Tag Archives: AM/FM Radio

Is Radio Biting Off More Than It Can Chew?

caravelle radio broadcast stationThere are lots of items in the news these days about what the radio industry should be doing. Streaming, podcasting, smart speaker accessible etc. The one thing I hear little talk about is, improving the core product and focusing on what the listener is seeking.

The Radio Ecosystem

If you think about it, the radio ecosystem, AM/FM radios, have not seen any real changes in decades. Oh, there was the introduction of HD Radio – introduced around the same time as Apple introduced the iPod (R.I.P. 2001-2014), but listeners never really understood the need for it. HD Radio was embraced by commercial broadcasters when they learned they could feed analog FM translators from HD Radio signals and have more FM radio stations in a single marketplace. This was hardly listener focused and actually chained the radio ecosystem to old analog technology.

What IS Radio?

In the beginning, radio was a way to wirelessly communicate with other people using Morse Code on spark gap transmissions. Guglielmo Marconi built a radio empire on this technology.

David Sarnoff, a skilled Morse Code operator and a Marconi employee envisioned a “radio music box” and wrote a memo about developing a commercially marketed radio receiver for use in the home. It wasn’t until after World War I, when Sarnoff proposed the concept again, this time in his new position as general manager of the Radio Corporation of America (RCA), that it would see the light of day.

Sarnoff would demonstrate the power of radio by broadcasting a boxing match between Jack Dempsey and Georges Carpentier. In just three years, RCA sold over $80 million worth of AM radios, and not soon after created the National Broadcasting Company (NBC).

Federal Radio Commission

America’s first attempt at regulating radio transmission was the Radio Act of 1912, that was enacted after the sinking of the Titanic. This law didn’t mention or envision radio broadcasting.

As radio broadcasting began to grow in the 1920s, then Secretary of Commerce Herbert Hoover would begin the process of trying to regulate the limited spectrum that everyone now wanted a piece of.

The Radio Act of 1927 was America’s first real attempt at regulating radio broadcasting. The Federal Radio Commission (FRC) was then formed by this act.

It should be noted that the FRC operated under the philosophy that fewer radio stations, that were well funded and provided live original programs, were better for America than a plethora of radio stations providing mediocre programming. It was an idea that the major radio receiver companies championed.

Federal Communications Commission

In 1934, the Congress took another attempt at regulating broadcasting (radio & TV) as well as all the other forms of communication that now existed. The Communications Act of 1934 created a new regulatory body called the Federal Communications Commission (FCC). By 1934, radio broadcasting had evolved into a highly profitable business. Broadcast educator, Fritz Messere, writes: “Many of the most powerful broadcasting stations, designated as ‘clear channels’ were licensed to the large broadcasting or radio manufacturing companies, and the Federal Radio Commission’s adoption of a rigid allotment scheme, under General Order 40, solidified the interests of the large Broadcasters.”

The biggest and most well-funded broadcasters have been favored since the very beginning. What kept things in check until 1996 was the limit on the number of AM, FM and TV stations a single company could own.

Telcom Act of 1996

Those limits would evaporate with President Clinton’s signing of the Telcom Act of 1996. Radio, as America had known it, would be over.

Now, for the most part, a single owner could own as many radio stations as their pocketbook could afford. Lowry Mays and Red McCombs, founders of Clear Channel Communications, would grow their portfolio of radio stations to over 1200 from the 43 radio stations they owned before the act was signed.

In 2003, Mays testified before the United States Senate that the deregulation of the telecommunications industry had not hurt the public. However, in an interview that same year with Fortune Magazine, he remarked, “We’re not in the business of providing news and information. We’re not in the business of providing well-researched music. We’re simply in the business of selling our customers products.” (Mckibben, Bill (2007). Deep Economy. San Francisco: Ignatius Press. p. 132.)

Radio Zoning The FCC is now considering whether to further loosen up the ownership limits of radio and TV stations in America. FCC Attorney John Garziglia recently wrote:

“If radio stations could be erected like fast-food establishments and grocery stores, with no numerical limits imposed other than a businessperson’s risk tolerance, it would be difficult to argue for FCC-imposed ownership limits on radio. Indeed, a regulatory agency enacting numerical limitations on restaurants and grocery stores would likely not pass legal muster.

