Dear Radio Executive:
There's been so much discussion in newspapers, trades and at
the water cooler regarding the competitive state of the radio
industry that it's already beginning to be difficult to determine
the realities vs. the fiction.
One of the things I enjoy most about the research business is
the comfort that can be brought on by empirical evidence. It's
not always easy, but there are times that the facts can blow
away the fog of theory and chatter.
At Bridge Ratings we wanted to get to the truth regarding the
significant alternatives facing traditional radio. This has been
our inspiration for the ground-breaking studies we've published
recently about audience attrition and erosion and
the soon-to-be-released study of the general radio audience and
its intent to migrate to satellite or Internet radio.
We recently gathered as much data as possible regarding projected
subscriber growth at satellite radio, Internet radio streaming
usage and the projected availability of the Wireless Internet.
We graphed the results to see just where all this shakes out.
You may be surprised. Digital
Audio Market Projections.
The compiled data indicates that at this point in time, projected
subscribers to satellite radio should reach 35 million by 2010.
We still see XM as retaining its 'senior' market share throughout
the growth term.
Meanwhile, Internet radio streaming is already the source of
preference among Americans for supplemental audio entertainment
and it will continue its growth as more users are equipped with
Combine this data with the market penetration potential for
wireless Internet and the picture becomes much clearer. And while
the wireless solution for in-car Internet radio still needs to
be determined, its potential for use by the public at large is
far greater than the impressive growth projections being tossed
about for satellite radio. The question that begs to be answered
is: "As Internet radio use accelerates both in and
out of home, will satellite radio's profitability model matter?"
The key here is this: with Internet radio already the preferred
medium over satellite radio, traditional radio should continue
to perfect and refine its product, keep an eye on the alternatives
and not get distracted.
I've been interviewed recently by the San Francisco Chronicle
and the New York Times about some of our recent audience studies
at Bridge Ratings. What I found most interesting about these
discussions was that the writers seemed more enamoured with the new
technology vs. traditional radio angle than they were about
getting the facts straight and depicting an accurate picture.
The momentum of all this press is being driven by two things:
1) the race by the traditional press to get the story out regardless
of its accuracy, and 2) the active but small group of early adopters
of this new technology. Primarily due to the publicity energy
generated by these print articles, these two components are creating
a distorted perception of the true nature of the marketplace.
Don't get me wrong; there is, indeed, something going on at
more than the grassroots level of "radio" listening
fueled by all of this new technology. It just appears that the
'wolf' isn't banging on our door yet; he's still a few miles
away. But for traditional radio, the point of fact is that it
needs to remain focused on what it does and has always done.
Be local and live and relate to its community and let the facts
of the coming impact of technology remain clear.
According to this data, wireless Internet radio represents
the biggest challenge - not satellite radio. The Internet
radio solution will be aggregated in a portable device, much
like an iPod or MP3 player with docking ports in your car and
in every room in your home so it can be heard through car and
home entertainment audio components.
Furthermore, the data supports recent Bridge Ratings interviews
which indicate the future pervasiveness of audio streaming and
audio downloading through mobile telephones. In fact, by 2010
we project the number of Americans streaming audio through mobile
telephones will match or surpass those subscribing to Sirius
Your feedback is vital to our company's on-going success. I
look forward to hearing from you.
Dave Van Dyke - President