theCriticalThought.com May 2017          Tom Ersin, Managing Editor
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The Thinker

Of Mice and Menus


The best laid plans ...



The technological integration of computers and home/auto entertainment systems will completely revolutionize radio and television consumption. Radio programming choices will increase exponentially due to worldwide (as opposed to solely local) accessibility.

Antique TVRadio and television are again about to make the world smaller — Internet radio and television — with seemingly infinite choices of stations all over the planet that can be accessed from anywhere on the planet. Internet radio has been in existence since the 1990s but has been considered a novelty until recently. As with so many new digital developments (think audio and video streaming), we discovered that it could have many more applications than were originally conceived. Once radio broadcast streaming became possible, many stations adapted their transmission to include online access. Additionally, as personal computer usage has become simpler and more common, so has Internet radio, with Internet TV not far behind. 

The commercial development and production of end-user products is already underway. Special car routers are on the market with subscription fees that compete with traditional Internet wireless service prices. Home entertainment centers and car stereos at the consumer level will soon incorporate a dedicated computer. Stand-alone portable Internet radios are currently available for purchase. The one problem for Internet radio may be recent drastic increases in royalty rates for online broadcasters; however, many experts are confident this dust will settle in an equitable way for stations and artists.

The importance of this innovation, this convergence of technologies, cannot be Intrnet media - earth with headphonesunderestimated. It can’t NOT be done. Or if you like, it MUST be done. There is simply too much to gain for so many different entities. According to John Dvorak of PC Magazine, Internet broadcasting of radio and TV programming is inevitable for these three compelling reasons:

1) Reach — The Internet already has the capability to be accessed anywhere on earth with high quality reproduction of audio and video. With the spread of satellite connections, the only limitations are in the cost of end-user equipment, which continues to come down. Ultimately, the Internet will be accessible from whichever planets humans happen to be on — or between.

2) On Demand — Internet broadcasting has the dual capability of being streamed live or accessed whenever the user desires, without any additional equipment — unlike Tivo-like storage appliances that are necessary for traditional broadcast television. This is why podcasts are considered a form of Internet radio. They are simply time-shifted programs waiting to be accessed by consumers.

3) Low Cost — Once the programming is produced, Internet transmission costs are a small fraction of what it costs to maintain large transmitters, antennae, etc. We know that cost is usually the determinant force in transforming a technological format. 

Low cost supported by virtually unlimited reach, on-demand capabilities, and live access will mean the end of traditional broadcasting methods. Dvorak predicts the last terrestrial transmitter will be permanently switched off by 2020. That may be optimistic (or pessimistic, depending on your perspective), but it is a question of when, not if.

There is one possible obstacle to the growth of Internet radio. The large record companies sought a stiff increase in Internet radio royalties, citing a U.S. CD sales drop of 20% between 2004 and 2006. The broadcasters said this increase would put them out of business.

The two sides couldn't agree on new rates in late 2005, which put the matter before the Copyright Royalty Board, a panel of three judges appointed by the U.S. Copyright Office. Siding with the music companies, the board ordered in March that royalties be raised to 0.11 cents for each song listened to, up from 0.08 cents last year. The rate is scheduled to reach 0.19 cents in 2010 (Tirrell, 2008).

Yahoo Inc. and Time Warner Inc. affiliate AOL are threatening to shut down their Internet radio operations. "We're not going to stay in the business if cost is more than we make long-term," said Ian Rogers, general manager at Yahoo's music unit. "Radio sites have been dealt a severe blow," said Jeffrey Lindsay, an analyst at Sanford C. Bernstein & Co. in New York. "It seems very unlikely that at this stage a solution will be reached" (Tirrell, 2008).

The changes in the rates were so extreme that many smaller companies have already been driven out of business. Some Canadian entrepreneurs are hoping to give royalty-rate refuge to broadcasters. This could be a boon to Canadian music business interests; however, driving American companies out of their own country is certainly not good for them or us (Jack, 2008).

