Is radio experiencing its digital revolution? Cheaper radio chips and the increasing penetration of wireless networks has given rise to a new technology said to be a disrupter of satellite and AM/FM radio.

The WiFi Radio. Selling between $200 – $400 dollars these battery powered internet radios can access the over 10,000 internet radio stations freely and they can be combined with existing devices like smartphones, MP3 players, and connect to a home computer linked to home stereo system. They come in various shapes and shine and the techology has even made its way into some car stereo systems.

The idea of listening to radio over the internet isn’t new. It has been around pretty much since the early 90′s. As a late night insomniac I have for many years listened to the after midnight “Coast to Coast” show and to Art Bell interviewing interesting scientists, psychics, and other odd people via streaming audio, podcast, MP3 download or through live broadcast. I used to download some radio songs I liked but found many stations hard to find after the copyright regulators cracked down. Apparently radio broadcasters are not allowed to broadcast the same songs over the internet as they are on their broadcast radio stations. I believe this stunted radio’s online growth and its opportunity to explore its new media opportunities. But things are now changing for radio.

There was an interesting research study done by a UK research firm RAJAR. They tracked WiFi radio listeners during a period of May through October 2008. They found most internet radio listeners listen at home (89%), 1 in 5 listen at work (21%), and 6% indicate listen elsewhere. In their latest media study Deloitte (Dec 2008) indicates that in their opinion WiFi radio is positioned to take off because of improved broadband connections and the fact that two-thirds of households are subscribers to high speed.

Radio broadcasters may now have a very real opportunity to turn the tide on their fortunes. Radio revenue was down by 12% in the 3rd quarter of 2008. Online revenue grew by 5% over 2007. According to the US Radio Bureau online currently represents only 9% of total radio income.

The internet offers the radio industry an opportunity to extend its reach and strengthen relationships with current listeners while at the same time build new listener relationships. At its core radio programming is sponsored audio content and entertainment that can be shared over multi-platforms. Enter a contest through SMS and announce the winners through a sponsored web-based video. Interesting? Radio has always been a media that engages and as such is strategically positioned to finally shed the “old media” label for the more attractive “new media” one.

I believe the “signal” is clear, radio has a “new media” face.