John Allen Hendricks. The Business of Entertainment. Editor: Robert C Sickels. Volume 2: Popular Music. Westport, CT: Praeger, 2009.
The late twentieth century brought about rapid technological advancements in the communications industry. In an effort to address antiquated federal regulatory legislation, the U.S. Congress examined and scrutinized the Communications Act of 1934 and determined that it was indeed antiquated and needed to be replaced with legislation that would address the issues and challenges facing the communications industry of the twenty-first century. Moreover, during the 1980s and 1990s, there was a movement toward deregulation of numerous industries, including the communications industry, to stimulate competition in the consumer marketplace. Thus, Congress passed the Telecommunications Act of 1996, and it was signed into law by President Bill Clinton. The 1996 act replaced the 1934 act but kept the Federal Communications Commission (FCC) as the regulatory agency for the communications industry and kept the “public interest” standard as a tenet for twenty-first-century terrestrial media, which required licensees to operate radio stations in a manner that benefits the public’s interests and needs.
There were several aspects of the telecommunications act of 1996 that many industry observers found controversial and that played a pivotal role in determining the programming content available to consumers. First, economists posited that deregulation would stimulate competition in the marketplace, but that was not what occurred in the media marketplace upon deregulation because large conglomerates were (a) permitted to own up to 45 percent of the nation’s television households, (b) cross-ownership of television stations and newspapers was permitted for the conglomerates, and (c) there was an elimination on all national radio ownership caps, which allowed for ownership of multiple stations in multiple media markets. Thus, the act promoted a concentration of power in the radio industry instead of creating a competitive environment. Second, the 1996 act made license renewals automatic for licensees and extended the period of time a license is effective. These instances created an environment in which the radio industry was owned and operated by a small group of conglomerates that served as informational and musical gatekeepers to millions of television and radio listeners throughout the nation.
The effects of deregulation from the 1990s were far different than the purported intentions, especially as concerns the end result for users. In fact, consumers found themselves listening to homogenized, bland formats that did not allow for the introduction of diverse and niche music and programming genres. In fact, as a result of deregulation, four companies controlled more than 50 percent of the total listening audience in regard to 28 out of 30 of the major music formats, while just two companies controlled 42 percent of all radio listeners in the entire nation.
Deregulation: An Examination of Its Shortcomings and Impact on Consumers and the Music Industry
The 1996 act allowed corporations to own up to 35 percent of the nation’s television viewing households. In 2003, the FCC increased the national ownership cap to 45 percent and also granted approval for television-newspaper cross-ownership to occur. This was controversial because it allowed for additional deregulation in an industry where there still remained a robust debate as to whether the move to allow for deregulation in the 1996 act was the best decision, thus creating an environment where only a few conglomerates would own a majority of the television broadcast frequencies, which had the potential to limit multiple perspectives and opinions.
The 1996 act eliminated all national radio ownership limits and allowed for conglomerates to own multiple stations in multiple media markets throughout the nation. The duopoly rule for radio, where two conglomerates or owners were not allowed to have firm control of a media market, was repealed, allowing for the ownership of up to 8 radio stations in media markets with 45 or more radio stations, 6 radio stations in media markets with 15 to 29 radio stations, and 5 stations in smaller media markets with less than 15 radio stations. Critics argued that the 1996 act promoted a concentration of power and conglomerate mergers rather than creating a competitive environment in the media marketplace.
The 1996 act also extended the length of time that licenses were effective from seven years to eight years. But, more importantly, the 1996 act created a situation where license renewals were automatic unless the licensee requesting renewal had demonstrated a pattern of (1) not serving the public interest, (2) demonstrating serious rule violations, and (3) not violating other regulations that combined would constitute a pattern of abuse. Unless these three things combined could be demonstrated by anyone wishing to challenge the license renewal, there was an automatic renewal to the existing licensee. This was a vast departure from previous practices where licensees were required to prove they were serving the public interest and had earned the privilege of receiving a license renewal. DiCola and Thomson note that the 1996 act “virtually ruled out the possibility of licensees being challenged by competitors on the grounds of their public behavior.” Prior to 1996, it would cost large sums of money in legal fees for licensees to defend their right to maintain the license and frequency assignment.
