Hmmmmmm....I'm sure CBS, NBC and ABC all made those same arguments when cable TV first came out. "It's a fad". "People won't pay for television".
Ahhhhh...but the people DID pay! They will pay for the variety! They will even pay extra for premium channels so they can watch movies without commericals and all the swears dubbed out!
The TV networks still exist, but in a much, much less profitable form than before. And they never would have made it at all as stand-alones--all three of the major networks are now just subsidiaries of larger conglomerates.
If the people want free radio with commercials, then why has the amount of actual radio listening been decreasing steadily for the past 10 years? That's what most analysts would call a bankable trend.
Maybe it's because all the loyal listeners of traditional radio are getting a little older and dying off! If you were a little younger, maybe you would understand.