Internet Stations Give Listeners A New Way to Tune In By Frank Ahrens Washington Post Staff Writer Thursday, January 21, 1999

Until now.

No longer do radio listeners have to passively accept the couple of dozen stations they can tune in at home or at work, slaves to the corporate formula that dictates repetitive, hit-oriented playlists. Right now, almost any standard computer can cheaply become the ultimate radio, tuning in stations from Miami and San Francisco, from Moscow and Singapore. For free.

Don't want to click around? Then build your own radio station, one that plays only country or classical or punk. Even all-Hawaiian, all the time. This, too, is free.

Sick of finding a tolerable station on your car radio, only to drive out of range in half an hour? Soon, there's a good chance you'll drive coast to coast and listen to the same station that plays your favorite songs, or if you get tired of that, choose from 99 other stations.

Commercial radio broadcasting – a $14 billion a year business in the United States – is shaking off three decades of technological stagnation. The next few years could revolutionize everything about radio, from how to make money at it to how it sounds.

Something like this has happened before: the cable TV revolution. The radio revolution is happening faster.

Remember when cable TV was just for getting a better picture? Suddenly, those late-'70s sitcoms came in a lot clearer. But there were all these other channels, most of which seemed to consider a city council meeting compelling TV. Other channels broadcast snow.

But soon, hundreds of niche channels rushed into the vacuum. The Big Three networks rightfully scoffed in the early days – most cable programming was terrible. But they stopped laughing soon. Even though the networks still rule the ratings, cable TV channels have become the arbiters of style (MTV) and sports (ESPN), and raised the TV movie to Hollywood heights (HBO). Every network has established a cable presence, either by buying cable companies or creating cable networks, like CNBC.

Now it's radio's turn.

The No-Niche Niche

Frustrated, foiled and fed up, McEwan had had it with local radio. Every Washington-area pop station sounded the same, and none of their formats included the music he wanted to hear.

Then, while driving through Upstate New York about eight months ago, his car radio scanner stopped on WBER, an alternative rock station that instantly sounded like home. The tunes were eclectic, unpredictable, edgy. The deejays didn't sound like they'd learned their voices in broadcasting school. Then McEwan heard something else he liked even better:

"We're the first station in Rochester on the Internet!"

Back in Alexandria a few days later, in his one-man computer sales and consulting office, he flipped on his computer and went looking. Shortly, he found it: wber.monroe.edu, the station's Web site.

"Listen to WBER live on your computer," read the underlined words on the station's home page.

Two mouse clicks and 30 seconds later, McEwan was listening to a piece of radio's future, joining the estimated 6 percent of Americans who've listened to a radio station online, according to a recent study by the Arbitron radio ratings company.

"Once I came across Internet radio, it changed the way I listen to radio," says McEwan, 32. "It even changed what I listen to in the car. I don't listen to 'HFS or any other commercial stations anymore."

In the car, he listens to news or public radio. He waits until he gets to his office – where he can choose from hundreds of radio stations broadcast over the World Wide Web – to listen to music radio.

At about the same time, in a Bethesda office, Ben Smith was tuning in to the future, too.

Smith, 32, is the photo editor at Education Week, a trade publication. His work can get tedious – scanning in photographs, retouching them, and so on. Music would make a nice distraction, he thought, so he lugged an old tuner and turntable into his office (spinning vinyl!). But he wanted more – he wanted live radio with diversity. He started fooling around with an unused PC in his office and stumbled onto a Web site called www.gogaga.com.

Gogaga.com is an Internet-only radio station. Like an over-the-air station, it has programs and deejays. Unlike an over-the-air station, it plays stuff you'd never hear elsewhere, much less on one station. Obscure jazz, spoken-word, pop, electronica, a non-format format that would baffle a program director. "What market demographic are we aiming for?" the PD would wonder. "What niche?" The answer is: the 17 percent of listeners Arbitron says are dissatisfied with over-the-air radio.

"Washington has no real good independent radio stations," says Smith. Most stations "have a pretty heavy playlist. You hear one song you know and here it is 20 minutes later, exactly the same song."

There's a reason why commercial radio is so hit-dependent. During peak morning and evening drive times, about 35 percent of all radio listening occurs in the car, according to Arbitron. Most car trips last about 25 minutes. People flip up and down the dial, listening for a familiar tune, stopping on the station that plays it. And over-the-air radio satisfies most people, according to Arbitron.

For now.

Arbitron recently conducted a study on radio and the Internet. Perhaps the most compelling finding is that Internet use eats directly into radio listening time – online Americans spend nearly three fewer hours per week listening to the radio than people who don't use the Internet.

