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New Entrants Target Radio’s Success

Nearly from its origin, radio has coexisted with other media that competed with its service to audiences.

Nearly from its origin, radio has coexisted with other media that competed with its service to audiences.

As each emergent service made its debut, pundits claimed the new offering would eclipse radio’s value to its listeners, and that radio therefore was doomed.

Yet the medium has survived and flourished. From its origins in the administration of Grover Cleveland (the first one, no less) until the present day, the medium has maintained its viability against what may have seemed insurmountable odds.

The onslaught of LPs, television, CDs, the Internet and satellite radio, to name but a few, has yet to overtake radio’s dominance as a preferred delivery system for audio content.

Radio’s seeming insuperability has been the stuff of legend in a world where new media offerings rise and fall almost weekly. Much analysis rightfully has been directed towards the makeup of the medium’s thick skin, and it has provided some interesting results.

Above all, radio is (or at least, in today’s environment, has become) cheap.

There is no less expensive way to provide a mass audience for the delivery of real-time, high-quality audio content. It also bears the valuable attributes of push and scarcity, which it never knew it had until compared with new media’s pull and nearly infinite availability.

Moreover, its astronomical receiver penetration levels are enviable by any measure.

So is radio truly immortal, or is it a cat that is running out of its finite number of lives?

The ultimate challenge

Among radio’s primary values is its ability to present to listeners at least some of what they want, when they want it, essentially for free. This is a hard deal to beat.

This content-presentation scheme is not extremely precise, of course. The targeting of a format’s specific elements does not work for everyone all the time, but the science of today’s formatics has brought the concept close enough to provide a viable business model when applied to radio’s existing mass distribution infrastructure.

Recently, however, the very idea of mass appeal has been challenged. New media’s ability to personalize and customize content for narrower — or even individual — tastes has the potential to devalue the formatics model.

Terrestrial radio’s intrinsic scarcity has largely immunized it from such a threat for the most part, and this attribute used to seem insurmountable. Yes, there have been a number of Internet-based radio services that attempt to provide content congruent to listeners’ tastes, but they take some effort on the listener’s part to initially select genres and then fine-tune with feedback. They are also only available on listeners’ PCs (although one such service, Slacker, promises mobile and portable solutions soon, but without much detail).

To date, these constraints have kept such services from truly threatening traditional radio broadcasting. Recently, though, a few additional features have brought the lure of “the ultimate radio station” a bit closer to reality.

A number of entities have launched services that attempt to capture the appeal of a favorite radio station and optimize it on a per listener basis, without any real effort from the listener, and with at least some degree of portability.

For example, a Seattle-based company called Melodeo has created a service called NuTsie, which looks at the songs stored in a user’s computer and streams them to the user’s cell phone. The user uploads an iTunes song list (using the Export Library function in the iTunes File menu) to the NuTsie service. Then the user downloads the NuTsie player to his or her mobile phone(s), and launches the player to listen.

(click thumbnail)A number of entities have launched services that attempt to capture the appeal of a favorite radio station and optimize it on a per listener basis, such as Melodeo’s NuTsie.Importantly, the songs are not copied by NuTsie from the user’s computer — just the playlist. NuTsie plays out its own legally obtained copies of the songs, and pays royalties like any Internet radio service.

Naturally, this implies that certain songs on the user’s library may not be available from NuTsie, since its library currently includes only about 10 percent of the entire iTunes inventory, but (again, like regular radio) focusing on the most popular genres and songs.

Although it has not done so yet (the service currently offers a free public beta), NuTsie will likely add interstitial advertising and/or charge a subscription for ad-free service, in order to cover its considerable costs in royalty and data-streaming payments.

Under Internet radio rules, the NuTsie service must play the files in randomized order, and the player cannot rewind, although it can pause or skip to the next song. (It’s currently unknown if any ads will be rendered unskippable in the player.)

The obvious advantage of the service is portable access to (at least some of) a listener’s preferred music without taking up storage space on the portable device. But there are considerable downsides.

In order to maintain a modicum of fidelity, a large buffer must be preloaded for each song, meaning that in some cases there may be annoyingly long pauses between songs. Phones with higher bandwidth connectivity (or WiFi access) can reduce or eliminate this problem, however.

Also, the service does not automatically sync with the user’s current computer music library, so whenever the user adds new music to the computer, a new library file must be uploaded to Melodeo if the user wants the new songs to be included in the NuTsie service.

Finally, because wireless phone networks maintain strict control of their handsets and the features they support, only a few phones currently offer the NuTsie player. But because the NuTsie service can increase use of the phone, more network operators may add the service (or a similar one) as an option over time.

Variations on a theme

A similar service called Lala scans a user’s PC for music files (via a browser plug-in), and, like NuTsie, if any of the songs it finds are already on Lala’s servers, the listener can access those files from any other PC or device with Internet connectivity.

Unlike NuTsie, Lala does not specifically target mobile phones at this point, but users can sync content to an iPod directly from the Web through such a connection, providing offline mobile access.

Also unlike NuTsie, however, Lala also will background-upload files that it does not already have in its collection from the listener’s PCs, allowing eventual access to them online, as well. Some labels also have provided Lala with access to some of their music, which all listeners can access through the service via free streaming or 99 cent downloads.

Lala’s real strength comes from its legal, communal aspect, in which it allows all its users to stream (but not download) all the music in its collection, whether the songs were in that user’s PC library or came from someone else’s — or directly from a participating label.

Lala began life as a CD-swapping service, and this attitude continues to drive its philosophy. It plans to also sell new CDs and DRM-free downloads in the future. But its free streaming-your-own (and others’) music feature has become a popular attractor, even though that service is a collateral element and not a revenue source for the company.

The firm apparently has some decent funding behind it and claims 300,000 members in its CD-swapping network to date. Its free streaming offering could give subscription services (like Real Networks Rhapsody, which charges $12/month) some significant competition. The company’s slogan of “Play albums on demand, buy the ones you love,” may have some appeal to listeners and labels alike.

The breeding will continue

These new ventures are intentionally reptilian in their propagation: From thousands of eggs, a handful of adults may survive. But all it takes is one Godzilla to emerge with a successful model for the legacy industry to be threatened.

Radio’s defense comes in two forms — first, by continuing to improve and update its on-air and online services; second, by developing or partnering with others to create its own new speculative services. Building upon radio’s strong existing brand, these processes may eventually bear some fruit of new revenue for the old medium.

Even if they don’t, however, they will at least indicate that radio is not a sitting duck, but an agile, moving target, which remains relevant to audiences today and tomorrow.