Online radio such as AOL Radio, Slacker, Pandora and Last.fm have gained attractiveness recently. Moreover, a lot of wireless devices including mobile phones support these platforms. Does this mean the end of conventional radio stations? I will take a look at the influence of streaming radio on the radio landscape.

Local radio stations do seem 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 providing mobility, a big number of commercial-free music channels in addition to news and entertainment channels. The internet has enabled access to a practically indefinite number of online radio channels.

A lot of online radio providers such as Pandora are now available on mobile products such as cell phones and other wireless audio devices via appropriate apps. This adds mobility to online radio which has still been the trump card of local radio stations.

AOL Radio which features 200 plus music channels of 25 genres uses CBS radio as its underlying platform. It also provides access to 150 national CBS radio stations. Listeners can also create their own customized radio stations at the CBS radio “play.it” website and save each track for playback on an iPod by utilizing 3-rd party software 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, on the other hand, fail to offer fully customized music channels.

Does online radio mean the extinction of local radio? The growing number of options clearly is going to shrink the market share of traditional radio broadcasters. Specifically niche broadcasters have found online radio very useful. The main reason is the low broadcasting expense of online radio compared with terrestrial radio. One more reason is the problem acquiring frequency spectrum licenses from the FCC. Nonetheless, rising royalty charges have made the life of online broadcasters more difficult lately.

The big number of available stations is a big benefit 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. At the same time, on the other hand, there is less pressure to insert commercials because of the lower expenses of broadcasting in comparison with conventional stations. This has made online radio content more appealing than terrestrial radio.

One big benefit of local stations however is local content such as news or current events. Furthermore, local radio is now improving the audio quality by using digital broadcast technologies versus conventional FM broadcasts which has been a big advantage of online radio thus far. It is difficult to predict a clear winner in the battle between online and local radio as both offer their own unique content and high mobility which are the crucial factors that will decide the destiny of each service.

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