Will Internet Radio Kill the FM Radio Star?

January 19th, 2011 by Staff

www.foxnews.com — Technology companies love to boast about how their services disrupt — in some cases even wipe out — existing businesses. Now they’re taking aim at a business that’s been a mainstay in our lives for over a century: radio.
Streaming music has made incursions against the established music business even since Napster began offering free (illegal) songs; but now a slew of legal online radio stations are crowding the music space. Rhapsody, Slacker, Last.fm, Grooveshark, MOG, and Spotify are just some of the better known services. They range from free streaming radio stations to on-demand subscription services, but the overall goal is clear: they want to take out traditional radio.
There have been threats to radio in the past. When MTV launched in 1981 many expected video to kill the radio star. Of course, that didn’t happen, and now music videos seem like quaint promotional tools, bested by amateur versions on YouTube.
And radio has fought back, notably through HD Radio, which boasts the clarity and fidelity of digital broadcasts. It was a way for local radio stations to compete against satellite radio. While it is widely available across the country and is standard or available as an option on most vehicles, HD Radio isn’t likely to stem the tide of online streaming music.
There’s an important difference today, you see. Until recently, broadcasters didn’t worry much about Internet radio in spite of claims it would kill their business. Why? Because most podcasts and streaming services were desk-bound. Most people listen to the radio when they’re on the go, so why worry about nerds sitting at their computers playing music?
Now streaming online music is making a serious run at the last bastion of broadcast radio: the car.
You can already get Pandora in Ford’s 2011 Fiesta and Mustang, via the Microsoft-powered Sync service. And Alpine and Pioneer offer car stereos that connect to the service, which creates custom radio stations based only on the music you want to hear. Certainly, iPod users and even fans of Slacker and those other streaming services have been playing their music in cars for some time — using their smartphones. It’s a distracting practice, however, especially if the driver looks down to fiddle with his phone.
The Ford, Pioneer, and Alpine approach removes the distraction by putting the controls for the online music services into the car radio itself. In other words, just as you can scan for FM channels using buttons on the steering wheel, you can now do the same for Pandora channels. And it’s a trend that’s poised to sweep the auto industry.
Recently, Toyota announced that it would offer Pandora sometime this summer in a new in-dash system dubbed Entune. Other automakers, including GM, BMW, Mercedes-Benz, and Audi, are also working on similar offerings. Eventually, many expect them to work with other services ranging from Slacker to MOG. When that happens — and what’s on the radio is solely the songs you’ve chosen — will anyone tune in local stations anymore?
Some of the biggest broadcasters in the U.S. say yes. Clear Channel, for example, has a network of over 750 AM and FM stations across the country. And it already has a popular mobile app of its own called iheartradio. The app gives listeners access to stations around the country, as well as to special podcasts. The company says that rather than draining away listeners, the app has added 15 percent more listeners to its total audience.
Even subscription-based Sirius XM thinks it can withstand the onslaught of free, Internet-based streaming services. It has managed to eke out a profit over the last year and retains approximately 20 million subscribers who pay $12.95 a month or more. Sirius says specialized channels with experienced DJs draw listeners, and many fans are enticed by exclusive programs ranging from Howard Stern to Cousin Brucie. The company also points out that Internet-based music services are vulnerable to frequent dropouts when cell phone coverage lapses.
It’s certainly true that with spotty cell phone coverage, Internet music remains an option rather than a mainstay in cars — for now.
The next generation 4G wireless networks could change that as well. David Hyman, the founder and CEO of streaming radio service MOG, points out that Verizon is installing his company’s app onto all of its forthcoming 4G LTE phones this year. And MOG is offering software to help automakers install its service in their cars. MOG is a for-pay, on demand music service that starts at $4.99.
But can monthly subscription or even free online music services really make a significant dent in over-the-air car radio? Hyman invokes the dreaded N word:
“We’re like a Netfix service,” he notes. And we all know what Netflix has done to Blockbuster.

11 Responses

  1. Thomas

    It’s true I think because us as consumers don’t want to listen to local boring DJ’s who play the same song six times a day. People want a choice of who they want to listen to Bubba, Howard or some radio personality based in another part of the country. I won’t speak for others but where I live we have no options unless it comes from Denver and the only show I listen to has trouble at times getting the signal here. Our local radio stations are horrible. We don’t have HD radio here either because it’s not popular. Really, it’s all about choice and getting that choice out to people.

  2. NedsNuts

    Don’t even bother going back to Sirius..they lose. why would you even consider going back. principals are worth more than money.

  3. Your Mom


  4. JD

    To “Your Mom”

    Your a f’ing moron. Stuck on the internet? I would hardly call it stuck. It’s the future of radio. Oh and don’t forget that his show is syndicated in multiple cities on FM radio. You don’t like it? Don’t fing listen you little bitch.

  5. Jason

    First off, I still listen to your show on 102.5 in the morning at least once a week. I did listened to you everyday on Sirius/Xm. I find your show very entertaining and believe that your team helps out a lot of needy people. However, I do not believe that internet radio will kill fm or satellite radio. I do listen to internet radio, Pandora, sometimes when im at home on the computer. I remember when you got kicked off fm radio, Sirius/Xm picked you up when you were down and out. Then you got back on fm radio and now internet radio.. Just my opinion, but I do believe that if you were exclusive to Sirius/Xm then they would have gave you more money. Once you have Sirius/Xm no other radio comes close to what they offer…. Good luck with RadioIO and I hope to hear you back on Sirius/Xm in the future..

  6. No More Sirius

    I canceled my 5 subscriptions with Sirius. I hope to turn them all back on but I won’t until Bubba is back on. I miss the show and I hope you’re still in talks with Sirius.

  7. JAy

    Being a tech person apps such as radioio will work
    as data streaming on smart phones become even faster
    4G is fast but specification wise 4G is not really 4G speed.
    It’s a quite a bit slower.
    SIRRIUS/XM store sold radios are so unreliable
    I canceled my subscription due to the fact that here in Orlando the signal FADES in an out.

  8. Tom

    I use to listen to you guys on Sirius. Im a huge Howard fan and I find myself missing you at 3.In the afternoon. I got an iPad and found you on radioio. It was great to hear you again but wow everyone sounds really stressed out.I hope Howard gets you back on Sirius.

  9. Buck

    Gents, miss you on Sirius. Being in Cali, I am OVER the east-coast centric universe. Shit going on in LA is always aired LIVE in the east, and the RECORDED regurge, is played for us here. My point? You guys have a FL based program, but you still made it relevant to me here in the SF Bay Area. Just wanted to pass it along. As the for the internet vs. FM.- My “local rock station” 107.7 THE BONE with Lamont and Toneli has been on for about 15 years. After hearing you guys, I realized how SHITTY FM really is. Not sure the internet is going to be the immediate solution. I think it’s not the platform that is important, it’s the talent. BTLS has been successful on every platform. I have not followed you to RADIOIO, primarily because I don’t have time to f around with a new system or application. I bought Sirius so I wouldn’t have to go from FM, to sat, to the computer, to my phone, ect. I drive a bit (60 min commute twice a day, and then another 25 min commute twice a day for my second job). I have a phone to make calls, not stream. Come back to an established medium. We all have it, but many of us don’t have the time or energy to jump through any more hoops in life. You guys deserve a deal that makes sense for you and your families, I just hope that includes hearing you again on Sirius.

  10. Rob P.

    I cancelled my two subs in Canada and they offered me $100.00 credit.
    I said no thanks. Internet will be the way to go and to Sirius…good luck to ya.

  11. PJ

    You realy need to post up the Google Analytics so people can see your numbers.

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