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AT&T may have just saved radio

Radio
Richard Price | Getty Images

Has the mobile phone just saved, instead of killed, the radio star?

Experts have been predicting and declaring the death of old fashioned terrestrial radio for years. That's because fewer and fewer people seem to listen to the radio at home. And the once reliable audience of car and truck commuters has had more and more new options like SiriusXM Radio to choose from over time. But now a knight in shining armor has emerged and is doing something that could very well save radio and boost its audiences for generations to come. And that knight is AT&T. The company announced Tuesday that it will be activating the receiver inside every Android phone it sells that taps into FM signals. The service will be turned on beginning with phones sold in 2016.

Again, this is only for Android phones and AT&T is currently covering about 30% of the wireless market. But Sprint started activating the FM chips in 2013, so now the trend is clearly picking up steam. The radio industry has understandably been pushing for all of this for years. AT&T's decision is its biggest victory on this front so far. The big questions are: 1) will AT&T's rival Verizon follow suit? and 2) will Apple allow wireless carriers to activate the FM chips inside most iPhones?

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I'm betting the answer will be "yes" to both of the above questions. The reason is simple: content is still king in the media. And terrestrial radio still provides a lot of great content for free. When Sprint was alone in activating this service, things were still iffy because Sprint often acts like an outlier. But now that AT&T is on board, the rest of the dominoes should start to fall. I know there are still some serious potential roadblocks. Good reception on many phones may require some kind of antenna that none of the smart phone designers are going to want to add. And many radio stations have already made their content available via smart phone apps with limited success. But I'm still optimistic.

The similarities are amazing when you you look at this development and how the industry was saved by transistor radio in the 1960s. By the late 1950s, radio was considered dead as Americans were choosing television almost exclusively for their at-home entertainment. But the large scale manufacturing of lower cost and smaller transistor radios gave consumers something TV could not: mobility. For roughly 30 years, people took their transistor radios everywhere and the content went with them. It didn't matter if it was at the beach or tucked under your pillow so you could follow all those ball games that stretched after your bedtime. Convenience and mobility gave radio a second wind.

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Now this development could be even better. The radio industry doesn't have to hope that people will buy new portable radios, we all already have the mobile smartphones than can deliver radio content. And since enough baby boomers and gen X'ers who grew up listening to radio are smartphone users, the industry won't have to start from scratch developing a mobile phone-based audience. Another big plus for the industry is the fact that radio listeners on mobile phones should be much easier to track and more accurate than the current surveys and devices used to measure radio audience levels. In other words, radio ratings could get a lot more accurate.

But the most encouraging thing about all of this is that it proves that new technologies and media needn't destroy the ones that came before them. If terrestrial radio becomes more available and more portable, a still worthy part of the American economy and culture will live to see another day. And this will not be in spite of the Internet and wireless services, but because of them.

Commentary by Jake Novak, supervising producer of "Power Lunch." Follow him on Twitter @jakejakeny.