Second, while several Internet radio services have created applications for Apple's iPhone and other cell phones that can play music wherever you have cellular coverage, the path to playback in the car -- the primary setting for radio listening -- is still not as simple as for alternatives. Faster cellular networks may facilitate in-vehicle playback, but high-speed wireless connections can cost up to four times as much as a satellite radio subscription. One service, Slacker, had been planning to create a satellite link for use with its Internet radio product in order to facilitate music delivery in the car, but now believes other approaches will provide a superior alternative, at least in the U.S.
In an economy that is leaving consumers hungry for entertainment without a lot to spend on it, Internet radio can further stretch dollars being spent on broadband. But business model pressures and technological limitations may place limits on where it can reach and for how long.
Ross Rubin is director of industry analysis for consumer technology at The NPD Group.