AOL Radio – The Extinction Of FM Radio?

Online radio such as AOL Radio, Slacker, Pandora and Last.fm have gained popularity recently. Additionally, several wireless products including cell phones support these platforms. Are local radio stations doomed? I will take a closer look at online radio to attempt to answer this question. In particular I will investigate the impact of streaming radio on local broadcasters.

Local radio stations do seem to have a difficult time these days. Satellite radio has been cutting the market share of previous radio stations severely in the past couple of years by providing mobility, a big number of commercial-free music channels in addition to news and entertainment channels. Specifically, online radio has turn out to be fairly popular by offering a practically indefinite number of radio stations.

Numerous online radio services such as Pandora are nowadays available on mobile devices including cell phones and other wireless audio devices via appropriate apps. This adds mobility to online radio which has still been the trump card of local radio stations.

AOL Radio offers in excess of 200 music channels and in addition 150 national CBS radio stations since it utilizes CBS radio as its platform. Listeners can also make their own customized radio stations at the CBS radio “play.it” website and save each track for playback on an iPod by using 3-rd party software iGetMusic.

Users can also create customized radio on other online music services by entering the artist and album names and these providers will play songs based on that information. However, most online radio broadcasters lack the ability to create fully customized radio stations such as the “play.it” platform.

Is the extinction of local radio near? The increase of competition from satellite and online radio has started to take away listeners from local radio stations. Conventional radio seems to have a difficult time to stop this trend. Particularly niche broadcasters have found online radio very practical. The main reason is the low broadcasting expense of online radio in comparison with terrestrial radio. One more cause is the difficulty acquiring frequency spectrum licenses from the FCC. Nonetheless, rising royalty charges have made the life of online broadcasters more difficult lately.

The large number of available stations is a big benefit for online radio listeners. However, this is a difficulty for online broadcasters. This big number of stations is diluting the number of listeners. Consequently streaming radio broadcasters have found it difficult to be profitable. At the same time, on the other hand, there is less pressure to insert commercials because of the lower costs of broadcasting compared with conventional stations. This has made online radio content more appealing than terrestrial radio.

Local programming such as news and local events, nonetheless, will remain one of the big advantages of local radio. One downside of local radio has been the poor audio quality of FM broadcasts. Nonetheless, that is being remedied by the latest introduction of digital radio broadcasts such as HD radio. It is difficult to predict a clear winner in the battle between online and local radio because both offer their own unique content and high mobility which are the essential aspects that will decide the destiny of each service.