Is Terrestrial Radio Destined to Die? The FCC is expected to decide next week whether satellite radio companies Sirius and XM can merge. We examine new technologies such as portable Internet radio and examine whether old-fashioned radio should be afraid.
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Is Terrestrial Radio Destined to Die?

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Is Terrestrial Radio Destined to Die?

Is Terrestrial Radio Destined to Die?

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From the studios of NPR West, this is DAY TO DAY. I'm Madeleine Brand.


I'm Alex Chadwick.

Sometime in the next week the Federal Communications Commission is expected to decide whether two satellite radio companies - XM and Sirius - can merge.

BRAND: Which is why we're starting our radio show today with radio. You're probably hearing this on FM or maybe AM over a radio station. You could also get us on satellite and increasingly on HD.

CHADWICK: And if you're not sure what that is, we'll explain in a moment.

First though, there are even more devices coming to let you listen to radio over the Internet anywhere, even in your car.

Celeste Headlee reports.

CELESTE HEADLEE: Jonathan Sasse says his company's sleek black four and a half ounce gadget will change the way we use radio in our cars. He represents Slacker, out of Texas, that bills itself as the world's first personal radio company. Here's how the device works.

Mr. JONATHAN SASSE (Vice President of Marketing, Slacker): Through any Web connection, you can go in and decide which stations are going to be on your device.

HEADLEE: So if there's a station that you listen to on your computer, you program it into your Slacker gadget. And when the device connects to the Internet, it goes to those Web addresses and downloads music.

Mr. SASSE: So as it collects content, it knows which songs you will prefer and which ones you won't.

HEADLEE: Sasse says customers can purchase the handheld device in two weeks. And beginning in early January, Slacker says it'll go one step further. The company will offer a kit that goes in your car and that'll take that radio station that you stream over your computer and shoot it through your car and out the speakers. And automakers are showing some interest.

Vickie Chiang is an engineer in Audi's electronics research lab.

Ms. VICKIE CHIANG (Engineer): We're always looking for new trends on the horizon that we think our customers will demand. Customers will soon expect to have the same features and the same experience that they have at home in their cars.

HEADLEE: And in fact there are a number of companies vying to create the first automotive Internet radio unit. But Chiang says it's not likely any of them will be built into dashboards soon.

Ms. CHIANG: Internet radio depends on having the infrastructure for connectivity, and currently that infrastructure does not exist.

HEADLEE: Slacker has an answer for that too. Jonathan Sasse says the portable device doesn't need a constant Internet connection to make it work.

Mr. SASSE: As you're driving around, let's say if you have the satellite antenna, you will be receiving content. If you don't have a signal, the system continues to play out of the cache. So whether you're driving through a tunnel or you're in a parking garage or there's buildings or trees around, it doesn't really matter.

HEADLEE: Audi used the device in its Cross Cabriolet concept car that appeared at the L.A. Auto Show this week. But concept cars rarely get made. They're basically an automaker's idea of what consumers might want five years in the future.

Paul Eisenstein of says of all the options for radio technology in cars, Internet radio is the most problematic.

Mr. PAUL EISENSTEIN ( There's no question that people want as many choices as possible, but what will be the trade-offs to get Internet radio into a car, not just technically but in terms of the cost side? Are consumers going to be willing to pay what it might take if the technical problems are solved?

HEADLEE: The price of a portable Internet radio gadget is about $200, and the car adapter kit will likely cost about the same. Slacker is betting that at least some tech-savvy drivers spring for the unit right away. But most analysts say Internet radio will probably not be a real player in the automotive business for the next few years. Still, Slacker has attracted at least 50 million venture capital dollars in the last year to develop its device. And it seems inevitable that Internet radio will eventually make its way from our desktops to our dashboards.

For NPR News, I'm Celeste Headlee in Detroit.

CHADWICK: So Internet radio, H.D. Radio, satellite radio, you can now get the radio on your cell phone. It's a lot to keep track of, but we have a technology guru here - radio fan and reporter, DAY TO DAY's Alex Cohen.

ALEX COHEN: Perhaps you've heard of satellite radio. In fact, maybe you're hearing it right now. DAY TO DAY airs on Sirius Radio - that's one of two U.S.-based satellite radio companies. The other is called XM.

Mr. LOU DOBBS (Radio/TV Host): Border to border and coast to coast, this is Lou Dobbs on CNN XM 122.

COHEN: Both XM and Sirius rely on satellites which beam hundreds of channels of programming from outer space down to receivers in cars, homes and in handheld devices. And that, says Wilson Rothman of Gizmodo, means you can get much better reception than you would with a terrestrial radio signal.

Mr. WILSON ROTHMAN ( You're driving across country, you're between Cincinnati and Cleveland, and there's nothing on. What satellite radio does, because it's coming from outer space, very far up, it can project the same program everywhere in the United States.

COHEN: But unlike your AM or FM stations, satellite radio isn't free.

Mr. ROTHMAN: What you got to do is pay - it's about 12 bucks a month for either the Sirius or the XM satellite services. There are other services, special services, if you have an in-car navigator; some of them are compatible with traffic service that might cost you a few dollars extra.

COHEN: Next up, HD digital radio.

(Soundbite of ad)

Unidentified Man #1: H.D. Radio is brilliant digital sound. It's an audio explosion, if you will.

Unidentified Man #2: I will.

Unidentified Man #1: And it's a ton of new stations from your favorite local radio stations, all free just like radio always has been.

Mr. ROTHMAN: HD radio is kind of the digital evolution of regular radio, what the industry people would call terrestrial radio.