How, then, to gain back those three hours? One answer: Pump your radio station into the computer, so folks can listen while they're on the Web. How crucial is it for stations to broadcast on the Internet? Jim Farley, WTOP's vice president of news and programming, says this: "Get online, or get out."

Cue the Talent

Zachary understands this. Even though commercial radio is enjoying "mind-boggling credibility" with advertisers, he says, he knows that the first Hondas and Toyotas started appearing in the United States just when Detroit was feeling best about itself.

Zachary calls the workplace the "real battlefield" for future radio listenership. The best way inside is via the Internet, he says, because it's hard to hear over-the-air radio in many office buildings. The Internet, he says, would let WHFS "bust through that concrete."

Only a handful of stations in the area can be heard on the Internet, and WHFS is not among them. Though it is relatively easy for a talk or news station to broadcast on the Internet, it takes more money and better technology to pump good-sounding music through a computer. WHFS is exploring the option of adding its live broadcast – called "streaming audio" – to its Web site, hoping its corporate parent, CBS, will provide the money.

The cost, however, depends on how many Internet listeners the station seeks. There is no volume discount; more listeners often means a higher cost. Richard Rieman, vice president of Radio Data Group in Vienna, Va., which provides WTOP's Internet broadcast, says he could guarantee WHFS the ability to handle 500 simultaneous Internet listeners for $1,000 a month. Five hundred is a good Internet start – WTOP's online listenership topped out at about 800 simultaneous listeners during the House impeachment hearings.

Zachary, like the rest of his industry, hopes over-the-air radio can maintain its two trump cards over Internet radio: localism – as in local traffic, weather and local school closings – and personalities.

Local stations gain much of their identity from local star deejays, like the Greaseman, and national giants, like Rush Limbaugh, who appear on local stations via syndication. They are the ratings slam dunks: If a station can afford to pick up, say, Dr. Laura via syndication, a ratings boost is guaranteed.

But Web radio means that every station that's on the Internet suddenly becomes a national station for a small but growing audience. Every deejay becomes a national deejay; every ad is heard nationally. Will this chip away at the hegemony of superstars like Howard Stern and Limbaugh?

Zachary has fretted over this. He invokes the cable TV analogy.

"I think what it comes down to is commercial radio has to do what free TV has had to do – it has to keep those big events that the masses want to see, like the Super Bowl and '60 Minutes.' We're going to have to do the same thing in radio," he says, meaning over-the-air radio must hold on to Stern, Limbaugh and other ratings colossi. "We can't allow another medium to get a leg up on us on personalities. Anybody can beat us song-for-song. If that's what we're hanging our hats on, we're in trouble. But I don't think we are."

Eschew the Talent

At a Web site called imagineradio.com, listeners can choose from about 25 musical genres (e.g., hip-hop, classic country, smooth jazz). They decide how often they want to hear songs from that genre's 50 to 75 artists. A few more clicks and, if you're, say, an indie '80s fan, the Clash's "Clampdown" comes streaming out of your computer – definitely not one of the three Clash hits you can catch on commercial radio.

The service is free for now, says John Adams, program director at imagineradio.com. The site – launched last March – sells banner advertising and a click-through button that links listeners to CDNOW, an Internet shopping service ( imagineradio.com does not make a profit).

Adams, 32, along with about three dozen other employees, helps run imagineradio.com out of an office in a suburb south of San Francisco. He's a 16-year radio veteran who earns part of his living telling traditional radio broadcasters how to survive the wave of Internet radio services like imagineradio.com.

"A lot of people, when given the choice of listening to a CD or radio, choose the radio," Adams says. "They like hearing their favorite deejay telling the traffic on the way home – he may be the closest thing a local market has to a celebrity." He tells local stations that they can never compete with imagineradio.com on a song-for-song basis. Nor should they. Because imagineradio.com will "never be able to send a deejay to Moosebreath, Minnesota, to kiss babies and open a car wash."

It comes back to localism, he says. But the Internet is twisting even that.

Consider Adam Hostetter, 22, a senior at George Mason University and Web developer for AmerInd, a government computer contractor in Alexandria.

About eight months ago, he began using www.broadcast.com, a clearinghouse of Web broadcasts, to listen to his home-town stations in Hartford, Conn. He's become so addicted to Internet radio, he muses aloud: "Sometimes, in my car, I wish I had the Internet."

2 There are a couple of men who'd love to give him something they think is even better.

Satellite Drive Time

Abrams, 45, is known as the father of album-oriented rock, the format that established FM. He's gray now, and a little thick around the middle, but he can't wait to pipe that seemingly endless list of formats into car radios via satellite.