But there are widely-enacted municipal limitations on just about every type of local business. The limitations are called “zoning” – the permitting or prohibiting of certain uses in certain areas to protect the character of the community.

The FCC’s radio ownership rules can be thought of as a kind of radio zoning. In the same way as land-use zoning protects a community’s character, the FCC’s ownership rules permit or prohibit certain radio station combinations protecting the amorphous concept of the public interest.

With land-use zoning, communities maintain a distinct character, livability, aesthetic, and economic success by not bowing exclusively to the profit motive of land developers. Allowing several or fewer owners to own virtually all of the radio stations in the country would doom the specialness of our radio industry.”

 

I think John makes some excellent points and I would encourage you to read his complete article HERE.

Biting Off More…

Radio operators today can’t properly staff and program the stations they already own. What makes them think that will change if they own even more of them? Most radio stations are nothing more than a “radio music box” run off a computer hard drive, an OTA (over-the-air) Pandora or Spotify.

Former Clear Channel CEO, John Hogan, introduced the “Less Is More” concept when I worked for the company. While it actually introduced more on-air clutter, not less, the idea was neither new or wrong.

If owning more radio stations was the answer in 1996, then why in 2018 are we worse off than we were then?

Why was Jerry Lee able to own a single station in Philadelphia and dominate that radio market?

Why are many locally owned and operated radio stations some of the healthiest and most revered in America today?

Radio not only needs zoning on the number of radio stations a single owner can control in a market, but the total number of radio station on-the-air in a market. And it needs radio stations that are neglected to be condemned like property owners who let their land go to seed.

The FRC wasn’t perfect, but the concept of “less is more” served America well for many decades. Fewer radio stations that provided high quality, live programming, operating in the ‘public interest, convenience and necessity’ and by virtue of that diversity of ownership, provided diversity of voice and opinions, as well as healthy competition.

 

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Whatever happened to…

Red Sox CapThe other day, we took two of our grandchildren to a wildlife safari park here in Virginia. It was a simply magical day. But that’s not the part of the story I want to share. It is that both kids were wearing their Boston Red Sox baseball caps.

As we were getting ready to leave we met one of the animal caretakers who screamed “YES!” Then a second later, she exclaimed, “They’re both Red Sox Fans!” Instantly, there was a bond between complete strangers.

Purple People

Minnesota Vikings Mower

I’m convinced that Minnesota Vikings fans bleed purple. I know one whose whole wardrobe is virtually branded with Vikings colors and logos; even his lawn mower.

Sports franchises truly understand the power of their brand and building their fan base.

So, whatever happened to this sort of thing with radio stations?

Eazy 101

Eazy 101 receiverJerry Lee recently sold his only radio station, WBEB in Philadelphia, Pennsylvania. It was 55-years ago this past May that Jerry and his partner David Kurtz put the station on the air. It signed on as WDVR. In the 1980s the call letters were changed to WEAZ and the station was branded as “EZ 101.” The station brand was not only well known, but fixed tuned FM radios were given out by the radio station to area businesses to play the station in their stores and offices.

B101 Bee

When the station updated its format, and changed its call letters again, this time to WBEB and branded itself as “B101.1,” giant bees appeared at events all over the “City of Brotherly Love.”

The End of an Era

Marlin Taylor (no relation) was there from the beginning and recently blogged about the station’s sale to Entercom. His article was titled “End of an Era.” You can read it HERE 

Marlin wrote:

“While I pretty much grew up with a ‘Can Do’ attitude…seeing Jerry in action confirmed that staying pro-active and constantly on the offensive were keys to a meaningful and effective life! If you need proof, just take a look at the 55-year track record of the station at 101.1 on the FM dial in Philadelphia.

There’s no question that Jerry was and is a promoter, pure and simple! And, yes, he’s a Futurist…a person who studies the future and makes predictions about it based on current trends and conditions. I would also add…always looking down the road to see what challenges and opportunities lay ahead, then utilizing (his) assets to most effectively counter-act or benefit from them.”