After July 2007 when the higher fees went into effect, attempts to reduce the increase were implemented. Lower fees have been offered to smaller Internet radio companies, and the big boys would like some of that same consideration. Ultimately, the matter may end up in a U.S. Appeals Court or in the lap of Congress. This appears to be a temporary, though prolonged, hurdle to Internet radio’s development. If the broadcasting companies can’t make money under the new royalty rate and they can prove this, how can the record companies and artists be willing to cut off their own nose that feeds them (to mix metaphors)? They will protect their body parts by compromising because 0.08 cents multiplied by something is better than 0.11 cents multiplied by nothing. In the meantime, SoundExchange (the Internet royalty collecting arm of the U.S. Copyright Department) has apparently agreed to stop collecting royalties while a new deal is worked out.

Contrary to Paul Boutin’s Slate magazine article in which he seems to say he thinks this will never happen, home entertainment centers, or media centers, that have incorporated some form of personal computer will eventually be commonplace. He might have outlined some reasons for the delay, but his most pressing argument is essentially explained away by Stewart Hoover, professor of Media Studies at the University of Colorado in Boulder. Boutin says that couch potatoism is the main reason we won’t be seeing Apple TVs — that people don’t want to mess with mice and menus while they’re potatoing. But exactly as Hoover foresaw in the early 1980s, "the marketing of ‘informatics’ technologies to more and more unsophisticated households further along the ‘diffusion curve’ will be accomplished through simplification of the controls and increased centralized management and control by interests outside the home" (Hoover, 1983).

Boutin argues that people don’t want to mix their home office chores and computer fun with TV or movie viewing (2006). He’s right about this. That’s why we’ll still have our separate office desktop or laptop to take care of business and to indulge in our digital hobbies. Our media centers will have their own dedicated computers to do the work of accessing and playing audio and video content from the Web. Additionally, since all of our home computers will be networked (wirelessly, don’t ‘cha know), our media center will be able to access any content from any of our other home computers, as well as from the Internet. No muss, no fuss, and no spreadsheets or book reports on our big screen TVs.

Mass marketing of these products mandates simplifying their use, as has been done with almost every technological innovation from the automobile to the home computer to the sleep number bed. The ability to access any radio or TV station that has an online broadcast is just too delicious for big business not to do whatever it takes to get it done. Think of the expanded consumer pool for advertising. Internet broadcasting is irresistible — and irreversible.

Traditional terrestrial broadcasting will become extinct or nearly extinct. It’s simply a matter of time. The far-reaching potential of the new technology’s capabilities is somewhat like the birth of the home computer, itself. There will be commercial, worldwide access to virtually every radio and television station on earth — from anywhere on earth — because eventually all broadcasters will add an Internet feed in addition to traditional transmissions. Ultimately, stations will only broadcast on the Internet. My hope is that the prospect of being only one of thousands of choices will encourage stations to improve their programming and decrease the amount of advertising, though it’s likely to have the reverse effect. From a marketing standpoint, this would create a new frontier. It will be interesting to see where all of the pioneers land — and on what parts of their anatomy.

There will be a massive transition of hardware. Traditional giant transmission antennas will come down or have their duties reassigned. Transmitting satellites will become more powerful and all-encompassing. A fringe benefit could be a significant improvement to the landscape. There will also be a massive transition in the workforce as one technology dies and another one establishes itself.

Among considerations for the future are the following: What will happen to all those obsolete transmission towers? Will Internet broadcasting lead to even more narrowcasting, or splinterization, of media and messages? How will this affect the music and record businesses, which are already reeling from digitization? Will movie theaters be hurt even more by the increased availability of high quality home entertainment systems coupled with a blinding increase in content choices? How will this sea change in broadcasting be affected by FCC control, if at all? Will writers and artists get their due compensation when the tracking of playlists, TV shows, and audience consumption becomes more difficult due to a drastic increase in the number of stations to track? Will Superman finally marry Lois Lane? These and other questions will be asked and answered over time, just as equally pressing questions were asked at the dawn of radio, then television. It should be a wild ride. ■



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The importance of this convergence of technologies, cannot be underestimated. It can't NOT be done. There is simply too much to gain for so many different entities.

 

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Traditional terrestrial broadcasting will become extinct or nearly extinct. It's simply a matter of time. The far-reaching potential of the new technology's capabilities is somewhat like the birth of the home computer, itself.

 

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