The purpose of the deregulatory nature of the Telecommunications Act of 1996 was not only designed to stimulate economic growth in the communications industry but also to advance the “core public interest concerns of promoting diversity and competition.” The marketplace was indeed stimulated with billions of dollars worth of media mergers taking place just prior to and after the 1996 act was signed into law. In anticipation of the bill’s passage, Chancellor Broadcasting Company owned by Roy E. Disney, a nephew of Walt Disney, paid $395 million for 17 radio stations located in many of the largest media markets in the nation, including New York, Los Angeles, San Francisco, Houston, and Atlanta. In 1995, Infinity Broadcasting Corporation purchased 12 radio stations from Pyramid Communications for $306 million.
Rather than promote diversity and competition, one study found that two companies alone—Clear Channel Communications and Viacom—were in control of 42 percent of radio listeners and 45 percent of radio revenue. The same study found that only 10 companies controlled two-thirds of all the listeners and all the revenues of the radio industry. In the case of Clear Channel Communications, it owned 1,240 radio stations throughout the nation, reaching more than 100 million listeners or nearly one-third of the entire U.S. population. This consolidation of ownership had a tremendous impact on the music industry. The same study revealed that only four companies controlled over 50 percent of the total listening audience in regard to 28 out of 30 of the major music formats available to consumers.
Peter DiCola, the Director of Economic Analysis for the Future of Music Coalition, asserted:
Radio consolidation has no demonstrated benefits for the public. Nor does it have any demonstrated benefits for the working people of the music and media industries, including DJs, programmers—and musicians. The Telecom Act unleashed an unprecedented wave of radio mergers that left a highly consolidated national radio market and extremely consolidated local radio markets. Radio programming from the largest station groups remains focused on just a few formats—many of which overlap with each other, enhancing the homogenization of the airwaves.
Gigi Sohn, the Executive Director of Media Access Project, agreed that there is a homogenization of radio formats, observing everything sounds the same regardless of which city the radio station is located.
Some listeners complain of the blandness of radio formats or the repetitious nature of post-deregulatory programming. Paragon Research conducted a study to determine whether listeners believed radio programming was repetitious and found that 84 percent of listeners thought radio stations should stop playing the same songs over and over, 75 percent of radio listeners thought that stations should play more than one or two songs from a CD or album, and 54 percent of radio listeners thought stations should play more unfamiliar music.
Clear Channel Communications benefited enormously from the passage of the 1996 act and has been the target of much criticism as a result of its impressive dominance of the radio industry and aggressive business practices. Clear Channel is headquartered in San Antonio, Texas, where in 1972 the company started with one radio station; it now owns more than 1,200 radio stations throughout the United States. Not only does Clear Channel own more radio stations than any other media conglomerate, but it also owns concert, or live entertainment, venues throughout the nation. The company has been accused of forcing musicians to perform in its concert venues or not have their music played on Clear Channel radio stations.
In 2003, the Senate Judiciary Committee examined the issue of payola, which is a pay-for-play system in which radio station owners require payment from artists and record companies before music is played on radio stations. Despite the fact that payola is an illegal practice in the radio industry, critics of Clear Channel Communications allege that the conglomerate is engaging in the practice. In 2003, Clear Channel Communications adopted a policy that ended the practice of payola in which promoters of music had to pay radio stations to have the music they were promoting played on stations owned by Clear Channel Communications.
Pay-for-play, or payola, is big business for the industry. Studies show that nearly $100 million is spent annually by record companies through middlemen, known as “indies,” to serve as promoters of a record company’s music. The consolidation of radio stations has encouraged the use of pay-for-play. Katunich noted, “With multiple stations in the same market controlled by one entity, the number of station outlets available—should a station in one market refuse to air a song—is considerably reduced,” which encourages record companies to participate in payola. Moreover, “New radio conglomerates hungry for revenue to compensate for the expensive consolidation process are exploiting potentially illegal ways to increase profits through joint marketing airplay, promotions, and free radio concerts.”
Pay-for-play can influence not only which songs are played on radio stations but also which songs are heavily promoted to radio listeners and consumers of music. For example, if a large radio station wishes to sponsor a concert to generate a profit, the station will offer a band or artist less than the usual performance price to appear at the concert. If the band rejects the radio station’s offer, the radio station has the ability to stop playing the performer’s music. And, with large conglomerates such as Clear Channel Communications owning the vast majority of radio stations throughout the nation, it could have a detrimental impact on the success of the performer. One observer characterized this as “extortion” by the conglomerates. Critics of payola suggest that the system promotes bland, homogenized music that was simply the highest bid from an “indie” rather than “good” music that radio listeners and music consumers actually desire.