"It feels like the early days of FM radio again," he says.

Abrams is the program director of XM Satellite Radio, located in the basement of a Dupont Circle office building. XM is locked in a space race with CD Radio, a New York company. This year, each plans to launch satellites. Within two years, each says, they will use those satellites to beam 100 channels of radio into your car, for $10 a month. The signals will be received by a palm-size satellite dish affixed to a car window and played on a special radio.

At home, people have many entertainment options: TV, satellite TV, VCR, DVD, radio and so on. The car, however, is limited to radio, CD and cassette. That's why the automobile is considered, along with the workplace, the second major battleground for the future of radio.

Abrams's wall list is only a working grid, but many of the pieces are in place. There are several rock formats – classic, heavy, album-oriented. Heftel, a Spanish-language radio network, has contracted to provide several Spanish channels. There are talk formats, a gossip format, a health format, several country music stations, classical and so on. "Real radio stations, with living, breathing deejays," Abrams says.

Abrams's boss, Hugh Panero, 42, helped build the cable TV system in New York City in the 1980s. Everyone thought the same thing then, he says: Who'd pay for something you get for free?

"When I was in Queens, we had a tremendous ethnic diversity among neighborhoods," Panero says. "What we found is, for instance, Japanese subscribers will buy lots of channels just to get the one Japanese channel that gives them the news from back home."

Panero estimates he'll need 2.5 million customers to break even. The actual hardware – the radio that plays XM satellite broadcasts and the satellite dish – will probably cost between $200 and $500.

Abrams is a radio guy, Panero a cable guy. CD Radio Chairman David Margolese, their competition in New York, is neither.

A 41-year-old Canadian, Margolese dropped out of college in the late '70s to found a Canadian cellular phone network. The idea for beaming satellite radio into cars hit him a decade ago, when he learned of a guy pumping radio into homes via cable TV. He thought: "It's the right idea but the wrong market. The radio is to the car what the TV is to the home." Like XM, he'll offer 100 channels of music and talk, Spanish and financial, country and celebrity news from a studio at Rockefeller Center in Manhattan. The race is on.

The Ultimate Personal Radio

Talmage's e-mail reply reads like a postcard from the future:

"I'm doing that right now, as I type to you. I'm sitting in my living room. My Sony PCG-505G laptop, Ricochet modem, and Sony speakers are all together on the table. A few minutes ago, I listened to WPFW-FM [in Washington]. After a little network congestion, the signal came in steadily. Now, I'm listening to WWOZ-FM from New Orleans, Louisiana, through www.broadcast.com."

Translation: Talmage was using his computer, Internet connection and a wireless modem – something like a cell phone – to listen to a radio station half a nation away. His set-up is clunky – in a few years it's likely that all of his hardware will be compressed into a gadget the size of a cell phone. It may, in fact, be a cell phone. And a radio. And an Internet browser. This, optimists say, is the real future of radio – with the listener unencumbered by broadcast range and phone lines.

One obstacle to that future, says Robert Unmacht – publisher of M Street Journal, a radio weekly in Nashville – is a commercial radio industry stuck in the past. People used to live in the cities, so that's where the radio transmitters are. Now, they live in the suburbs and drive to work in other suburbs, often outdistancing radio signals.

"AM and FM are using ancient technologies allotted for the way people lived years ago," Unmacht says. Right now, commercial stations are moving toward broadcasting their signals digitally, which they promise will make a song on the radio sound as clear as a song on a CD. But even that's missing the point of the future, Unmacht says. He compares it to "putting a new Porsche engine in an old Nova."

Instead, he says: Why not transmit your radio station on a wireless digital system, like a cell phone signal, so your station can be heard from coast to coast?

Heck, he says, in a few more years, everything – radio, TV, Internet, phone calls – may come over one wireless digital signal, into your TV set or pocket phone or car computer.

Here's where a guy like Unmacht gets delighted:

A traditional radio station is an expensive, equipment-heavy, unwieldy thing. A digital station need not be. And that could create the ultimate local radio – the personal radio station that doesn't have to compete for space and federal permission to be on a crowded AM or FM band.

"You could have an office radio station and program your own stuff," Unmacht says. "Or a neighborhood radio station. Schools could broadcast school closings. Things can be small and local and big and national, just like cable."

Yes, there are doubters. The technology is a ways off. Corporate radio is a huge financial success. Four out of five listeners are happy with what they get over their radios, anyway. And now, people are asking you to buy satellite radios? To "get online or get out"? To pay for radio?

Unmacht laughs. Again, it's hard to escape the cable TV analogy.

"I remember," he says, "when they said HBO didn't stand a chance."