Unlike what Bong seems to read, :

I for one haven't read any posts in this thread from people in the know that are saying AM is yet completely dead-in-the-water. However there is substantial evidence that would indicate listening to the medium is in fairly rapid decline. Through listener perception reseach the main reasons appear to be:
1. New or younger listeners are not coming on board. As pointed out here, the majority of listeners age 12-30 don't listen to AM, let alone know it even exists.
2. Fidelity and signal issues. Having a computer on your desk pretty much eliminates the ability to hear AM stations. Electronic devices cause noise and interference, making the reception of AM difficult to even dyed in the wool AM listeners. AM can't be heard indoors very well. The audio quality sounds inferior as compared to FM or an MP3 player. I'm not sure of the physics involved, but it has something to do with wavelength of the AM band.
Even advertisers think of AM as an inferior medium by comparison. If a local advertiser has trouble hearing their spot or notice the sound quality differences, then they don't want to pay for the ads.
3. AM is very expensive to run by comparison. As mentioned in an earlier post, AM requires a lot of valuable land and uses a lot of electricity to broadcast.