It is always tomorrow’s because the pundits’ predictions about today’s invention never pan out. The iPod was going to kill radio. It didn’t. Satellite radio was going to kill radio. It didn’t. Broadband was going to kill radio. It didn’t. Internet radio was going to kill radio. It didn’t. Table-top streaming radios were going to kill radio. They didn’t.
Which brings us to new-media’s latest darling and radio’s newest nemesis, Apple’s iPhone. Once again we hear radio’s Chicken Littles predicting radio’s demise.
We’ve all heard the argument. There is no FM tuner on the iPhone, but users can listen to Internet radio and streams via their web browser. There are free applications for Slacker, Pandora, LastFM and others.
As a result, radio stations are rushing to develop their own apps, so they too can join the 20,000 applications that iPhone users can download.
Let’s put the iPhone in some sort of context. There are about 220,000,000 cell phone subscribers in the US. Of those, about 80,000,000 are AT&T subscribers, the only official iPhone carrier. Of those 80 million AT&T subscribers, it is estimated that under 7,000,000 own iPhones. That means iPhone penetration is 3%. So with 3% penetration, we know that 97% of the country’s cell phone subscribers do not own iPhones.
Of course, the iPhone is not the only smartphone that can web-browse and use applications. New ones are coming out everyday. Current estimates suggest that we might hit 25% smartphone penetration by the end of the year. The iPhone will be lucky to hit 20% of this penetration, so iPhone subscribers might reach 5% by 2010.
So by 2010, 95% of cell phone subscribers still won’t have an iPhone. Still scared of what the iPhone is going to do to radio?
The demographic profile of iPhone users is rather interesting. It tilts young, male, and with above average income. What group is most hostile to commercial radio? Young, male, and higher income.
Somehow we suspect that even if the iPhone had an FM tuner, it wouldn’t get used much. First, because of the demo profile of the typical user, but more importantly, because IT’S A PHONE.
Fundamentally, a phone is used to communicate. The definition of communication has expanded as each new means to communicate has appeared. Word of mouth has given way to smoke signals, which has given way to the telegraph, which has given way to the telephone, to radio telephones, fax machines, and now cell phones.
We can now communicate via voice, text, email, and so on. A smart cell phone has expanded our means to communicate, but fundamentally it just continues to serve us in the same way that Alexander Graham Bell’s invention served us.
What do iPhone users do with their phones? They talk, exchange e-mails, and text. Those activities consume the majority of time spent on the device. There is one unusual characteristic of iPhone owners. They listen to music more than the typical smartphone user.
This is what the new-media pundits have seized on. Users listen to music on their iPhones!
This shouldn’t be a big surprise. They are disproportionately Apple people who also own iPods. They have been trained to use their devices to listen to music. But even iPhone users don’t spend a great deal of time listening. Usage varies depending on the phrasing of the question, but current estimates place any listening at 60-75% of users, and daily usage at 10% of users. That’s three times the usage of other smartphone subscribers, but still not a lot of listening.
Will the popularity of applications change that? Probably not. First, you can’t listen to music while checking email. That’s going to cut down on listening. Secondly, there’s a dirty little secret about applications. Everybody loves free applications and most users have downloaded a few.
Pinch Media has discovered, however, that use of free applications drops to virtually zero after about 90 days (see graph at left). People end up not using any of those applications. So while millions have downloaded Slacker or some other radio killing application, there’s a very good change that within a few weeks of installation, it is gathering dust along with all the other free apps excited iPhone users have downloaded.
By the way, I hear that Apple’s new tablet is going to KILL radio.