What Will Kill AM/FM Radio

I’m driving around listening to DJ Jeremiah Red on KROQ and it’s 30% static. A great playlist, but I can’t fully take it in. Then I remember I could stream it from my phone. I open iHeartRadio, but unfortunately they don’t carry KROQ. They carry KCRW and KPCC (the NPR stations – my other go-tos on the FM dial), but no KROQ. I find the stream on their website.

Once my iPhone has seamless syncing with my dash and there’s fast LTE internet everywhere, I won’t need to turn on the AM/FM radio again. It will make no difference to us if we turn on the radio or open the streaming radio apps built into the dash.

In 10 years more people will be streaming music into their cars than over the terrestrial air waves – if terrestrial radio even exists.

Remember how they did away with analog TV when everyone said that day would never come?

Getting back to iHeartRadio, these guys (uh Clear Channel) should get every radio station added to the app. They should go to the radio station’s websites (who haven’t opted in) and embed the streaming players to the app. Or at least link to the players from the app. The more helpful iHeartRadio is (as selfless as it may be), the more users they’ll have.

It’s like Spotify, the more artists who aren’t on the service the less attractive it is.

That’s why Spotify worked so hard to get the majors on-board early on – even though it cost them a lot of capital up front. They figured the indies would follow suit. Once word got out that the deals were skewed in favor of the majors, the indies started pulling out. Spotify had to move into damage control to woo the indies back and Spotify Artists was born.

Growing pains. But Spotify overcame this minor hiccup and is moving along so well it is rumored that they are nearing 10 million paid subscribers. Apple is so frightened by Spotify that they had to buy Beats to steal its algorithm. They didn’t buy Beats to reduce the competition. With it’s meager 110,000 paid subscribers, it’s no competition.

But it has built a beautiful, back-end algorithm that obviously gave Apple a hard on. Yes, Beats Electronics is attractive as well and now Apple won’t have to split revenue for all the headphones they sell in store.

But back to radio.

Spotify, Pandora, Sirius/XM, iHeartRadio, YouTube, iTunes Radio (which will improve infinitely with the purchase of Beats and the arrival of iTunes streaming service), and all the other niche streaming sites that will pop up over the coming couple years, will win out over terrestrial radio.

Millennials aren’t obsessed with terrestrial radio like Gen X is. The younger Millennials aren’t turning to AM/FM radio for discovery; they’re turning to Pandora, YouTube and Spotify.

Once all of these services are integrated seamlessly into cars there will be no need for terrestrial radio. When was the last time you turned on the radio at home? Or at the office? Or anywhere other than your car? Now ask the same question to someone under 30.

By the time SoundExchange has successfully lobbied Congress to change the law to get performers and master rights holders paid for terrestrial radio plays, it will be moot.

It’s too bad SoundExchange doesn’t see this soon-to-be new reality and devote more of its resources to work out the data clusterfuck that is its payment system. And it’s horribly incompetent customer service. Stop lobbying congress. It’s going to be irrelevant.

What is relevant, is the thousands of artists and rights holders who cannot get paid what they are owed, no matter how hard they work the SoundExchange system. If SoundExchange isn’t careful, another organization will pop up. SESAC arrived post ASCAP and BMI followed shortly after. Another company will accomplish what SoundExchange isn’t. SoundExchange claims to be there for the artist, but artists are having a hell of a time figuring out how to get paid from SoundExchange (myself included).

Catch Up: SoundExchange is a non-profit organization setup by the US government that pays performers (singers/bands) and master rights holders (labels/bands) royalties for non-interactive streams on digital platforms in the US (Pandora, Sirius/XM, internet streams). SoundExchange does not currently pay royalties for terrestrial radio (AM/FM). It’s a messed up part of the law that’s been around for way too long. Every song has two copyrights: one for the composition (the song) and one for the sound recording (the recording). SoundExchange pays for the sound recording. PROs like ASCAP and BMI pay royalties to songwriters and publishers for the composition.

Despite what it seems, I’m rooting for SoundExchange’s success. It’s to my benefit, as an artist, to see them accomplish what they boast. But the more I try (and fail) to get paid as an artist, the less I can support them. They’re not supporting me. I’ve tried: 3 reps over the phone, 12 emails, and even talking to the VP of communications in person.

+SoundExchange Is Screwing Me Out Of Money And There’s Nothing I Can Do About It.

Personalized radio and curated playlists will soon takeover. Terrestrial radio will die. Local radio will stay put, but in a streaming, digital form. And your grandparents’ dial will continue to gather dust.