As a result of the pay-for-play investigation that involved major radio conglomerates such as Clear Channel Communications and others, the FCC concluded that there was inappropriate business practices occurring and that the conglomerates should be required to air 4,200 hours of local and independent music. The Future of Music Coalition blog stated, “This meant that the talented artists that had long been excluded from the airwaves in favor of payola driven play lists were finally getting a small bone.”
Financially, though, this did not mean much to the independent musicians because Clear Channel Communications required independent musicians to waive their performance rights to prevent the conglomerate from having to pay royalties on the airing of the music. Moreover, when the Digital Performance Act was established, the NAB successfully worked behind the scenes with legislators to ensure that the conglomerates would not have to pay performance rights to musicians from music played on high definition radio. The Future of Music Coalition stated, “That’s right, the richest, largest and most powerful broadcasters—including Clear Channel—secured an exemption for themselves. Other digital broadcasters such as Live365, Sirius, and XM pay the royalty.”
In 2002, there was an attempt by U.S. Senator Russell Feingold (D-Wisconsin) to get legislation passed, titled “Competition in Radio and Concert Industries Act,” which would have prevented monopolistic practices from occurring in regard to the ownership and control of live entertainment venues. At a hearing on the matter by the U.S. Senate Committee on Commerce, Science and Transportation, Senator Feingold stated,
I have been hearing from independent radio stations and concert promoters in Wisconsin who are being pushed out by anti-competitive practices that are in turn a result of concentration. The Telecommunications Act of 1996 opened the floodgates for concentration in the radio and concert industry, and that’s exactly why we are here today—because we need to repair the damage that has been done through this anti-competitive behavior.
At the 2003 Senate hearing on radio consolidation and deregulation, the CEO of Clear Channel Communications, Lowry Mays, argued that the Telecommunications Act of 1996 actually saved the radio industry from financial collapse noting that before the 1996 act was passed more than half of the radio stations in the nation were not performing well financially and were in the red. Mays noted that while the top 10 largest corporations owning radio stations do indeed produce 44 percent of the industry’s revenue, only 5 record labels control 84 percent of CD sales. Additionally, Mays noted that concert ticket prices have increased to account for a decrease in CD sales to listeners and fans and did not attribute the rise in concert ticket prices to anything that Clear Channel Communications was responsible for through its live entertainment venues.
The regulatory changes of the 1996 act created a situation where programming choices for radio listeners were scaled back. One study noted that oligopolies, a situation where a few producers have a significant affect on the entire market, exist in geographic media markets and music formats and asserts the “consequences of geographic and format oligopolies have more acute effects for the listening public, small businesses, and musicians.” In a study titled “False Premises, False Promises: A Quantitative History of Ownership Consolidation,” it was found that large conglomerate-owned radio stations tend to choose from approximately eight music formats, or genres, thus excluding many niche musical formats such as Classical, Jazz, Bluegrass, New Rock, and Folk. DiCola and Thomson asserted, “consolidation reduces the number of gatekeepers controlling access to the airwaves.” For example, if one company owns most of the stations that format a specific music genre, then that company controls which musicians get air play on radio stations.
As a result of ownership consolidation within the radio industry, there now exists a consolidation of formats. DiCola and Thomson suggested: “Few firms controlling a format may mean less competition and less innovation in playlists, resulting in less diversity and less interest.” In contrast, an FCC study found that “consolidation has played a very little role in playlist diversity, although this might not be the case in smaller markets.” DiCola and Thomson believe that a lack of diversity in radio music playlists has become a reality.
A lack of diversity in the playlists is not the only thing some observers of the radio industry have noticed since the passage of the 1996 act. WQBHAM was an African American-owned station in Detroit that programmed liberal to moderate talk shows, gospel music, and religious programming but is now owned by a conglomerate, Salem Communications. Now, WQBH no longer exists and has not only changed its call letters to WDTK but also programs conservative talk shows and religious programming on the weekends only. One Detroit radio industry observer noted, “The Federal Communications Commission has destroyed community radio by letting all these big conglomerates buy these stations. It’s leading to the destruction of minority-owned small stations—stations all over the country.”
