Swiping the local broadcast audience

Television broadcasters need to pay close attention to the latest report from Borrell Associates. The report, Here Comes Online Radio, notes that start-up companies may swipe the local radio audience — or at least all but the drive-time segment — from local broadcast stations altogether.

It’s already happening. For as little as $2,000 per year in music licensing fees and Web hosting costs, anyone can establish an online radio station. No FCC license, no broadcast tower, no expensive tape decks or remote broadcasting trucks. There are already about 450 professionally run Internet-only companies operating thousands of online “channels,” plus another 2,250 web sites run by broadcast stations that simulcast their programming.

Online radio today is reminiscent of the early days of the Internet. Our surveys show an overwhelmingly male, educated and higher-income audience — just as the Internet had when it first took hold in 1994. It is also a small audience, barely 10 percent of the U.S. adult population listening to “radio” through their PC speakers. But it has a very interesting characteristic: A very high buyer’s ranking for homes, cars, computers, CDs and travel.

Local TV stations need to think about this for two reasons. One, there’s nothing to stop a TV station from adding Internet radio to its portfolio. Two, this threat is even more acute, in my opinion, than DVRs. Even now, amateur “television” programs are popping up here and there in the form of video blogs, and it won’t be long before hordes of others enter the space. Like anything else where consumers have choice, the cream will rise to the top, and unless local TV stations get this through their heads now, they run the risk of losing the local video news niche in their markets.

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