Is AOL Radio Going To Cause The End Of Local Stations?

Online radio services like AOL Radio, Pandora, Slacker and Last.fm have become rather popular lately and are even accessible on various mobile wireless devices including cell phones. Are local radio stations doomed? I will take a closer look at online radio to try to answer this question. In particular I will study the effect of streaming radio on local broadcasters.

Local radio stations do appear to have a difficult time nowadays. Satellite radio has been cutting the market share of traditional radio stations relentlessly in the past few years by offering mobility, a big number of commercial-free music channels along with news and entertainment channels. In particular, online radio has become pretty popular by offering a virtually infinite number of radio stations.

Pandora and other online radio providers have become accessible on wireless audio transmitter and portable products by installing the suitable app. This increases convenience and mobility of online radio. Mobility has thus far been the biggest benefit of local radio.

AOL Radio offers in excess of 200 music channels as well as 150 national CBS radio stations because it employs CBS radio as its platform. The underlying platform “play.it” also has a feature that allows listeners to create their own radio stations by entering favored albums, artists etc. The individual tracks of each music channel are also accessible for storage on an iPod through 3rd-party software such as iGetMusic.

Pandora and other online radio services have in the same way started to offer customized music. The user can enter music-related details such as artist, track or album name. These channels will then pick tracks which are similar to the information entered. On the other hand, most online radio broadcasters lack the ability to create fully customized radio stations such as the “play.it” platform.

Is the extinction of local radio close? The increase of competition from satellite and online radio has started to take away listeners from local radio stations. Conventional radio seems to have a difficult time to halt this trend. Online radio is especially useful for niche broadcasters who have been unable to broadcast due to the high price and licensing of frequency space.

Online radio broadcasters have found it difficult to be lucrative. The major reason is the vast number of competiting channels which is diluting listeners. The lower expense of online radio at the same time allows creation of more interesting content than local radio by serving niche markets and inserting less commercials.

One big advantage of local stations however is local content including news or current events. Furthermore, local radio is now improving the audio quality by using digital broadcast technologies versus traditional FM broadcasts which has been a big advantage of online radio to date. Content and mobility will be essential in deciding the fate of online and local radio. Online radio offers a large number of alternatives while local radio excels by supplying local content. Both online and local broadcasts offer great mobility. As a result it is hard to predict a clear winner in this radio battle.