In their study, DiCola and Thomson found that every radio format available to radio listeners, except for Adult Standards and Nostalgia, is controlled by an oligopoly. Thus, musicians find it difficult to get airplay time for their music because over 60 percent of radio listeners are controlled by oligopolies—or a small number of radio station owners. DiCola and Thomson observed: “This makes it much harder to gain airplay because only a large promotion budget can get a musician and a song through the bottleneck … Coupled with the growing practice of centralized programming, the reduced number of gatekeepers makes access to the airwaves far more difficult for musicians, especially local musicians.” Perhaps more alarming to musicians and listeners is the fact that some conglomerates have blacklisted musicians for holding political beliefs that are contrary to the conglomerate’s political beliefs.
Clear Channel Communications and Cumulus Media banned all music performed by the Dixie Chicks from being played on radio stations owned by the two conglomerates because Natalie Maines, the lead singer of the Dixie Chicks, criticized President George W. Bush and the Iraqi War. Tom Petty’s song “The Last DJ” was also banned by some radio stations because it was considered antiradio. In response, in a Rolling Stone interview, Petty said, “I don’t really give a flying fuck about any of it. I’ve tuned out. But I was elated when my song was banned. I mean, nothing could have complimented me more than to hear they banned it at such-and-such a station because it’s anti-radio. Now, in 2002 to have a song banned that doesn’t have a dirty word, doesn’t advocate violence—it’s fascinating, you know. Like, what are you afraid of? No record has ever been made that was more pro-radio, you know.”
In an effort to protest further deregulation that was considered by the FCC in 2003, 30 well-known recording artists signed a letter of protest that stated that deregulation had “reduced marketplace competition, reduced programming diversity and the homogenization of playlists, reduced public access to the airwaves for local programming, and reduced public satisfaction with listening options.” The petition was signed by artists from all musical genres, including Jimmy Buffett, Don Henley, Toby Keith, Tim McGraw, Stevie Nicks, DJ Spooky, Pearl Jam, Tom Petty, Bonnie Raitt, and others.
New Media: Satellite Radio and Podcasting
The rapid proliferation of the World Wide Web has enabled and encouraged innovative ways to distribute information and entertainment. Traditionally, terrestrial radio and television were the primary outlets consumers used to access and listen to music and other types of entertainment. But, the appearance of and mainstream adoption of new media is changing the traditional media landscape. In 2007, at a Congressional hearing on the radio industry, W. Russell Withers, Jr., the founder and owner of Withers Broadcasting Companies, stated: “Now, radio stations are competing for the same advertising dollars as television, cable, newspapers, Internet sites and huge Internet aggregators like Google.”
Also, satellite radio is increasing its audience size because most new vehicles sold now come equipped with a satellite radio. Currently, there are two satellite radio providers, XM and Sirius. In 2007, there were attempts to merge the two satellite radio providers. Interestingly, although not linking the negative assertions about the merger of the two satellite companies to the traditional radio industry, members of the traditional radio industry proposed that if the merger was permitted by Congress that many of the predicted negatives were exactly what critics of traditional radio charged had occurred when deregulation was permitted within that industry. Withers stated, “A monopoly in satellite radio would clearly harm consumers by inviting subscription price increases, stifling innovation and reducing program diversity.” In 2008, the U.S. Department of Justice ruled that the merger could occur.
DiCola and Thomson noted that proponents of the 1996 Telecommunications Act suggested that “financially sound radio stations would be able to compete more effectively against new media competitors” such as cable television and the Internet. And, former FCC chairman Michael Powell, believed that competition from the emergence of new media such as satellite radio and the Internet balanced the power gained by the conglomerates over traditional terrestrial radio and broadcasting. However, when Powell was considering initiating additional deregulation of the broadcasting industry in regards to television stations, one observer noted:
If you think concentration in Old Media is okay because New Media will provide the discipline, then stand up for freeing the New Media from the shackles that Old Media are trying to weld on. Because if you’re not serious about freeing the New Media, then you’re not serious about competition, and what you’re describing isn’t a bold new world, but a sellout.
Boehlert noted, “When one company dominates an industry, it can leverage its monopoly power in all kinds of unpleasant ways, both politically and economically.”
