Saturday, June 26, 2010

AOL Radio - The Extinction Of Traditional Stations?

By Brian Fuller

AOL Radio, Pandora, Slacker and Last.fm are some of the online radio services which have become popular these last few years. Many of these are also available on mobile devices such as cell phones. I will look at the impact of online radio on traditional radio broadcasters to find out if this means the end of local radio stations.

Local radio seems to be having a hard time in today's radio landscape with competing satellite and online radio services taking away listeners by offering commercial-free music and entertainment. There is virtually an unlimited number of online radio stations available.

While traditionally local radio has been the only truly mobile radio, online radio services such as Pandora are now available on wireless audio transmitter and portable devices such as cell phones.

AOL Radio which boasts 200 plus music channels of 25 genres uses CBS radio as its underlying platform. It also offers access to 150 national CBS radio stations. The underlying platform "play.it" also has a feature that allows listeners to create their own radio stations by entering preferred albums, artists etc. The individual tracks of each music channel are also available for storage on an iPod through 3rd-party software such as iGetMusic.

Users can also create customized radio on other online music services by entering the artist and album names and these services will play songs based on that information. Other services, however, fail to offer fully customized music channels.

Does online radio mean the end of local radio? The growing number of options clearly is going to shrink the market share of traditional radio broadcasters. Online radio is particular useful for niche broadcasters who have been unable to broadcast due to the high cost and licensing of frequency space.

The large number of available stations is a big plus for online radio listeners. However, this is a problem for online broadcasters. This large number of stations is diluting the number of listeners. Therefore streaming radio broadcasters have found it difficult to be profitable. However, online radio has less pressure to insert commercials which has made the content more appealing to listeners.

However, local radio has one big advantage over satellite and online radio. That is local content such as local news and events. One drawback of local radio has been the poor audio quality of FM broadcasts. However, that is being remedied by the recent introduction of digital radio broadcasts such as HD radio. It is hard to predict a clear winner in the battle between online and local radio since both offer their own unique content and offer high mobility which are the key factors that will determine the fate of each services.

About the Author: