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Radio changes its tune

So many new channels, so many new ways to hear them - the medium will never be the same.

By Staff writer of The Christian Science Monitor / February 17, 2005



These days Radio and Records, a trade publication, doesn't just list what's hot on America's AM and FM stations. It also lists the Top 10 songs playing on Sirius satellite radio and the Top 10 downloads from the Internet music service iTunes.

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"We have to adapt," says Roger Nadel, executive editor of the radio-industry publication in Los Angeles. "It's a significant part of the business."

In fact, the radio business may be undergoing its biggest shakeup ever. So many new digital technologies are beckoning to its traditional listeners that it's hard to know what radio is anymore.

It's no longer limited to the airwaves, thanks to cable TV's music offerings, the Internet, and one day, perhaps, cellphones. It's not strictly live because online "podcasters" and others let you download music to play at your convenience. About the only thing that really separates radio listening from, say, uploading music to an iPod is that on radio, someone else plays deejay.

"What we increasingly have here is one big, bad digital soup" of programming, says Paul Saffo, a director at the Institute for the Future, a Silicon Valley think tank. Various companies "are offering us different kinds of ladles to use at different moments."

That spells upheaval for the industry. But for consumers, the result looks mostly positive: more choices of programs and more control over when they can hear them.

For example: Some of the most cutting-edge radio can't be heard on a radio at all. Internet broadcasters send all kinds of programming streaming live over the Web. Others, called "podcasters," are mostly amateurs who offer highly individualized programs that can be downloaded to computers or personal music players such as an iPod.

IPods themselves, capable of storing up to 10,000 songs, have become a significant alternative to radio. Will people keep tuning in if they can so easily build their own music library?

Yet another traditional radio alternative comes from Internet companies that provide music from giant online libraries. Subscribers can download songs for "rent," rather than buy them from sources such as iTunes. The songs no longer play if the subscription lapses. Napster now offers a $15 per month service, and others are expected to follow.

Cellphone companies may also offer portable music, with satellite radio as a possible source of some of its programming.

Except for iPods, which threaten to crush radio, none of the new digital technologies has yet built the audience to directly challenge the 3,000 AM and FM radio stations in the United States. But two satellite radio companies, XM and Sirius, each with more than 100 channels of audio programming, are trying hard. By the end of the decade, about 40 percent of all American households will subscribe to satellite radio, about 32 million listeners, predicts the investment firm J.P. Morgan Chase.

Optimism ... and red ink

Despite those optimistic projections, the two satellite companies are far from profitable. Together, XM and Sirius lost more than $1 billion last year.

XM, the larger of the two with 3.4 million subscribers, has cut deals to be available on JetBlue and AirTran airlines and in Hertz rental cars. Its hand-held MyFi receiver makes satellite radio portable and available anywhere - in the car, on a hike, or inside the house. The MyFi also can store up to five hours of programming for later listening. Besides scores of specialized music channels, XM offers the entire slate of Major League Baseball games (listen to your home team wherever you are), two NASCAR channels, and right- and left-leaning talk-show channels - all for $10 per month.

Sirius gained notoriety last fall when it signed controversial Howard Stern to move his radio show to Sirius next January for a cool $100 million per year. For $13 per month, it offers its own long list of musical niches, including a hip-hop channel programmed by rapper Eminem, two channels programmed by Bruce Springsteen guitarist Steven Van Zandt, and an all-Elvis channel. Football fans have access to the radio coverage of all the NFL games. Sirius plans to offer mobile video programming in 2006.

"Satellite [radio] has the chance with almost 130 channels to be almost all things to all people," says Tom Taylor, editor of Inside Radio, an industry newsletter. He sees local radio stations as similar to local newspapers, needing to attract a fairly wide variety of consumers. "You can think of Sirius and XM as more like being the magazine stand" where consumers go for specialized content, he says, from rock climbing to home improvement.

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