As one observer of the radio industry noted, the “deregulation of radio was tough on good-neighbor radio because Clear Channel and other conglomerates were anxious to vacuum up every station in sight for fabulous sums of cash and turn them into robot repeaters … With a whole generation turning to iPod and another generation discovering satellite radio and Internet radio, the robotic formatted-music station looks like a very marginal operation indeed.” Another observer offered additional criticism of terrestrial radio: “By the 1990s terrestrial radio had ceased being entertainment. Instead it became a real estate grab and a political game.”
The traditional radio industry has had a difficult time integrating Internet radio as a means to offer ancillary programming to listeners. The Copyright Royalty Board (CRB) was criticized by the National Association of Broadcasters (NAB) for implementing copyright law it deemed incompatible with traditional radio practices. Specifically, there were three copyright conditions the NAB requested to be removed from the traditional radio stations who stream audio via the Internet, which included (1) the prohibition of playing three tracks from the same CD within a three-hour period, (2) the prohibition of pre-announcing songs, and (3) the requirement of providing text data identifying the programming. Withers noted, “Radio stations should not be forced to choose between either radically altering their over-the-air programming practices or risking uncertain and costly copyright infringement litigation.”
Satellite radio is growing in popularity. As one observer noted, “In a marketplace where seemingly every company wants evergreen monthly charges on consumer’s credit cards, satellite radio delivered a product that millions upon millions of end users thought was worth it and they bucked up.” Several core approaches are believed to have contributed to the success of satellite radio. They include the ability to offer satellite radio listeners local programming through traffic reports and weather reports in the major media markets, offering better programming based on listener preferences, having a satellite radio installed in all news cars, and increasing the audible quality of sound of satellite radio through digital quality audio and surround sound.
By 2001, technological advancements permitted audio files to be transferred to and from Web pages thus creating a rudimentary form of podcasting. A podcast is an mp3 file that is located on Web pages for consumers to download and listen to at a convenient time, known as time shifting. There are many Internet podcast, or mp3, portals, such as iTunes, that permit consumers to purchase music and download it to mp3 players or download programs, similar to traditional radio programs, that discuss specific topics. Hendricks noted:
As a result of this technology, consumers can listen to podcasts at their convenience. Traditional terrestrial broadcasting does not offer consumers this flexibility, or time shifting. If a listener misses a favorite radio show, then he must wait until the following day or week when the show is programmed. Podcasts significantly change this listening paradigm by offering consumers the ability to access programming and listen to it at a time that is convenient to their schedules.
In 2005, one study indicated that approximately 11 percent of all Americans own iPods. Moreover, one study indicated that more than a billion songs have been downloaded for podcast, or mp3, use. Podcasting is being marketed to not only an older consumer but also to younger consumers in their teens and preteens with such programming as Disney’s High School Musical and Nickelodeon’s Zoey 101. Most importantly, podcasting permits consumers to access the genre of music they desire, and it permits consumers to listen to that music when and where they desire. Traditional radio cannot make that claim. Niche programming, diverse programming, and consumer driven programming are the desires of the twenty-first-century music consumer, and podcasting offers it all to consumers.
Low Power FM Radio Stations
On January 20, 2000, the FCC authorized the issuance of licenses for a new form of terrestrial radio referred to as low power FM (LPFM) radio, and the rules for this new type of broadcast license became effective on April 17, 2000. Although noncommercial educational facilities are eligible to apply for a license and operate a LPFM radio station, individuals are not permitted to apply for a license. The maximum wattage for a LPFM station is 100 watts, which would provide geographic coverage of approximately three and a half miles, while the 10 watts is the smallest LPFM station and would provide geographic coverage of approximately one to two miles. There will be no commercial LPFM radio station licenses issued by the FCC nor can companies currently owning cable systems or newspapers be granted a LPFM radio license. The FCC must specify certain windows of time when applications can be submitted for a LPFM license.
The NAB, a powerful lobbying group that represents traditional terrestrial broadcasters, has successfully opposed the full-scale licensing of LPFM radio stations. The NAB argued that LPFM radio would introduce technical interference by being placed alongside traditional FM radio stations on the radio dial. In 2007, at a Congressional hearing on the future of radio, Withers stated, “local broadcasters do not oppose the licensing of LPFM stations.” Coincidentally, in the same testimony before Congress, Withers stated, “local broadcasters oppose S. 1675, the Local Community Radio Act of 2007,” which allowed for licensing of additional LPFM radio stations.
