Posted 02/16/2010 - 5:59pm by Julia M
Starting this week, Pollack Media Group is pleased to present an in-depth look ahead at the future of media in the digital world, focusing on the future of radio. The following is an excerpt from “IP Radio – A vision of radio in the Internet age” by Pierre Bellanger, long-time CEO of Skyrock Radio in France and a Pollack Media Group client for more than 2 decades. In addition to his long history in radio, Pierre launched a blogging site (skyblog.com) back in 2002, followed by his launch in 2007 of the first full-scale social network in France (skyrock.com), which is now available in 11 languages internationally and includes more than 20,000,000 profiles globally.
“IP Radio – A Vision of Radio in the Internet Age” Part 1
Introduction
Radio, like the written press, the music industry and television, is changing. The changes to their respective environments are so significant that they entail more than just an adjustment: they require a comprehensive reappraisal.
The common characteristic of these threatened industries is the confusion which has grown up over time between their mission and its execution. Essentially, it is a crisis of distribution, i.e. progressing from the model of traditional channels (radio and television frequencies, DVDs, CDs, newspapers, etc.) to the network model (the Internet). This crisis challenges these industries’ economic model but not the needs they have to meet. We have never read more, listened to more music or watched more videos.
Case study: the written press
The mission of the written press to inform and entertain is complicated by the method it currently uses for printing and distribution: paper. The impact of this handicap is felt most strongly by the daily news press as it is obliged to present events which actually occurred the day before as the latest news. This addiction to paper is accentuated by the deep chasm separating the existing model in decline and an emerging model generating revenue which remains modest.
Although the Internet became the leading source for written news in 2008, the advertising revenue generated by the audience of online newspapers is currently ten times less than that generated by print newspapers. Further, current terminals still do not offer the same level of comfort for the user as print newspapers and are a long way behind in terms of the visual quality and physical sensuousness of traditional magazines. Nonetheless, an online press embracing electronic conversations and organized into a network of blogs and sources represents the dynamic and profitable future of this field, as demonstrated by sites such as The Huffington Post and Politico.
Case study: the music industry
The music industry’s mission to provide the public with the music it wants is complicated
by its chosen method of distribution: plastic CDs. Its dependency on polycarbonate has been exacerbated by the recent appearance of network distribution without reward for the artists.
The problem seems to have no solution: anything which can be freely duplicated becomes
free; a music file can be reproduced, indexed and distributed at no cost. Music is consequently becoming free and losing all its commercial value. However, if it is to exist as an industry, music must be rewarded monetarily.
The solution lies in reassessing the past: music has always been free because it has been freely available in other forms as well as commercial CDs: recorded on the radio, exchanged between friends, recorded onto cassettes, copied onto CDs, etc. As soon as a product is available for free, what is being purchased (when it is purchased at all) is not the product itself but the service accompanying it.
Therefore, if a CD is purchased, it is not the music which is being purchased (because that is free), it is not an object (unless it is a collector’s item), it’s a service: the conditions of the availability of the music chosen. This service rewards music. This service pays for music. Music’s economic model has always been indirect and involved the intermediary of a service.
This reassessment of the past shows that the music industry is not confronting a new situation (free music) but a new form: free music on computer networks.
The music industry must be seen not as an industry creating content but as a service industry, investing first and foremost in distribution and secondly in the production and management of the related rights. Its service is to make music available at the request of all. In the past, this service was provided through the distribution of records. That is why we refer to record companies, highlighting their main added-value, distribution (a service), rather than calling them music (product) companies.
Who provides the best service today? iTunes, an online service, combined with the iPod terminal. Apple’s product, integrating software and equipment into an elegant and intuitive whole, currently represents the best way to organize and possess music, or even discover new music from a choice of ten million songs. The public has been quick to catch on: most of the music sold online uses this service. Recently, it exceeded six billion downloads.
In the face of such domination, record companies have evolved by developing a portfolio of often prosperous activities around their music: promotions and products for mobile telephones, by-products, concerts, association with music platforms, experimental funding of music through advertising, rights agents and managers, etc.
However, fundamentally record companies are suffering from not being CD companies and, above all, going down the legal path to defend themselves instead of using IT to better serve their customers. The record industry’s current struggle to become network music’s leading service provider has led it to concentrate its efforts on managing music rights and consequently place itself in the legislative and legal field, something which was admittedly necessary but which has occasionally diverted attention from its most important mission: service.
To read the full "Tech Trends" for the week of 2/15/10, click here.
