Tim Davis will want to take some credit for the discovery of singer Leslie Feist, known just by her last name. But the reality is that until she showed up in that iPod Nano ad, singing "1234," nobody knew who she was.  Since that spot started airing nationally, Feist and "1234" are bona fide hits.  And once again, radio has had little - if anything - to do with it.

And as the incessant Danny Buch emails keep telling us, Old Navy ads are making a star of Ingrid Michaelson.  Of course, if you watch Grey's Anatomy, you first heard...or saw Michaelson as part of that hit show's soundtrack.  Once again, radio is the last to get the message.  In fact in one of his missives, Danny actually was trying to get the single serviced to radio, long after it started becoming one of those "Who's that singing on those Old Navy commercials?" phenomenon.

It's more evidence that new music and new artists are being broken outside of radio, an industry that's often stuck either trying to catch up or just figure out what's all the commotion about.  Yes, the statistics continue to reinforce that radio is still #1 for exposure to new music.  But when commercials and TV shows are generating the real music buzz, it's time to start re-evaluating.

Twice this week, the FCC released decisions denying applications proposing city of license changes for AM stations proposing to take away the only station licensed to one community and move it to another.  In its order adopting simplified city of license changes (see our previous posts including those here and here), the FCC refused to change its policy of not allowing the removal of an established radio station which is the only station licensed to a community except in cases where an extraordinary showing justifying a  waiver of the rules could be made.  The two cases decided this week show that merely moving to a community with greater population (even one which has no other station licensed to it) will not, in and of itself, justify a waiver of the rules.  Thus, stations which are the only station licensed to their communities are effectively blocked from changing cities of license without  providing a "back-fill", i.e. moving another station so that it can be licensed to the community that would otherwise be abandoned.

In one case decided this week, the broadcaster proposed to move its AM station to a community that had three times the population of the one that it was proposing to leave.  The Commission rejected the move, finding that the residents of the current community should be able to rely on continued service from that station.  This was true even though other stations could be received in the community, as the Commission reminded licensees that their primary responsibility is to serve the needs of their city of license, and that this primary service cannot be duplicated by the secondary service provided by a station licensed to another town or city. 

The second case was similarly decided. There, the Commission made clear that, while the community to which the applicant proposed to move would have been favored over its current community had the choice been between which one most deserved a new station, the fact that the the station was already licensed and operating in the first community meant that its listeners had a presumption that the service should be retained.  Even though the station was not physically moving its transmitter site and would not change its coverage, the Commission found that change in city of license would result in the loss of an outlet required to serve the community as its primary obligation.  Together, these cases make clear that stations licensed to a community cannot be easily moved without some as yet undefined unique circumstance, or unless another station can be moved to the first community to replace the station that is being moved.

Much has already been written about these new satellite radio ratings numbers released by Arbitron from the Spring '07 survey.  Some are questioning the accuracy of the data, suggesting that listening levels are understated, given the challenging task of recording channel numbers from XM and/or Sirius stations, and other methodological aspects.  I will leave this discussion to the ratings research mavens to haggle over, but the thrust of these numbers and their implications are obvious.

As we have been pointing out over the past couple of years, satellite radio is an issue for commercial radio operators, but there are other more encompassing threats that challenge traditional listening habits.  Mobile phones, iPods, and the notion of CVC - control, variety, choice - are issues that broadcasters will grapple with moving forward.

In fact, our most recent Tech Poll, conducted earlier this year, suggested that satellite radio's growth is stalling out, and this may be accentuated by this long waiting period that XM and Sirius are enduring as the merger question is being decided.  Clearly, the union of the two services, and subsequent pricing adjustments and packaging could make satellite radio a larger factor in 2008 and beyond.  But for now, XM and Sirius emerge as niche players, and satellite radio is rapidly becoming a medium that had potential but is not having the promised impact.

Consider that Howard Stern's reported cume audience is in the 1.2 million range.  In a good book at WXRK, WYSP, and WBCN, he easily topped those numbers.  Clearly, he is now broadcasting on a much smaller stage, which is one of the reasons why you just don't hear people say "Did you hear what Howard said this morning?"

It is also of note that many of the big names that XM and Sirius threw millions of dollars at are delivering at the levels of Des Moines FM stations - or lower.  Again, even if these ratings are 25% lower than "reality," satellite radio's chieftains have to be calculating the ROI on stars like Martha Stewart, Oprah, and other big name celebrities.  While terrestrial broadcasters may not be spending enough to attract and nurture household names, satellite radio's "drunken sailor" spending has to be questioned at some point. In XM's recent release of its third quarter financials, losses have widened from nearly $84 million to more than $145 million.  Can you imagine a commercial broadcaster having to continue to explain this level of failure to company shareholders?

As I suggested in an Inside Radio piece, the ratings results of the hundreds of satellite radio channels could serve as a template or primer for traditional broadcasters, seeking compelling programming for HD2 channels.  While it's true that the "Long Tail" effect of listeners seeking cool, niche programming is more definitely in play in these ratings, it's also a fact that the more mass appeal channels attract the most listeners.  Maybe Paul Drew and Bill Drake are somewhere laughing at this "revelation," because playing the hits has always attracted the most listeners - in whatever medium you choose.  Perhaps satellite radio's niche channels bring in a wide diverse audience of interested subscribers, but how can executives rationalize these incredible expenses in order to grow new signups?