In response to yesterday’s piece on the likelihood of getting FM radios into cell phones (here), Emmis Communications Chairman/CEO Jeff Smulyan writes in:

“It is great to discuss improvements in our content — we must continually refine what we do. However, we should note that radio reaches nearly 260 million Americans every week, with content that has been less fragmented than any of our media peers.

“Kurt and Mark talk about giving consumers what they want, when they want it. This is a proposition all of us can agree on. However, it is simplistic to assume that giving people every conceivable channel that is available through streaming is a business model that can ever make sense to us.

“Unfortunately, our industry is based on the age-old theory that in order to pay our people, we must bring in sufficient revenues. Streaming audio, run through the Internet, has never proven to be a viable business. It allows us to experiment and provide lots of fascinating niches; however, it is an extremely inefficient distribution model, and has never shown any ability to amass audiences large enough on a local basis to become economically viable.

“If our goal is to cater to every conceivable consumer taste without regard to economic viability, than we have a different business rationale. If our goal is to create viable businesses for the benefit of our employees, our audiences and our communities, then expanding the reach of our terrestrial signals to different methods of distribution seems like a much more rational solution.

“It is very easy to talk about providing compelling, alternative programming — making that programming pay the bills is a much more challenging proposition.

“Today, our customers do want product wherever they are, in the most efficient manner possible, which we are convinced is through the distribution of our existing and new HD channels. We need to be wherever they are, especially on cell phones and portable digital appliances.”

________________________________

Kurt here again. Jeff makes some excellent points above. Although I believe that some webcasters have proven that they can build successful businesses (as long as performance royalties are reasonable), I do agree 100% with the main thrust of Jeff’s argument: If he can get FM radios into cell phones and portable digital appliances, he’s better off.

Comment

1. Mr Smulyun is probably correct. This is why I prefer interactive radio like Pandora rather than “programmed” radio.

   — Tom Nield · Jun 13, 03:06 PM · #

2. It’s no wonder that Emmis’s stock is selling for $2 a share when the CEO states he is clueless on how to monetize the delivery system that is clearly the future of ALL media, the Internet.

   Jeff, audio streaming, when properly performed, is not only the most efficient distribution model for content, it is also the most efficient method for connecting advertisers directly to those who are most interested in their products or services.

   The transition from AM/FM to wireless Internet is inevitable. It is happening this very moment. Those companies that fail to innovate to accommodate the interactive nature of the Internet are doomed to perish.

   The new business model that will be radio’s future is much more complicated than selling a commercial and playing it on the air. Personalized programming and, pull, not push, advertising unique to ever individual listener is the future of our industry.

   — A · Jun 16, 01:29 PM · #

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