Online Radio and Globalization - Research Paper Example

Online Radio and Globalization Introduction Arbitron & Edison latest annual report on the impact of online radio platformshows that though radio still has high social regard, it currently faces the challenges of being eclipsed by online radio. Most people currently prefer to listen to internet radio because of its wide appeal and global nature. Internet radio platforms slowly exceed radio and television combined, as the medium of choice for many people. Because of the growth of internet radio, commercial radio stations can create content for target people. Commercial entities, instead of paying enormous amounts of money for radio advertisements, and sponsoring target programs, can develop content that attracts and retains an audience (Kozamernik, & Mullane, p. 13). Internet radio has an immense impact on globalisation because it targets a wider global audience, and can influence commerce and culture. Internet radio does not only impact on globalisation but it also impacts on commercial trends. It impacts on advertising, management, production, marketing and radio listenership. With the advent of internet radio, business shifted their attention to seeking for advertising space in online radio because of its international nature. Online radio also changed radio listenership; international listeners could tune in to an online station and listen to music that may not be available in their local radio stations. This means that expatriates can listen to radio stations from their native countries, and in a way influence the locals to listen to this radio stations. Online radio is also appealing to the youths who are internet savvy and compose the highest number of radio listeners (Kozamernik, & Mullane, p. 18). Radio incorporates signal transmission in space using electromagnetic waves that have frequencies below visible light. This waves, electromagnetic waves, travel by oscillating electromagnetic fields in air and vacuum space. Radio waves carry information by systemically modulating properties such as phase, amplitude, pulse width and frequency of the radiating waves. Radio has immense capabilities of conveying information. During the First and Second World Wars, nations relied on radio for information and news. The uses of radio over time changed from just a media of information and news to an entertainment and commercial entity. Ships used radio by sending Morse code to land in 18th century. The importance of radio came to the fore during the sinking of the RMS Titanic. Operators on board the Titanic communicated with nearby vessels using radio. During the First and Second World Wars, radio gained immense usage by the navies and the armies (Kozamernik, & Mullane, p. 5). Commercial radio broadcasting in 1920s changed the landscape for radio usage. Besides, radio program relay, point-to-point broadcasting and telephone messaging became widespread in 1920s. Presently, radio has taken many forms, which include mobile communication, wireless networks and radio broadcasting. Commercial radio broadcasting includes music, news, comedies, dramas, variety shows and numerous forms of entertainment. During the golden age of radio, it gained uniqueness as a method of presentation because it only used sound. Technological developments brought other means of mass media, and the currently, online based services takeover from some of the services that people used to enjoy. Internet or online radio is growing in acceptance and may overtake conventional radio within no time. Internet radio has changed aspects of radio such as advertisement, its globalization role, listenership, production, marketing, education and entertainment (Kozamernik, & Mullane, p. 7). Internet or online radio uses the internet to transmit audio services. Internet radio primarily involves streaming media, which presents listeners with non-stop audio streaming. This means that the audio stream cannot be replayed or paused but can be stopped. Internet radio is similar to conventional radio, but the difference is in the mode of transmission. However, internet radio differentiates itself from podcasting, which involves downloading as opposed to streaming. Most internet radio services exist in association with a corresponding terrestrial radio network or station. Internet-only radio exists independently from such association (Kozamernik, & Mullane, p. 9). Internet radio services can be accessed worldwide. For instance, a person can listen to a radio station in Australia from America or Europe. However, leading networks such as Citadel Broadcasting and CBS Radio restrict their services to in-country listeners because of advertisements concerns and music licensing. Among listeners with interest and expatriates, online radio remains hugely popular. These listeners mostly do not like local radio services, therefore, opting for online radio. Internet radio just like terrestrial radio offers sports, news, music and talk shows in formats available in terrestrial radio (Kozamernik, & Mullane, p. 10). Internet radio introduced dynamics of radio services that did not exist before its advent. Internet radio does not only cater for expatriates, but also helped to advance globalisation. People can obtain news or occurrences from a certain internet radio or internet-only radio station in Canada while in Russia, or Africa. This form of radio has also experienced growth in popularity with revenues exceeding 50 million US dollars in 2003. Also, online radio services consumption in USA increased by 19% according to consultancy firm Bridge Ratings & Research. In USA, 57 million people tune in to listen to online radio weekly. This survey by the consultancy firm shows that most people in the USA listen to online radio than to podcasts, satellite radio, and cell-phone-based-radio and high-definition radio combined (Kozamernik, & Mullane, p. 12). Impact of Online Radio on Advertising Advertisers and marketers clearly know that advertising mediums do not exist in a vacuum. Marketers consider advertising campaigns holistically, measuring and assessing effectiveness and impact across media. With the diversification of media and especially with the growth of the internet, cross-media measurement grows complex. Digital media has increasingly become central to social and commercial aspects of the globe (Laszlo, p. 5). In advertising, internet radio is effective both independently and in