The future of radio -- An in-depth look at what's wrong with the airwaves and the new innovations that might make radio better than ever

Wanna see radio execs turn all pale and sweaty? Introduce them to Mark Wallace. The 23-year-old graphic designer from Quinby, Va., loves music, but he couldn’t be less interested in what’s available on the airwaves these days. ”I can’t even remember the last time I listened to FM radio,” he says. His complaints? ”The annoying ads and those constant repeats. And if you change the channel, you just hear the same song on another station.”

Two years ago, Wallace invested in an XM satellite receiver, and radio has never been the same. ”I don’t think I could ever get rid of it,” he says. In the past four years, more than 7 million Mark Wallaces have abandoned broadcast radio for the joys of satellite, and when Howard Stern debuts on Sirius satellite radio in January, that number is expected to explode, with several million Stern fans likely to sign up, according to a recent study by Bridge Ratings. Which is no surprise to Joseph Turow, professor of communication at the University of Pennsylvania’s Annenberg School. ”The radio industry had its collective head in the sand for years when it came to younger listeners,” he says. ”They lost the opportunity to guide the musical choices of an upcoming generation.”

But listener flight isn’t the only thing bringing big problems and bigger changes to the radio industry. Serious payola investigations by the New York State attorney general and the FCC could hit stations and labels with large fines, and might even cost some stations their broadcast licenses. In addition, there is an exciting array of new ways to tune in (more on this later) that could forever change the way people listen to the radio. In other words, things are about to get interesting. For the corporate behemoths that run commercial radio, the outlook is downbeat. But for music lovers, the uncertainty and change of the next year just might be the best thing that’s ever happened to the radio biz.

Two hundred million people tune in to commercial radio each week, and that adds up to a $21 billion-a-year industry. Sounds pretty healthy, until you realize radio’s audience has decreased by 13 percent in the last decade according to Arbitron. Radio execs like to point out that such losses are plaguing all media, as their Hollywood brethren discovered this summer. ”Sure, listening levels are down,” says Sean Compton, VP of programming for Clear Channel Radio, which owns nearly 1,200 stations. ”But so are newspaper circulations, so is television watching.”

Okay, but that still leaves a record number of Wallaces tuning out broadcast radio for very quantifiable reasons. Today’s stations actually do play more minutes of rage-inspiring beer ads per hour than in past decades. And Mariah Carey’s ”We Belong Together,” say, doesn’t just seem to come on the air more than a dozen times a day — it does. A typical Top 40 station has a total playlist of fewer than 200 songs — less than half of what it was a decade ago. That means big hits get played more often than ever, leaving less and less space for new artists and unexpected choices. And for that you can blame the 1996 Telecommunications Act, which led to a huge consolidation of radio holdings. ”Consolidation has led to increased homogenization of what gets played,” says FCC commissioner Jonathan Adelstein. ”It’s harder for local and new artists to get on the air. Today I wonder: Will the next Elvis throw down his guitar in disgust because he can’t get on the radio?”