The law of supply and demand

In response to the suggestions that when it comes to listening to the radio, "the wave band doesn't matter. If the format is what the listener wants they will tune in to anything."

I'm not so sure that that's the case any more, thanks to the laws of supply and demand.

Until comparatively recently information was relatively scarce. Because of that people were willing to accept a much higher cost to obtain the content they valued. That might be a visible cost, such as paying £15 for a CD of a band they liked, or a less obvious one, such as switching to a different waveband, hunting around for a station and then listening through crackles and interference, rather than pristine FM stereo.

The problem is, with the huge growth of digital media outlets and the net, we're now in a situation where there's an information surplus. The amount of money people are willing to pay for content has dropped hugely – in some cases to near zero.

This is what you see in the wars between the record companies and the file trading networks. When there's so much music available for free, customers no longer consider it worth so much to them. The record companies have now at least entered into customer negotiations with the launch of their new download services, but the price can only really drop. There's no going back to the fat cat days of old.

The only way you can really charge premium rates now is if you are in complete control of the means of distribution – for example the movie industry with cinemas – or if you have timely information that others do not – such as sports rights. Media owners are attempting to regain control through the use of digital rights management systems, limiting use of content through encryption technology, but at some point it has to go back to analogue and then all that protection is in vain.

The same laws of supply and demand of course also apply to radio. AM is not yet dead in some markets, but the extra cost involved for listeners (the switching waveband, ...) means it's on the way out. Sports may be viable longer because of its value and consequently the extra cost listeners are willing to put up with. However, where listeners have access to other media, music radio will find it increasingly hard to survive. That leaves it only for an older, rural audience – a group that is not a priority for most advertisers.