New Territory For Radio Expansion

by Brian D Smiley

August 20, 2013


Internet radio has opened the doors for countless new formats, programming and content heard by niche markets. Radio listening continues to grow rapidly online and very slowly with traditional terrestrial radio finally taking advantage of new technologies like high definition (HD); with the ability to transmit weather information on sidebands, and the Low Power Frequency Modulation (LPFM) spectrum carved out in 2000 that suits localized communities. FM and AM stations continue in popularity with 243 million people listening every week, but commercial radio has seen large declines in advertising revenue and listenership (Vivian, 2013 and Peoples, 2013). Despite a rapid growth in smartphone users tuning into online radio, with 21 percent reporting listening while driving in 2013 (up from 6 percent in 2010), AM/FM radio is heard by drivers 84 percent of the time, according to a recent survey by Edison Research. Radios outnumber people in America by two-to-one (Palenchar, 2013)! The Internet streaming service Pandora has 200 million registered users, up from 100 million in 2011, and Apple, expected to join the rapidly growing industry with its own personalized Web radio service later this year, is joining the game (Peoples, 2013). Commercial, public and home-based radio stations are accessed using online radio services and archived in podcasts, which increases access for advertisers and access for communities. Despite the recording industry’s challenges to embrace digital download technology, the Federal Communications Commission’s unclear rulings and radio station owners’ slow change to digital broadcasting, radio listeners have benefited with a new wide range of exciting entertainment, compelling news broadcasts and relevant community programming. This resurgence has influenced culture and allowed for more artistic freedom and diversified opinions.

Beginning with the Radio Act of 1927, the U.S. Government was involved with radio station programming despite the First Amendment’s ruling that no law should be created that limits the freedom of speech or the press (Vivian, 2012). The Radio Act came about after it was evident that radio stations stepped on each other’s frequencies, causing interference as well as a concern for public decency  (Pember and Calvert, 2013).  From there, the equal time rule in 1934, created to balance political discourse, brought about the formation of the FCC (Vivian, 2012). The federally appointed commission then set forth the fairness doctrine, in place from 1949 to 1987, to ensure that all public matters had an even coverage (Vivian, 2013). With the adoption of the long-standing international Berne Convention in 1988, American media companies helped to pressure congress into adopting a set of standards that allowed for media expansion and author protections across borders (Pember & Calvert, 2013). A major communications milestone in 1996; the Telecommunications Act, deregulated radio station ownership as well as other broadcast companies (Vivian, 2012). Media conglomerates like Clear Channel Communications and Cumulus Broadcasting LLC purchased many independent stations at a time when advertising revenue started to wane (Vivian, 2012).  The creation of National Public Radio  (NPR) and public funding of educational and informational programs across public radio allowed for radio to become a place where advertising isn’t the primary objective. In a 2011 Government Accountability Office (GAO) report on media programming incentives, they found that programming selections are based on advertisement revenue, the cost of programming and market competition as the main economic factors of what a station chooses to play (2011). Other factors discovered in the GAO report include FCC rules and regulations as well as infrastructure limitations like the station power only able to cover certain areas and demographics (2011).

Radio is the main currency of sonic media but not the only sound that affects modern society.  Digital technology also influences sound in a variety of settings. Audio is used in video, live performance and presentation, podcasting, embedded in various technologies, online interactivity and used for education, entertainment and health applications (Brabazon, 2009). Sound is everywhere and messages can be overt declarations or subtle cues to act in a certain way; as seen in crosswalk tones or the sound made to alert when someone walks into a store.  Other sounds have been trademarked to signal when a certain brand is used; think of the Microsoft and Apple start-up sound. The radio waves are used by industry to send cellular signals, two-way radio broadcasts and to send heart monitor information; the radio spectrum is broken up into frequency bands that delineate what type of operation can use them (Crosby, 2013). All are monitored and regulated by the FCC, and the Federal Trade Commission (FTC) regulates the industries that spring up around the new technologies (Crosby, 2013).  The iPod and similar storage and playback devices allow students to capture classroom lectures, listen to iTunes University classes or to transport written material from one computer to another (Barbazon, 2009).  With the most sought after radio programs diversifying across broadcast frequencies, the Internet and downloads, it is doubtful that essential audio programming will go away. However, with advertising as the driving force behind commercial radio, it is likely that continued changes to AM and FM will be coming (GAO, 2011).

