Competition abounds for radio

MP3 players, satellite challenge conventional version of medium

December 15, 2005|By NICK MADIGAN | NICK MADIGAN,SUN REPORTER

In its first 100 years, commercial radio fended off television, record players and the early days of the Internet. Now, with new gadgets such as satellite radios and MP3 players enabling consumers to decide what to hear and when to hear it, conventional radio might be facing its most formidable competition ever.

Tomorrow, when shock-jock titan Howard Stern exits earthbound radio for the burgeoning world of satellite next month, he leaves behind a medium whose audience is spending 17 percent less time listening than it did in 1993. A sense is growing that commercial radio is becoming a technological dinosaur.

"It's become such a secondary medium," said Fred Jacobs, a radio consultant best known for originating the classic-rock concept. "Radio is lacking the buzz that's around satellite and iPods."

But it's too soon to write radio's obituaries.

"Radio is not going to go away," said Dan Burstein, who has written two books on new media technology. "But there might be a much more serious challenge to traditional radio than to, say, newspapers. Most traditional radio has not routinely had premium content. There are a handful of radio personalities, but so much is so similar. There's very little brand loyalty and way too much advertising."

Traditional radio broadcasters are also competing for attention with hand-held digital music players like iPods, millions of which are in use in the United States, as well as music download services, Internet radio stations streaming music through cell phones and various other gadgets, and programs that are giving people innumerable choices.

Recently, satellite radio has generated far more attention than commercial radio. Almost every week, satellite radio, which offers a huge selection of music, news and other programming, seems to unveil a new lure for listeners. XM Satellite Radio, the larger of the two companies in the market, announced Tuesday that the usually media-averse Bob Dylan would host a weekly show.

Last month, XM's satellite radio competitor, Sirius, which had snagged Stern in a five-year, $500 million deal, announced that it will dedicate one of its 120 channels to the music of Bruce Springsteen. The move demonstrates satellite radio's ability to deliver on a listener's specific tastes. Sirius has a station that is all Rolling Stones and another devoted to Jimmy Buffett.

XM has 5 million subscribers and Sirius has 2.2 million, even as both companies acknowledge that they have yet to make a profit. Some analysts have predicted that as many as 45 million listeners will be tuned in to satellite radio by the end of the decade, even though it means buying a special receiver and paying a monthly $12.95 subscription fee.

Commercial radio is trying to fight back. It recently started an ad campaign that mocks radio you have to pay for. And eight of the largest commercial radio companies - including Clear Channel, Infinity and Emmis - announced last week that they will devote $200 million worth of airtime to promote their new technology, high-definition radio, which delivers much higher-quality sound and may enable listeners to pause, rewind and buy digital songs over the air.

About 600 radio stations in the United States, including more than 60 affiliates of National Public Radio, are broadcasting in high-definition quality. The HD technology also gives stations the ability for "multicasting," broadcasting several digital channels on what was previously a single analog channel, thereby offering their listeners more progamming options.

Whether HD will be enough to stop commercial radio's slight but steady leak of listeners remains to be seen.

"Terrestrial radio has been slow to really get its arms around what's been happening technologically," said Jacobs, the radio consultant. "With iPods, the Internet and video games, young people have moved away from terrestrial radio."

Still, Jacobs believes that HD is a promising place for commercial radio to make a stand. "You're going to see a great deal of experimentation and innovation," Jacobs said. "The sky's the limit as to what those broadcasters will be able to do with those channels. Terrestrial radio has an opportunity to be buzz-worthy again."

People in satellite radio don't think much of terrestrial radio's latest attempt to keep its listeners.

The HD channels "will just make it easier to hear commercials better," said Jim Collins, a spokesman for Sirius. "It'll just improve their sound and give them flexibility to have more channels. But you're still talking about stations owned by huge conglomerates with very strict playlists, very homogenous, very repetitive, and chock-full of commercials."

By contrast, Collins said, in three years Sirius has launched 120 commercial-free channels, 65 of them for music and 55 for talk, sports, news, comedy and other disciplines. "That's something you just can't find in normal commercial radio," Collins said. "You just can't get that for free."

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