Internet radio: alive and rocking

savenetradioOne thing that’s great about the online world is that as offline industries move online they are often reshaped for the better. This is almost nowhere more true than in the radio industry. The homogenous, monolithic stations on your FM dial that are riddled with ads and obnoxious DJs have been reshaped into interactive, highly diverse, ad and DJ-light stations where the consumer truly comes first.

Of course this has a lot to do with the medium – competition in traditional radio is limited by the size of the FM and AM bands, and by the size of the geography that a radio station can reach. Only the biggest companies and the most popular music can survive. Stations online aren’t limited by either frequency or geography, so they are set free to provide a much richer set of options. As a result, new services like Pandora and have built great new ways to serve the purposes for which radio was originally intended: to provide access to a library of music much more vast than the average listener would buy, and to allow listeners to discover new music before they buy it.

Don’t ever expect the old world order to go down without a fight, though. Right up until last weekend big media had influenced the Copyright Royalty Board into consideration of a new royalty structure that was so ridiculously rich it would basically kill online-only radio providers (think if Borders and Barnes & Noble would have risen up to get online tariffs placed on Amazon to kill it in the early days – where would the book industry be today?). There is more at stake here than just less ads and DJs, too. The big labels’ lock on traditional radio means that they are programming audiences with what they want them to listen to – internet radio puts that power back in the listeners’ hands and ensures that more great, undiscovered musicians will find their audience.

The short story is that it didn’t happen – grassroots campaigns like pressured back, congress has intervened, and now more reasonable royalties are being negotiated. The industry is not out of the woods yet, but it certainly dodged a bullet.

The web is a land of opportunity, where it’s easier than ever for the little guy/girl to start something that could someday compete with Bigco. For it to remain that way we’ll all have to stay vigilant.


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