Eventually when the Boomers and Generation X become non-factors in the entirety of the media ecosystem, terrestrial radio will become a thing of the past along with all of those radio towers, and the radio spectrum that is currently controlled by the FCC. But there will always be a need for audio content in some shape or form even if it’s for no other reason than having a space for local content like news and talk content (think NPR radio) and local sports content (think local sports stations like WFAN The Fan in New York, 98.5 The Hub in Boston, and 94 WIP in Philadelphia rather than national sports talk like ESPN and Fox Sports Radio which are available on Sirius XM).
We agree that podcasting and digital content; and being able to monetize it in the form of ad revenue is the focus of this potential move now and in the future. So overall a potential merger makes sense for both iHeartMedia and Sirius XM for that reason alone. The potential talks of a merger was first reported by Bloomberg. The article is behind a paywall though. (See the excellent thoughts on the potential merger from DaMizza below)
Neither company is just going to hand things over to Spotify or YouTube without a fight when it comes to forms of streaming content. So a merger will become a reality with other radio/media companies joining forces to combat the top dogs in the music industry that exploit music artists by avoiding radio and go direct to streaming platforms. Companies like iHeartMedia and Sirius XM and their parent company Liberty Media see the writing on the wall and have turned their focus to podcasting audio content to make money.
The fact is audio content is over saturated with podcasts. So imagine this. The way they are promoted, it seems one day we could have 100 million podcasts. (of course this is an exaggeration, but look at how they are promoted by iHeart and Sirius.) So if there are that many podcasts, all you need is for a podcaster to listen to their own podcast and get one or two friends to listen. Is that their strategy? seems like it. Do you have a podcast? How about a YouTube channel? (Well… umm not yet. Were you thinking about?) Get a sponsor or sell an ad… and there you have it– it’s monetized!
Now the situation with music labels is much more nefarious. They can bypass radio altogether or sell that idea to an artist. It ultimately cost labels less to go directly to streams and artists get paid less. Artists make more from radio air play and a physical product like a CD or vinyl record than that Spotify app. Meanwhile at the end of the day media companies struggle to keep their properties (radio) relevant in the eyes of the listening public. NOBODY LISTENS TO RADIO is what everyone is saying.
But the one thing that can never be said about streaming is this: It has yet to create a music superstar. Think of any superstar artist, regardless of genre (pop, hip-hop, rock, country, R&B. etc.), they built their following through radio. Will there be a day that an artist becomes HUGE without radio airplay? (So far the answer is no.)
With that being said here are some more thoughts on the potential merger and radio. After viewing the posts below we can conclude: People under 30 don’t know who the DJ is or care to know who the DJ (the on air personality) is on the radio – outside of the morning show of the radio station they might be listening to. That falls squarely on the shoulders of radio management. But in most cases it falls on the on air personality to promote themselves. That’s a problem.