Familiarity

As Jerry changed his brand over the years to keep his station’s programming and image in vogue with the times and his target listeners, he understood the power of familiarity in attracting and keeping a radio audience tuned to his radio station. Mark Ramsey suggests that “familiarity IS preference.”

morefm rebrandingMost recently, Jerry rebranded his station as “101.1 MoreFM.” This change, like all the others, was promoted in every imaginable way and became familiar to listeners virtually overnight.

wobm bumper sticker

Bumper Stickers

Once upon a time, you couldn’t drive in New Jersey without seeing a WOBM-FM bumper sticker on the car driving in front of you. They were everywhere. They made this station VERY familiar and Paul Most, a former GM of WOBM-FM, always used to say “When you can’t be heard, you’ve got to be seen.”

Arbitron Diary

arbitron diaryOnce upon a time, all radio listening was recorded using a diary, kept by a listener for seven days. Years of diary reviews at the Arbitron headquarters in Maryland proved to me that the radio stations most familiar to their listeners got the most “votes” from their fans.

When PPM measurements were introduced, the importance of unaided recall seemed to take a back seat with radio operators. Best Practices in large radio companies replaced the old tried and true ways of doing things. Radio promotion, except for over a station’s own airwaves, was cut from station budgets.

New Media Platforms

The shiniest new media platform on the block is the smart speaker. A recent research study, “The Smart Audio Report” from NPR and Edison Research, showed that traditional OTA radio was seeing the time people spent with radio, being the most disrupted. smartaudio-chartPeople in the survey said traditional AM/FM radio was the thing most replaced by audio listening via their smart speaker.echo

Having now owned three Amazon Echo smart speakers for six months, I can tell you Alexa is very addictive. But she’s also very precise. To have her serve up what you want to hear, you need to say it correctly, in the exact way she is programmed to understand, or else she will serve up some really bizarre things.

My household pretty much matches the research on why audio consumers love their smart speakers: 1) it’s fast, 2) it’s convenient and 3) it provides great choice.

Brand Promotion

In an interactive voice world, if people are familiar with your brand, they will ask for it by name. If not, the digital assistant will make that choice for you. That will make branding more critical than ever.

This means that the way radio promoted itself to its listeners back before PPM – the unaided diary days – will be the way it will need to promote itself in a world of voice control devices.

“Brands are a risk of being marginalized in a voice driven world, so brand marketing may matter even more.” -Bryan Moffett, COO, National Public Media

branding“Brands now have a chance to behave like human beings, talking, understanding, guiding, empathizing…voice is the single biggest vector of emotion, emotion is the biggest driver of preference. This is a true 1:1 marketing opportunity and a chance to build relationships like never before.” -Mark Paul Taylor, Chief Experience Officer, Global DCX Practice, Capgemini

Jerry Lee never deviated from his proven path of spending on promotion and delivering a quality product.

Everything old is new again, when it comes to branding a winning radio operation.

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AM/FM or just FM?

HD FM Radio ReceiverThere’s something that’s been troubling me for some time. It’s the radio industry’s habit of reporting radio listening results by calling it “AM/FM” versus what it really is, virtually all FM radio listening.

Nieman Lab

Who could not be buoyed by this headline from Nieman Lab: “AM/FM radio holds strong for American listeners.”

But is it true?

When I read the ratings reports from both PPM and diary markets, I see an FM world.

Don’t get me wrong, I grew up on AM radio and recognize that almost every market has a heritage AM radio station that still garners a big audience. I’m not blind to the wonderful ratings of 1010 WINS in New York City for example.

But there are only 26 all-news terrestrial radio stations left in America according to Nieman. This popular format is missing from the majority of America’s radio markets.

WTOP

WTOP logoWTOP was built on AM radio. It moved its entire operation over to the FM band and grew its audience, revenues and lowered its listener demographic. People who never heard this radio station on its AM dial position were suddenly newly minted fans of their all news format.

The FCC Saves AM Radio

The FCC’s mission to save AM radio is to give these radio stations an FM dial position using a translator. What are we really saving? The AM band or a particular format that a radio operator created on the AM band and now, to survive, needs to move it, like WTOP, to the FM side of the dial.

WIP

WIP logoFrom my blogging, I get lots of feedback about a variety of things concerning broadcasting. One reader wrote to me about his father, a sports fan, who turned on WIP-FM to hear the latest chatter. WIP-FM was broadcasting a game of no interest to his father, so his son said to him, why don’t you turn on WIP AM610. Sadly, this person wrote the audio was unlistenable. He wrote: “You’d think the FCC would mandate that AM have standards for audio quality in receivers.”