Photo is by Liz West and used with the Creative Commons License

49 Responses

  1. TuneHunter

    “Millennials aren’t turning to AM/FM radio for discovery; they’re turning to Pandora, YouTube and Spotify”

    Pandora, YouTube and Spotify and similar business model entities run naked around the tow and beg to be screwed. They can and should monetize. There is absolutely no reason to spill all the goods allover and hope that miracle will bring the money to the bank.

    Pandora is converable to 5 billion dollar Radio tomorrow!
    YT can become $50 billion dollar hub of 100 billion dollar industry before 2020.

    Lets put some under ware and start flirt for better future of music and self-respect as a businessmen.

    • Ted

      Tunehunter- how is every single one of Pandora’s 100 million users worth $50 per year, “tomorrow”?

      Seriously. Tell us.

      • smg77

        He wants people to pay a dollar every time they use Shazam.

        • TuneHunter

          Just 39 cents for 100B in 2020. $ 40 billion music industry was mad with just 3 billion $13 CD sales!

          Today we have at least 5B smartphone handsets and 10x as many folks able to effort 39 cent transaction than in 1999. The whole concept is idiot proof but someone has to help me to communicate with golf playing custodians of the industry.

          In place of full info including photo of CD cover Pandora would display “the best of Bruno” with smiley face of Bruno.

          If the tune in the air is not part of you confirmed playlist with you preferred supplier (i.e. Shazam) YOU GOT TO PAY!

          It is over due, I hope investors will kick Shazam boy out of the adult kindergarten!

          • Ted

            Fact check. People wont pay 39 cents to identify a song. It would also be stupidly easy for others to build a competing free ID app that is free.

            Back to the drawing board Tunehunter. Sorry.

        • tippysdemise

          Happy to hear that someone can follow his posts.

      • TuneHunter

        It would $50 in actual revenues $500 on Wall Street.

    • shmince

      And yey,here we are on 10/6/2017…Still waiting…Ari…

  2. Yup

    I haven’t listened to the radio in 3 years. I also don’t own a car.

      • R.P.

        exactly. terrestrial radio is dead, but they want us to believe that it lives and that it is still the #1 place for discovery… maybe at the Country Radio format it is.

        • Roy P. Perez

          as Terrestrial Radio begins to bleed out, I wonder what those at the top trying to hide its demise, are saying/doing now. They should retire. Clearly not living in this planet.

  3. Brittany Bedford

    Sorry about the tweeting chaos. So my question is is there a way to get both composition and sound recording royalties from one site like ASCAP? I don’t know much about how these sites work but it seems to me that you have to have a lot of different accounts from different sites to distribute music and get paid.

    • Ari Herstand

      As it is setup now, no. You must signup for SoundExchange to get paid sound recording royalties and you must signup for ASCAP, BMI, SESAC, SOCAN (or others if you’re outside the US/Canada) to get paid composition royalties.

      I have heard that CD Baby is looking into being the middleman for all of this.

  4. Casey

    I’ve been saying for a long time that the fight for royalties from terrestrial radio is a losing battle. By the time royalties can be collected, there won’t be a lot of royalties to collect. And royalties will only accelerate terrestrial radio’s death, especially any remaining music formats on AM. The major thing terrestrial radio currently has going for it now is that it is free. Listening to internet radio in the car can get very expensive and unlimited plans are slowly disappearing industry-wide. Until that trend reverses and data plans become cheaper, terrestrial radio will hold out.

    Local radio will probably be a thing of the past outside of large markets once terrestrial radio dies.

  5. 40 Year Radio Vet

    FINALLY – something I actually have professional experience at LOL.

    Terrestrial broadcast radio’s demise has been predicted since the 80s. I worked on my Master’s thesis in 1990-1992. The research was on DAB (digital audio broadcasting) – the precursor to HD-Radio (not high definition radio as some believe it to be). I was an early stock holder in XM and Sirius before the merger – and after with Sirius. I currently am a syndicated content provider/producer/show host.

    Here’s my opinion, for what it’s worth. I too predict that the technology will become very nearly obsolete within a decade. And I did say NEARLY. Vestiges of it will likely remain for another 20-25 years.

    The specific wifi architecture required for seamless i-radio broadcasting at a local level is far from being in place. I don’t think we’ll see it done inside of 25 years.

