It's not working in a big way yet. According to the Pew Research Center, American use of local AM/FM radio hardly budged between 2001 and 2011 -- a period during which online services graduated from web 1.0 to web 2.0, and moved assertively into the mobile space. Of note, 93 percent of American teenagers and adults used traditional radio in 2011, nearly the percentage of television use (98 percent). During that 10-year span, broadband internet adoption rose from 20 percent to 70 percent, and use of "online radio" (including terrestrial webcasts) rose from 28 percent to 56 percent. So it's evident that people are dipping their toes into various forms of internet radio without abandoning their terrestrial stations.
By not separating All Access from Google Play ... Google is merely adding a feature rather than trying to start a movement.
Michael Robertson, CEO of DAR.fm and founder of the original MP3.com, recently expressed confidence in the long-awaited migration from passive over-the-air listening to more configurable music streams offered by web / mobile services. "There's no question that it will change from 10 / 90 (digital / analog) to 90 / 10 because FM cannot compete with the benefits of internet-delivered music."
Robertson feels that Apple's recently announced iTunes Radio service, coming this fall to its mobile devices in the iOS 7 upgrade, will accelerate consumer adoption of internet radio. That might be true. When Apple announced and described the service in its WWDC keynote, I tweeted, "As expected, iRadio appears (from the demo) to be completely pedestrian, usual feature set that other services have had for years." A friend tweeted in response: "and it will eat their lunch."
That might be true, too. You cannot overestimate the power and adoption clout of a native app on one of the world's most-used mobile platforms. Google is missing the boat in this regard, with its Play Music All Access service. By not separating All Access from Google Play, not placing it on the mobile start screen and not giving it a coherent name, Google is merely adding a feature rather than trying to start a movement. Apple's gambit is also a feature add-on to a wide array of ecosystem attractions, but it's setting it up for success as a killer app, despite its unoriginal functions.
Apple's mobile footprint will probably introduce new users to the pleasures of listening to highly personalized music streams. But for the big migration to occur, ease of use is the mountain that internet radio must climb.
Not many entertainment habits are easier or more ingrained than turning on a radio -- especially in the car. Pandora's attainment of 200 million users was assisted by its increased presence in autos. When it comes to radio, mobile means driving. When Pandora struck a deal with Pioneer Corp. to bundle the internet radio service into dashboard navigation systems (this was in 2010), Pandora's co-founder Tim Westergren was quoted as saying, "Maybe a year ago people would have said Pandora is a computer thing. They're beginning to realize that internet radio is an anytime, anywhere thing."
Apple appears to be thinking along the same lines. The single remarkable point in the iTunes Radio announcement was the pending development deals with 12 car companies. There's no information yet on what the integration might look like, but the few seconds in which Apple's slide appeared signaled a clear intent to tie general mobility (iOS devices) to radio mobility (the car).
Pre-cable television was considerably easier to operate, and free. Now the set is tethered to the wall, operated by a hostile hand-held device bristling with inexplicable controls, and the programs cost a fortune.
Media and tech companies can wrench users from one platform to another even when the experience is burdened with some degree of complication, hassle and expense. Pre-cable television was considerably easier to operate, and free. Now the set is tethered to the wall, operated by a hostile hand-held device bristling with inexplicable controls, and the programs cost a fortune. On the plus side, the picture is gorgeous, the channel variety is stunning and all that money sloshing around produces movie-quality shows.
Internet radio has advantages, too, that balance its complications. Subscription tiers eliminate advertising, the noisy bane of commercial AM/FM radio. Personalization features differentiate effectively from the expertly curated genre stations of SiriusXM -- the chief in-car challenger to AM/FM.
Competing on the basis of accessibility is fine, and internet radio needs to get easier in both car and home. It also needs star power and blockbuster announcement material. SiriusXM enjoyed immense publicity when Howard Stern moved to that platform from terrestrial radio. Jerry Seinfeld is producing his Comedians in Cars Getting Coffee for Crackle, bestowing interest and recognition on that "internet television" service. And look at Netflix, which shifted from its original mission as an innovative DVD-rental outlet to a streaming service, and from there to a content producer. After making waves with its House of Cards online-only, binge-watching series, this week, Netflix signed a long-term content-development deal with DreamWorks.
Internet radio lacks all these shades of glamour. Even with its rising popularity, internet radio is geeky. Its image is tethered to computers and smartphones. That is a status quo in which the usage numbers of terrestrial radio remain fairly safe. It is up to Apple, or Google, or Rhapsody, or Spotify, or Pandora, or Amazon, or another internet player to break down the perceptual walls within which internet radio is trapped, developing content or importing stars that will compel users to commit more of their attention to the platform. Technology alone might not be enough to disrupt the nearly 100-year-old technology of terrestrial radio. But technology plus killer content can do it.
Brad Hill is a former Vice President at AOL, and the former Director and General Manager of Weblogs, Inc. He streams internet radio from his phone into his car's sound system, and listens to NPR at home.