NPR CEO Radio Predictions Don't Add Up

Speaking at the D: All Things Digital conference, NPR CEO Vivian Schiller made two predictions:

In 5-10 years Internet radio will replace broadcast radio.

One day all cars will have Internet radio of some form.

She noted along the way that 40% of weekday listening is in the car.

Her comments were reported by Barrons, and picked up by FMQB. The Barrons story is well worth reading for the other things she had to say.

Her Predictions, however, just don’t add up.

Last year, 10.4 million cars were sold in the US. GM predicts that about 12 million cars will be sold this year. There are slightly fewer than 140 million registered cars in the US, out of a total of 250 million registered vehicles.

That means it will take at least 12 years to replace all the cars on the road today.

It is anybody’s guess how many of those new cars will have docking stations or built-in Internet access. GM’s OnStar has 5 million subscribers. That tells us that not a lot of people want to pay a monthly fee to be constantly connected.

Analysts predict that AT&T will sell 15.8 million iPhones this year. That suggests that more people are likely to use some sort of smart phone docking arrangement than pay a separate fee for car Internet access.

How many smart phone owners are going to buy a car in the next five years, or ten? Even if a quarter of iPhone and Android users buy a car in the coming years, it will take decades for most people to have convenient Internet access in their car.

If 40% of listening is done in the car, and it will be decades before the majority of cars have Internet access, how can Internet radio replace broadcast radio in 5-10 years ? It isn't likely in 20 years, let alone 10 years.

Maybe Ms. Schiller was just talking about NPR listeners. Most NPR listeners probably already own an iPhone and replace their Mercedes or BMW every couple of years. We wrote about them not too long ago here.

Comments

[Richard Harker]

Joe, there is no question that the technology that delivers radio to listeners is evolving. The question yet to be answered is whether that will fundamentally change listeners. The evidence thus far is that it won't. The most popular channels on satellite are the "commercial" sounding channels, not the niche channels you can't find on the radio. The most popular downloads are the songs people hear on the radio, not the ones radio won't play. There is a reason 90% of Americans listen to commercial radio--they like it. There are plenty of alternatives for the other 10% who don't. The challenge for those alternatives will be financial viability.

[Richard Harker]

Dave, We were being facetious. We realize that NPR attracts listeners of all types, most of which do not drive expensive cars, and more importantly do not replace their cars every couple of years. Our point was that apparently Ms Schiller disagrees. Otherwise how would she think that most NPR listeners will be listening to their stream rather than on a radio in 5-10 years.

[Dave Kanzeg]

There are also lots (the overwhelming majority, actually) of NPR listeners who don't own BMW's, Mercedes or iPhones.

[Joe]

If I were looking down on listeners I'd agree. However, I'm just critical of the stations. It's a shame that as a radio consultant you're not open minded to the generational shifts and the idea of the long tail. It may take a long time, but things are going to change (albeit slowly) and consumers will want to play program manager on their own. It doesn't make any of them snobs, just well informed consumers who go get what they want from the marketplace.

[Richard Harker]

Joe, the definition of "snob" is one who believes himself to have superior tastes to others. 90% of Americans consume commercial radio, 10% do not. The 10%, perhaps including you, look down on the 90% by their dismissive attitude towards commercial radio. And snobs are the last to admit they are snobs--they think everyone thinks like they do. By ignoring the fact that the vast majority of listeners behave differently than you do, while declaring streaming, NPR, Sirius, etc. to be the new paradigm, you prove my point. That's not anger speaking. That's not an attack--it is simply looking at the facts.

[Joe]

An idea, instead of the anger and attacks at people who don't agree with your view of the world, how about trying to understand why they feel that way. There are plenty of people out there (many of them are called Gen Xers and Gen Y) who don't like commercial radio and are streaming, listening to NPR, Sirius/XM, etc. That doesn't mean they're snobs, it means they're part of a new paradigm that is becoming more popular.