combination with traditional radio broadcast and online advertising. Online radio advertising response rate increases 3 times among online radio listeners. The addition of online radio advertisements contributes to increased advertisement response of broadcast radio and online advertisements. Online radio advertisement for advertisement category or brand improves customer response and recall (Laszlo, p. 7). Weekly internet use increases among online radio listeners indicating that online radio use complements online usage. Internet radio listenership has a positive impact on online advertisements response and it significantly and broadly influences offline and online action. Therefore, internet radio significantly increases the advertisement response of broadcast radio. This is clear when quantifying advertisement recall rates of essential services or products category. It also impacts on advertisement response immensely than incremental increase in online activities. This intense synergistic effect clearly comes out among 1-10 hours weekly listeners of internet radio. Another crucial impact of online radio is that it complements traditional broadcasting. Broadcast radio listenership has gone up with the addition of internet radio platforms (Laszlo, p. 8). One aspect of internet radio that attracts marketers and advertisers is that it does not play many commercials per hour. Internet radio also has an affluent listenership, and mostly targets a specific, mass group. Advertisers can also use internet radio with online selling or buying to increase its effectiveness. Internet radio concentrates on entertainment, attracting the youths and interested people. Because of this, it has grown in listenership, and marketers can utilize this effectively in marketing. Listeners of internet radio use the internet to listen hence they can access the advertiser’s website easily (Laszlo, p. 8). Online radio listeners actively engage in commercial and social activities, and they possess an above average purchase intention levels compared to broadcast radio listeners; according to the BIG Research. This makes it essential for the advertiser to include their website address during advertisement because the listener can visit the website and see the product on advertisement, unlike traditional radio that only uses sound Internet radio advertisement, with online selling of goods and services, increases purchase activities among the listeners (Laszlo, p. 10). Internet radio has an additive and synergistic value on planning for digital advertisements, buying and broadcast radio. Though internet radio users highly engage in demographics, they also engage in broadcast and digital media. Combination of internet radio with either broadcast or digital media drastically increases the effectiveness of a media campaign. It increases the response rate of the campaign across an array of action both offline and online. The benefit of using internet radio with a combination of other media impacts on advertisement recall and response than any increase in the activities of this media. Therefore, internet radio offers is a complementary component of broadcast and online radio advertising, and it offers a compelling platform for brands to utilize for maximum engagement with consumers (Laszlo, p. 13). Impact of Internet Radio on Marketing The evolution and growth of the internet has become a critical phenomenon. Marketers have tried to harness the potential of the internet by using electronic mass media campaigns in their marketing activities. As they try to harvest the potential of online radio, email-based viruses and spam have cluttered email-based advertisement, making electronic referral marketing a problem. However, online radio seems to have solved this problem for marketers. The crucial driver is the effectiveness of online radio in triggering interest, creating awareness and generating adoption and sales (Lilien, & Bruyn, p. 3). Online radio facilitates consumer interconnection through the internet. Online radio coupled with customer reviews that are encouraged by advertiser’s website enable the consumer to share and spread the information easily; through the internet and social media, or by word. The interconnectivity, facilitated by the internet, is a global phenomenon that can help neutralise negative perceptions and perspectives about a certain product or service. It offers the brand managers and marketers the ability to control dissemination of ideas by maximally ensuring that the brand has a positive image online. Additionally, online radio challenges the geographical markets existence enabling the development of both local and international marketing strategies (Lilien, & Bruyn, p. 3). The internet offers both visual and audio services for marketers. It also offers customer-leveraging possibilities among which online radio offers the most intriguing services. In online radio marketing, the online radio interface can be used for advertisement; the radio does not have to play audio advertisements for the listeners. Anyone listening to the online radio can have a visual impression through the visual capabilities of the internet to see advertisement. This can be used by the marketers to achieve the goal of consumer-consumer reviews and communication, rather than company-consumer communication and reviews (Lilien, & Bruyn, p. 7). Impact of Internet Radio on Copyright Royalties Because of the tremendous growth of the internet radio, the US government through the Copyright Royalty Board announced an increase in the statutory licence rates for internet radio. Internet radio like terrestrial radio is non-interactive where listeners receive programs from a broadcaster. Internet radio has benefits over terrestrial radio; diverse playlists, efficient cost structure and exposure for the artist. Online radio has vastly increased the choice for radio listeners (Castro, p. 4). The growth of internet radio has seen investors set up their broadcasting stations to cater for the growing numbers of listeners. Clear Channel Communication in 2002 grew from 40 to 1,240 online radio stations. The American Association of Independent Music stated that independent radio labels cater for 10% and 37% of terrestrial and non terrestrial radio services. This shows that online radio services are growing in preference. Therefore, internet radio offers a source of exposure and growing revenue for the artists; crucially impacting