We live in interesting times. On the one hand we have initiatives such as Pandora’s Box with their backs to the wall for having the temerity to publicise music on a global scale. On the other, in the UK, we have a debate raging about whether digital radio in its current format can survive. On the third hand (count them), last night, I cooked up a nice curry while listening to Last FM delivered to my kitchen wirelessly. Maybe this ‘third way’ is the way forward?
Just over a week ago, a report emerged from media and telecoms specialist Enders Analysis comparing the demise of DAB to Betamax. It claimed that:
… the launch of the second national commercial digital radio multiplex, headed by Channel 4, might exacerbate the problems rather than solve them, and warned that media regulator Ofcom would face a public outcry if DAB failed.Enders Analysis added that the high cost of DAB transmission and slow growth in revenue had combined to undermine confidence in the new medium and led to the closure of a string of national digital stations.
The report was written by Grant Goddard, who appeared again on Radio 4’s Today programme debating the future of DAB.
His argument runs that, while he would love to see DAB flourish, and accepts that the analogue-to-digital switchover is inevitable, the current commercial system just doesn’t work. To date he hasn’t found a single commercial digital radio station that has turned in a profit, mainly due to low audiences.
Goddard’s belief is that it’s too late for DAB. It’s had nearly ten years and has not gained enough momentum. He’s not sure which platform will take over from it.
This comes hot on the heels of root-and-branch changes at EMI, which similarly blames its revenue models for being out of touch with a modern world of digital downloads.
If we’re saying that a low audience doesn’t have sufficient traction to perpetuate standard revenue models, then let’s change the models.
Perhaps one problem with DAB is that it suffers the disconnect that I’m currently trying to remedy in my own home. I’ve had enough of my radio not being linked to my iPod, or my PC not being linked to my TV. I can listen to anything, anytime, anywhere. But I cannot with DAB. It lacks flexibility and connectivity which we’re all now starting to take for granted. I can’t listen to Last FM or a free radio station through iTunes on a DAB radio, even though I want to – and, indeed, can right now through the web.
So let’s assume that the next platform for digital radio will be something more open and integrated, such as the web or, more specifically, Web 2.0. And let’s also assume that I get greater choice over what I listen to, simply because it’s possible now. This means I don’t want to listen to adverts, and I do want to listen to music I like.
Enter social media. If companies can make money on the back it, then they can do so for any application. Whether delivering video (YouTube) or audio (Last FM), the ‘social download model’ could be where digital broadcast is heading.
It’s just up to companies to figure out how to create revenue from models in which they cannot influence the content, the message or the audience. This will be particularly difficult for audio producers in which their ad-averse audience aren’t necessarily even sitting at the screen to be exposed to on-screen promotions.
It’s a tough nut to crack. But, far from being against the wall, Last FM could be on the verge of great things. Heck, maybe even Pandora will be able to make it.