The Infinite Dial

Last week, the UK's most recent RAJAR data was released, and the results were extremely encouraging for British broadcasters. The headline stat, of course, was that more people than ever are listening to the radio in the UK--a record 45 million persons, or about 90% of the population. The primary reason for this growth has been broadcasters' platform-neutral approach to radio. By getting their product squeezed through every possible distribution channel, they have taken the decidedly 'Web 2.0' (and 1.0) approach of building audience first, and cracking the revenue model later. As a result, not only is the reach of terrestrial radio at an all-time high, but the use of other digital platforms to listen to radio is also rising dramatically. For example, almost 8 percent of the 15+ population has listened to radio on their mobile phone. This stat is currently almost unattainable here in the States, where our mobile phones rarely even have a tuner. Of course, getting tuners into mobile phones in the UK was as much a product of intense lobbying by the BBC as it was consumer demand--but, there you go. Maybe our lack of phone-tuners is just lack of effort after all.

Internet radio usage is also continuing to rise (as it is here, and we will soon have some fresh data on that score) and 39% of UK adults have listened to radio over their TV sets. The number that HD fans and foes alike have found solace in is the fact that 16% of UK adults own a DAB receiver. I'll come back to that point in a moment, but the big takeaway here is that by encouraging--and not stifling--the use of radio on other platforms, UK broadcasters are growing their industry. While useless debates rage on here with AFTRA and Harry Fox, broadcasters in the UK have done everything in their power to foster the development of Internet Radio, Podcasting and other digital platforms. Broadcasters have made it easier for UK listeners to consume time-shifted radio content, and listeners have responded by doing so--in record numbers. Here is where "The Paradox of Choice" has not stifled consumption, but clearly encouraged it.

There are some obvious conclusions here. One, certainly, is to fix that AFTRA thing already. Listening to Internet radio in the states is painful--we can't continue to preach about fixing what is "between the records" when what goes on in that space on our streams is...unspeakable. Another would be for high-level radio execs to start talking aggressively to Microsoft. Unlike the iPod and its typical (for Apple) closed-loop environment, the Zune has (gasp!) a pretty good FM tuner. Now Microsoft is working on a Zune phone to compete with the iPhone, and as long as it doesn't match the iPhone's hideous retail price, I wouldn't bet against it (and I am the only, stubborn Mac user in the company.) Broadcasters need to lobby hard to be sure there is at minimum an FM tuner and preferably an HD receiver built into the Zune Phone.

But there is a deeper point to be made here--and this goes back to the 16% penetration of DAB in the UK. DAB receivers are overwhelmingly home units--not installed in vehicles--and the UK model is actually proving successful by reaching people who want compelling audio content in their homes. The UK model is certainly different, with a separate tier of options removed entirely from the AM/FM band. But while many pundits in our business are just waiting for in-car WiFi to kill radio and its 'captive audience' for good, UK broadcasters have come up with a product that is compelling in the most competitive environment of all--the living room.

How have they been able to do this? Simple--necessity is the mother of invention. Broadcasters have thus far had it easy here in the US, with our wide urban streets, plentiful parking garages, suburban sprawl and monstrous ex-urban commutes. No such luck in the UK. Because UK broadcasters must succeed out of the car, they do. Now, so do we.

Here is what Southwest Airlines has to do with all of this. When Reagan deregulated the airline industry, most commercial carriers didn't even blink--they just kept plugging away with the suddenly irrelevant hub-and-spoke system, and failed to grasp what their new mission must be. Southwest, on the other hand, came into the business fresh, able to clear away the cruft of the old system, and find new, more profitable ways to ferry listeners from point to point that eliminated the decaying architecture of the hub-and-spoke system. The airlines hub-and-spoke system is, essentially, our AM/FM-based architecture. Regardless of whether or not the FCC accelerates or reverses consolidation, radio has already been deregulated. Though a handful of broadcasters here in my hometown of RDU have been granted "exclusive" spectrum licenses, sitting here at Starbucks as I type this I can listen to anything in the world I want to, and I do.

What the industry desperately needs is a Southwest Airlines to come in with a radically different model--to amalgamate saleable numbers of passionate listeners, no matter what the platform, using the AM/FM band as a promotional tool. Because the current crop of broadcasters are tied to their own hub-and-spoke system of quarterly books, an increasingly ill-prepared sales function and a failure to understand that radio station websites should be at the other end of the funnel, we are stuck maintaining hundreds of gates at DFW when our listeners can (and do) go anywhere they want, and grab any content they want, with little to no friction.

It's time for a Southwest to come into radio and change the rules.