Will AM/FM radio vanish from car dashboards anytime soon?  A recent announcement to that effect whipped the broadcasting industry into a frenzy, raising concerns – and valid questions – on the future of car radio.

The controversy sparked at the Convergence Panel in Santa Clara, hosted by Greater Media’s Buzz Knight and featuring three representatives of the automotive industry.  One of those experts asserted:

“AM and FM are being eliminated from the dash of two car companies within two years and will be eliminated from the dash of all cars within five years.”

A Harsh Reality for Radio

He explained that MTV Scratch research showed that young people simply don’t use radio anymore and the automakers see no need to continue installing radios in their cars.

We don’t know how many people were surveyed to reach that conclusion.  But the 395,844 people surveyed by Arbitron tell a different story.  Last week’s release of RADAR 116 shows an overall increase in AM/FM listenership, with teens representing the largest gain in radio listenership among the major age groups with 23 million total weekly listeners.  (That’s a statistically-significant difference of 23,000,000 listeners from the claim that “young people don’t listen anymore.”)

Radio listening also remained steady with young adults, with 66.5 million listeners aged 18-34.  That figure is equal to 92% of all Adults 18-34; a figure in perfect step with the 92% tune-in across all age groups.

Radio Adds 1.6 Million Listeners

Broadcasters and journalists were justifiably rattled by the suggestion that two major automakers would drop AM/FM radio from the dashboard.  After all, AM/FM may have lost its monopoly on in-dash entertainment decades ago (dating back to 8-track players), but it’s always been standard equipment on every new vehicle.

Furthermore, eliminating AM/FM from the dash doesn’t take into account radio’s role in public safety.  The FCC’s Emergency Alert System (EAS) is configured to communicate vital public safety information through radio waves to AM/FM receivers in times of emergency (when electrical power and the Internet “go down”).

Will AM and FM disappear from the dash?

The Big Three – General Motors, Ford and Chrysler – reacted to the news by affirming that AM/FM radios will remain in dash, at least in the near term.

“We have no plans to get rid of them because of their value for our customers,” said Chrysler spokesman Eric Mayne.  Mayne noted that Chrysler plans to begin installing HD Radio as standard on some Dodge Ram pickups.  GM’s Chief Infotainment Officer, Phil Abram, echoed the affirmation, noting that GM has no near term plans to eliminate AM and FM from GM vehicles.

Detroit’s Big Three Remain Committed to AM/FM Radio

Those who say it’s just a matter of time before Internet powered technology forces AM and FM off the dash point to apps like TunedIn, which enable a web user to listen to thousands of AM and FM stations and well as thousands more worldwide.

Perhaps the biggest stumbling block to forcing the AM/FM radio off the dash is the cost of a truly wired motor vehicle.  Will Americans acquiesce to paying another $30, $50 or $70 per month to access the Web via their car?  It’s one thing to patch in an iPhone and use your mobile phone plan to access the Web for streaming audio.  It’s another thing to ask motorists to cough up another $500 annually for a Web-friendly car.  If that comes to pass, suddenly the $14-18/monthly charge for SiriusXM Satellite Radio might look like a bargain.

It’s likely we’ll hear debate on this issue for many years to come.  But, for now and in the “near term,” AM and FM are safe and sound in the new car dash.

Roll down the windows and crank it up.

Mark Lipsky is the President and CEO of The Radio Agency. Please follow The Radio Agency’s Blog “Sounding Board” by subscribing to the email or RSS links above.Visit our website TheRadioAgency.com