In Boston WBCN went off the air. The company that owns the station is switching to a Sports/Talk format. WBCN was the station in the 80's that would play break out artists like U2. In today's market it lost it's way and Howard Stern. Thus if became a hard place for advertisers.
Radio advertising drives the format (not the other way around). I have worked for radio stations and I have sold air time to advertisers. The way radio works is that each station is a house and in that house lives a certain demographic.
It may be 25-40 year old women (80%). Which is one of the best demos for advertisers. This would be "light" rock stations or stations that play hits from the 80's, 90's or present day. Sports talk station attract 80% male that are some high income earners. This allows Sport talk station to charge a premium for their spots.
Radio is sales driven. If your format is not attracting a demo that is attracting advertisers then you are in trouble.
The myth that station care about the music or content is silly. It is all about attracting the demo that your station is known for. 90% of the music played on the radio is pre-packaged selection of songs to attract a certain demo that has been created by radio consultants. 90% of the time the DJ has no input what is played on the air.
This formula was been working for a long time but now things have changed.
First the IPod has allowed people to chose the music they listen to and by pass the radio stations. Second there are some great "radio" internet sites that allow to listen to the type of music you want with very little commercial interruption. So besides the radio in your car (which I think will be slowing be going away) less people are listening to traditional radio at the office or at home.
I think this trend will continue and traditional radio (as we know it today) will change. This change will be good for the listener but bad for the companies that own radio stations.
Radio advertising is not cheap. Spots on top stations in during morning drive time can go be $1,500 per spot. One spot is not going to get you much (you really need to rise above the clutter) so a "smart" buy would be at least 25 spots a week. So you can easily drop $20,000 a week for one station in one top ten markets. If you are doing a national buy the numbers can get very high.
Internet marketing is still finding its way but with the price of doing a successful radio campaign so high, internet marketing has a real chance to offer advertisers a cheap alternative with ROI tracking.