PodcastExpo
Dec 14th, 2004, 12:06 PM
A Wall Street Journal article from yesterday (Dec. 13) talks about Internet Radio being a big threat to traditional radio, but doesn't even mention podcasting - bizarre.
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Where the Listeners Are
What's the biggest competitor to regular radio? No, guess again.
By SARAH MCBRIDE
Staff Reporter of THE WALL STREET JOURNAL
December 13, 2004; Page R4
With all the talk about satellite radio services Sirius and XM, it's easy to forget a much bigger competitor to regular radio: the Internet.
While just 3.4 million Americans subscribe to satellite radio, about 19 million listen to Internet radio each week, according to research firms Arbitron Inc. and Edison Media Research. That's still tiny compared with the 277 million who listen to regular radio each week, but the number of Internet listeners has grown fast. Just three years ago, only 11 million listened to Internet radio each week.
THE JOURNAL REPORT
[Go to the Technology report]
See the complete Technology report.
That growth has caught the attention of the big radio broadcasting companies, both for the threat it implies and the promise it offers. Internet-only radio, which offers listeners a vast variety of musical genres and more control over what they hear, threatens to draw more and more people away from traditional radio. And the most popular of these sites are owned by Internet powers Yahoo Inc. and Time Warner Inc.'s AOL. But hundreds of broadcast radio stations in the U.S. also offer their programming online, and the Internet presents an opportunity for broadcasters if they can build on that presence.
Perhaps the clearest signal yet of how serious broadcast companies are getting about Internet radio came in the middle of last month. Clear Channel Communications Inc. -- the nation's biggest radio broadcaster, with 1,200 stations -- hired Evan Harrison away from his position as general manager of the Internet's top-ranked AOL Radio Network, to lead Clear Channel's online radio efforts.
Also last month, Radio One Inc. of Lanham, Md., the largest owner of radio stations directed toward African-Americans, paid $56.1 million for a majority stake in Reach Media Inc., in part because Reach has a Web site with some 700,000 members. Reach "will definitely help us advance our online efforts," says Mary Catherine Sneed, Radio One's chief operating officer. Radio One plans to start simulcasting some of its broadcasts online, beginning with talk stations in Washington and Cincinnati, in the next few weeks.
"There seems to be a sense that technology will replace what's existing," says John Hogan, head of the radio division at San Antonio-based Clear Channel, in reference to the threat the Internet poses to traditional broadcast radio. Instead, he believes, "technology will challenge what's existing," but broadcasters will meet that challenge.
Reaching the World
Mr. Hogan's confidence stems in part from the toehold broadcasters already have on the Internet. The online simulcasts provided by hundreds of broadcast stations in the U.S., including 200 Clear Channel stations, make those programs available to listeners anywhere in the world, as well as to people who might not have a radio at work but do have a computer.
"People use [Internet simulcasts] to sample stations they can't get," says Tom Webster, an analyst at Edison Media Research, of Somerville, N.J. That broadening of their potential audiences may help traditional radio stations offset any loss of listeners to Internet-only stations.
With online radio still in its infancy, though, it isn't clear how powerful a lure traditional broadcast programming is for Internet listeners. Some listeners enjoy everything that radio hosts bring to their programs, from their chitchat to their tastes in music. For these people, picking up a local station online at work or finding a fascinating radio personality from another state or country might be ideal. But others would just as soon skip the chatter and have more say in what they listen to. For them, the online-only services have an advantage, at least for now.
Services such as the radio option on Yahoo's Musicmatch service allow listeners to pick a category -- say, alternative rock -- and then play a steady stream of tunes in that genre, with no talk and far fewer ads.
The distinctions between Internet-only radio and broadcasters' online offerings may soon blur, however. For example, after Clear Channel hired Mr. Harrison away from AOL, the broadcaster said it might consider consolidating some of its online offerings and making them generic. That means, for example, that instead of simulcasting several different country-music stations online it might offer just one Internet country-music station that isn't tied to any particular broadcast station. In other words, it might move toward the model of Internet-only radio.
