6 Major Trends That Will Change Radio Forever
Radio hasn't changed much in the last ten years. In fact, radio hasn't changed much in the last twenty years. The single most impactful change in radio happened with the passing of the Telecommunications Act of 1996. It deregulated media ownership, allowing a company to own more stations than previously.
Most famously, Clear Channel went on a buying spree, purchasing hundreds of radio stations over that next few years.
This changed the "who" of radio. It changed programming. Made stations more homogenized and centralized. It shifted the social ecology and dismantled the culture of radio, replacing it with the shell of corporatism. These radical shifts in the media landscape changed the "who" of radio, but they didn't change the "what" of radio, i.e. what listeners think of as radio, that remained the same.
In the next five to ten years, the "what" of radio is going to be flipped on its head and transformed into something that's fundamentally different. The young and the digital are going to live through the greatest transformation that traditional radio and in-car music have ever seen. In this post, we'll talk about the democratization of radio, the app revolution, the personalized music experience, e-commerce on wheels, real-time station analytics, and the creative destruction that will ensue.
Here are six major trends that will change radio forever:
1) The Democratization of Radio. Right now, we take it for granted that we can only access the radio stations that exist in the places where we live.
Local radio is local because we don't have the ability to tune into much else.
In as soon as four years' time, experts argue we will see "near saturation" in the connected, Wi-Fi enabled car market. What this means is that the tyranny of geography that defines the current radio landscape will be lifted indefinitely.
Listeners will gain access to stations on the web and across the country. The amount of options available will be unprecedented. Given how rigid most single-format, local stations are, those without a connection to their audience will die.
The carbon copy, dime a dozen classic rock and top 40 local stations will be disrupted. Those without a voice will lose. Soon, radio will cannibalize itself.
All stations will be at war, everywhere; they'll steal listeners from each other.
2) The In-Car Music App Revolution. In-car radio is a fact of life. The few competitors to challenge the mindshare of traditional radio have been the cell phone, the social phenomenon of the iPod, and satellite radio, i.e. SiriusXM.
The connected car will bring forth the availability of apps like Pandora and MOG, as well as, ones that we haven't even anticipated yet. Once traditional radio is just another app, rather than a stand-by, it shifts the landscape. The selling point of radio has always been that it's free, it works, and it's just there. In the future, that proposition won't hold as strongly in the minds of listeners. The notion of tuning into an personally irrelevant and banal local station will seem dated and contrived once listeners have more personalized experiences available to them.
News and weather updates, as well as, celebrity gossip can be delivered more efficiently though other in-car apps. Once the personalized, on-demand music experience takes hold, traditional radio will increasingly lose listener interest.
3) The Personalized Music Experience. There's nothing better than hearing a personalized music experience while driving. Something about the act of driving – and our built-in expectations of it entails – heightens the pleasure derived from hearing a personalized playlist. Hearing song after song of music that we love has a certain blissful, euphoric feeling to it. We've all jammed out when one of our favorite songs played on the radio, but few of us have had the chance to jam out to every one of our favorite songs. Yes, a person can create aplaylist or shuffle their iPod, but the randomness and discovery elements are what make the personalized music experience so special. Our brains have a prediction mechanism and when a song plays that we love, yet hadn't quite anticipated, it's flooded with dopamine. It's like winning at a slot machine.
Playlist music doesn't have that effect. There are no pleasant surprises.
The second thing to consider is that the data that can be collected to determine the nature of a personalized music experience is vaster. Voice recognition can pick up on a listener's tone, i.e. mood, GPS knows their location, and in-car apps know what the weather is like. All of this can be used to create a unique playlist.
Added to this is also the fact that personalized, ad-supported services will take user profiles into the car and serve up highly targeted ads. Rather than being hit with ads from car dealers and insurance providers, listeners will hear targeted ads that are relevant to them. At present, traditional radio can't offer these things.
4) E-Commerce on Four Wheels. Think about it. Everything is for sale.
Every song played on radio will be available to be purchased while people drive. It will download directly to their car. No driving to the store. No visiting iTunes.
Now. You hear a song you like and purchase it at the moment of discovery.
By the time things get to this point, some have argued that listeners will have shifted from an ownership to access model. There's truth to this, but trust me, everything changes when everything is for sale. When a song can be bought mindlessly with a single voice control or press of a button, listeners will buy.
The identity of every song will be known and various types of dynamic pricing can be integrated. At various times of the day, a song may cost $1 or it may drop to 50¢. When every single listener is a potential buyer, when every recommendation is more personalized, it changes the entire face of music marketing. For a fee, listeners may be able to send songs to their family members and friends during their morning commutes. Once everything is for sale, radio stations could may evolve into the largest, most profitable affiliate marketers ever. All songs are ads.
5) Real-Time Listener Analytics. Tim Westergren, the founder of Pandora, imagines a day when every car has "Thumbs Up" and "Thumbs Down" buttons installed on the steering wheel. And if you think about it, traditional radio hopes for the same thing too. Not only would such a feature provide real-time listener analytics, but it also would help prevent listener turnover. When a listener puts effort into making a station better and feels like their votes matter, they will be much likely to stick with a station when a song comes on that they don't like.
Instead of calling a station to request a song, voice recognition will analyze a listener's request and send it to a station in real-time. This will be the first time that traditional radio will gain insight into their listening audience. Stations will know more quickly when a song is falling out of favor and when a new one is on the rise. Once traditional radio transitions into a user-controlled format, rather than a data driven spreadsheet, stations will be able to adjust playlists daily.
6) Infinite Creative Destruction. Now, stop. Connect the dots. What happens next? War. There will be blood. A handful of corporations control what listeners hear. They decide what programs receive syndication. They own hundreds of radio stations, billboards, and venues. And you know what?
It doesn't matter. None of it. Once anyone can launch a station from anywhere, make it available on the web, and listeners can access it in their connected cars, the entire landscape of radio shifts. The start-up costs of a radio station plummet.
Waves of would-be radicals and entrepreneurs can rethink radio, recreate it.
Licensing will be a barrier for some, but with the right strategy, they can rise from the bottom-up. Radio is a legacy institution. It's there because it's there. No one has been able to challenge its dominance. You can't beat radio at its own game, but once the rules change, you can create a new one. Once the barriers fall to offering in-car programming, an era of infinite creative destruction will commence.
Clear Channel's monopoly exists due to the curvature of the media landscape.
The rules changed in 1996 and it created a new game. Once those rules change again, entrepreneurs will create a new game and the winners and losers will differ.