Broadcast radio has been part of our culture for many years, it was the first source of home entertainment for every family around the world. As this medium grew, it provided music fanatics with a convenient source to discover new and popular artists. Therefore, companies used broadcast radio to advertise their products to the public at a lower cost than television. But, since the introduction of Satellite Radio and the Streaming Revolution, we have seen a significant growth in demand for these type of services. Today, everyone listens to music on their cellphone, automobile, or satellite devices that reduce the amount of ads that AM/FM has offered in the past years, even the quality of audio is much higher compared to traditional radio. We have to stop and think if this media has a future in this technological revolution era, or if it’s time is slowly coming for it to exit the market.
On a research done by Adam Singer, he mentions that “…radio is dying over the last decade” (Singer, 2013). He continues to say that this is actually a good thing for music listeners, and this media should be completely replaced in the next coming years (Singer, 2013). The first stage where radio started to decline happened with the introduction of MP3 players. With this device, the listener is able to store music in vast amounts without ads and provided convenience by enabling the user to share data without restrictions (Singer, 2013); that is until Digital Rights Management (DRM) came along. DRM is the technology that controls what people can do with digital media and the devices they own (Sinha, Machado, Sellman, 41) (Montes, 2013). When a program (app) doesn't let someone share a song, read an e-Book on another device, or play a single-player game without an internet connection, it’s because they are being restricted by DRM (Sinha, Machado, Sellman, 41) (Montes, 2013). In theory, “DRM enables music publishers to sell digital music that is difficult or impossible for end users to duplicate” (Sinha, Machado, Sellman, 41) (Montes, 2013). DRM was later removed by the industry after doing a study that showed that sales actually increased without its presence (Sinha, Machado, Sellman, 41) (Montes, 2013).
Today, cellphones have an internal memory that can store MP3 data and give the user that same convenience without having to buy a second device. Additionally, we can download a cellphone application like Pandora® to stream music via 3G/4G or Wi-Fi, providing an alternative solution to the user that does not want to store music using all or partial memory on the device. With Pandora, the user is able to explore a vast trove of music by just dropping the name of a favorite song, artist or genre into the search engine and let the Music Genome Project® do the rest (About Pandora, 2013). Best of all, along with satellite radio, the user can find a very limited portion of ads and a more robust sound quality.
Ads can take the experience of the listener to not enjoy or experience the music to its fullest, especially when they are introduced in large amounts. Adam Singer mentions that, “…many of them use car and police sirens (which should be illegal). And anyway, they are not at all contextual or measurable in a meaningful/actionable way” (Singer, 2013). In my experience, I have never heard an advertisement like that on Pandora® or Sirius XM®. Usually, ads are present after a number of songs have played consecutively without interrupting the experience of the listener as much as traditional radio. I have noticed that people that listen to AM/FM radio while driving their vehicles, are constantly changing stations to avoid listening to ads for long periods of time, always trying to enjoy music at a more continuously fast pace. The reason why Sirius® or Pandora® have limited ads, is because it helps them pay the bills (help.Pandora.com, 2013). Free Pandora listener accounts are primarily supported through a variety of ways like video, audio and visual advertisements (help.Pandora.com, 2013). On Pandora’s website, it is mentioned that:
Pandora's streaming music service is associated with significant costs, including music royalties we pay on every song we play, each and every time we play it. Advertising allows us to cover those costs while offering you a lot of great music for free. (help.Pandora.com, 2013)
Satellite Radio is able to reduce ads by a monthly or yearly membership fee that the user pays in order to activate their device, there are different packages and prices to choose from depending on the number of channels the user desires to listen (SiriusXm.com, 2013). With Pandora’s streaming radio interface, the user can also eliminate ads by upgrading to Pandora One® (help.Pandora.com, 2013). When we compare the prices for both companies, there is a noticeable price difference between them. Pandora One® offers streaming audio at 192kbps, all external advertisement removed, and custom skins for only $36 a year or a monthly payment of $3.99 (help.Pandora.com, 2013). On the other hand, Sirius XM prices vary from $14.49-18.99 a month or $159.39-199.99 a year with the ability to listen to “premium programing” from a vehicle, computer, smartphone, tablet and more at "variable bitrates" in order to provide the highest quality of audio possible given a cellular network conditions (Sirius XM Support, 2013). Both companies provide a vast variety of music to the user at the highest quality of audio possible depending on the device connection, the only difference we can get from them is that there are more vehicles with Sirius XM® service installed than Pandora® applications. But the difference in price between them in this hurting economy is what keeps Pandora® growing day by day, since the market shows that a lot of people do not want to spend money on music in this recession compared to other years (Montes, 2013). Here is a graph that shows the comparison and current growth between Sirius®, Pandora®, Apple® and Google®:
In my own perspective, people are not buying AM/FM Radio consoles anymore as they used to do fifteen years ago or before. The only reason they still exist is because the car industry and alarm clocks keep installing them on their products. Of course the demand for them still exists, but is very minimal compared to other digital products. That is why radio stations chose to create giveaway events to persuade the public to listen to them in exchange. They have been able to support themselves and compete with the digital revolution so far, but I don't think they can keep it up for too long. Eventually, in a very near future, we will see consumers, advertisers, artists and personalities embrace the digital age to its fullest, taking full advantage of the benefits it provides to everyone. Adam Singer mentions in his blog that he sees AM/FM Radio as a medium for emergency alerts to the public (Singer, 2013). In my perspective, he is being kind to the medium. That is because now days, we are able to obtain alerts directly to our cell phones no matter the situation: Weather, Amber, Terror, etc. If we are to embrace the digital revolution, it means that AM/FM Radio will soon completely exit the market to be replaced by Satellite and Streaming Radio; there is no fighting the future at this point.
Montes, Omar. (2013) Online Piracy. “The Pirate Bay”. Blog. Retrieved from: http://www.musicmontes.com/blog.html
Pandora. (2013). About Pandora®. Retrieved from: http://www.pandora.com/about
Pandora. (2013) Help Pandora. Why Ads? Retrieved from: http://help.pandora.com/customer/portal/articles/162149-why-ads-
Sinha, Rajiv K; Machado, Fernando S; Sellman, Collin. (2010). “Don’t Think Twice, it’s All Right: Music Piracy and Pricing in a DRM-Free Environment”. Journal of Marketing, Vol. 74 Issue 2: p.40-54. Retrieved from: http://ehis.ebscohost.com.ezproxy.nu.edu/eds/pdfviewer/pdfviewer?sid=d07327ba-138b-48c1-ada0-91aad0acdbe8%40sessionmgr113&vid=4&hid=17
Sirius XM – Satellite Radio. (2013) Support Center. How much does Sirius XM cost? Retrieved from: https://listenercare.siriusxm.com/app/answers/detail/a_id/3676/~/how-much-does-siriusxm-cost%3F
Sirius XM – Satellite Radio. (2013) Support Center. Why do I hear different quality audio at different times when I listen to the service? Retrieved from: https://listenercare.siriusxm.com/app/answers/detail/a_id/4219/kw/audio%20quality
Singer, Adam. (2013). The future buzz. AM/FM Radio Is Already Over, and No One Will Miss It. Blog. Retrieved from: http://thefuturebuzz.com/2013/07/16/am-fm-radio-is-already-over-and-no-one-will-miss-it/#sthash.8k3TvNcs.dpuf
Figure 1. Sirius XM Radio, Pandora, Apple and Googles Financial Analysis. Retrieved from: http://chart.finance.yahoo.com/z?s=SIRI&t=1y&q=l&l=on&z=m&c=P,AAPL,GOOG&a=v&p=s&lang=en-US®ion=US