Over at Hear2 Mark Ramsey suggests about NetFlix foray into digital delivery is a model for radio business models.
What’s interesting about the NetFlix entry is that it’s a preemptive change. Their customers are not ready to adopt downloading movies on mass – but the rise of video sharing sites means that if NetFlix doesn’t put its stamp on downloading movies – it’s likely someone else will. It’s using its brand to both stop it’s customers from looking elsewhere when they finally want to consider it and telling competitors that it wants (and will defend) that space with its deep pockets.
For stations the issue is a bit different. First NetFlix is more like satellite radio that a local station – it aggregators its users across geography around a relatively simple message – also like satellite – more selection, few interruptions (ads or returning videos). Any investment in technology may change the mechanism of reaching the user – but that’s all.
For local stations the issues are much bigger. First they need to decide how to change their business model – Internet obviously but stream their current content (and be similar to so may others) or pick an unexploited niche that has a local base, then is the new service stand alone or linked into existing services, and is it stars or unique content that makes you a destination. Finally there is the question of audience demographics – most Internet plays are for audience most stations don’t care about now (under 24’s).
Radio needs a new business model – one that’s in line with technology evolution and emerging consumer behavior – it’s just not as simple as looking at NetFlix to know what the right model is. That said Mark’s right if he’s suggesting doing nothing is disastrous.