Commercial terrestrial radio's decline into irrelevance

The New York Times had a good piece on the decline of the commercial terrestrial radio industry.

The industry has changed dramatically since 1996. In that year, the Republican Congress passed the Telecommunications Act of 1996, which almost completely deregulated the broadcast industry. President Clinton essentially completed the Reagan Revolution by signing this bill (along with the massive deregulation of the financial sector too.

After ownership restrictions were lifted, most commercial radio stations in the country were bought by a handful of huge media conglomerates, most notably Clear Channel. In my market, like many others, Clear Channel owns most of the radio stations you can find on the dial.

Increasing consolidation led to increasing homogeneity. Many stations ceased to be local and their programming was centrally or regionally controlled. There was an notorious case of a flood in one of the Midwest states, I believe, where municipal officials tried to call the local radio station only to find that there was no human being there to answer the phone. And do you think there's much chance of a Des Moines band getting play on a Des Moines station if the programming originates in Chicago?

In recent years, commercial radio has also been ruined by more and more ads. It's been even more contaminated by an avalanche of yap by inane hosts who think that listeners are actually more interested in their vapid banter than Lennon's lyrics. If you scan the radio dial in PM drive time, music is the exception not the rule; in the morning, it's virtually non-existent.

The increased sameness of programming and deteriorating quality may not have hurt the industry's bottom line in an earlier age but this has coincided with a dramatic increase in consumer choice of music delivery options.

There has always some private forms of music, from vinyl to CDs via cassettes. But digital music has dramatically increased consumer flexibility. Accessories can transform an iPod to a boombox. The Internet has led to tons online only radio stations. With podcasts, you're more likely to get a host who actually talks about the, gasp, music. Or not at all. Why would anyone suffer through commercial radio yammering when these options are available?

In the last few years, satellite radio has exploded: the two main services being Sirius (which I get) and XM. They each offer dozens of channels of music, also commercial free. Host banter is minimal. In the past, terrestrial radio might've competed with satellite on the basis that it was local, that it was homegrown. In most cases, that's no longer true.

It's telling that commercial terrestrial radio's quality has diminished so rapidly that people would rather spend a few hundred dollars for an MP3 player instead of forty bucks for an ordinary Walkman. Commercial terrestrial radio has so turned people off that they are now flocking to pay $12.95 a month for what they used to get for free.