Sunday, March 19, 2000
Pay stations, Internet to change what and how you hear
BY JOHN ECKBERG
The Cincinnati Enquirer
Few industries are changing at a more rapid pace than radio. In the not-too-distant future, analysts say listeners can expect:
• Commercial-free programming on dozens of new channels, delivered by satellite to cars in every major market in the country.
• Pay-to-listen radio competing with free, commercial radio.
• Radio via the Internet that will become increasingly popular and sophisticated.
“Radio as an industry has logistically operated the same for the past 40 years,” says Darryl Parks, director of AM operations for the four Cincinnati stations owned by Clear Channel Communications, the dominant radio owner in the city. “What radio is in 10 years will be totally different from today.”
Perhaps the biggest change will hit consumers when they are behind a steering wheel, where 27 percent of radio listening occurs.
By next year, thousands of new cars will have a third broadcast band in addition to conventional AM and FM bands. That digital band, containing signals with compact-disk clarity, will bring dozens of commercial-free music channels to commuting consumers for 10 a month.
“It will be like (having) all the radio stations in New York City and Los Angeles combined,” says Mark O'Brien, vice president of BIA Financial Networks, a broadcast consulting firm in Chantilly, Va. What's more, satellites will allow a listener to find a signal and stick with it — even on a coast-to-coast drive.
“There are 200 million vehicles on the road in America,” says Clay Mowry, executive director of the Satellite Industry Association, a trade group of 30 manufacturers and satellite service providers in Alexandria, Va. “That is a huge market, particularly with longer commuting times and western states with limited radio service.”
Ford and GM expect to bring the technology to new cars by next year. Other car makers are expected to follow.
Two companies, Sirius Satellite, based in New York City, and XM Satellite Radio, based in Washington, D.C., purchased rights in 1998 from the Federal Communications Commission to be the exclusive providers of the clean-signal programming. Some homes and workplaces already are receiving digital radio over cable lines and through DIRECTV, a trend that's expected to grow, too.
But will people pay for what has been free for three generations?
“That's what everyone said about cable TV, and now 70 percent of people get their television through cable,” Mr. O'Brien says. “If people perceive their local station has stopped playing Sting, and there's enough people who like Sting, maybe there will be an All-Sting channel.”
Radio via the Internet also is ready to explode in popularity.
Take WOXY-FM in Oxford, Ohio. The station, which bills itself as “The Future of Rock and Roll,” reaches from the Oxford IGA in Butler County to New York, Sweden and beyond.
Tiny broadcasters like this Oxford alternative station are finding that grateful international audiences await on the Internet. About 1,700 stations from 100 countries broadcast over the Web.
Arbitron estimates that last year, 13 percent of people in this country logged into the Internet to listen to radio — twice as many as the 6 percent in July 1998.
WOXY is an Internet radio favorite of Ira Rosen, 32, of Highland Park, N.J. “I listen 10 hours a day, the moment I walk into work and when I leave work,” says Mr. Rosen, a project manager at a telecommunications firm.
“The first time I listened I e-mailed a request and it was played. That doesn't happen in a major radio station in New York, and it doesn't happen with canned play lists.”
The Internet's potential is not lost on the radio megapolies. In August 1999, Lowry Mays, chairman and chief executive of Clear Channel, announced a $15 million investment in Tunes.com, an Internet music network that spans formats from hip-hop to jazz and rock.
The company's Web sites already receive more than 60 million visits per week. The company plans to have all stations providing Internet audio this year, Randall Mays, chief financial officer, told an audience at the National Association of Broadcasters last April.
Ford and Sprint PCS, the wireless arm of Sprint Corp., intend to put wireless phone and Internet into cars next year, expanding the market even more.
Clear Channel this year also used station Web sites to register domain names — or Internet addresses — through a venture with SamsDirect Internet of Beverly Hills, Calif. A February promotion for the company's dot-cc domain registration in Miami, Fla., yielded 10,500 name registrations and $1 million in shared revenues.
In Greater Cincinnati, about 1,000 to 2,000 names were registered, Mr. Parks says. “It was a demonstration of just how powerful one radio group can be,” says David Ross, vice president of Clear Channel/South Florida.
The Internet offers opportunities for radio programmers as well. “Streaming video, music videos, Web sites with chat instead of a text-related Web site, why not a multimedia-based Web site?” Mr. Manning says.
“The Internet essentially offers radio stations the potential to become a television station.”
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