In 2000, there was Congressional wrangling over whether the LPFM radio stations should continue to be allowed to exist. The FCC allows for public comments when such matters are considered, and the LPFM radio issue generated more than 3,000 written comments from the public, which was more than the FCC had received in its entire history on any single issue. Additionally, the LPFM radio issue had an impressive list of supporters, including the Green Party, the Catholic Conference, the Library Association of America, the ACLU, the Council of Calvin Christian Reformed Church, Native American tribes, the United Church of Christ, and several high-profile celebrities such as Jesse Jackson and Bonnie Raitt. Initially, not only did the NAB oppose LPFM radio, but also National Public Radio (NPR) opposed the concept. Public Radio’s Regional Organization recommended that LPFM radio be delegated to the Internet and not the FM spectrum despite the fact that more than 100 million Americans lacked Internet access.
The traditional radio industry encouraged Congress to push through legislation increasing the use of FM translators, which allows for the retransmission of existing radio signals to further points in a geographic area. Withers stated, “Affording preferential treatment to new LPFM stations would jeopardize FM stations’ delivery of important, locally-oriented programming to many parts of the country via FM translators.”
In June 2007, U.S. Congressmen Mike Doyle, a Democrat from Pennsylvania, and Lee Terry, a Republican from Nebraska, announced their intention to introduce legislation that would promote the creation of more LPFM radio stations. The Future of Music Coalition Blog viewed this as a positive move for the music industry and stated, “Given the shrinking playlists and bland programming brought about by radio consolidation over the last decade, low power FM has the potential to create radio that is truly radio: local voices, cutting edge music and genres that are not regularly heard on commercial radio.”
Low power FM radio stations have the ability to serve underrepresented community groups and musical genres that have been overlooked by large, mainstream, traditional radio stations owned by conglomerates. A fact sheet from the Future of Music Coalition asserts: “Music that is not perceived as highly profitable is not usually heard on the radio in many communities, impacting the livelihoods of many musicians, including jazz, classical and world music artists. Musicians find it increasingly difficult to reach listeners via the airwaves, while presenting organizations, orchestras and opera companies have fewer opportunities to promote their performances and broaden their audience base.” Illustrating this point, the Future of Music fact sheet on LPFM radio stations pointed out that Opelousas, Louisiana, was the birthplace of Zydeco music, but the genre could not be heard on local radio stations until a LPFM radio station was licensed to that community.
Moreover, LPFM radio stations offer women and minority opportunities to own and work in radio, musicians are afforded valuable airtime for new and diverse music, religious groups get access to airtime, farmers benefit from agricultural information that can be targeted to that demographic, and LPFM radio stations provide yet another viewpoint. Proponents of LPFM radio stations note that 51 percent of the population is female, but only 6 percent of radio stations are owned by women; also, 33 percent of the population consists of ethnic minorities, yet only 7.7 percent of all radio stations are owned by minorities. Low power FM radio has the potential to improve these statistics.
Observers of the LPFM radio movement, noted that the low wattage stations have not been as successful as groups such as the National Federation of Community Broadcasters (NFCB) had hoped. Proponents of LPFM radio stations believe the licensing process is too slow with the FCC and is risky on the front end of the venture because the FCC requires that the LPFM stations be built in advance of a license being issued. Also, the existing LPFM radio stations have failed to offer the diverse programming some had predicted. Silverman stated, “nearly half of the 710 low-power permits the FCC issued have gone to religious organizations.” A LPFM radio station success story, however, is KEDU-LP in Ruidoso, New Mexico, which broadcasts both local and international news, music, and a women’s football team; the station relies on local DJs with local programming.
Future of Radio
Technological advancements are having profound influence on traditional mass media in general and particularly the radio industry. The Internet and other new media such as LPFM radio offer unprecedented outlets and choices to music consumers. Perhaps more importantly, the Internet and new media technologies are enabling music consumers to obtain music and information that is tailored specifically to their individual interests. Technological advancements are providing consumers the ability to have more control of what they listen to and when they listen to it, rather than to have it all filtered by large media conglomerates.
