Written Apr. 26, 2010 by Tom Webster in Internet Radio + Social Networking with 3 Comments
In this year's edition of The Infinite Dial, our cross-platform study on radio's digital future, we noted three distinct factoids:Pandora is by far the most widely recalled brand in online radio
Facebook is by far the most popular social networking Web site
The Internet has nearly caught Radio for music discovery
Now mull those factoids over in light of what we recently learned from F8, Facebook's developer conference. Last week's series of announcements regarding Facebook's new Open Graph initiative will be talked about for years to come, but their impact upon radio will certainly be felt this year. The most important development as far as the Infinite Dial is concerned is Facebook's pending integration with Pandora. Essentially, Facebook has created a giant "like" button for the web, and is closing the loop on all the data associated with expressing preferences online.
Consider this: the next time you visit a website equipped with these tools and express an opinion, Facebook will capture this data, whether you are on Facebook or not. I wrote a few days ago on Social Media Today about just how sinister this development could be, especially in the hands of a company that has already stumbled several times on the issue of privacy, but lets set that aside for a moment, since you and I both know most Facebook users simply don't care (yet.) What is fast becoming true for Facebook users is that "searching" and "browsing" are being replaced by links from friends. Search engines are already preparing for the next generation of search - prioritizing links from your network - and Facebook has jump-started the process by making your friends' "likes" around the web part of their social graph, and your social data stream.
As the ReadWriteWeb piece I linked to above notes, if you are a site that is built around proprietary social tools, like Last.fm, you just got served. In other words, if your path to revenue was monetizing a social network around books, or music, or anything else, you are going to be faced with the prospect of forcing your users to "like" things twice (maintain profiles on your site as well as Facebook) which only the hard core fan would ever do. Facebook has made things easier for users, but a whole lot harder for competitors.
Now, if you are Pandora, and you aren't built around monetizing social interactions, you are in a position to essentially make a deal with the devil. Pandora hands over the reins of user suggestions to Facebook's Open Graph, and in exchange, when people share links on Facebook about songs or artists they like, those links are increasingly likely to be Pandora links. Facebook captures the data, Pandora captures the ears. And the more you integrate the two from a listener/user perspective, the easier the whole thing gets and the richer the experience. Again, setting aside the privacy implications, for most people this integration is going to be a good thing.
Take all of this together, and the future for online radio (both for terrestrial broadcasters AND for online-only streamers who are not part of this master plan) just got a little murkier. With the near-total commoditization of music online, playing music is essentially like trucking wheat. The only way to grow in that business is scale. Having already leapfrogged everyone else on mobile phones, Pandora is set once again to leapfrog its rivals by getting in bed with what is increasingly everyone's home page on the Internet. As shared links to "liked" songs become the new currency of music discovery online, Pandora and Facebook may have just done an end run around everyone in the online music space, and there probably isn't anything you can do about that.
I don't like ending a post here on such a down note, but I've noted several times in this space that jukeboxes - online or terrestrial - are a race to the bottom at this point. With the confluence of the web's most popular social networking site AND most popular online radio service, music discovery in America has reached another inflection point. For broadcasters of all stripes, the future will likely be increased (online) consolidation, cooperation with former rivals, and of course aligning yourselves with Facebook's own rivals (Google, for now). It also wouldn't hurt to accelerate your plans to load up those wheat trucks with something besides music...
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