Internet & Technology
Tuesday, July 25, 2000
Radio Stations Find Web
A Good Delivery Channel
By Pete Barlas
Investor's Business Daily
When Inner City Broadcasting Corp. in 1996 set up Web sites for its three radio stations in the U.S., it decided to be one of the first to broadcast radio signals on the Internet.
“Why have a Web site that you can’t hear?” said Fred Jewell, Inner City’s director of technology.
Four years later, the sound of radio is crackling all over the Web. Roughly 2,000 of the nation’s 12,500 radio stations broadcast via Web sites.
Analysts say more stations are expected to go online as more consumers listen to radio on their personal computers.
In May, 30 million U.S. Web surfers, or about 36% of all online users, accessed streaming audio and video programming on the Web. That’s up from 21 million and 28% in November, says Nielsen-NetRatings Inc., a Milpitas, Calif., market researcher.
Streaming audio and video encompasses a lot of things, such as audio and videoconferencing. Still, though it has no precise figure, the market tracker attributes a large percentage of that use to radio.
“The space is growing really fast,” said Nielsen analyst T. S. Kelly. “More and more radio stations are going online and streaming content.”
Several companies specialize in bringing radio stations to the Net. Web portal Yahoo Inc. is on that list, due to its purchase of Broadcast.com Inc. last year. Other, less-known companies have also jumped into the field. They include BroadcastAmerica.com Inc., GlobalMedia.com, GetMedia Inc., RadioWave.com and WebRadio.com.
Demand Surging
Of these, in addition to Yahoo only GlobalMedia is publicly traded. These companies sell one-stop services to help radio stations broadcast and make money on the Internet.
BroadcastAmerica is the largest. The Portland, Maine-based company has contracts with 600 radio stations worldwide. About 400 of those stations are online now, and another 60 are slated to air material over the Net by late September.
The company can barely keep up with the demand, says BroadcastAmerica President John Brier. “We’re adding 30 to 50 stations a month,” he said. “It hasn’t slowed down in the last year.”
Radio stations are finding a new audience on the Internet, says Jeff Mandelbaum, chief executive of GlobalMedia.com. The company has 250 radio stations under contract.
“The No. 1 reason (radio stations) go on the Net is to reach an audience at work or people who don’t have a radio accessible,” he said. With the Web, stations also can transcend the geographic limitations of their signal transmitters, Kelly notes. “(The Web) builds a global reach for stations.”
The Web also helps radio stations build revenue.
BroadcastAmerica, for example, sells advertising and sets up contracts with companies that want to sell goods via the radio stations’ Web sites. It splits the revenue with those stations.
GlobalMedia sells its audio software player to radio stations for $5,000 while setting up e-commerce operations on its radio customers’ sites. It handles all product inventory and delivery and shares revenue from product and ad sales with radio stations. Products sold on the stations’ Web sites include books, compact discs and videos.
“We’re not only providing streaming services, we’re providing one-click product ordering as well,” Mandelbaum said.
Web firms like GlobalMedia also can help radio stations save money. Inner City would have spent at least $4,000 to buy enough hardware and software to let 10,000 listeners hear one station on the Web, Jewell says.
“Spending $4,000 per 10,000 listeners didn’t convert well for us,” he said.
Having such a Web partner eliminates a lot of headaches, Jewell adds.
“GlobalMedia sells the ads and the products and we share it,” he said. “I’m just sitting back and collecting the checks.”
Even as it grows, there is some consolidation in this emerging business of getting radio stations on the Web.
In June, GlobalMedia bought 212 radio contracts for $9.5 million from rival OnRadio.com. That Scotts Valley, Calif., firm is refocusing to become an online marketing company.
OnRadio, say analysts, dropped the radio business because it hadn’t been able to sell products over the Web as effectively as GlobalMedia and others.
In May, another player, Magnitude Networks Inc., merged with rival ICast Corp. Both companies are owned by Internet investment company CMGI Inc.
And not all radio station companies are rushing to the Web. Some companies like Viacom Inc.’s Infinity Broadcasting Corp., which owns 162 radio stations, want to develop their own Web casting systems first.
“They won’t broadcast (on the Web) until they get a concept together for the entire company,” said Kelly of Nielsen-NetRatings.
New Technologies
Most radio stations are probably thinking about going online. One reason is that BroadcastAmerica and others are working to bring radio capability to wireless devices.
Cell phones lack the bandwidth and fidelity to adequately handle stereo broadcasts, but Kelly says devices to be released within 12 months will let users listen to radio via the Web.
“With high fidelity, users will be able to listen to whatever they want, wherever they go,” he said.
When it comes to Web technology, Inner City Broadcasting isn’t stopping at audio. The company plans to add live and taped video programming to its radio station Web sites in the next few months. Video will include shots of the disc jockeys in the studio, live concerts and taped promotional events, Inner City’s Jewell says.
“We’re going to be almost like a TV station,” he said. “The benefits and possibilities are endless.” |