Internet and satellite radio influence each other and terrestrial radio in a number of ways. In programming, advertisements have grown shorter, playlists have become slightly more varied, following the more random “Jack Fm” format, and stations that support popular all-comedy broadcasts are readily available (Vivian, 2012).  Sirius XM radio has integrated the personalization features of Pandora with a MySXM feature that uses the services playlists as a starting point for their preferences (Peoples, 2013). Clear Channel Communications has struck deals with radio manufacturers to support their iHeart radio application and other media chains have followed suit. Public radio adopted the digital signal early on and provides its programs in a variety of formats. Subscription-based models get rid of or minimize advertising, play directly to niche audiences and utilize metrics on listening time and variability with more accuracy. However, Clear Channel still controls over 800 radio stations nationwide and will often syndicate the same news, talk or entertainment programming across several different markets to cut costs and increase revenue. The quality and diversity of information has suffered under this market factor.

The 2009 GAO report on media programming notes that syndicated programming and voice tracking of DJ’s announcing the songs has not diminished the radio localism that the FCC strives to protect (GAO, 2009). The value of the programming, according to one station owner, is seen by how much it resonates with the listeners and not by where the programming originates (GAO, 2009).  Market competition can determine the formatting of a station, and commercial enterprises want to cater to niche markets if they have money to spend on the advertising (GAO, 2009).  However, for years, under-served communities have lacked the programming they need. KPFA was the first fully listener-sponsored radio stations, formed after World War II and has been on air continuously for over 60 years. The Pacifica network they are part of spans across the country, but it does not serve every community. So, in 2000 the FCC began to license Low Powered Frequency Modulation (LPFM) stations that serve smaller communities and were sometimes operating as “pirate radio” outlaws (Hightower, 2013). On October 15th 2013, over 1000 LPFM will be released under the Local Community Radio Act signed by President Obama in 2011, and driven by the Prometheus Radio Project (Hightower, 2013). When these stations combine with Internet broadcasting, independent voices, activists and local community groups will get their messages out to the world with a credible foundation of local radio to support them.

The recording industry was an early partner with radio. It provided the content that drew in listeners and targeted messages to the audiences (Vivian, 2012).  Radio stations might have received kickbacks from the industry to play certain artists but listeners could call in to drive programming or respond to Arbitron ratings. Now, the ability for listeners to interact with their Internet radio stations by signaling a like or dislike for a song creates a more specialized and highly targeted sound (Peoples, 2013). Pandora is not anathema to the new marketplace of iTunes and the recording industry. Although there have been complaints that artists do not get paid enough for even thousands of plays, the service allows listeners to bookmark artists and buy songs on iTunes (Peoples, 2013).  Apple’s music store constantly ranks as one of the top Internet sites because of the ability to sample 90 seconds of a song; this natural pairing of sound and movies to digital downloading has saved the recording industry and fostered independent musicians and overall artistic freedom (Peoples, 2013).

The innovation that comes from artists who support themselves on independent labels has been a boon to culture (Vivian, 2012).  Apple’s iRadio is being developed to compete with services like Pandora, Spotify and Slacker and they are slowly working out the contracts with major recording labels, independent artists and various hardware manufacturers before its official release (Roettgers, 2013). However, iTunes has been at the forefront of streaming Internet radio since the late 1990’s (Vivian, 2012). Although stations have come and go, the variety of small independent voices has reached millions of otherwise distant listeners throughout the world (Peoples, 2013).