WSM

WSM logoWhen I was living in Bowling Green, Kentucky, I couldn’t receive 650AM WSM in my office, even though my office looked south and my antenna was able to enjoy a full wall of windows. The noise floor both inside my university office as well as around town while driving in my car made the station unlistenable. WSM was once listened to all the way to Louisville in northern Kentucky. Instead, I downloaded WSM’s app and could enjoy the radio station in crystal clear stereo. (I see WSM has stopped subscribing to Nashville Nielsen Audio ratings.)

BBC

BBC logoThe British Broadcasting Corporation (BBC) did a review of the range of services it offered on the AM band (called medium wave across the pond) and it included a financial review of all its services too. They concluded the ROI (return on investment) in AM was not there and announced they would be turning off some 13-AM radio stations in January 2018 according to Radio Business Reports.

WHVO

WHVO logoThere’s a great radio operator in Cadiz, Kentucky by the name of Beth Mann. WHVO is her AM radio station at 1480, but if you go on her website, you won’t find any mention of this station being on the AM radio dial. It’s promoted as WHVO 96.5 & 100.9 FM.

Bottom Line

It’s time to face the fact that AM radio needs to be re-deployed for a new service. Current radio station owners should be given a viable FM dial position that replaces their AM service area, and doesn’t require multiple translators to attempt to accomplish this task. (Note: WHVO needs two translators to deliver the signal of its AM 1480.)

It’s time to allow those same dedicated radio broadcasters to sell off their expensive AM tower sites and turn off their AM stations that consume electrical power with no real ROI.

Ecclesiastes 3

“To everything there is a season, and a time to every purpose under heaven…”

AM radio’s time has come and gone as the mass communication delivery system it was from the 1920s to the 1970s, much as radio replaced vaudeville.

To put things in perspective, at a time in America’s radio history when the number of FM signals equaled the number of AM signals on the air, 75% of all radio listening was to FM. So, you can only imagine what it’s like today for AM radio listening when FM signals outnumber AM signals by four and a half times in the USA. (FCC BROADCAST STATION TOTALS AS OF JUNE 30, 2018:  4,633 AM signals / 20,758 FM signals)

That’s why I believe we do no service in promoting radio as “AM/FM” and not being honest about where virtually all of the radio listening is really taking place.

Sadly, AM radio is to broadcasting as coal is to power generation. It was the perfect solution in its day.

 

 

 

 

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Why Do People Love Radio?

We-Love-RadioI read a recent article in Bloomberg about how in an age of cord cutting, where millions of Americans are leaving the cable bundles and abandoning traditional TV, others are staying put.

Why?

The big reason should scare anyone working in ad supported media: “Our customers don’t want to cut the cord because they’d have to give up critical features like the ability to skip commercials…” said Jay Roth, chief marketing officer at Dish Network Corp.

Commercials = Clutter

A former colleague of mine at the university wrote to me the other day about the changes going on in higher education and the field of radio broadcasting. He wrote:

“I’ve also had it with local radio and TV, too. Too many commercials back to back to back – it’s like classified ads. Who remembers the 5th ad in a spot set, even if it is well written? (most are not). Thank goodness for SiriusXM. That’s where I am, unfortunately.”

Here’s the concerning point of sharing my colleague’s comment, this person grew up, worked in and taught AM/FM radio, and is of the age group that should still be “in love” with the business.No Ads

We have plenty of data showing how the younger age groups don’t even own a radio, instead listening to audio content via their smartphone or some other connected device.

So, what makes radio listeners stay?

The Radio Habit

A 2017 Jacobs Media survey found that AM/FM listening is pure habit. 91% of survey respondents said they listened to radio for an hour or more per day, but TV/video and the smartphone usage came in at 87%.AM FM Radio

Digging a little deeper, respondents cited hearing their favorite music and a connection to their favorite air personalities as reasons they listen to AM/FM radio.

Radio’s Free

The 2018 Infinite Dial  study from Edison Research and Triton Digital reported that 82% of respondents who have ridden or driven in a car in the past month listened to traditional car radio.

Pandora For Brands authored a “State of AM/FM Radio: What Advertisers Need to Know” piece that said:

“True, America’s oldest electronic mass medium – AM/FM radio – is still alive, kicking and serving throngs of listeners every day, but it’s also being disrupted by today’s growing digital media landscape. Radio has prospered for so many decades because it’s free, easy-to-use and there are tons of them around. In fact, it used to be the only way to enjoy music without having to invest in a record collection or to hear news, sports and traffic information on-the-go.”