    Why 90+% of us still use AM/FM is not because of the music – it’s because of the CONTENT around the music. It’s the immediacy of localized information, available conveniently, that people use radio. It is because of the broadcasting technologies behind the AM/FM radio that we still have the AM/FM radio technology itself. We have a century plus investment in AM and FM technology. It is ubiquitous, and it still works admirably well.

    Yes, a growing body of consumers like endless streams of music, without commercial or vocalized interruptions – but at a universal/global level, it’s a much smaller percentage than of those who use traditional AM/FM radio to gain or to disseminate information.

    My parents, those still with us, know little about the tools we take for granted, and I know increasingly little about the tools that my grand children are now beginning to use, and will be developing over the next 20+ years. Today’s 20 yr old, living in middle America, or in the Rocky Mountains, or the Northern Great Plains, will be 40+ before AM/FM is obsolete.

    The one thing you can count on is that AM/FM are not reliant on the internet or the technologies that drive the internet. They go down, AM/FM is the last communication resource standing.

    As you drive through the heartlands of America, radio is king … and will be for what I think is much longer than 10 years from now. Los Angeles, New York, SF, Chicago, Houston, etc? More than 50% will have shut off the broadcast radio in favor of wifi driven internet based broadcasting within the next decade.

    Nothing I’m seeing or reading about is telling me that we’re anywhere near ready to shut it all down yet.

    • jw

      Old folks aren’t going to be pulling out their iPhone & bluetoothing to the car & loading up the iHeartRadio app. When you say it like that, of course that’s not going to happen.

      But if you buy a new Cadillac & the stereo has AM, FM, & Web buttons, & then the “Web” button is just a list of streaming stations, that doesn’t require any technical knowledge. Middle America isn’t going to come to the technology, the technology is going to come to Middle America… it’s all in the execution. You’re looking at things backwards.

      And whether this will be accomplished by a bluetooth hookup at the dealership, or data plans built into the price of the car or whatever… it will, unquestionably, happen. And sooner than you think. My mom is in her 60s, & she’s adapted to iPods & iPhones & navigation systems in cars & on demand programming… the comprehension involved in streaming web radio pales in comparison to these other technologies.

      People thought a device like the iPhone wouldn’t fly in Middle America. Well it did. I think you’ll be surprised.

      • 40 Year Radio Vet

        if you buy a new Cadillac & the stereo has AM, FM, & Web buttons, & then the “Web” button is just a list of streaming stations

        Yes, I know. I am 60. I just went and looked at new cars. I also use bluetooth hookup in my car, via smartphone technology.

        I am not looking at things backwards. I am using underlying broadcast infrastructures as the baseline, and attempting to project the curve at which it becomes obsolete. Among today’s 12-24 yr old persons AM/FM is nearly obsolete in use now. But the underlying infrastructure has to be ubiquitous … the investment is too severe to dump. All technologies eventually die and are replaced. That’s not backward thinking.

        whether this will be accomplished by a bluetooth hookup at the dealership, or data plans built into the price of the car or whatever… it will, unquestionably, happen.

        Been there for two years already.

        Love the kids I work with … so full of enthusiasm for the future. LOL. When it’s your 10-60 million on the table, let me know … ;) just sayin’

      • 40 Year Radio Vet

        some of what you say, I see and agree with … some of it … not so much ;)

    • hippydog

      As to time line, I lean towards the longer period,
      Terrestrial radio has the infrastructure and is supported in rural areas,

      As to tech being put in cars making a difference? not likely.. If they concentrated on simply making the car connect better to the smartphone, that would make a difference.. but they are not, they are trying to be a smartphone replacement which will never be fully accepted..

  6. 40 Year Radio Vet

    What will kill AM/FM radio? Wifi …

    • Casey

      Wifi? Some. LTE, LTE Advanced, and whatever comes next will be the real killers.

  7. Matt

    I live in tornado alley. The local radio stations are often the only way to get the updates on storms when the power goes out. I think the local and immediate element will keep terrestrial radio going, at least until we have a reliable data network that doesn’t rely on the local power grid. Even then, local stations will still be important, even if they are somewhat of a merger between local radio and TV.

    • Casey

      Really? My radio stations don’t even bat an eye when a storm comes. They will air the EAS announcements and go right back to the syndicated (eer.. I mean completely live and local) programming. A WX radio is a far better source of weather coverage here.

