Impact of the Mobile Phone on Classical Radio

Impact of the Mobile Phone on Classical Radio

Brenda Barnes (University of Southern California, USA)
Copyright: © 2015 |Pages: 11
DOI: 10.4018/978-1-4666-8239-9.ch096
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Abstract

Television was the first disruptive innovation that impacted radio. Radio adapted by changing its programming to disc-based music, which was less expensive to produce, and changing the revenue model from network advertising to local ads and national advertising. Mobile phones are being used increasingly for music, and since they are as portable and easy to use as radios, they are creating a new wave of disruptive innovation. Currently, radio revenues are holding strong, advertising across traditional and new media platforms is effective, and radio executives are creating apps and trying to activate the FM chip in mobile phones in order to ensure a place on the new platforms. Classical public radio has a slight advantage in that the Internet streaming radio services do not serve classical listeners as well; however, that could change. It will be necessary to monitor changes in technology use and advertising effectiveness to ensure that radio and classical radio remain competitive.
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Introduction

Fagerberg (2005, p. 4) defines invention as the “first occurrence of a new product or process” and innovation as the “first attempt to carry it to practice.” It was Schumpeter who first made the distinction between invention and innovation (Ruttan, 1959; Pavitt, 1990)--“the inventor produces ideas, the entrepreneur ‘gets things done’” (Schumpeter, 1947, p. 152). In the earlier years of his work (Schumpeter Mark I), Schumpeter focused on the role of the inventor/entrepreneur. Later, it became apparent that innovation was more likely to be carried out by firms, not individuals; therefore, the second part of Schumpeter’s career (Schumpeter Mark II) focused on the firm and its role as manager of innovation (Freeman & Soete, 1999).

In addition to distinguishing between invention and innovation, Schumpeter described four types of innovation: product innovation, organizational innovation, management innovation, and technological innovation (Pavitt, 1990; Hall & Preston, 1988). Rothwell (1992) adds another category he terms marketing innovations that can include new financing arrangements, a new method of selling, and so forth. Christensen (1997) adds the category sustaining and disruptive technologies or innovations. Sustaining innovations improve the performance of existing products and disruptive innovations offer something new to the marketplace. Christensen’s thesis is that failure to recognize the importance and value of disruptive technologies is a leading cause of business failure.

Information and communications technology is a disruptive innovation to radio creating new ways for listeners to access music and creating new competitors for music formatted radio stations. The mobile phone is emerging as a major platform in this arena.

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Overview

This article explores the current dynamic between classical music in traditional media and new media environments with emphasis on the mobile phone and its role in changing the economics of the music business. This is a relatively new field of study; therefore, it is necessary to consider several threads of academic literature. For the development of radio see Erik Barnouw Ph.D. formerly of Columbia University, and Robert W. McChesney Ph.D., University of Illinois at Champaign-Urbana.

For literature about the development of public radio see Jack W. Mitchell Ph.D. of University of Wisconsin Madison and Wick Rowland Ph.D. of the University of Colorado Boulder. For a history of research on cannibalization and convergence see Henry Assael Ph.D. New York University Stern School of Business, Prasad Naik Ph.D. University of California Davis, and Kalyan Raman Ph.D., Northwestern University. The Pew Research Center is an excellent source of information about technology usage.

Key Terms in this Chapter

Synergy: When the impact of two forms of media exceed the sum of the parts.

Disruptive Innovation: Innovation that impacts the customer and/or revenue base of an established industry.

Convergence: When traditional and digital advertising reinforce one another.

Cannibalization: When traditional and digital advertising compete with one another.

New Media Technology: Also known as information and communications technology or digital technology.

Classical Public Radio: A nonprofit radio station that offers disc-based classical music programming.

Innovation: Bringing an invention to market.

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