To ears tuned to the big media, satellite ventures like Sirius and XM sound like the future of radio. But while those companies have loudly spent buttloads for marquee names like Howard Stern and Jimmy Buffett, another sector of the industry has been quietly gathering strength: Web radio. Basement hobbyists and semi-pros alike are developing a business model from the bottom up, and although you won't hear it from any celebrity spokespeople, those quaint little webcasts are beginning to usurp power effectively from the Clear Channels of the world, and evolve into a solvent media movement.
Last week's Streaming Media East conference at the New York Hilton was Internet radio's state-of-the-union address. Though SME hasn't fully rebounded from its halcyon turn-of-the-millennium erabooths numbered only about 40, and most focused on hardware and software, as opposed to contentthe event carried an optimistic vibe. This is thanks in no small part to the iPod. Apple didn't just re-energize the singles market, it provided a new outlet for the digital radio industry via online music's latest wrinkle, podcasting. Podcastswords or music recorded as discrete programs and made available for downloadallow the user to not only time-shift, but also space-shift and media-shift content, liberating web radio streams from the tether of real-time broadcast.
But even old-fashioned, non-podcast web radio has plenty going for it. Kurt Hanson, whose "RAIN: Radio and Internet Newsletter" is a must-read, brought slides and data points to illustrate everything net broadcast has going for it. Here are the broad strokes:
The Sirius business model, observed Drew Robertson of PhoneRanger Wireless Solutions, aims for penetration in 10 percent of cars in the next five years. According to Hanson, though, "the vast majority of in-car listening is not on the interstates," but rather, in urban areas (i.e., during commute time), so there aren't long stretches of tune-in timeresulting in poor audience numbers outside drive-time, which is sure to scare off advertisers. Oldies DJ Barry Scott adds: "A lot of people got [satellite radio] free with their cars. It just came with the car as-isI don't think [the car owners] even listen." (A point also made during Hanson's panel.) In other words, satellite radio is relying on a health-club model in which money is made off those who subscribe to a product without using itwhich only works until that wave of subscribers cancels en masse.
Scott, a longtime radio veteran who works in Internet broadcasting, makes another point. His Boston-based show, "The Lost 45s" was once syndicated to trad radio. But program directors took umbrage with him playing forgotten chart hits: "What they wanted was, every time someone punched in their radio station, they got the same old song that they always play, so that you knew instantly what their station was about." His show has nevertheless been number one in its market for several years. But only on the Internet can he easily expand beyond that market without being subject to narrow format rules.
As webcast personalization has improved, audiences have demonstrated that they care less about celeb DJs than getting the music they want. Meanwhile, even the perennially out-of-step Rolling Stone has cited RAIN publisher Kurt Hanson's own AccuRadio as one of radio's "best and most adventurous" properties. As hype goes, it ain't much. But at least web radio has earned it.
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