Mays responded, “I don't think there is one particular competitor that's going to supplant radio. It's just going to be lots of different competition. Satellite radio is not going to replace radio in the near future . . . The great thing about radio is that it's local—it's focused on local content. Sirius and podcasting can't create local content. Podcasting is a great thing. Have you listened to any of these podcasts? It is painful.”
Let’s reflect on what he said.
“Satellite radio is not going to replace radio in the near future.”
Are we to infer from Mays' comments that this newer form of the Radio medium doesn’t pose much threat?
If Satellite Radio is so insignificant, then why is it, Clear Channel invested $75 million dollars in in 1999 for an 8% share of XM Radio? Is a company of this size generally prone to tossing around that kind of cash because they don’t expect a return?
(I think that’s generally referred to as ‘hedging your bets”.)
But, Mays is technically correct when he says Satellite Radio poses no threat in the “near future”. Even so, I don’t believe for a moment the CEO of a company that owns 1200 radio stations would be caught dead being shortsighted in his thinking.
What about the not so near future. Bloomberg.com recently reported:
Today, satellite radio is where cable television was in the 1970s, a business with few subscribers compared with the traditional broadcast networks. Yet it has the potential to disrupt an industry, says Randall Rothenberg, 49, chief marketing officer at Booz Allen Hamilton Inc. consultants in New York.
Then there’s the issue of traditional Radio’s listenership.
In April, 2005, Kurt Hanson's Radio And Internet News reported:
...reflecting trends for the most-recent 5-1/2 year span…the average person's "At Home" usage of radio (which, by the way, comprises about 2/5 of all radio listening) declined 14%.
On a per-person basis, "At Work" listening…has declined about 16%. "Other Locations" listening…has declined about 12%.
…in the listening location that would be most affected by the growth of satellite radio, "In Car" listening (which, on a national basis, comprises about 1/3 of all radio listening, although most people assume it's more), radio usage has actually risen by almost 3% during the period!
(more...)
