Am I the only one shocked, mouth agape at the valuation that music streaming companies are receiving? Isn’t that called a radio station, and weren’t they meant to be dead by now? The sheer madness of it forced me to pause and ponder it all for at least a moment or two. And, if you think about it enough, it all sort of makes sense … sort of.
The epiphany came with the realization that business models, especially in the music business, have become very dependent on the average bandwidth consumers have access to. The iPod revolution was really about being able to buy just the song you want, when you want, and having the ability to build your own customized library of tunes to take with you anywhere. Finally, after decades of being a slave to the whims of record labels, the average consumer was back in the driver’s seat. As has been pointed out many times since, the iPod was not the first portable music device (the Walkman came well before it). But have you considered the role that bandwidth played in its success? If the average internet access speed hadn’t been sufficient, the concept of iTunes and its store would not have been possible. iTunes over a 28K dial-up modem? A nails-on-chalkboard pain goes up my spine even thinking about it. I would argue that the launch of iTunes is closely correlated to the adoption of broadband. Though whether broadband enabled iTunes or iTunes helped speed broadband adoption is a chicken-and-egg situation I leave to the reader to ponder ad nauseam.
Live streaming music is not new either. Radio stations have been doing it for years. However, once again I would argue that we've reached a new inflection point in access bandwidth. I remember awkward early music streaming apps. The performance was horrible, selection dismal, and finding a cell signal or wi-fi hotspot good enough to support it was difficult at times. Fast forward to today and we’ve got more than we need. Right now, average sustained bandwidth and signal coverage for both wi-fi and mobile are overkill for streaming music. Moreover, people have grown weary of buying and managing huge music libraries, and it seems like the average lifecycle of a hit song has dropped from weeks to days to sometimes hours. Is it not better to pick a music type that fits the listener and just listen? Throw on top of that the branding aspect, as I can now access the exact same music that Pitbull or Tay Tay are listening to, or get hooked on the latest DJ star. If mobile bandwidth speed or coverage weren’t sufficient, could the music-streaming bidness really be booming?
This is the reason that the Gigabit-to-the-home crowd keeps saying “build it and they will come”. Well, at least that’s what I say. There is really no defensible argument to justify Gigabit to the home, not even 4K UHD video. The best reason to drive Gigabit to the home is that it will enable new business models that we cannot even envision today. Though, with demographic shifts toward the new mobile generation that wants to own nothing (late Millennials and after), perhaps “Gigabit to the phone” would be a better mantra.
And so we’ve gone full circle – from listening to DJs playing popular music over FM radio broadcast from radio towers to listening to DJs playing popular music over the Internet broadcast from cell towers.