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Commercial radio is caught in a digital funk.

Satellites are invading from outer space.

iPods are everywhere.

Music sites flood the Internet.

New formats like "Jack" are springing up.

And on the Lake, WLKK-FM 107.7, hip classic rock personality Tina Peel is playing a tribute to the Carpenters.

The Carpenters on alt/rock radio?

"Why not?" says Peel, who grew up listening to long-dead, free-form local rock stations such as the Wizard and WUWU before working as a jock at 97 Rock. She now hosts a 10 a.m. to 3 p.m. shift at the Lake, which signed on here a year ago.

"It's nice to finally work at a station where I really like the music," Peel added. "It's not just a job; the music gets in my soul."

But the Lake is owned by Entercom Communications of Philadelphia, one of the industry giants. Entercom, like most of the big companies that dominate radio throughout the country, programs stations the way McDonald's makes hamburgers.

Since national deregulation nearly a decade ago, a handful of radio companies dominate markets throughout the country. This not only limits competition but also local ownership. In Buffalo, for example, only a few, small stations - such as WJJL-AM and WXRL-AM - are locally owned. Big national companies Entercom, Infinity and Citadel operate every major station here.

Technology, however, is changing radio's competitive landscape.

Satellite radio is growing at a record pace. The pay format recently passed the 5 million subscriber mark. XM and Sirius, the two satellite broadcasters, are expected to reach 8 million subscribers by the end of the year and 20 million by 2010. Satellite is also getting big names. Bob Edwards and Opie and Anthony are on satellite, and the king of all media himself, Howard Stern, goes to the sky next year.

Internet radio will reach 30 percent of all households and 50 percent of households with broadband in the next five years, according to Forrester Research.

iPods are best known for downloading songs, and 28 million digital audio players have been sold in the past seven years including about 5 million last year. Broadcasts of music, called "podcasts," loom on the horizon.

Traditional commercial radio is feeling the pinch.

Although it still dominates with more than 90 percent of the audience, digital delivery systems, such as satellite and the Internet, are eating away at the audience.

The latest radio craze is "Jack," a format inspired by the iPod shuffle. Turn on Jack and you could hear just about anything from Green Day's "Boulevard of Broken Dreams" followed by Elvis Presley singing "Little Sister." Earlier this month, Entercom switched a Rochester station from oldies to the Jack format. Another such format is called "Bob."

Why now?

"I think it's a reaction to tight playlists," said Tom Taylor, who writes a column called "Inside Radio" for a broadcast industry newsletter. "People want to hear more songs and something different. Besides, it's fun not knowing what you'll hear next."

Taylor said that radio, like other media, has become niche-driven in recent years. It was no longer going for a general audience but a specific one. Teens, women, housewives, young men, old men all get their own sound.

The result, Taylor said, was a narrower choice of music played by each station.

"A format like Jack is really about attitude," he added. "I thing it's a good thing and shows that radio still has vitality. It's about opening things up."

Locally, the Lake is no Jack but still offers an eclectic song mix and sometimes nearly 15 minutes straight of music without a commercial.

Hank Dole, program director at the Lake, is still trying to figure out a name for the format.

"A listener called and said we're an album-tracks station," Dole said. "I said yeah, I like that."

The Lake actually harks back to the early days of FM rock, when alternative radio took hold during the late '60s and early '70s. The Lake's core artists, such as the Beatles, Rolling Stones and Eric Clapton, fit a classic-rock playlist.

But it's the range of songs and surprising list of other artists that give the Lake its distinctive flavor. The playlist includes: "Industrial Disease," by Dire Straits; "Don't Want to Wait Anymore," the Tubes; "You Need Love," Muddy Waters; "Use Me," Bill Withers; "One Love," Bob Marley; "About A Girl," Nirvana; "I'm Gone," Anatara (local band); "Superman's Song," Crash Test Dummies; and "Angel From Montgomery" by John Prine.

The music has attracted an audience. In its first full Arbitron ratings book last summer, the Lake jumped from 1.3 to a 4.3 average quarterly hour audience share. It has maintained those numbers and is rated 9th overall in the Buffalo market. 97 Rock still dominates classic rock with nearly double the Lake's numbers and is rated third overall.

But the Lake is making an impact.

"I happen to like it a lot, especially the music," said Larry Levite, former owner of WBEN radio. Levite was also the man who ran the old WPHD, Buffalo's first and most memorable FM rock station in the late '60s. "WPHD was edgier than the Lake, which tends to be more mainstream. But the Lake adds something different to this market."

"We have a feel that goes back to the free-form album rock days," said Doc Phillips, morning man at the Lake. He has been in radio for more than three decades and understands the need for change.

"Radio got so bad, because all it was playing was hits," Phillips said. "Radio disenfranchised listeners by playing the same five or six songs over and over and putting on all those commercials."

The Lake is not a big risk for Entercom. It has a monopoly running the only commercial news station in Buffalo with WBEN-AM. Entercom also operates KISS, WKSE-FM, for teens, and bought out the competition to have WGR-AM for sports talk, with Star 102.5-FM for adult contemporary music fans. Entercom also has WWKB-AM, an oldies station.

With so many stations, formats and power, turning to the Lake format was a way to find another niche, somewhere between classic rock and alternative, giving listeners a reason to turn off their satellite, iPod, CD player or the Internet.

That's the audience commercial radio is losing.

"If we don't change, we're never going to get those listeners back," Phillips said.

Radio companies are famous for burning through fad formats. Will the Lake and Jack go the way of smooth jazz and dancing oldies? Can big radio corporations be trusted to stick with a creative idea at the expense of commercial pressures?

"I know some people are disillusioned and skeptical," Tina Peel said. "It's a corporation and they're out to make money, but right now they're giving us freedom and it's working."