When the first drive-in opened in Camden NJ, a company by the name of RCA Victor designed the sound system. They called it "Directional Sound". Using 3 main speakers mounted next to the screen, they tried to blast the volume so that even the cars in the back could hear.
There were 2 major problems with this type of sound system. Since light travels faster than sound, the sound arrived at the back rows late, i.e out of synch with the picture. the second problem was that while everyone in the entire drive-in could hear the sound, but so could the neighbors, passing cars, and overhead planes. Some complaints stateed that farm animals were disturbed miles away. This system was replaced with the individual window-speakers most movie goers are familiar with.
It was in the early 70's that AM radio sound came into practical use at the Drive in. Although the idea had been kicking around since the 1950's, with some systems even calling for a separate box the patron would purchase and reuse, it was made practical by Cinema Radio, a company started by Fred J. Schwartz after experiencing what he felt was poor sound quality at a drive-in.
The big change since 1950 was the number of cars that had radios, by 1970 the number was up to an estimated 97%. The timing was perfect. Normally transmitting a radio signal would require a facility license. For no reason clear to me, the drive-ins were given the wave by the FCC. They passed on licensing these Low Power stations as long as they kept it under 50 Milliwatts. [Closed cable FM was also exempt.] These broadcasts usually could be received via your car radio, or by a transistor radio which you could borrow from the snack bar.
Initially these were AM stations but the policy spread to FM licenses as that became adopted as the standard. FM is what remains in use to this day at most drive-ins. read more here: http://www.capridrive-in.com/dih.php
RELATED DRIVE IN RADIO FIRSTS:
In 1986 FM stereo sound was introduced via FM broadcast at broadcasting is introduced at Shankweiler's in Orefield, PA. This is also America's oldest, continually running Drive in. http://www.shankweilers.com/
In 1999 The Boulevard Drive in was the first drive in theater in the world to install digital sound. They broadcast at 89.7 FM in Kansas City. I am told that their fixation on high quality audio has made it superior to that of many indoor theatres. http://www.boulevarddrivein.com/
There is now even a company trying to buy time before, between and after the movies run on the radio signals at the drive ins! They distribute content via CD-R mailed weekly. It's an interesting niche service.