Commercial radio was born in November of 1920. The first OEM (Original Equipment Manufacturer) car radio came along in 1922 designed by the Chevrolet Motor Company and manufactured by Westinghouse. This first car radio was heavy, cumbersome and expensive; costing $200. In today’s dollars this would be the equivalent of $3,347.00. A 1922 Chevrolet, Superior 5-Touring automobile was priced at only $860, so you can see how expensive it was to buy one with a radio installed.
The good news is the radio worked and would then birth 100-years of innovation in the automobile dashboard.
The 1920s Car Radio Sales Pitch
With a radio in your car, your family could drive anywhere within a hundred miles of a radio station while being entertained, informed and educated.
It’s hard for any Baby Boomer to imagine not having audio entertainment as standard equipment in their dashboard.
1930s
It was radio engineer Paul Galvin that would pioneer more affordable car radios which he manufactured and sold through his new company, called Motorola.
1940s
Midway through the 40s, it is estimated that nine million cars now had radios in their dashboard and people were becoming concerned that they were leading to distracted driving thereby causing more auto accidents. Both broadcasters and radio manufacturers made the case for how having a car radio was useful in emergencies and alerted drivers to bad weather conditions.
Today when the topic of distracted driving comes up, it’s usually about handheld cellphones being used by drivers. But back then, Radio-Craft Magazine told of the battle being waged between state legislatures and radio manufacturers: “Ever since auto-radio installations became popular, a controversy has been going on…as to whether auto radio presented an accident hazard or not.”
The president of the Radio Manufacturers Association made the case that car radios were safe saying:
“Radio is not distracting because it demands no attention from the driver and requires no answer, as does conversation between the driver and passengers. Motor car radio is tuned by ear without the driver taking his eyes off the road. It is less disconcerting than the rear view mirror.”
Several states proposed steep fines for drivers, while others considered making installing a car radio a crime.
The Princeton Radio Research Project was created to study the effects car radios were having on automobile safety. In a paper published by Edward A. Suchman for that project, he reported that his small study found no link between car radios and traffic accidents.
1960s
In 1963, Frequency Modulation (FM) radios were introduced into the automobile for the first time. Radio penetration in cars had now reached 60%.
Along with FM radios, the 60s also gave birth to both eight-track tapes and car stereos, primarily due to the use of transistors, instead of vacuum tubes. Solid state transistors were smaller, drew less power and emitted very little heat.
1970s
If the 60s belonged to the 8-track tape player, the 70s would belong to the stereo cassette tape player. Recording tape manufacturer Maxell promoted these cassettes as nearly indestructible.
1980s
While the Compact Disc (CD) would be introduced in the 80s, it didn’t really become ubiquitous until the late 90s, coexisting with compact cassette players in automobile dashboards for two more decades.
21st Century
Probably the biggest disruption to the automobile dashboard came with the advent of Bluetooth allowing smartphones to interface with a vehicle’s entertainment system.
In 2011, automobile manufacturers stopped offering cassette tape players in their new cars, soon followed by the elimination of CD players/changers.
Today’s new cars come equipped with access to Satellite Radio, and an automatic interface with your smartphone allowing you the ability to stream anything you want to hear into your car’s entertainment system.
In fact, my first article for this blog in 2022 was “Why I Stream ALL My Radio Listening,” which diagrammed how my car radio audio systems are now programmed by my iPhone.
“Radio is not going to be Numero Uno in the dash any longer.”
-Fred Jacobs
AM/FM radio will most likely coexist with other forms of audio access for a period of time, but the writing is on the wall.
The definitive answer to how long over-the-air radio will continue to be used in the automobile really depends on broadcasters and whether or not they offer compelling and attention-getting content that audio consumers demand to hear.
AutoStage
Xperi’s newest in-dash experience is AutoStage. It was demonstrated at CES2022 and it should be noted that this system comes with the following pre-sets: SiriusXM, FM, AM and TuneIn Radio.
I use the TuneIn Radio App for most of my radio listening, but why was it chosen by Mercedes Benz? Turns out the answer is, “TuneIn’s radio stations can be accessed worldwide in 197 countries on more than 200 different platforms and devices.” TuneIn says it “provides the displaced radio listener a connection to home with local, national, and international stations anywhere they go and on any device.”
In other words, why would any audio consumer need DAB (Digital Audio Broadcasting), DAB+, Digital Radio Mondiale, HD Radio, AM or FM when they can receive any radio station in crystal clear audio via streaming?
