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Death Rattle

August 30, 2004

Tech pundits are forever drawn to stories predicting the demise of industries at the hands of new technolgies. This weekend Barron’s cover story predicts the slow death of radio. Barron’s believes that traditional radio has hit its peak and indicates that satellite radio and iPods are hastening radio’s unravelling.
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Forbes & The Perils of Fighting Big Radio
While Barron’s succeeds at showing that radio is in an advertising slump, it is unable to show that this is anything more than a cyclical downturn or poor performance by radio oligarchs. Certainly, there are great analogies. Cable TV, Tivo, and the Internet have contributed to vastly shrink the coffers of the TV networks and the music industry has been shafted by shareware. But just because radio is a traditional medium doesn’t mean it will suffer the same fate as other traditional media. An obvious difference is that radio reaches an audience that is often in cars, away from Internet connections.
In contrast to Barron’s take, Forbes’ cover story on the radio industry comes from the angle of upstarts like XM Radio and Sirius to show how immensely difficult it is to succeed when you compete against the radio incumbents. Big radio’s lobbying arm – the NAB – has been able to cajole politicians into defending their turf through legislation that is painstakingly illogical (similar to the tactics of the RBOCs as they fend off the threat of VoIP). Satellite radio has barely encroached on the turf of traditional radio. We suspect that five years from now, Forbes’ story could still run while Barron’s will look back on its story as a summertime folly.
Read – Dialing Down [Barrons Online – $]
Read – Broadcast Bullies [Forbes Magazine]

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