on royalties (Castro, p. 6). Two copyrights exist for music recording; for music composition and sound recording. Music writers own the copy right for music composition, which includes copyright for lyrics for the song and the notes. The record label owns the copyright for sound recording, which encompasses the interpretation of the composition and the actual sounds. US legislation exempts terrestrial radio broadcasters from committing a royalty for performance of the sound recording to the owner of the copyright. However, internet radio broadcasters are not exempted from paying the performance right (Castro, p. 8). Before 1998, radio broadcasters; both internet and terrestrial, paid rights, and royalties to music composition copyright owners. However, this changed and all broadcasters must pay copyrights to their respective owners. This represents a significant increase in the revenue from copyright ownership (Castro, p. 12). Impact of Internet Radio on Globalization Globalization is a phenomenon that describes a shift to an interdependent and integrated global economy. The internet plays a crucial role in globalization and it is the most noteworthy technological advancement or innovation that advances globalization. The internet supports online radio which enables the movement to a global village. It does this through the creation of easier, faster and cheaper means of passing information and communication. Online radio provides an enormous pool of information and it facilitates the expansion of commerce (Hendy, p. 151). Online radio provides an alternative for terrestrial radio and it has effectively led to the creation of a worldwide audience. For instance an individual can listen to an online radio station broadcasting from Japan while in England, Australia or USA. This radio stations facilitate the exchange of culture and are vital in setting social trends. Online radio provides an up-to-date, fresh and wide ranging role in the global contemporary society (Hendy, p. 153). Internet radio places radio on a global context, facilitating the impact of digitalization, globalization and the internet to modern society. Online radio provides a link between radio, music, news and culture on a global context, in the construction of musical taste and social identity (Hendy, p. 154). Impact of Internet Radio on Listenership Internet radio has led to changes in the way people listen to radio. Before the advent and popularity of internet radio, people had to buy radio sets to listen to radio, which was either Fm or Am. However, this has significantly changed with internet radio because it only needs internet to listen to an online radio station. Internet radio listeners are mostly young, stylish and highly engaged. This audience is expected to double within the next four years because of technological advancements. Recent advances in technology especially in Wi-Fi, smart phones and smart gadgets will lead to an increase in internet radio listenership. More access to internet and internet radio means that the service attracts diversity in listeners allowing them to personalize playlists. The platform allows listeners to consume content across boards and platforms. For instance, the online radio station, Pandora allows listeners to personalize playlists around their favourite songs, composers or artists available in the radio’s website. This kind of diversity in offering services coupled with consumption patterns and content affinity creates an opportunity for advertisers and marketers to target an audience with relevance and precision (Kozamernik, & Mullane, p. 5). At least 50 million people in the US listened to internet radio in 2010. This number is higher than the 2009 figure which put internet radio listeners at 45 million people. This figure is expected to double in the next four years. The reason for such success of internet radio is attributed to its different features which are user friendly. The popular internet radio services allow the listener the opportunity to listen to music and connect with their favourite artists through the internet. Most popular terrestrial radio stations are currently providing their radio services through the internet, because of the popularity of the internet (Kozamernik, & Mullane, p. 9). Impact of Internet Radio on Production Traditionally, audio programmes were available through dedicated terrestrial networks that broadcasted to radio receivers. This system operated on Fm and Am platforms. However, with the shift to digital broadcasting, audio programmes are currently available through DRM, DAB and IBOC platforms (Lilien, & Bruyn, p. 7). Radio programmes are not only available through Hi-fi enabled tuners, but are also available through Wi-Fi enabled devices and multimedia –enabled computers. These changes in radio technologies dramatically influence radio medium itself. It influences production, consumption and delivery. The capabilities of terrestrial radio were restricted to their local countries. However, internet radio is not restricted to a single country. Therefore, internet radio broadcasters have to change from the terrestrial radio production of programmes to a more global production of product, services and programmes (Lilien, & Bruyn, p. 6). Conclusion Global internet usage is increasing at a high rate, and is close to hit 1 billion. 70% of Americans can access internet at home, or at work. The American media research firm Arbitron & Edison in 2009 reported that 57 million Americans used internet radio. The advent of internet radio has helped accelerate globalization because of its influence on culture, economy and social trends. Internet radio provides an enormous platform for advertisers and markets to reach their target groups and advertise their product to the world. This is because internet radio has a wide global appeal. It also has an impact on marketing, production and radio listenership. Work Cited Castro, D. Internet Radio and Copyright Royalties: Reforming a Broken System. The Information And Innovation Foundation. (2007). Page 3-13. Hendy, D. Radio in the Global Age. Polity Press. (2005). Page 150-170. Kozamernik, F & Mullane, M. An Introduction to Internet Radio. Internet Radio. (2008). Page 2- 15. Laszlo, J. Internet Radio Advertising Impact Study. Targetsport-Parks Associates. (2009). Page 3-14. Lilien, G. & Bruyn, A. A Multi-Stage Model of Word Of Mouth through Electronic Referrals. (2008). Page 3-8. Read More