As a dual subscriber of both satellite radio services, I can say that, like others, I have these subscriptions to avoid local radio as much as possible. There are many formats that won't get touched in this market on satellite.
Personally, if I didn't already have satellite, and I were to hear a "commercial" telling me that instead of paying $13 a month for better radio, that I could get Frankie Warren or Jumpin Jeff Walker for free on local radio, I'd be at Circuit City as soon as possible getting a [satellite] radio. There are people who know (and praise) satellite's alternative: All Music, No Commercials, No DJ's.
Maybe if there were some diversity in formats and personalities (length of some's tenure), local radio might be more appealing. But, it's usually the same 500 songs day in and day out, the same DJ's (some for 20+ years) doing the same thing. Those who have been with them since their start still tolerate it, but the younger (40-under) have, and are using the other alternatives. Not just sat radio, but iPods, MP3 players, etc.
Keep it current, be diverse, be professional, and yes, be local. There are many posts which constantly come up about WARM. It was the thing in its day. There really wasn't any other competition out there back then. I guarantee you that if there were other listening options, WARM would have still come out on top. They were on top of things. But things have advanced so much since then. WARM today, if it were like it was still doing the same thing, with the same people would fail.
Things aren't changing with the times in NEPA. The same thing is being done as it were 20 years ago. Sure, there is still advertising revenue coming in (which is all that matters, I guess). We won't even get into other things that local stations can do to keep up with the "threats" (*cough* IBOC..install and promote that)... but listenership is not as high as it could be with stations because it is stale.
The one example I'll state is a station like the River. Sure, the signal isn't the best in NEPA...but it, for the first time in a long time for 104.9 had a pretty darn good book. It's radio done differently, and it's actually working for its benefit. Most of the day is no nonsense music, no traffic, sports, DJ's....just music....and a promise of fewer commercials. All they're going on is a few billboards and an ad at the Red Barons stadium. They must be doing something right, or at least on their way there.