Interviews with Digital Media Thought Leaders

RIP for RIM’s BlackBerry and the Radio Industry?

Podcast Video | Posted by Phil Leigh on August 18, 2008

Download to Video-Enabled iPods

This video investigates whether the 3G-iPhone signals the decline of the fortunes of Blackberry-maker, Research-in-Motion as well as those of broadcast and satellite radio.

Many executives hunger for the iPhone but can’t do without real-time email while they’re on the move. As a result, they haven’t bought the iPhone because they don’t want to carry around yet another portable unit in addition to their Blackberries. However, the situation changed on July 11th when Apple started selling the 3G-iPhone with “push” email while earlier iPhones can get a free “push” email download.

Since Apple “push” email works with the Microsoft Exchange Server used by most sizeable businesses, it’s a game changer. Confessedly, there are some impediments, such as the limited battery life, but acceptable real-time email has arrived and the Apple experience will only get better.

This is bad news for Research-in-Motion. Even if they introduce a more competitive product, the iPhone may well become the de facto sector standard, much like the iPod did in the portable MP3-player market. For example, despite its considerable resources, Microsoft’s Zune barely moved the needle on the iPod market share. Research-in-Motion will face similar challenges against the iPhone.

Additionally, applications available from 3rd party suppliers at the iPhone Apps Store could obsolete both satellite and broadcast radio. For example, Pandora and last.fm offer (disruptive) ad-free Internet radio that enables the listener to configure stations playing only the music he wants to hear. The stations can be designed to center on genre (e.g. classic rock), artist (e.g. Bruce Springsteen) or composer (e.g. Bedrich Smetana, Beethoven). 

While the services are also available on other phones, the process of getting them loaded-up on the iPhone is typically less “geeky” and therefore more likely to be used by the mainstream. Additionally, aside from the iPhone the carriers that make Internet radio services available on other phones charge an incremental fee. In contrast, the iPhone is marketed with an unlimited data package of (typically) $30 a month on top of the voice service charge. That means that Internet radio is a free service for those with the data package.

Once the consumer has Pandora or last.fm on his iPhone he is much less likely to tolerate the frequent and obnoxious commercials of broadcast radio or pay the fees of satellite radio. Since the iPhone can be played through the entertainment system of most automobiles, and jacked into boom-boxes and home stereos, as well as through its own headphones, consumers will be able to play personalized Internet radio wherever they go.

There are two reasons why this is good for the record labels. First, unlike broadcast radio, Internet radio pays mandatory royalties to the labels. Second, the Internet radio services are interactive and therefore enable the consumer to buy the album, or track, spontaneously over the Net. 

Guests:

  • Tim Westergren, Founder, Pandora Internet Radio
  • Alan Reiter, Consultant, Wireless Telecommunications and Mobile Computing
  • Steve Marx, Founder, Center-for-Sales Strategy

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