      There was a market near here that had the worst storm in their history (entire city took severe damage) and their single station designated for the market did absolutely nothing. When the station was bought out by a major broadcaster, they grouped it with another market’s cluster, despite it being still licensed to the original market and syndicated everything. They don’t even have a local morning show and this is an FM. That is what radio has become.

      • Matt

        Wow. That’s pretty sad, really. In Oklahoma City, the local AM and FM stations are all practically taken over by the weather when bad storms come through. Each major radio station group here has a partnership with a local TV station, and their weather broadcasts take over during major storms. Not to mention the daily weather reports, immediate local breaking news like crimes or whatever, and traffic reports, but those can be had in numerous ways via internet, TV, etc.

  8. Anonymous

    It will be a very, very long time before am/fm disappears. Sports and local talk radio alone will see to that. Wi-fi and standard OTA broadcasts will co-exist and truthfully, there’s no reason for them not to.

  9. mdti

    What Will Kill AM/FM Radio?
    – lack of diversity
    – uniformisation
    – not playing a prescriber role (not making anyone discover anything)…
    – abuse of advertising

    Radio is more powerful than TV and the internet, it is much less polluted by images and noisy “social” interactions (ie, that actually make people more lonely with the illusion of not being alone)…
    So it could survive TV and the internet in many, many countries.

  10. Dustin

    Download the Aha app. KROQ and every one else is there and its already integrated in to more than 50 different models of cars on the road.

  11. Dave Buerger

    It’s a regional thing. I live in rural northern California where you can’t get decent broadband into your home, much less your car (or in my case, pickup truck). The big ISPs don’t give a damn about rural America. So there’s a good chance this is (at least geographically speaking) one major patch where radio will be around for while. Besides, the local radio jocks are “big people on campus” – wouldn’t want to deprive THEM of a job, would we?

  12. KnobTwiddler

    I love it when 20-30 something kids in a city like Los Angeles make these end of days predictions…..check out the real world sometime before predicting the future based on your own contrived, narrow view of things. 40 Year Radio Vets comments are better written and more informative than the authors own words. Smh

    • Sky

      KnobTwiddler, I think there is merit in both 40YearOldVet’s and the 20-Something Angeleno’s comments. The Top 20 US radio markets represent 100M, or one third of the population, The Too 50 markets reach 150M, or about half.

      There are two very distinct sides to this coin.

      I haven’t dug into the statistics but assume ad revenue per capita tends to be higher in urban areas. This creates a huge incentive to re-plumb urban markets for the demographic tracking benefits of digital, especially with the streaming infrastructure largely in place. Contrast with half the population requiring increased infrastructure investment and having fairly distinct demographics. I imagine that the terrestrial broadcasters will run with what’s working until the cost of keeping radios online surpasses the cost of reliable digital infrastructure.

  13. P

    I could see it happening within 20-25 years down the road as one commenter mentioned before me. The infrastructure is just not set up yet across the meat + potatoes of the United States. Maybe sooner.. depends upon a lot of things.. BUT, what I do think will be a byproduct of the technology Ari is talking about in his article is the final decline of the CD. 10-15 years down the road when cars, even used ones, have streaming/Bluetooth capabilities built in to the dashboard then people will have less of a use to buy CDs. I know a lot of people who still buy CDs just to have in their car as it’s easier to pop in a cd than it is to drive down the road, try to hook up your Bluetooth, try and drive and scroll through your spotify app or whatever app you use… Not only is it a pain, but it’s dangerous driving. Once all of this is in your dashboard with even better voice recognition technology, then a CD will have no use.

  14. Kris

    You will not find Kroq on iHeartRadio because they are owned by CBS. Why would Clear Channel hand you to it’s competition? 30% static for an FM station is still very listenable and isn’t the reason people will immediately tune out. Kroq has always had a much weaker signal then all of the other LA stations. It’s the top billing station in the country. And for years was at the top of the ratings. Why? Content. People will tune in if you give them something compelling to listen to. That is the problem with today’s radio. The content sucks pretty much across the board.

  15. Willis

    Nothing will kill radio – it is the cockroach of music.

  16. David B

    TuneIn has KROQ and only thousands of other stations from all over the world. Plus car integration and a cool new version of their app.

  17. Chris Hugan

    Ain’t gonna happen until providers offer unlimited data plans. Or, there is some kind of omnipresent wi-fi.

  18. BP

    -From the piece:
    “Getting back to iHeartRadio, these guys (uh Clear Channel) should get every radio station added to the app. They should go to the radio station’s websites (who haven’t opted in) and embed the streaming players to the app.”

