Rabbitte’s radio shocker: ‘The future of radio is online’

30 Apr 2013

Ireland’s Communications Minister Pat Rabbitte, TD, has told the IBI annual conference that radio stations will have no option but to go online, given that there are more smartphones than radios in the public’s arsenal of media devices.

Rabbitte said the entire media sector in Ireland is going through a period of “destructive change”.

However, despite the effects of Ireland’s economic decline on the media sector, it is now in a time that can be described as a perfect storm, where the sector is being reformed and reshaped.

Rabbitte cited the rise of online media and said online advertising in Ireland is now worth €150m a year and is growing at a rate of more than 12pc per annum.

Despite this, the changes that are hitting traditional media are happening faster than the rise of online revenue, with newspaper circulations falling dramatically.

RTÉ has taken €100m worth of cost cuts and reduced staff by 400. And even in the midst of the perfect storm, independent television station TV3 has invested in a new HD studio.

“But make no mistake; the television market in Ireland has changed completely,” Rabbitte said.

“There are now 34 channels of advertising sold in Ireland, up from seven a decade ago, and when taken together with the entirely value for money-driven approach of the advertising industry today, it is difficult to see revenues – and either price or volume – returning to anything like previous highs.”

Rabbitte said a five-year review of funding for the country’s public service broadcasters is due to land on his desk in the coming weeks.

He also said that when it comes to sustaining the media sector in Ireland, there are few levers available to the Government.

But when it comes to preserving the plurality of media, commercial radio stations play a critical role and the regulatory framework for the sector is being kept under continual review.

Internet saves the radio star

Rabbitte said that while commercial radio may seem more robust than other media sectors, this should not blind the sector to the challenges that are coming.

“Digital Audio Broadcasting – or DAB – looks very much like a false start, even if there were a market rationale for it in the Irish market.

“No, as with so much else, radio is ultimately going to have to go online. It may take awhile; there are a lot of FM radios out there, in cars, or on window sills around the country. But there are relatively few new radios sold, certainly relative to the number of smartphones or other connected devices, and that is where the audience is going, not just for radio or TV, but for everything.”

Rabbitte said this is only the start of what could be a long process of convergence.

“This term ‘convergence’ when applied to media doesn’t just mean the simple fact that you can now watch television or listen to the radio on your phone – the implications are far deeper and wider than that.

“In time, it will likely come to refashion media entirely as the relationship between content owners, distribution networks and audiences change.

“For example, it is possible to see a future where the role now played by television broadcasters, who effectively create or aggregate content and then distribute it, is played instead by a differentiated set of media.

“Some bodies, like sports rights holders, for example, may choose to stream and sell content themselves, offering it across multiple platforms for a share of the revenue, or perhaps just offering it to the market themselves.”

Rabbitte returned to his perfect storm analogy and said the changes wrought by online cannot be ignored.

“The trick, in so far as there is one, is not to try and stop them, or pretend that they are not happening, it is to ride that wave, to use all of the tools that are available.”

Internet radio image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years