The future of terrestrial radio in the age of podcasts.

Podcasts Are Great, But Don’t Count AM/FM Radio Out Just Yet

Podcasts Are Great, But Don’t Count AM/FM Radio Out Just Yet

The past, present, and future of podcasts.
Dec. 14 2014 9:00 PM

Don’t Count AM/FM Radio Out Just Yet

Podcasts are big and getting bigger, but what are you gonna turn on when the zombie apocalypse comes?

Is radio dead?

Illustration by Natalie Matthews-Ramo. Radio photo by iStock. MP3 player by Shutterstock.

As part of this rah-rah, decennial pep rally for podcasting, I’ve been assigned to ponder the grim future of terrestrial radio. You know—AM/FM. That stuff your parents used to tune in with the old-fashioned knobs on their cars’ dashboards. Antiquated call letters. Staticky Eagles songs. Brontosaurish broadcast towers rusting away on forgotten hillsides.

Seth Stevenson Seth Stevenson

Seth Stevenson is a frequent contributor to Slate. He is the author of Grounded: A Down to Earth Journey Around the World.

“Can radio even survive?” asked my editor, gazing dreamily into the middle distance. “No one listens to it anymore. What will become of those radio airwaves now that podcasts have taken over the world?”

His concern is sweet. But terrestrial radio doesn’t need his pity. At least not yet. According to Pew’s State of the Media report from earlier this year, in 2013 a full 91 percent of Americans 12 and up listened to traditional radio at least once per week. That number is barely changed from 2012, or for that matter from 2002. America still tunes in.

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Yes, I know, you and your buddies are deeply into Serial, you haven’t listened to FM in years, corporate radio sucks. But people like you do not reflect the actual state of the marketplace. And frankly, Jeff Smulyan is getting mighty sick of your podcast triumphalism.

As founder and CEO of Emmis Communications, Smulyan owns an armada of radio stations—including behemoths like Power 106 in Los Angeles and Hot 97 in New York. When I ask him whether terrestrial broadcast outlets like his can survive amid the podcast renaissance, he scoffs at the question’s premise. “Terrestrial radio’s biggest problem right now is it has no cachet,” says Smulyan. “Podcasts only eat about a less than 1 percent chunk of my business. Internet radio streaming is 7 percent of the American radio industry, if that. Things are beginning to fragment, make no mistake. But we still made more money before lunch today than Pandora has made in its entire history.”

Radio continues to be a useful, profitable technology. Consider: For $39,000 in annual electricity costs, Power 106’s broadcast tower can reach 15 million people in Southern California. There are no incremental charges involved—when an additional person tunes in, it doesn’t cost the station a dime. Not so on the Web. Each time you click a streaming radio channel, or download a podcast, it’s as though you’re making a collect call. Somebody’s paying to send all those data packets your way. The more people tune into a streaming broadcast, the more the broadcaster must spend on servers and bandwidth. According to Smulyan, if the roughly 3 million people who actually tune in to Power 106 on the radio each week (out of the 15 million the station’s broadcast tower can potentially reach) all suddenly switched to listening over cellular networks, it would cost him about $1 million annually to send out the data, and would cost them more than $1 million to receive it. (Whether they noticed these costs, or their cellular provider ate them, would depend on the nature of their cellular plans.)

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Even if Smulyan paid to send out all those data packets, they’d still fail to reach a lot of people. Many rural communities don’t receive reliable broadband. Some people can’t afford the broadband that’s available to them. Not everyone owns a smartphone (though if you do, Smulyan wants you to know that it already has an FM chip inside it, which wireless carriers only need to activate for you to listen to over-the-air signals). Older people, and the less tech-savvy, sometimes have trouble figuring out how to find and listen to podcasts. Or how to connect their phones to their car speakers. For these folks, terrestrial radio remains a terrific option. It’s already installed in their cars. And if they want to listen at home, they can buy a Sony AM/FM receiver for about 12 bucks, operate it with ease, and enjoy the river of content that flows out of it for nothing more than the cost of a pair of AA batteries.

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To be sure, terrestrial radio still faces profound, looming problems. For one thing, the industry as a whole is crippled by debt. In the wake of the Telecommunications Act of 1996, radio ownership groups were newly permitted to buy multiple stations in the same market, and the cap was lifted on the total number of stations they could own nationwide. This set off a wave of acquisition and consolidation. Huge firms like Clear Channel (now known as iHeartMedia) gobbled up every frequency in sight, borrowing money to afford suddenly booming station prices as everybody else went on buying sprees, too. Those investments turned out to be folly, particularly after the advertising market crashed during the Great Recession of the late aughts. iHeartMedia remains smothered in debt—$20.7 billion of it, as of September. Other radio ownership groups are in similar straits.

