Come on, now, let's be realistic. AM radio is dead and FM isn't too far behind. That is simple reality. It was great while it lasted, but technology and consumption of media evolves. If more folks in terrestrial radio spent time, energy and resources on understanding new media and technologies and the social and behavioral changes of how its consumed instead of what ifs, they would be executing successful business models on a day-in, day-out basis. Stop going backwards.
People keep saying AM radio is dead and FM is close behind it, yet all the AM allocations in the NYC/Philly/Wilm/Balt/Wash metro are taken. Granted many are not making big money, but someone is listening to AM and as long as AM offers something not found on FM, it might be able to hang in a bit longer. Granted probably the bigger issue for AM's survival is not getting an audience, but getting one the advertisers want. I do agree that AM is becoming more religion and regional ethnic formats as news/talk and sports/talk are starting to migrate to FM. So AM's role will diminish more, but may be able to serve other groups of listeners who today are underserved as in various ethnic groups that can generate ethnic advertisers who want to reach their group, but maybe not to the level needed to support an FM station.
In terms of the "standards" format or what used to be referred to as popular music, there is an audience for that music - not all are 80+ years old either, just as there is an audience for Classical Music, Jazz, Blue Grass, Classic Country, Real Oldies, etc. These formats may generally skew older than the advertisers desire, as they don't get enough of the younger demos advertisers want. Yet there are people in their 20's who like all of those forms of music and do listen to stations playing that specific type of music if available in their area. A possible answer for the standards format might be the non-comm radio route. There are fewer and fewer commercial radio stations playing Classical Music, Jazz, Classic Country, Blue Grass, Real Oldies, Big Band/Standards, Polkas, etc. Many of these formats can be found on an NPR non-comm or college non-comm stations, so why not big band/standards? As Philly's WRTI covers Classical and Jazz, WHYY-FM offers some Classical, WVUD 91.3 Newark, DE U of Del offers on Saturday night a program called Scratchy Grooves, where the host plays from original 78 rpm's music from the 1920's through the 1940's. WVUD also airs a couple Blue Grass shows, plus other styles of music. WXPN Philly U of Penn offers alternative music. New Jersey's Rowen University radio 89.7 (forget the calls) offers Oldies sometimes, so why not a non-comm offering big band/standards as their primary format or even as a part of block programming similar to what WVUD is doing?
Frankly non-comm radio is where the real variety in music and the more creative type of programming is being found more and more. Between corporate underwriting and listener donations, it seems to work, where commercial radio's advertisers only want a real narrow segment of the audience and the commercial radio programming reflects that. As America's population continues to age, it might end up being that radio's "salvation" may be in non-comm radio, where you support your favorite station without the need of advertisers who's influence on programming would cease.
The thing I've never understood about the advertisers on radio's attitude towards the older demo vs cable TV's attitude. Commercial radio doesn't want anyone over 49, non-comm radio does want any one including the older demos, because they have more disposable income to donate. Cable TV found that selling the older demos works, just pick the right companies and products to sell to that aging Baby Boomer group. I don't think cable TV could survive without all the medicine spots. So why couldn't an Oldies or Big Band commercial radio station sell spots to those same companies? They'd be reaching the same audience that they get watching cable TV. But for some reason there's a mind set against that, so it seems the non-comm radio route is the answer for those of us who want that underserved style of music we like.