While traditional radio has proved remarkably resilient up until now, it could be approaching an inflection point thanks to the advent of the internet-connected car. GMSA, an industry group representing mobile operators, last year said it expects 50% of all new vehicles (pdf) sold by 2015 to be internet-enabled, and 100% by 2025, according to qz.com.
Internet radio services give listeners a near-infinite amount of options, and advertisers the ability to target specific audiences, but they also face disadvantages. Pandora, the biggest internet radio service in terms of listening hours, has signaled a huge push into connected cars in 2014, but it still must pay higher royalties to artists than traditional radio. (Spotify, which many consider Pandora’s true rival, pays even higher royalties).
The top radio companies have established hedges against the internet radio revolution: Clear Channel, the biggest radio company (which through a subsidiary syndicates The Rush Limbaugh Show, among other programs) is the owner of internet service iHeartRadio, and Cumulus Radio has taken a 15% stake in Pandora rival Rdio. That might sustain their link with the American public for years to come.
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