With the exception of the proprietary content offered by SiriusXM, everything else is available via streaming at no charge.
Waxing Nostalgic
Car radio has come a long way from the day William Lear and Elmer Wavering drove their girlfriends to lookout point high above the Mississippi River town of Quincy, Illinois to watch the sunset and their dates told them how much better this romantic evening would have been had they been able to listen to music in the car.
Lear and Wavering shared their girlfriends’ comments with Paul Galvin who would go on to make Motorola car transistor radios, and then AM/FM radio would dominate the dashboard for the rest of the 20th Century.
So, now moving further into the 21st Century, radio broadcasters really need to follow the advice of Steve Jobs in order to survive and thrive, and that is to:
DickTaylorBlog 
Interesting that people have dealt with these “distractions” for a century now. Broadcasters and manufacturers have plenty of bloody feet these days with the downgrading of audio quality of AM, the HD spectacle of FM and the sometimes disappointing quality of Satellite. Adding in the 15 minutes per hour of irrelevant content on most AM/FM stations these days (usually poorly produced commercials), The vast number of streaming choices may be “free” but my $300/month Verizon bill tells me differently. Broadcasters have to realize they have real competition in 2022, and it needs to be addressed or the car dashboard will eventually squeeze AM/FM out of the picture.The “other” guys (satellite, Spotify, Apple, etc.) are already pressing that issue. Think different? How about “THINK!!”
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My wife and I are both on an unlimited data/text/phone plan as seniors; it’s about $87/month. We stream all our audio entertainment when out-of-the-home. When home all our TV viewing is also via streaming.
But no one cares, because we’re both out of the coveted 25-54 demo and no wants are greenbacks. Their loss. We’re doing fine.
Thanks for sharing your thoughts today Dave.
-DT
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But there is a charge – to broadcasters. With the US Copyright Royalty Board’s gratuitous streaming fees for non-subscription streamers, traditional broadcasters get punished for success at a very specific rate per listener, per song – a stone Spotify, Pandora, and the rest don’t have hanging around their necks. Until we’re on a level playing field, a lot of broadcasters can’t fully throw their hats into the streaming ring.
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Remember when Pandora bought a radio station so it could get the broadcast station royalty rates? That ploy didn’t really work in the end, but playing fields are never level. Someone always has an advantage.
Here’s a link to an article with more about that: https://www.rbr.com/pandora-dumps-its-only-fm-station/
The real problem here is it is an apples/oranges argument. Broadcast radio has one set of royalties that it pays for over-the-air music performance and another for streaming. Pure plays only have streaming.
Expect this debate to continue for some time to come.
-DT
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Dick, if I may add to this storyline of copywrite performance royalties that appear to continue as misunderstood.
I was on the team of Congressional lobbyist for copyright royalties in 2001. To clarify Cameron Coats’ claim of “…a stone Spotify, Pandora, and the rest don’t have hanging around their necks”: traditional broadcasters were asked numerous times to join in the fight against onerous CAB rates – which apply
only to streamed songs. There was a continued silence (from I believe Gary Fries and all his followers at the time). They saw high rates as being a killer for online radio stations and were content with watching new competition die.
Original rates were set at paying the main performer 45% of fees, with 5% paid to backup and session musicians – the remaining 50% of the CARP rate was paid to an artist’s label. Originally the labels setup a system to disburse
these funds, but that was struck down in court and they were forced to create SoundExchange. Note that originally, if SoundExchange could not locate an artist it was allowed to keep the fees. The Mormon Tabernacal Choir was one
of the groups SoundExchange claimed not able to be able to find.
Misconception on this issue occurs when broadcasters believe they pay a performance royalty for over the air play. They do not. Broadcasters paid (and still pay) a publishing royalty which goes into the pocket of the labels as
a BMI, SESAC and ASCAP line item.
The Copyright Royalty Board drafted a “performance” royalty that was placed on the play of all songs online. This was in addition to a publishing fee (BMI, SESAC, ASCAP). Broadcasters later would pay a negotiated rate to CARP, but at the time of negotiations in 2001 – and to the best of my knowledge, today – nobody in broadcast paid a performance royalty for over the air play.
Here’s why that’s important: reciprocity.
If Adele had a song play on a U.K. broadcast. she received a performance royalty. If Modona had a song played on a British radio station she received no performance royalty because the U.S. offered nothing to Adele for over the air play.
