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Will AOL Radio Cause The Extinction Of Traditional Radio?

AOL Radio, Pandora, Slacker and Last.fm are a few of the online radio services which have become popular these last few years. Many of these are also accessible on portable products including mobile phones. 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 hard time as of late. Satellite radio has been cutting the market share of conventional radio stations severely in the past few years by providing mobility, a big number of commercial-free music channels in addition to news and entertainment channels. Specifically, online radio has turn out to be fairly popular by providing a virtually unlimited amount of radio channels.

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

AOL Radio which features 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 permits listeners to make their own radio stations by entering favored albums, artists and so on. The individual tracks of each music channel are also accessible for storage on an iPod via 3rd-party software such as iGetMusic.

Other online music services have followed suit and are providing similar customized music. Pandora and Last.fm allow listeners to enter the name of an artist and then play music by arbitrarily choosing titles by these artist in addition to other titles which are comparable in genre or character. Thus far, however, competing music services have fallen short to offer similarly fully customized radio channels.

Are conventional radio stations destined to become extinct by the constant reduction of market share due to online radio? Online radio has proved useful specifically for niche broadcasters because of the inherently lower broadcasting cost in comparison with local radio stations.

The big number of accessible stations is a big advantage for online radio listeners. However, this is a difficulty for online broadcasters. This big number of stations is diluting the number of listeners. Consequently streaming radio broadcasters have found it difficult to be profitable. The lower cost of online radio at the same time enables making of more interesting content than local radio by serving niche markets and inserting less commercials.

However, local radio has one big benefit over satellite and online radio. That is local content such as local news and events. One downside of local radio has been the poor audio quality of FM broadcasts. On the other hand, that is being remedied by the latest launch of digital radio broadcasts such as HD radio. It is difficult to predict a clear winner in the battle between online and local radio because both offer their own exclusive content and high mobility which are the vital aspects that will decide the destiny of each service.

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