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Old 01-30-2005, 12:43 PM   #1
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Default Changing the Way People Listen

Changing the way people listen
Satellite radio pushes the industry into a different world
Inside Bay Area
Just like cable television changed TV, satellite radio and other emerging technologies promise to change the way people listen to radio.

The radio industry has undergone a metamorphosis in the past decade, with the Federal Communications Commission deregulating station ownership in 1996.

Now the second part of the evolution — high technology — is changing the way people listen to radio.

Digital broadcasting, Internet radio and now the biggest competition to traditional radio yet, satellite radio, have taken off making XM Satellite

Radio and Sirius Satellite Radio big players in this emerging medium.

"Radio is not going away," said Jeff Littlejohn, executive vice president for San Antonio-based Clear Channel Radio.

But it is changing.

In the next 10 years, most people will be listening to high-definition music, news and other content on new digital radios, Littlejohn said.

Already, 4 million people pay to subscribe monthly to satellite radio through either XM or Sirius.

XM, the largest satellite broadcaster, offers more than 120 digital channels of music, news, sports and children's programming direct to cars and homes via satellite. Many of its music stations, which range from hip-hop to classical, are commercial free. Some channels include PBS's News Hour with Jim Lehrer, NASCAR, CNN News, The Weather Channel and even the Playboy Channel.

Sirius also offers more than 120 channels, with 65 devoted to commercial-free music and the rest to sports, news and talk formats.

Both Sirius and XM expect double-digit growth in subscribers this year. XM has predicted its subscriber base will double in 2005.

Satellite radio, which began to take off in 2000, has overcome several obstacles, including the initial startup costs — about $200 for the radio and between $9 and $13 a month for the service, said Fritz Messere, chairman and professor of broadcasting and telecommunications at State University of New York at Oswego.

"It appears as if they are growing by leaps and bounds in a relatively short period of time," said Messere, who is also author of "Broadcast, Cable the Internet and Beyond."

An audience exists for pay radio just like an audience exists for pay cable TV, Messere said.

"I think we are likely to see satellite radio grow tremendously in the next few years," Messere said.

But Clear Channel, which owns a small stake in XM, doesn't think satellite radio is the future of radio. Clear Channel has more than 110 million listeners weekly on its 1,200 radio stations nationwide.

"We have single radio stations within our group that have more listeners in single market than XM has in the entire nation," Littlejohn said.

Just as the Internet changed the way people get news and other information, another blockbuster technology could also be in development that will change the way people get their music, news and other information. Already, the popularity of MP3 players such as Apple's iPod is worrying Clear Channel more than satellite radio competition.

An estimated 9.5 million U.S. consumers plan to buy an MP3 player this year, a 33 percent jump from 2004, according to a recent study by the Consumer Electronics Association.

Another analyst, Forrester Research, estimates that 25 percent of all U.S. households will have an MP3 player by the end of this year, up from 6 percent in 2004.

"We're at the beginnings of a radio revolution," said Christopher Sterling, professor of media and public affairs at George Washington University. "It's interesting to see whether radio becomes more of a niche player in the future."

A year ago, Sterling got an XM radio innstalled in his car, and he's never going back to traditional radio again. His wife, who is 61, got an iPod for Christmas, and she's programming her music to take with her.

"I stopped listening to commercial radio about a year ago because it is so infested with advertising and chatter so you can't get what you want," Sterling said.

Since its invention in 1895, radio has faced many technological challenges, including the introduction of TV, eight-track tapes, cassettes and compact discs. But radio has endured despite many reports of its demise.

Even with all the competition, radio still reaches more than 94 percent of the U.S. population, with Americans spending about 20 hours per week listening to music, news, talk and more on radio, according to Arbitron's American Radio Listening Trends.

"In reality, it goes back to that localism issue," Littlejohn said.

"All of our stations are programmed locally. That is what our listeners expect. It's the localism issue that is going to keep radio popular."

Even without the competition from satellite, everyone agrees that the digital revolution will change radio.

The United States has about 14,000 radio stations, but as digital gets rolled out nationwide, the number of stations will be gradually reduced, Sterling said.

Regular analog radio broadcasting is doomed, Sterling said. The only question is how long it will take to disappear.

"The technology is clearly going digital for everything," he said.
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