The file sharing software Napster in the mid nineties irrevocably altered the digital audio landscape and sent the recording companies into a decline, saved only by a series of court rulings and the viability of iTunes as an online marketplace (Vivian, 2012). The court actions of the Recording Industry Association of America (RIAA) against Napster, and over 35,000 individuals has created new laws, regulations and set new standards that seek to protect artists and labels from infringement in certain markets. The contracts formed between the RIAA and services like iTunes and Amazon have enabled the increase in the overall number of legal music downloads. However, the amount of illegal downloads worldwide has not diminished as services move to accommodating servers in Russia or other more lenient countries (Perloth, 2012). The rise of illegal file sharing resulted in U.S. federal prosecutors wining a court battle to shut down the giant bit torrent service Megaupload in 2012. This has created a lasting ripple effect among file sharing sites around the world, despite efforts for certain offenders to evade a total shutdown (Perloth, 2012).

The constitution puts a lot of weight into international treaties as the law of the land. With the adoption of the World Intellectual Property Organization’s WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT), the United States embarked on a legal precedent that said that rights holders could rely on a violation of the law to protect their work instead of relying on un-hackable technological measures known as Digital Rights Management (DRM) or Technological Protection Measures (TPMs) to protect a copyrighted work (Hinze, 2007). The adoption of the DMCA expanded on these treaties signed in the late 1990’s. However, Hinze states that there has been significant “collateral damage to consumers, scientific researchers and for competition and technological innovation” because of the overbroad approach that prevents non-copyrighted material from being shared (Hinze, 2007). TPMs work by either limiting access to copyrighted material outright or by preventing copies (Hinze, 2007). Part of her solution to the reforms needed for TPMs is to make sure that non-copyright infringing material is protected across the Internet by limiting the legal protection of TPMs to the boundaries of national law, to establish a flexible mechanism that permits access to legal material, to regulate anti-competition misuse of TPMs, to carefully structure circumvention penalties to allow scientific research, education, and finally that TPMs’ should have a review process to review their effectiveness on non-infringing users rights (Hinze, 2007).  These steps will be necessary to return copyright to its original purpose of promoting the arts, engaging criticism and encouraging the sciences (Pember & Calvert, 2013 p. 539).

With some protections in place, the potential for long-term revenue streams for artists and recording labels exist; what Chris Andersen refers to as the “The Long Tail” which is more possible if media companies can rethink the traditional scarcity models and release their back catalogs (Andersen, 2004). Music and information will generate substantial revenue when it adds to the value of a brand and becomes a facet of social networking sites, merchandising, and ticket sales along with future monetized income streams (Andersen, 2004). For musicians and artists, this creates a whole new world to create in, but does it take away from the purity of their artistic expression? After all, traditionally a composer was not concerned with how their creation was monetized beyond who would pay to record it or how their own album sold. They would often leave the money making in the hands of A&R people or the recording label but this could restrict artistic freedom in an independent setting and thus contribute to a culture in decline (Vivan, 2012). Hopefully for music listeners and industry alike, the marketplace will find a balance between sales and accessibility.

New technological innovations will influence the way that music, news and talk shows will reach the listener, but it is highly unlikely that sound media will vanish anytime soon. Much like print, it will need to adapt to the new technologies. The lessons of digital music streaming and downloading as a challenge to the traditional distribution channels should not be easily forgotten (Vivian, 2012). The almost complete collapse of the recording industry and inability for artists to monetize and control their creations is stemmed for now, but could be easily challenged by the next technology. It is up to the industry to adapt and conform to the desires of the listener and to look at schemes like subscription services to make up for loss of advertising revenue. Commercial venues for radio are diminishing, but truly important consumer information is in specialized reports across niche stations that work with manufacturers to produce content that strikes a chord with listeners and is free from traditionally deceitful propaganda of advertising. The government can use the leverage of the FCC to enforce laws that foster competition, break up media conglomerates and give more of a local voice to issues as they have done with the Local Community Radio Act of 2011. Artists, entertainers and news media can use the resurgence that Internet radio creates to reach new audiences and foster financial relationships that can sustain their craft.



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