AUGUST 2008 IN
RICK ASTER’S WORLD

The High Cost of Radio

The satellite radio merger has been approved, and this event may mark the beginning of the end of radio as we know it.

Earth to Satellite Radio . . . Are You There?

When the satellite radio merger was announced, it killed off the hopes of establishing a new medium for music. Satellite radio used to be a movement. Now it’s a bureaucracy. How can satellite radio subscribers recommend the service to their friends when no one knows whether the inevitable financial collapse is three years or ten years away?

In approving the merger, the FCC voted to override Congress, and that’s never a safe strategy. The combined satellite radio company will have both the high operating costs of XM and the insurmountable debt load of Sirius — a recipe for financial disaster even if they can somehow manage to line up millions of new subscribers.

And in a recession, it is hard to keep existing subscribers or sign up new ones. Most of the time, the way people get a satellite radio is getting it pre-installed in a new car. Ask GM how many new cars they’ve been selling lately. At the same time, people are talking about canceling their satellite and cable television subscriptions to save money. Satellite radio can’t be far behind.

In the meantime, technology has changed, and it’s harder to dish out $100–200 a year to get music in the car. It is so easy to collect music now that you could download a year’s worth of music listening in one evening. (That’s less than 1,000 songs. Most of us are better off listening to no more than three new songs per day.) Subscribing to podcasts is even easier, and it now takes only the most ordinary equipment to get all this programming into the car.

Five years ago, people were saying that the satellite radio experience was amazing because they were comparing it to the jarring cacophony of commercial radio. Now that hardly anyone listens to commercial radio, satellite radio doesn’t seem so brilliant. The reaction now is more like, “Remind me again why it’s an advantage to have someone else pick out the music I listen to.”

In other words, people are questioning the whole premise of music radio.

No DJs

And what is the point of music radio? In the very old days, before about 1975, the idea was that a person was guiding you through the musical experience. It’s an open secret that there are no disks and no disk jockeys in radio today. The songs are not selected by a person, but by a computer. So how is that any better than going to a web site and having it pick music for you?

Commercial radio still somewhat maintains the pretense of DJs, but the commercial radio personalities are there only to paper over the annoying commercials. And so many commercials! Stations have cut back, but 10 commercials per hour still means you’re wasting an hour of listening time every few days. An hour of time lost, and for what? So that you can be sure you’re listening to the music that some big corporation thinks you ought to be listening to?

Even Internet radio is hard to explain or justify. Congress killed it off, or tried to, with music royalty rates that are higher than record companies sometimes pay for the music on music CDs, but even without that problem, is there really a point in listening “live” on the Internet?

Oh, I know, something in life has to be “live,” so that you can experience it in the moment when it’s happening, but does it really mean anything for recorded music on the radio to be “live”?

And if it doesn’t, then what is the purpose of radio?

Beyond Music

There must be a way to make radio relevant, but no one seems to be saying what that is. At one time, I thought that local traffic reports would be the one application that would keep radio alive for sure. Now that a few satellite navigation systems include traffic reports, I’m not so sure that traffic is the programming that’s going to keep radio alive. But there has to be something.

Whatever it is that will make us listen to the radio in the future, the fact that no one seems to know what it is says that it is probably something that is not on the radio now. It is hard to make a case for radio as the ideal medium for any of the programming it currently carries.


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