Harker: Radio Should Learn From AOL's Struggles
August 16, 2011 at 3:59 AM (PT)
In its most recent posting on its Radio Insights blog, HARKER RESEARCH masterminds RICHARD HARKER and GLENDA SHRADER BOS note, "AOL Stumbles: A Teachable Moment for Radio?"
In it, they write, "Recent stumbles of two early digital leaders is a reminder that at Internet speed, winners can quickly become losers. The struggles of AOL and KODAK should be a warning to both broadcast and its challengers that success is far from assured for either. Millions of Americans discovered e-mail and the Web using an AOL account and software. For years, AOL was synonymous with the Internet, but that was then. Now AOL is struggling. The company has lost half its value in just the past year, 28% in the past few days. Today, PANDORA has a higher market cap than AOL, despite a tenth the revenue."
Now it is up to broadcast groups to exploit the opportunity Pandora identified by creating their own brands of personalized radio, refining and expanding the category.
"Two pioneering companies with enormous strengths and deep pockets both find themselves struggling," continues HARKER. "What are the lessons for radio? First, there is no 'First Mover Advantage.' In digital, the opposite is more often the case. Early entrants into a space help identify opportunities, but generally the companies that follow are more successful. GOOGLE+ launched in JUNE, years after the leading social networks, but it has already become the fastest growing social network, attracting nearly 30 million members in its first month. Analysts expect it to surpass LINKEDIN and TWITTER in its first year."
"PANDORA has shown there is a market for personalized radio, but not even a hundred million registered users is an insurmountable lead," notes HARKER. "Now it is up to broadcast groups to exploit the opportunity PANDORA identified by creating their own brands of personalized radio, refining and expanding the category. While watching immediate threats, keep an eye on the horizon. Personalized radio may be the future of radio, but it's popularity might fade to be replaced by something else."
Check out the full posting here.