Will the iPhone Kill Radio?

I remember when the promise of Internet radio was totally hot back in 2000. But as long as it was tied to the PC and Internet radios, it was doomed to a second tier existence.

With the new 3g iPhone all that is changing; and fast. Services like Pandora are emerging as the killer apps of the iPhone. It’s a free, mobile, digital radio station that only plays music you like and lets you skip the stuff you don’t. It's currently the fourth most popular free app on iTunes (behind Apple’s Remote, AIM, and WeatherBug), and has reportedly been seeing a new listener every 2 seconds.

With the launch of Pandora’s new iPhone app last Friday, it looks like the service is about to reach a long awaited critical mass. TechCrunch reported that usage over the past weekend hit an all-time high for the service, with 3.3 million tracks streamed to iPhone listeners alone, with a staggering retention rate of listeners, who are averaging over an hour of listening per day.

The personalized music service employs a team of 50 musicians to create a “Music Genome” that describes each song according to 600 attributes. Listeners input a few of their favorite artists, and the Pandora engine analyzes the Genome to serve up an endless stream of recommended music.

Not surprisingly, Pandora’s usage stats are mind boggling. Pandora is currently the fourth most popular free app on iTunes (behind Apple’s Remote, AIM, and WeatherBug), and has reportedly been seeing a new listener every 2 seconds. Usage over the weekend hit an all-time high for the service, with 3.3 million tracks streamed to iPhone listeners alone. Perhaps more impressive is the retention rate of listeners, who are averaging over an hour of listening per day.

White usage and ad revenues have been shifting away from TV and print at lightspeed in the Digital Age, radio has remained a bit more resilient. The latest technology used to measure ratings -- the Portable People Meter -- shows ratings are down about 30% in the first markets to use these monitors. (Ratings in the past used journals, a far fuzzier approach; the PPM picks up a signal to record exactly which station is tuned on the dial). Despite soaring fuel prices, we are still a car culture. We live in our automobiles and radio still rules there, despite the iPod invasion.

The cellphone will forever change the radio landscape by not only establishing a two-way modality but by ushering in new the most promising new mobile ad formats models that are targeted to people's musical tastes and perhaps locally relevant as well thanks to GPS mapping.