As someone who owns and operates an internet only, talk radio station......a couple of things.
FYI: Not all internet radio sounds like crap. I have 30 different shows on the station. About 1/3 originate at AM stations and are then rebroadcast here, almost always later that same day (if produced at night, the next morning).
Most of the rest of the shows are independently produced either in "home studios" or using online services like BlogTalkRadio, Spreaker, etc. BlogTalkRadio's sound quality is easily the worst, but there are steps that can be taken to make the show sound significantly better. Spreaker's sound quality is quite good.
Many of the independent podcasters were in AM radio for years, even decades, some in major markets and have decided to move to new media as AM radio is for the most part drowning in red ink.
Only the very naive have any illusions as to becoming the next great talk radio star. I've been doing a show for more than five years and I do it because I enjoy doing it (helps with my sanity) and believe it or not, have thousands of loyal listeners each month. That being said, I KNOW that I'm not going to be discovered unless a major radio exec has a flat tire in my driveway.
My station, believe it or not, makes a small (very small) profit and in 2013 had well in excess of 500,000 listening hours and even though it's early, we're on pace to exceed 720,000 listening hours in 2014 and should have a decent shot at 750,000 hours this year. The next goal would be to break 1 Million hours. The station is less than 4 years old, so that's not too bad, considering there was NO ONE listening when I flipped the switch in May 2010.
Like anything......some of the shows in the lineup are better than others. Not just in production quality, but in content, but that's true of traditional radio. We have one tiny AM affiliate that broadcasts our internet stream on the AM band. I'm talking with a couple of other stations right now that are a bit thin on their own lineup and are considering us to fill some of their content needs. I've got no illusions about building a massive affiliate network. If we have 4-5 stations taking our feed during part of their broadcast day, then fine. If not, that's fine too.
I guess the bottom line is that a small grassroots internet station like ours does fill a niche as month, after month our listenership continues to grow. Stations like mine are a part of the new media. Generally speaking, 25-40% of our listeners are listening using a mobile device (iPhone, iPad, Android, etc.). The rest are using PC's or internet radios (i.e. Logitech Squeezebox).
AM radio will never completely vanish, I just think that as more and more autos add smart technology, internet radio will gain even more listeners. Some "experts" predict that within 5 years smart technology will standard equipment in virtually every car model. Not sure if that's true, but it's going that way.
If it happens, my station will be ready as it's on all the major syndication apps such as Tune-In, Stitcher, iTunes and about 8 or more lesser know websites (TalkStreamLive, Streamfinder, etc.)