Re: Vikings upset Karmazin

[Shawn Mamros <mamros@MIT.EDU>]

Rob wrote:
>No, Mel's made the right decision.
>
>Internet "broadcasting" is not and probably never will be profitable. To
>the extent that people do listen to it, it promotes audience
>fragmentation. However, most people won't listen to it; not only does it
>lack two of radio's principal advantages (it's not free nor is it
>portable) but it's unreliable. Net congestion and server capacity limit
>the number of people that can receive a given station's streaming audio,
>and that makes it likely that many listeners clicking on their favorite
>station's "Listen Live!" icon will hear intermittent audio or worse yet,
>nothing at all.

and Brian replied:
>I'll bet very similar arguments were made when that new fangled "radio with 
>pictures" device came out.  I will grant you that Internet radio is not big 
>right now but its still in its infancy.  I'll bet that Internet radio has 
>more listeners than HDTV has viewers right now.  Give it a few years.
>
>I agree that he's making a mistake. If he hopped on board now, he would get 
>in very inexpensively and establish himself by virtue of a presence over 
>time.  If he waits, say five years, he'll either have to acquire an 
>established property or spend big bucks to promote and launch a new one.

The analogy with "radio with pictures" isn't a very good one, for this
reason: With TV, there was a scarcity of channels in any given market.
If you didn't get in early, you missed the boat.

The Internet is a different story, as there is no scarcity of channels.
I doubt it'll cost any more to set up an "audio portal" site five years
from now than it does today.  In fact, it may cost much less five years
from now, as the cost for equivalent bandwidth is bound to go down, as
it has for the past several years.

Mel won't have to acquire any established property, either - he already
has one, namely the CBS brand name.  All he has to do, once he's good
and ready (translation: once he and his minions find a business model
for it that turns a profit), all he has to do is announce "CBSRadio.com"
(or whatever he chooses to call it) as an aggregator site, and people
will come.

The better analogy would be to what Microsoft did to Netscape.  Remember
when Netscape was the dominant browser?  But once Microsoft ramped up
Internet Exploder - and also did some monopolistic arm-twisting on the
PC manufacturers - Netscape was dead in the water.  Mel may not have
a monopoly to the extent Microsoft does, but don't underestimate the
weight of the CBS name.  When he's ready to make a move, it's not going
to go unnoticed.

-Shawn Mamros
E-mail to: mamros@mit.edu