Will AOL Radio Cause The End Of FM Stations?
Thursday, July 29th, 2010Online radio such as AOL Radio, Slacker, Pandora and Last.fm have gained popularity lately. Furthermore, several cordless products including mobile 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 appears to be having a hard time in today’s radio landscape with competing satellite and online radio services taking away listeners by providing commercial-free music and entertainment. The internet has enabled access to a nearly indefinite number of online radio channels.
Numerous online radio services including Pandora are nowadays available on mobile devices such as mobile 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 uses CBS radio as its broadcasting platform. It comes with in excess of 200 music channels. Additionally it offers access to more than 150 local CBS radio stations. The underlying platform “play.it” also has a feature that allows listeners to make their own radio stations by entering preferred albums, artists and so on. The individual tracks of each music channel are also accessible for storage on an iPod via 3rd-party software such as iGetMusic.
Other online music services have followed suit and are offering similar customized music. Pandora and Last.fm allow listeners to enter the name of an artist and then play music by arbitrarily selecting titles by these artist as well as other titles which are comparable in genre or character. On the other hand, most online radio broadcasters lack the ability to create fully customized radio stations such as the “play.it” platform.
Does online radio mean the end of local radio? The increasing number of options evidently is going to shrink the market share of traditional radio broadcasters. Online radio has proved useful specifically for niche broadcasters as a result of the inherently lower broadcasting expense compared with local radio stations.
The large number of available stations is a big plus for online radio listeners. However, this is a difficulty for online broadcasters. This big number of stations is diluting the number of listeners. Therefore streaming radio broadcasters have found it difficult to be profitable. The lower cost of online radio at the same time allows creation of more appealing content than local radio by serving niche markets and inserting less commercials.
Local programming such as news and local events, however, will remain one of the big advantages of local radio. Up to now the poor audio quality of FM radio has been a big disadvantage. On the other hand, recent digital radio broadcasts are set to enhance the audio quality. One of these technologies is HD radio. The big factors that will ultimately determine the destiny of each technology are content and convenience. Online radio and traditional radio each have their own niche regarding providing unique content and both offer high mobility and convenience so there will most likely be no clear winner.