Working the clicks without the bricks has proven dangerous, and only those with the most patient pools of venture capital have survived.

Recently, while helping my son excavate the archeological site known as his room, I unearthed an old magazine. Its cover carried a date of September 2000, providing a handy identifier for the age of the particular strata we were working on at the time. Saved from the trouble of Carbon-14 dating the artifact, we celebrated by taking a break from our work. I picked up the magazine and quickly flipped through it, and I encountered an even more interesting discovery.

The publication was focused primarily on streaming media issues, and it immediately struck me how many of the advertisements it contained were for companies that either no longer existed or weren't really doing much of what the ads mentioned anymore. Many of the magazine's articles featured companies who were also now defunct, or had never realized the plans they presented in grandiose terms on those pages.

You could probably pick up any number of old broadcast trade magazines and experience the same sense of wonder at how many things have changed or gone away, but you'd have to reach back at least several years to get much of that effect. Here, the phenomenon had occurred in fairly strong fashion within about half a year. It gave credence to the (already aged) expression that refers to a six-month period as an “Internet decade.”

Straddling the fence

Pity the poor broadcaster who must try to negotiate these radically different environments simultaneously today. One foot walks on ice while the other treads molasses. The difficult changes brought on by consolidation in the broadcast space seem positively glacial in velocity when compared to the travails of the online world.

Nevertheless, this unique duality may be the best thing that could happen to an Internet start-up. Most Internet-only companies that live on the icy side of the fence have now fallen and they can't get up, as the exhumed magazine so starkly revealed. Working the clicks without the bricks has proven dangerous, and only those with the most patient pools of venture capital have survived. On the other hand, those Internet ventures with strong traditional businesses behind them have fared somewhat better, and although many have scaled back their online adventures, the corporations continue, generally wiser for the experience. This careful straddling maneuver, although painful and requiring substantial agility, may be the right (or perhaps the only) way to manage the transition that faces our industry.

Lessons learned

The short term view might conclude that the current downturn in the Internet economy spells the end of a brief fad, and we may wish it good riddance. The more sensible, long-term outlook tells us that we've witnessed the birthing pains of a new giant that will grow — perhaps fitfully, at first — into a long, strong reign.

The pendulum effect that often accompanies new trends may apply here. It provides that early adopters will rush headlong into eager acceptance of the emergent mode, followed by a strong backlash and rejection, which eventually gives rise to a sensible, moderate and widespread adoption. The radical energy must be burned off before the centrist compromise can emerge. (Many in our industry may recall the example of the pendulum's swing on the introduction of stereo production to the record business: First came head-twisting, vertigo-inducing, ping-pong effects, followed by Phil Spector's “Back to Mono” movement, then the ultimate embrace of a mature aesthetic for stereo imagery that continues today.)

In the Internet case, the late 90s served as venue for the outward swing of the pendulum, which hit the peg hard early last year. We're now on the backward side, and probably still have substantial distance remaining before hitting the other wall. In fact, the space we're passing right now may be the middle ground that we'll eventually settle upon, so watch carefully as it goes by. (If you lived here, you'd be home by now.) Complicating this are the some parametric changes now entering the environment, such as broadband and wireless Internet deliveries, along with new music licensing rules. These may set off their own mini-pendulum effects, and the resultant interference patterns may delay stable equilibrium for some time.

How all this shakes out will determine the ultimate fate of radio broadcasters in the digital age. This makes strategic planning a serious challenge, but a little review of (recent) history every so often helps us keep the big picture in mind.