I wrote this in 2009. I have earlier writings but don’t feel the need to dig into my archives: “Years ago, back to 1998, I was calling for the radio industry to become involved in the Copyright Royalty Board’s excessive rates against internet radio. That cry was a forewarning; my chant was that CRB was going to eventually catch up to the radio industry. Its leaders sat silent.” – http://www.audiographics.com/agd/082809-1.htm
That we still have this misunderstanding on performance royalties is a testament on how hard U.S. broadcasters are still working to confuse the issue.
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Thank You for this Ken. You reminded me of an era I’d forgotten about, yet lived through, the period when the radio industry thought it would be to their advantage to hurt streamers by not supporting them in these royalty issues.
It reminds me of the old saw, you can’t stand taller by pounding another into the ground.
In the future, we will all be streaming audio entities, but it appears broadcasters prefer to stay the course they set back in the 90s for a while longer.
-DT
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Ken ( and Dick), this is part of the root of the problem. I’ve worked at stations that couldn’t play songs licensed by SESAC or ASCAP – because the publishing fees weren’t paid. It’s pretty complicated when you talk royalty,license, publishers label fees. It’s kinda like having someone explain gas prices. Carbon tax, sales tax, underground storage tax…It only seems fair that artists, musicians and labels get paid for their work. It also seems that the medium that shares this work-if it’s making money from the performance of this work-should pay a share. All involved should get a fair shake of the revenue-based on the amount of work they put into it. Doesn’t seem like that’s been happening. Whether it’s online, over the air or heard in a restaurant, you can’t deny those involved their revenue. It seems that it’s way too complicated these days to even figure out where the money goes-or where it comes from. Why not level the playing field in the spirit of fairness and charge the media outlet based on its revenue? Let the labels deal with publishers, artists and composers, and make it fair for all involved. Of course, a discount should be made for the medium that gets credit for the end user buying the musician’s work. All media-regardless of its platform should be given credit for inspiring the end user to shell out money to buy the artist/label’s product. Someone should really quit complicating the issue so much-so that everyone feels that their efforts are being rewarded. I’m just sayin’
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Dave, the world is moving to getting everything online and so in time, the difference between broadcast and online will fade away and everyone will be an online broadcaster, where playing is more accurately monitored for fees being paid to composers & artists it would appear.
I know in my own case, all of my audio listening — be it pure play or OTA radio — is done via a stream.
-DT
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Dave:
There are two parts to your statement. The first is a simple separation of publishing fees against performance fees. This dissolves to an “at what point is an artist considered a draw – where people tune into a station.” And “when are they being introduced – where the artist gains more from exposure than a station could recoup in sales.” I’ve always held that there’s a period all artists go through where exposure by the media to their product is worth far more than anything they (the artist) brings to the table as a draw: http://www.audiographics.com/agd/022013-1.htm
In addition to 27 years in broadcast, I took my first software course in 1969. I have written millions of lines of code and know that you’re talking about a million-dollar-plus investment to create the software which does what you suggest – parse out payment to stations for sales of music. Nobody is going to pay for that, and nobody will agree to share something like this with all other broadcasters. Remember the fiasco when Google offered to sell unsold inventory for radio? Evey company turned its back on the offer. How much farther along do you think broadcast radio would be today had they gotten together with Google in 2006?
The second half of your question is about crediting software crediting sales of an artist’s music. I’m all for that, with a caveat: are you willing to pay for the creation of this software, making this possible, and do you have the power to sell this concept to broadcast? I can only believe there’s no way you’ll get that multiple companies to agree to anything you bring to the table, and I know this after trying to bring a half-dozen digital concepts to broadcasters. Remember LMIV in 1999? It was a disaster – http://www.audiographics.com/agd/articl49-lmiv.htm
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Thank You Ken. -DT
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Ken, your response is more than I could have ever anticipated -it’s appreciated. I’m no accounting expert, nor am I a legal expert. I’m just a dweeb who’s used to the old “how much does it cost? I’ll buy it!” (line from Jonathan Edwards’ “Sunshine”). We have a knack for making things so complicated that one hand has no idea what the other is doing. I was just lamenting for a much easier solution. As you pointed out, getting companies to agree on anything is difficult-if not impossible.
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Ken knows his stuff. When we get into the weeds on some of these things, I’m always grateful when Ken to steps in and gets everyone on the same page while keeping it real.
-DT
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