Still Tuned In

On Martha's Vineyard, Mass., WMVY streams the Newport Folk Festival live. If you're looking for something to do in Taos, N.M., head over to KTAO for a Solar Center beer and a show. And if you want the latest news in Reading, Pa., check out WEEU-AM.

After rampant consolidation created Big Radio several years ago, its 1,600 or so independent cousins are still broadcasting, serving up some of the most innovative homegrown fare on the air today.

From old Cape Cod and Pennsylvania Dutch country to backwoods Montana, the Southwest and Los Angeles, indie radio remains a vibrant, often quirky medium still committed to a strong relationship with its listeners as it walks the tightrope between aesthetics and profits. Whether the format is music, talk, news or a potpourri, the indies' watchwords are local, live and relevant as they cater to their communities of interest and harness new technologies. The indies are counterattacking to take advantage of the status woe bedeviling mainstream radio in the U.S. The time consumers have spent listening to it has declined 14% over the past decade.

"We play music that we think people should hear," says Joseph V. Gallagher, president of Aritaur Communications, which owns what he calls the "very slightly profitable" WMVY on Martha's Vineyard. Noting that the 25-year-old station expects to post $1.3 million in revenue this year, he says, "We don't program to get ratings."

That way of doing business seems quaint, even crazy in the aftermath of the Telecommunications Act of 1996, one of the grandest government giveaways of modern times. By lifting most station-ownership caps, the law transformed middling players like Clear Channel and CBS into megapowers as they stuffed their pockets with prime radio properties nationwide.

Today the top 20 radio groups own at least 3,000 stations out of 11,000 outlets. In came economies of scale, calcified playlists, ROI and Dr. Laura, and out went boss jocks and news on the half-hour. Corporate stations generated some $18 billion in revenue last year, vs. the independents' $394 million, reports BIA Financial Network Inc. Along the way, though, Big Radio lost a good chunk of bored 18-to-24-year-olds, many of whom have defected to their iPods or the indies. Satellite radio is another threat, but declines of 41% and 55% in the stock prices of Sirius and XM this year underline the struggle that's taking place in the radio market.

The locals see an opportunity in the new technology. "Digital technology and the Internet are giving stations the power to do more with on-demand programming, online broadcasting and giving listeners exactly what they want," says Marc Hand, the managing director of Public Radio Capital, a consulting firm outside Denver. "The next few years will be telling."

Meanwhile, most big-market indies say they will have high-definition digital radio soon. Podcasting, or on-demand radio, is also in the works. What's more, owners like WMVY's Gallagher, realizing that radio is heading into a user-controlled, I-want-it-now mode, view the Internet as a potential cash machine whose raw materials will be deep program catalogs, as well as syndication, replay and on-demand rights. "Right now, it's a long-term play, but we're betting that it turns into our meal ticket," says Gallagher.