Radio changes its tune

Meanwhile, traditional radio is fighting back with a $28 million advertising campaign ("You hear it here first"). And it points to its own digital radio, sometimes called HD Radio, which would boost the sound quality of FM channels to CD quality. It would also have TiVo-like store-and-replay ability.

"This is going to revolutionize the terrestrial radio industry," says Dennis Wharton, a spokesman for the National Association of Broadcasters (NAB). "It's going to be a vastly improved listening experience."

But automakers have yet to offer HD Radio as original equipment. "I wonder if the time for it has come and gone," Mr. Nadel says. "I don't hear nearly the buzz outside the industry that I hear within the industry about it."

To counter complaints over too many ads on local radio, Clear Channel Communications Inc., owner of more than 1,200 stations, recently promised to cut the number and length of commercials on its stations.

The buzz now from commercial radio is that, unlike satellite radio, it's "local." Some observers see that push as ironic, as locally owned stations have been bought up by chains.

But "the reality is that if you're not local in the radio business, you can't be successful," counters NAB's Mr. Wharton. "Any station that thinks it's going to be successful importing a signal from 2,000 miles away, and pass that off as a local radio station, isn't going to be in business for long."

Last year, local radio topped $20 billion in revenue, a record, he says, though that represents only a 2 percent increase over the previous year. "We're long past the stage of realizing there is going to be competition for radio listeners time," Wharton says. But "right now there are 225 million people who on a daily basis listen to hometown radio stations, compared to something like 4 million people who've subscribed to satellite radio."

Despite the mushrooming digital competition, local radio has innate strengths, Mr. Taylor agrees. "You just turn one on, and it's there. You don't have to subscribe to anything, you don't have to decode anything, you don't have to wait for it to [boot] up. It's there."

Since Guglielmo Marconi first transmitted signals 110 years ago, radio has become one of the world's most common sources of news and entertainment. By one estimate, there's one receiver for every three inhabitants. But they're not equally distributed. Every American owns two, on average; in East Timor, there's one for every 50 people.

• Almost all commercial radio is local, with only a few players, like the BBC, operating globally. Public broadcasters have a higher share of the market in Europe than in the US or Asia. One of the fastest-growing markets is China, where some broadcasters have seen revenues double.

• Radio amateurs broadcast as well as receive. Today there are nearly 3 million such amateurs spread around the globe. That's double the total in 1985.

• The Internet has spawned new forms of radio, including "podcasting," which provide content on demand.

Sources: World Book; UNESCO; Datamonitor plc; International Amateur Radio Union

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