COHEN: Gizmodo's Wilson Rothman says H.D., like old-fashioned radio, relies on broadcast towers.

Mr. ROTHMAN: The difference is, instead of having analog radio signals - that is, old-school non-digital radio - you get something that has to be translated by a computer, a little tiny computer inside your radio.

COHEN: Unlike satellite radio, there are no subscription fees, but you'll have to pay for the radio device itself, which will cost you at least 100 bucks and sometimes much more. These devices can go in your home or in your car, but don't expect that same continuous cross-country experience you get with satellite, says Rothman. He likens the HD experience to cell phones in the '90s; sometimes you get the connection, sometimes you don't.

Mr. ROTHMAN: Actually, I had one HD radio from Boston Acoustics that I was playing with where if I carried the antenna to one end of my great room, it - you can - I could the receive HD radio, but by the window I couldn't. I didn't understand how that worked.

COHEN: What HD radio does offer is a lot more room than you'd find on your traditional radio dial. For example, here in L.A., HD radio can carry both KLSX, a talk station, and KLSX2, a talk station with the focus on baseball. And, says Rothman, there's also an interactive component to H.D. Radio.

Mr. ROTHMAN: HD radio, because of its digital properties, can broadcast more text. It can broadcast weather reports, news headlines. It could broadcast commercials - into text form right onto your screen of your radio.

COHEN: And he says there are other ways to listen to the radio cropping up all the time.

Unidentified Man #3: Welcome to NPR Mobile from North Carolina Public Radio, WUNC.

COHEN: Okay. Pardon while we toot our own horn. NPR and other radio broadcasters have started offering content that you can hear on your cell phone or by dialing in on one of those old tiny corded phones. But don't ditch your regular radio just yet. DAY TO DAY isn't offered on NPR Mobile. (Clears voice)

Alex Cohen, NPR News.

BRAND: Okay. So where does all that radio gadgetry leave the good old-fashioned radio station, the one you're probably listening to right now? For an answer, we called Mark Ramsey. He is the president of Mercury Radio Research. He writes a blog devoted to the world of radio. And I began by asking him, with all this new technology, does this mean the death of the old-fashioned terrestrial radio station?

Mr. MARK RAMSEY (Mercury Radio Research): No, I don't think so. I mean you've got to appreciate the fact that there are 800 million radio receivers in homes, workplaces, cars across the country. That's a huge installed base of distribution. And it's part of the texture and habit of the day for millions of people across the country.

BRAND: Eight hundred million radios?

Mr. RAMSEY: Eight hundred million units, yeah. If you add up all the clocks and all the cars and all the stereos and all the standalone units, that's what it adds up to.

BRAND: But I keep hearing in countless news articles that radio stations are having big problems retaining their audience and even attracting new listeners.

Mr. RAMSEY: It's not so much actual listeners disappearing as it is listening disappearing. It's the amount of the time they spend with the radio. And it's particularly true among people under the age of 30, 35.

BRAND: So what are they doing instead?

Mr. RAMSEY: Well, those people are listening to all other radio alternatives. I was talking to somebody the other day and she was telling me that there's more radio listening than ever, and I said how can that be? And then it became clear to me that what she was counting as radio was podcasting, Internet radio, streaming, satellite radio, all things which technically speaking to someone who owns a radio station isn't radio necessarily at all.

BRAND: So if these young people are doing that, doesn't that portend a gloomy future for regular old radio stations?

Mr. RAMSEY: Well, it does if and only if radio abused itself as being in the business of owning towers, broadcast towers. If that's how you view your business as a radio broadcaster, you're in trouble. But if you view your business instead as the medium between advertisers and listeners, listeners who have placed their trust in you and will have you as part of their listening habit, well, then the future is very bright because then the opportunity for radio is to leverage its content across all channels, all those channels I mentioned, and the opportunity is also to leverage these relationships that they have with listeners that are so extensive and so long-standing.

BRAND: So bottom line, Mark, is - are people in 10, 20 years, are they going to be listening to radio the way that we listen to it now where we get in the car and punch up, you know, your local NPR station and there it is?

Mr. RAMSEY: No. In 20 years people will have dramatically different behaviors. Because what's happening is people are being empowered by all these choices. Those of us who work in radio are going to really need to reexamine what it means to be in radio, what it means - what radio itself means, and to focus on creating content that can't be easily copied by a million different alternate sources.

If you are purely a music box, recognize the fact that in the not-too-distant future there can be millions of music boxes just like yours. If you view your advantage as distribution, then that too is going to disappear because the Internet is going to be equally as distributed as you are. So first, you've got to recognize that you're in the content business, and that means you're in the unique content business and you need to focus on being the best in the world for somebody in your marketplace.

I live in San Diego. I was affected by the wildfires. I had to evacuate my home. I went looking for a resource to provide me up-to-the-minute information. And in fact, where did I find it? I found it from the local NPR affiliate, not from the local commercial news talk station, which is top ranked in the market. That's an example - now, what did they do? They used Twitter/Google Map mashup. They had a few different tools that they used which really were exceptional, and had nothing whatsoever to do with radio per se but were mediated by my relationship with the radio station. Had it not been from my relationship to the station, I wouldn't have used the tool and it wouldn't reflect - have reflected favorably on the station.

BRAND: Mark Ramsey, the president of Mercury Radio Research. He also writes the blog Hear 2.0. That's H-E-A-R 2.0.

Thanks, Mark.

Mr. RAMSEY: Thank you.

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