Regarding new technology’s impact on radio and music listening habits, one study noted that the dialogue was well underway regarding whether podcasting is simply a fad that will soon fade or a rapidly proliferating new mass medium that will rival modern radio. It is not evident if one considers that Adam Curry, the individual considered to be the founder of podcasting, has a “traditional” radio show on Sirius satellite radio that can be listened to with traditional radio receivers versus an mp3 player. However, in contrast, one could also point to the fact that satellite radio differs greatly from traditional radio and is actually a form of new media similar to podcasting. In this regard, Greenlee stated, “podcasting is more about the grassroots creation of audio content and listener control than about being a technological revolution.”
As new media such as podcasting, satellite radio, Internet radio, and LPFM radio generates more advertising revenue and listener support, Greenlee asserted that “all the same issues of distribution and advertising placement will come back into play and the model that made broadcast radio successful will make podcasting [and all other new media] a commercial success.” The sizeable new media listener base should remain steady as young consumers of music mature and remain loyal to the technological advancements. Also, it is possible that technological advancements will continue to attract new and younger listeners to other Internet-based interfaces, thus creating the possibility that traditional radio listenership will continue to decline. Specifically, regarding satellite radio, observers noted, “As these new satellite services mature and grow in popularity, they will become an increasingly important vehicle for fans who delight in the discovery of music.”
Internet-based technology such as Pandora, which is an Internet radio station that can be listened to on computers and home entertainment systems, offer a truly extraordinary experience for consumers of music. Other popular and growing Internet radio services include AOL, Musicmatch, and Yahoo!’s Launch. Using a “musical taxonomy” called the Music Genome Project, once the listeners provide Pandora with the name of a favorite song or artist, the listener is then provided a list of artists and Internet radio stations that precisely match their musical tastes. Pandora boasts 8.5 million registered users and is the third largest Internet radio service in the United States. Furthermore, studies indicate that music listeners prefer niche programming, and Pandora-type technology certainly takes it to an elevated level.
Regarding Pandora, Westergren stated, “Something unique about Pandora is that all music, once analyzed by our musicologists and entered into our database, wins and loses audience in the purest of democratic processes. If listeners vote ‘thumbs up’ a song and artist are electronically added to more station playlists, the exposure is greater, and more people can offer opinions about that music. If listeners consistently vote ‘thumbs down’ then the song is performed and heard less.” Pandora has a music library of hundreds of thousands of songs from all genres that “range from the most popular artists to the completely obscure.” Furthermore, while only 10 percent of the music on traditional radio is performed by independent musicians, on Pandora that number is more than 50 percent. This is indeed the future of radio precisely because music consumers are adopting these new technologies and all of its advantages over traditional radio. In total, Internet radio boasts more than 70 million listeners, while traditional radio and homogenized music formats are losing listeners.
Above all, to maintain its listener base and effectively compete in the marketplace, traditional radio must confront several important constraints that new media do not face. New media posses several advantages: (1) the popularity for new media illustrates consumers’ desires for niche programming; (2) new media can be archived for later use, or time shifted; (3) audiences are attracted to the less intrusive advertising used in new media versus the commercial breaks that interrupt programming in traditional broadcasting; and (4) new media programming is mostly unregulated by the FCC. In sum, traditional broadcasting remains strong, but the industry must stay alert as emerging technologies offer listeners more personal, unfiltered programming options for music aficionados.
In conclusion, David Kusek and Gerd Leonhard note, “Podcasting is pirate radio for the twenty-first century, and will have as profound an effect on traditional radio as blogging has had on publishing.” The reason that podcasting, along with other forms of new media such as satellite radio and LPFM radio stations, is expected to have a significant impact on the future of radio is due in part because of its ability to deliver interesting, diverse, and new music along with consumer driven programming. New media also offer less repetitious programming and less homogenization in regard to programming. The future of radio is reliant upon its ability to recognize and deliver better programming based on listener preferences in accordance to the desire of consumers to hear what they want to hear when they want to hear it as they can with other new media such as iPods, Satellite radio, and LPFM radio. Despite the emergence of new media, the traditional radio industry remains robust and has a long history of successfully adapting to competition (e.g., television), and consumers will remain the beneficiaries of this competitive media marketplace in the twenty-first century.