    So iHeartRadio should pirate and rebroadcast terrestrial radio stations?

    • Jonny

      I’d like to see the same chart just for those that spend over $250 or more per year on music. I wonder if it would look any different, and if it did, what would it mean? If you want to just buy 3 or 4 hit songs/albums that everybody else is listening to in a year, radio is a great way to “stay-up-to-date” with music.

      Almost no one I know that spends a significant amount of money on music listens to music on the radio. If they are under 30, they don’t even see or understand the difference between AM/FM, internet radio, streaming etc.

      Radio isn’t going to die, but just like any other format, i think its relevance will continue to fluctuate/diminish.

      • 40 Year Radio Vet

        I’d like to see the same chart just for those that spend over $250 or more per year on music.

        $20 a month on music in what format, from what source? All music? Physical? Streaming? Digital DL? Live venue tickets?

        The avg ordinary person is not a collector or connoisseur of recorded music. I just surveyed roughly 100 people – 80% of whom are musicians. Their preferences for music discovery were FM radio, followed by YouTube, followed by Pandora, followed by Spotify. The most musically adventurous like Spotify.

        Music snobs, audio snobs, etc … it’s okay … most of us in the business have been down that road at least once or twice. BUT that person working in the retail store, or hospital, or school, or restaurant isn’t paying attention until they get in the car – and the #1 source of news, info, wx, music and talk is AM/FM radio.

        Anecdotes aside, this is what we look like in the lower 48.

        • Jonny

          Agree…..just think it’s important to put some focus on people that actually spend money on music.

    • Ari Herstand

      It also doesn’t account for iHeartRadio or any other digital app that streams “AM/FM” radio.

      • Paul Resnikoff

        Oh the colorful chart battle is ON Ari…

    • TuneHunter

      Very optimistic chart.

      Considering that Spotify must drift from, give all, Turbo-Napster zone to Pandora style operation
      we have 50% of Gen Z in the Radio zone.

      So it is time to cover boobs and charge 39 cents if you want enjoy full spiel again.

      Radio is convertible to music store.

      • TuneHunter

        …and YES, YouTube numbers are disturbing!

        Total win of YT would meant smaller than $10B dollar global music industry!
        Does Google have plan B?

  19. Mike

    FM radio is DEAD. It’s so weird to see radio people talk about content! That’s an opinion, and it’s wrong. Pandora, Spotify, ITunes radio and the likes have NO CONTENT. Those platforms are growing expenentially. Research and data people. Stations will begin to sign off the air in 2 years. Stations will begin to cut staff IN DROVES once these audio systems hit cats. Listenership will plummet. Revenues will drop and these stations won’t make money. Keep in mind that Pandora, ITunes Radio the profit. Local radio takes in Apple? Come on? Did radio will that war on the smart phone? No! They won’t win in the car either. Radio guys need to toughen up and start to rethink their careers instead of playing mind games to feel better.

    • Sky

      Mike, are you talking about the carrier or the content? FM radio’s unique content has been on-air hosts. When XM/Sirius takes over as the new digital carrier, will they remain curated music + ads, or will displaced FM hosts find new jobs on streaming music stations?

      To me the question is, do post-millennials want to turn a dial and be connected to music plus local community, or do they want to turn a dial and cocoon with music when driving? Or both?

  20. Andy

    In Australia, a very large proportion of millennials listen to the radio. One station in particular, a nation-wide station triple j (you can stream it), enjoys a very strong following. They are almost a media organisation in their own right where they run a number or web sites, promote gigs, produce a magazine and even produced a television show for a while.

    But despite this, I don’t think radio will ever die. I think there always be an appeal in radio’s simplicity. One of the things I love about radio is how you can just turn it on and listen. You don’t need to make decisions about what to listen to like on Spotify, Pandora etc and there is no temptation to keep skipping songs. There are also no complications involved, like is there a connection available, how much data it is using, is the connection fast enough, is it using the same device I want to use to browse the internet or text someone. Radios are everywhere, and easily integrated into stereo systems, cars, toilet radios, everything. They don’t need updating, logging into networks, they just work. That’s why you can afford to have 10 of them.

    I enjoy using Spotify, Pandora and music downloads, I think they are great and I use them most days. But every morning at my house, all day at work and most of the time when I’m in the car, the radio is on.

  21. Vin

    You said…you said.Well, i don’t know what you said now but,it’s 2019 and Radio is still hanging on.So much for your prescience.Where do you think you went wrong?