Why Traditional Radio is Hosed:
- The iPod. The ultimate personal radio.
- The cellphone. Commuters stuck in traffic were the salvation of radio in the 80s. Now we're still stuck in traffic, but we're on the phone instead.
- The 1996 Telecommunications Act, which liberalized the airwaves, adding a thousand FM stations to the dial and, due to the increased competition, depressing the economics of the incumbents. The act also relaxed the ownership limits in each market, leading to....
- Clear Channel. This giant is often blamed for radio's woes, but it's as much a symptom of the brutal economics in the industry as it is the cause. As the aforementioned competition ruined the business of local radio in the late 1990s, Clear Channel was able to do a roll-up of distressed stations and now owns more than 1,200 of them. Its plan was to dramatically lower the costs of radio with centralized programming and robot DJs. The result, however, was bland homogenization (with one exception). And still radio was broken.
- To whit: Clear Channel just wrote off 4.7$ billion in radio losses. A few days earlier, its main competitor, Viacom's Infinity, wrote off $18 billion. So much for the power of monopoly media.
- Radio listenership is at a 27-year low.
- Music is polarizing. This is why MTV doesn't play music anymore--there is no lowest-common-denominator playlist that enough people agree on to slow the tide of channel switching. The same is true for radio: Top 100, Top 40, Top 10--there is no magic list that can strike the right balance between broad popularity and grinding repetition to keep enough listeners. MTV went to reality TV and other "sticky" programming; radio went to cheap talk radio on the AM dial, where callers provide most of the content for free.
- The chilling effect of the FCC's obscenity crackdown, as evidenced by Howard Stern's departure to satellite.
- Howard Stern's rise in the first place.
- Washington DC's WHFS, my hometown alt.radio station and the soundtrack to my misspent youth, has just switched to spanish.
And what do you know? It's still hosed.