THE END OF RADIO

In 2005, as "shock jock" host Howard Stern prepared to sign off the terrestrial radio airwaves for the last time, he very confidently and aptly predicted its demise.

"Terrestrial radio is dead!" He said at a farewell rally broadcast over WXRK's FM signal. "Satellite is the future."

Stern has since broadcast live shows, with more freedom though less notoriety, over Sirius-XM's closed circuit satellite system. Shortly after Stern signed with the company then known as Sirius Satellite Radio, its subscriber base steadily grew from seven-hundred-thousand to eight-million, rivaling its only competition: the company then known as XM Satellite Radio and its roughly ten million subscribers. Sirius CEO Mel Karmazin then forced a merger to create the nation's lone satellite radio provider.

The merger was held up by the United States Congress and the Federal Communications Commission for an inordinate and unprecedented eleven months: longer than the merger between Exxon and Mobil. The likely reason is that Terrestrial Radio groups like the National Association of Broadcasters poured hundreds of thousands dollars into lobbying against the move, which they argued would create a monopoly.

But fast forward a few months to the present day, and the union of Sirius and XM does not seem to have made the company any more formidable. Inhibitive costs for music licensing and space technology are comparable, in terms of obstacles, to terrestrial radio's dwindling ad revenues and decaying transmission infrastructure.

Howard Stern was not wrong in declaring that "Terrestrial Radio is dead,' but he may not have been on target when he said that "Satellite is the future."

Both companies, like newspapers, face an increasingly hostile consumer and technological environment. As MP3 technology continues to be integrated more and more into phones, cars and homes, the need for music from the radio will dwindle. Other services like Pandora, tailor make music playlists based on the user's tastes. Pandora is now available for phone and car integration as well.

The industry went through a similar crisis in the early second half of the Twentieth Century. Television soap operas and dramas were quickly eclipsing those offered by radio. Before long, it was simply commercially inviable to broadcast something people could see as well as hear.

But radio survived, because as the old saying went "People always need something to listen to in the car."

Now as most automobile manufacturers offer alternatives to radio in cars, the industry will diminish further. Of course, it will still survive. Traffic and weather reports offered by national services like Sirius-XM are unreliable and unspecific. And the great majority of American and foreign cars will likely include AM/FM radios for decades to come. But broadcast corporations like Infinity and Clear Channel will be paying less for talent, will consolidate music stations, and will jack up advertising time to compensate for lost revenue: all the tell-tale signs of an industry on its way to the bottom.

SOURCE: http://media.www.tchnews.com/media/storage/paper840/news/2010/04/12/News/Radio.End.Days-3903612.shtml