or international) niche audiences, and might be willing to pay premiums to reach them.
Meanwhile, ad-serving technology will still allow the corner restaurant to advertise -- and not only aurally, but (if you've got a video screen hooked up) visually, too, because streaming technology enables different media forms to travel through the same pipe. Advertising revenues will supplement the transaction revenues the Web radio providers currently receive from their one click love-the-song-buy-the-CD process.
The radio news is no news to Alley, Valley and Street. In-car satellite radio services have garnered hundreds of millions from Sid Bass, Leon Black and other big ticket investors. Internet tech powerhouse CNET and the AMFM station group have just linked, in a radio equivalent of a clicks-and-mortar play. I'm sure it's only a matter of time before an ad-serving specialist hooks up with a major radio rep firm to work out the advertising logistics on this very old--yet spanking new--medium.
Copyright March 2000, Crain Communications Inc.