All that consolidation had further consequences, as well, as companies paying to service their debt trimmed costs by cutting regional flavor out of their station portfolios. Local DJs were canned, local staffs were downsized, and local programming was ditched in favor of prerecorded, homogenous, national fare from the mother ship. “When you think of the podcasts that are making an impact, ones like Serial and WTF,” says Paul Riismandel, a veteran radio broadcaster and the co-founder of RadioSurvivor.com, “those are very host-driven and talent-driven. Marc Maron makes WTF great. Sarah Koenig and the This American Life team make Serial great. When you think about commercial terrestrial radio, where’s the talent? They haven’t invested in the same way. The only breakout radio star of the last 10 years is Sean Hannity, and he wasn’t new.” These days, big-time commercial radio connects with very few passionate listeners beyond the realms of conservative political talk and sports gabbing.

Public radio is a different story. How comfortable is NPR with the Internet? In 2010 it declared that its R doesn’t even stand for radio anymore. It foresaw early on that its audience would steadily move online, and it made its peace with that. It kept on nurturing in-house talent and creating shows—such as Planet Money and Radiolab—that were unique and that translated well to the podcast format.

NPR is proof of concept for commercial radio companies: It has bred a culture in which terrestrial stations are still relevant, but the Internet is welcomed as an opportunity and not feared as a threat. Some initiatives from traditional radio companies (like iHeartMedia’s iHeartRadio) have begun to feed terrestrial radio content into online apps. The problem is, the traditional radio outlets aren’t producing any content worth listening to—no matter how you listen to it.

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The reality is that the Internet will win out, sooner or later. There’s no stopping it. Though the audience for audio has been growing overall, nearly all that growth is happening online. For good reason: Online you can fire up your favorite podcasts whenever you please—instead of tuning in and hoping against hope that something you’ll like is on. There’s much wider variety to be found on the Web, with thousands of niche programming choices—instead of a mere 30 stations on your FM dial. From the point of view of a person recording a podcast in her garage, it’s a breeze for her to distribute audio content over the Internet, with little in the way of startup costs. Like, for instance, she needn’t erect an enormous radio tower.

Of course, that garage podcaster will suddenly be smacked with huge data costs if her show becomes a hit. For this and other reasons, radio engineer and activist Pete Tridish predicts that terrestrial radio will always have a useful role to play. Tridish got involved with small-scale radio operations out of frustration with the consolidation that happened after that 1996 telecommunications deregulation. He helps engineer over-the-air operations for rural communities, groups of farmworkers, and such, sometimes placing small broadcast towers on the tops of buildings. When I spoke to him, he was about to help establish a station for a Navajo college in Arizona. “Just because we have word processing now doesn’t mean there’s no place for the pencil,” he says, “and just because we have the Internet doesn’t mean there’s no place for radio.”

He suggests a few reasons why terrestrial radio will stick around for a long time:

  • Most of us don’t feel the cost of the data we’re using when we stream online content. But this could be changing. “Half the public still has no idea what data metering is,” says Smulyan, “but we find it changes consumption completely when people see what they’re paying for the data they use.”
  • Due to some complex legislation, it can be less onerous to pay artist royalties when you play music over the airwaves than when you send it over the Internet. For this reason, last year Pandora bought an FM station in South Dakota, in an effort to qualify as a terrestrial broadcaster.
  • When the revolution comes, radio will be vital for the propagation of seditious content. It leaves no digital footprints. And the NSA is unlikely to hack into your transistor boom box and track what you listen to.
  • When the zombie apocalypse arrives, radio will save your hide. Anyone with a generator and an antenna can broadcast radio, and everyone listening hears the same key information in real time.

In 2010, NPR’s then-CEO Vivian Schiller prophesied: “Radio towers are going away within 10 years.” Four years later, that pronouncement is looking awfully silly. Radio towers haven’t gone anywhere, as that previously mentioned 91 percent of Americans could tell you. Radio companies still haul in billions of dollars in revenue. Even as terrestrial radio is overshadowed by podcasts and streams, it will continue to hold a place in our media landscape.

Now, if you’ll excuse me, the Eagles just came on. Need to nudge the antenna a bit to get out the crackle. Ah, radio—you give me such a peaceful, easy feeling.