But the real shocker was this data point:

“Currently, people between the ages of 50-60 years old who have mobile devices are spending more time with mobile apps than they are listening to AM/FM radio.”

-Nielsen Total Audience Report, Q1 2017

This age group was raised on AM/FM radio!

New Habits

I bring this all up because we are seeing new habits being formed with the new disruptive media technologies.

It’s like the old saying “Once they’ve seen New York, how are you going to keep them down on the farm?”

Once you experience Netflix or Amazon Prime, it’s hard to return to ad supported TV. And those folks who still buy the cable bundle, do so in part to have a way to eliminate the commercial clutter and to produce a more Netflix type of viewing experience.

Once you listen to your music on Pandora, Spotify, Apple Music or access your music via a smart speaker, you will be hard pressed to go back to a cluttered listening environment.

But the biggest new habit in our short-attention-span world is On Demand.

Whether we are talking about TV or audio, we are now a culture of wanting things when we want them, not when they are served up, and that’s the juggernaut all traditional media are faced with.

Newspapers, television and yes, radio, serve what they want you to have.

Today’s media consumer knows they have choices and they don’t have the time or patience for the way it used to be.

The Future is…

In 1967, the movie “The Graduate” had a scene where the Dustin Hoffman character was taken aside by a family friend who advised him about where the future was for a person his age. The answer was one word: “Plastics. There’s a great future in plastics.”

What might a friend advise a young person today to focus on? Podcasts?

Focus on the Things That Don’t Change

BezosJeff Bezos’ secret sauce has been to focus his efforts on things that would not change.

He said the question that he’s always asked is “What’s going to change in the next 10-years,” but the question that’s rarely asked is “What’s not going to change in the next 10-years?”

It’s that second question he feels is most important.

Bezos doesn’t concern himself with what will change, but on what won’t change. Then working to make those things better and better and better.

With this strategy, Bezos has become the richest man in the world.

This is what the radio industry should be doing.

 

 

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Disruption is Everywhere

disruption aheadI’ve been reading the trades, trying to grasp what is happening, and it is all so very confusing. Have you felt that way too? That’s what a period of disruption looks like. Black is white. Up is down. It’s enough to give you an Excedrin headache.

SiriusXM

Jim Meyer, the CEO of America’s only satellite service reported strong growth in Q2. On his conference call he’s reported as saying that despite the surge in technology over the past ten years, AM/FM radio still attracts a big number of listeners. However, he also feels that the radio industry has a problem and it’s their product. He warns that if AM/FM radio doesn’t vastly improve their product, it will be to their own peril.

The feedback I received from my recent article “Radio & Traveling – Then & Now” that I wrote about in “From the DTB Mailbag…” seems to indicate that Mr. Meyer is not alone in that sentiment.

Streaming

Then I read how just halfway through 2018, streaming is growing at a rate that defies mathematical trends. By that, the writer meant when it comes to percentages, they are usually big when the numbers are small but become smaller as the numbers of people engaged increases.

With this area of streaming, we are seeing BOTH the numbers of people who stream growing with the percentage of people who are now streaming.

That’s a trend worthy of keeping you up at night.

Adoption Curve for Smart Speakers

In my university “Process & Effects of Media Classes” I introduced my students to the work of Everett Rogers and his Diffusion of Innovation Curve. Adoption Curve - Everett Rogers

Rogers studied how innovations with farmers in his native Iowa were adopted. He very soon realized that what he was witnessing occurred in all areas when a new innovation was introduced.

The latest research report from NPR/Edison, “The Smart Audio Report” showed we are into the Early Majority part of the curve with the smart speaker innovation.

Good News, Bad News

The smart speaker innovation has the ability to bring radio listening back into the homeEcho at a time when AM/FM radio is no longer the entertainment focus of the vehicle dashboard, replaced by the entertainment center that resembles the touch screen on your smartphone.

Unfortunately, the smart speaker also delivers an infinite world of audio choices and it is not a given that radio will be the benefactor.

