Online radio such as AOL Radio, Slacker, Pandora and Last.fm have gained attractiveness recently. Furthermore, several wireless products including mobile phones support these platforms. Does this mean the end of conventional radio stations? I will look at the effect of online radio on the radio landscape.

Local radio seems to be having a hard time in today’s radio landscape with competing satellite and online radio providers taking away listeners by supplying commercial-free music and entertainment. The internet has enabled access to a virtually infinite number of online radio channels.

Numerous online radio services including Pandora are now accessible on portable products like 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 offers over 200 music channels and even 150 national CBS radio stations because it employs CBS radio as its platform. 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.

Pandora and other online radio providers have similarly started to offer customized music. The user can enter music-related details such as artist, track or album name. These channels will then pick tracks which are similar to the information entered. To date, however, competing music services have fallen short to offer similarly fully customized radio channels.

Is the extinction of local radio near? The rise of competition from satellite and online radio has started to take away listeners from local radio stations. Conventional radio seems to have a difficult time to halt this trend. Specifically niche broadcasters have found online radio very practical. The main cause is the low broadcasting cost of online radio in comparison with terrestrial radio. One more cause is the problem acquiring frequency space licenses from the FCC. Nonetheless, increasing royalty charges have made the life of online broadcasters more difficult lately.

As the diversity of stations is a benefit to listeners, it is at the same time diluting market share and online radio broadcasters are finding it hard to attract a moderately big number of listeners and be profitable. However, online radio has less pressure to insert commercials which has made the content more appealing to listeners.

Local programming such as news and local events, on the other hand, will remain one of the big advantages of local radio. One disadvantage of local radio has been the inferior audio quality of FM broadcasts. Nonetheless, that is being remedied by the latest introduction of digital radio broadcasts such as HD radio. The big factors that will ultimately determine the destiny of each technology are content and convenience. Online radio and traditional radio each have their own niche in regard to providing unique content and both offer high mobility and convenience so there will probably be no clear winner.

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