Does radio have a future?

Radio is testing anew the theory that there is no such thing as bad publicity. The industry had better hope so, because for the past couple years, media coverage of it has been filled with about as much good cheer as Asian bird flu.

The grim mood swirling around radio intensified earlier this week when a new payola scandal hit. Although a $10-million settlement was reached between Sony BMG, the nation’s second-largest music company, and New York Atty. Gen. Eliot Spitzer, the investigation continues and radio is bracing for more revelations of wrongdoing.

“This scandal on its own isn’t going to break them, but it’s another nail in their coffin,” said Jerry Del Colliano, a onetime DJ and program director, now a professor of music industry and recording arts at the University of Southern California. “Radio is under fire. They need this like they need a hole in the head.”

It would be an understatement to say that history will not remember this period as radio’s salad days. The trends are mostly down. Radio ad growth lags behind other big media -- cable television, Internet, even magazines and newspapers.

It continues to shed listeners, whose complaints about soulless, corporatized stations that repeat the same songs over and over again are reaching deafening levels. (The fact that radio stations were caught taking money and gifts from a music company to play their songs only adds to that perception.) In 1993, Americans tuned in to radios more than 23 hours a week. In 2004, that figure had fallen to about 20 hours, according to the Arbitron ratings service.

Technology is ramping up to offer static-free alternatives to traditional radio, leading some observers to declare the medium’s days of cultural relevance are numbered. Satellite radio, which already claims more than 7 million paid subscribers, is laying siege to radio’s base by stealing audience share and big talent like Howard Stern, who is due to depart by the end of this year. The growing preference for iPods and podcasts, which between them allow a user to store, arrange and play music and programs -- typically commercial-free -- at their leisure, isn’t exactly boosting radio’s ratings either.

And the most potent threat to radio may be yet to come. Internet radio, still years from any kind of widespread use, will essentially have the power to transform any person with a computer into a radio station. Indeed, all these technological advances have forced the term “radio” to surrender its original meaning. To distinguish itself from its high-tech competitors, what had been referred to solely as “radio” now is known in the industry as “terrestrial radio.”

“Radio faces a huge problem. It can’t compete with the variety and convenience of technology,” said Michael Harrison, editor of the radio industry magazine Talkers. “It can’t be stopped. It’s like a mighty river. It’s the tide of history.”

‘Not a bad business’

But radio has survived a slew of past technological assaults. At one time, television, CB radios, cassette tapes and MTV were supposed to slay the mighty giant of radio. Defenders contend that the new challengers and those still massing might diminish the medium’s influence, but radio will nevertheless endure the changes, the scandals and whatever else may lay ahead.

“Terrestrial radio has died many times according to the experts,” said Perry Michael Simon, news/talk/sports editor of AllAccess.com, an online journal of the radio industry. “This isn’t to say they won’t have a bite taken out of them, just as cable did to network television, they will. But it’s still not a bad business to be in.”

In the short term, experts say, the radio industry needs to put its latest scandal behind it as quickly as possible; the longer payola headlines land on front pages, the more the industry will suffer.

“Payola is going to further distract and sideline radio from what it needs to be doing,” Del Colliano said. “Instead of thinking about how to win over a new generation of listeners, they’re going to be thinking about how to keep the feds off of them.”

For now, the corporate radio station owners have offered little more than “no comment” about their public relations nightmare. Industry observers speculate the coming days for radio will mean little more than drawing up slightly stricter ethical guidelines or reminders about current ones. The main reason, say some, is that rumblings years ago about the payola investigation spurred radio to clean itself up.

“There will be some additional level of soul-searching,” said Tom Taylor, editor of the trade magazine Inside Radio, which is owned by Clear Channel Communications Inc., the giant San Antonio-based radio chain.

“But most companies have already gone through the housecleaning and introspection about this a couple years ago.”

Still, others point out payola hasn’t disappeared -- and probably never will. The huge money, oversized egos and massive insecurity that are all hallmarks of the music business will keep payola practices spinning. Spitzer’s office is investigating other music companies, and some expect another round of incriminating business practices to be uncovered.

“Payola has been an accepted way of doing business for the entire industry for years,” said Michael Steele, the program director at KDLD/KDLE-FM’s Indie 103.1, who previously held similar posts at Top 40 stations. “But I guess they can’t fire everybody.”

At the same time, there’s little argument over whether payola actually achieves what it sets out to do, namely, turn a song into a hit. It doesn’t and can’t. What it might be able to do though is buy access to the limited playlists of radio stations and give a record a chance to be a hit.

“There’s an old saying in radio: ‘The record is in the grooves.’ If it’s not in the grooves, you can’t make it a hit,” Taylor noted. “You can’t make people like what they don’t like.”

When radio gets past payola, its main priority must be to attract youngsters who don’t have the connection to the medium that their elders do, and did. It’s a similar challenge faced by, among others, newspapers and network television.

“There’s a whole generation that has grown up without loving radio,” Del Colliano said. “The next class of high school graduates doesn’t know what radio is, doesn’t care and doesn’t want it. One student told me recently we play what we want -- it’s called an iPod.”

Radio isn’t dead yet. An estimated 200 million people still tune in to terrestrial radio, and it still has a tremendous cost advantage over its competitors. Satellite radio, computers and iPods can all easily run into the hundreds of dollars to buy -- and then there’s the hassle of setup. A terrestrial radio can be had for as little as $10, and all you have to do is turn it on and find a station.

“Will radio’s influence be diminished? Absolutely,” said Alex DeMers, president of DeMers Programming Media Consultants, based near Philadelphia. “Is it going to go through change, maybe radical change? Yes. Is it going to go away? No way.”