Fred Jacobs basically lays out the fact that radio’s established brands such as a Z100 or a WTOP will find their engagement traversing from over-the-air to over-the-stream and onto smart speakers. I know that in my own case I can receive WTOP over-the-air, but atmospherics can play havoc with the signal at times. Not so with listening to WTOP via Alexa.

The best radio brands with strong listener engagement will grow.

Cord Cutting

The latest numbers indicate that cord cutting (eliminating the cable TV bundle) is growing faster than expected. The latest study from eMarketer  says that we can expect people cutting the cord to grow to 33 million Americans in 2018.

Netflix is now more popular than cable TV.

Jim GaffiganThe other night I watched Jim Gaffigan’s 5th Netflix special called “CINCO.” In his standup comedy routine, he hit the nail on the head about why Netflix is more popular than cable TV. Here’s what Jim said:

“Netflix has definitely made watching television with commercials kind of painful. Takes forever. You’re like, “What am I, growing my own food here? All right, Geico, we get it!” And it’s not just the length or the number of the commercials, it’s what the commercials say about the typical viewer of the show you’re watching. “Catheter? Why would–? Reverse mortgage? Back pain? I do have back pain. You know me so well, television show.”

Changing Habits

What we are witnessing in the current period of media disruption is the changing habits of the audience. They now have choices. Lots & lots & lots of choices.

Baseball, still radio’s #1 sport is seeing the decay of its audience to a myriad of choices to watch or listen to the same game. It’s no longer the monopoly it used to be.

But worse, once you’ve developed the Netflix or Alexa habit, going back to any delivery system that delivers lots of interruptions is, as Jim Gaffigan says, “painful.”

Ad Supported Media’s Future

I believe that there’s a future of ad supported media, but it can’t be done the way it’s currently being done. Podcasts understand this better than broadcast.

Amazon Prime is good at airing program promotions before the movie starts, in much the same way that my local movie theaters do.

And who didn’t enjoy hearing Paul Harvey say “page two?” It would be the first commercial break in his news and commentary but we listened. Because Paul was as engaging with his sponsor’s material as he was with the rest of his broadcast.

And thank you Mr. Harvey for making me want to own a BOSE Wave Radio. I now have two of them. However, I now play my Alexa Dots through them.

Life’s Only Constant

My old boss used to always say, nothing stays the same. You are either getting better or getting worse.

And he was right.

Life’s only constant is change.

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Podcasts & Homework

33On the surface these two things appear to have nothing in common. Right? But stay with me as I explain. I follow Duke Professor, celebrated author and student of human nature Dan Ariely. Dan writes a regular column for the Wall Street Journal in which he answers people’s questions. A recent question was “Any tips for encouraging kids to view their homework as play?”

Being that my second career is teaching at a university, subjects dealing with learning catch my eye, so I read what Dan had to say about this.

Can Homework Be Viewed As Play?

Two words: Not really.

However Dan goes on to explain why this is. While you can get kids to maybe enjoy homework more or to hate doing homework less, it is still work. Play is something else entirely.

So what does this have to do with Podcasts?

Hold on, I’m getting to that. Dan goes on to tell the story of how in a part of the world that has little water; deep wells need to be dug to find water. Pumping water out of these deep wells is a lot of work. A person noticing how children at a playground near the well loved to push a merry-go-round around for hours on end while at play had an idea. What if the children’s merry-go-round were connected to a pump that would draw water out of the well? Are you with me so far?  Well, that’s what they did.

A Not So Bright Idea

The result of this new “PlayPump” was underwhelming. And here’s the key point of the story. Dan says that “when you take a play activity and force children to do it, you change the activity from play to work, and the fun goes away.”

Podcasts = Work

In my honest opinion, Podcasts take work. You have to remember they are there. You have to download them onto your device. You have to schedule a time you’re going to listen to them. You have the ability to fast-forward or repeat them – which I’m sure you would say is their benefit – and that means you have control over them. You have a role to play. You have to work. So if Podcasts are to be a threat to over-the-air radio, listening to them is going to have to get a whole lot easier.

Don’t Discount Curation

Over-the-air radio is easy, just an on/off button, volume control, and your favorite stations ready to listen to at the push of a button. Someone else does all the work. They pick out the songs, they tell you the weather, they give you the time and traffic conditions, they entertain you, and they alert you to anything important happening in your world you should know about. All you have to do is play.

Who wants to do homework anyway?

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