What Can We Learn from Internet Radio?

A news release from Futuresource indicates that the number of people listening to streaming music over the Internet has remained about the same over the past year and a half — about 38% in the U.S. — but those people are listening more. The study reports that U.S. listeners increased the number of hours by 27% over the same period. Pandora is cited as one of the reasons, with its personalization options and social sharing features.

Another reason, however, is the growth of mobile broadband. Smart phones can access the Internet just about anywhere these days, and can maintain a connection even while moving (which is generally not the case with WiFi connections). As a result, more people are leaving their downloaded music at home in favor of an endless supply of free music from the Internet.

So the question is this: is this Internet radio behavior the bellwether for streaming video as well? As mobile broadband bandwidths increase, will we see the same rapid growth of streaming Internet video on mobile devices as we’re seeing on home entertainment systems? What are the implications for the traditional subscription-based television and movie delivery systems — satellite and cable television — if consumers can get (most if not all of) what they want in terms of video entertainment over the Internet? Watch your favorite television episodes on Netflix on your television, then continue watching on your smart phone as you ride in a car or bus or train, and then finish up on your computer at work. Wouldn’t that make the morning commute breeze by? And what if streaming video offered more of the features that make services like Pandora appealing, such as the playlists and social sharing features?

The problem remains that many of these services are still trying to figure out how to make enough money in their businesses, or how to get access to the content that their customers want the most, but I don’t think that’s much of a problem. I remember a little company that would pay list price plus shipping for a book that I self-published, so that they could turn around and sell it to their customer at the same list price. Amazon lost a little money on those transactions, but they rode that concept to become a dominant force in retailing. I think that the old models of broadcasting and distributing programming — either audio or video — to customers are broken and will be replaced sooner or later. The way things are going, it will probably sooner.