A similar strategy could make sense for broadcasters in general. Broadcasters stopped simulcasting many stations in recent years because they had to start paying licensing fees to record companies for the songs they played online. A more consolidated approach would lower the burden of those fees, by reducing the number of stations playing them, and still give broadcasters a presence on the Internet.
Meanwhile, Microsoft Corp.'s MSN Radio is trying to lure broadcast listeners to its site by offering programming that mimics that of popular broadcast stations. "Music played on your favorite local stations," the site boasts, "but with fewer ads, no DJ chatter, and less repetition."
Listeners can pick from choices that sound like more than 1,000 stations around the country, identified by name and call number. By purchasing copies of station playlists from Nielsen Broadcast Data Systems, MSN can re-create the sound of the station. Choices include Los Angeles hip-hop station KPWR, New York alternative-rock station WXRK and Miami Spanish-language hits station WRMA.
"We don't like it that Microsoft trades on equity we've put into these brands over many years," says Rick Cummings, president of radio at Indianapolis-based Emmis Communications Corp., which owns KPWR and several other stations MSN mimics. He says broadcasters involved are considering their options, but don't see the service as a threat. "Feedback we've gotten from our audiences is, 'It's not the same,' " says Mr. Cummings. " 'I miss the DJs and the audience interaction and I'm there for more than just music anyway.' "
Microsoft says stations that don't like the service are welcome to get in touch with the company, which will work with them to find a compromise. But it stands firm behind the overall concept. "We do get the playlists from a legal source, and we're using them in a legal way," a Microsoft spokeswoman says.
The MSN stations have a total of about 260,000 listeners per week, compared with 1.7 million for AOL's radio service and 1.6 million for Yahoo's LaunchCast, according to research and consulting firm comScore Networks Inc., of Reston, Va., and New York-based Arbitron. No independent service measures the online versions of broadcast stations, but the top ones are estimated to have thousands of listeners each.
Down the Road
For now, most people listen to regular radio in the car, while most Internet radio listeners, according to Arbitron, tune in at the office. But that could change -- and the competition for online listeners could really heat up -- as home networking systems become more popular and especially as wireless Internet access expands.
Already, people can enjoy better-quality sound for Internet radio at home by using networking products that allow them to stream music from their computers to their stereo systems. While earlier home-networking systems proved a little too clunky for the average consumer, the new ones are much easier to use.
The real boom in Internet radio should unfold over the next few years with the development of technology that would allow Internet users to travel around large areas and keep their connections, much like cellphone users can. Various companies are working on different versions of such technology.
Widespread mobile Internet access eventually could even allow consumers to get online right from their moving cars. Internet radio receivers could wind up on the dashboard right alongside regular radio tuners, much as satellite radio receivers are becoming standard in-car options today.
Ms. McBride is a staff reporter in The Wall Street Journal's Los Angeles bureau.
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Where the Listeners Are
What's the biggest competitor to regular radio? No, guess again.
By SARAH MCBRIDE
Staff Reporter of THE WALL STREET JOURNAL
December 13, 2004; Page R4
With all the talk about satellite radio services Sirius and XM, it's easy to forget a much bigger competitor to regular radio: the Internet.
While just 3.4 million Americans subscribe to satellite radio, about 19 million listen to Internet radio each week, according to research firms Arbitron Inc. and Edison Media Research. That's still tiny compared with the 277 million who listen to regular radio each week, but the number of Internet listeners has grown fast. Just three years ago, only 11 million listened to Internet radio each week.
THE JOURNAL REPORT
[Go to the Technology report]
See the complete Technology report.
That growth has caught the attention of the big radio broadcasting companies, both for the threat it implies and the promise it offers. Internet-only radio, which offers listeners a vast variety of musical genres and more control over what they hear, threatens to draw more and more people away from traditional radio. And the most popular of these sites are owned by Internet powers Yahoo Inc. and Time Warner Inc.'s AOL. But hundreds of broadcast radio stations in the U.S. also offer their programming online, and the Internet presents an opportunity for broadcasters if they can build on that presence.
Perhaps the clearest signal yet of how serious broadcast companies are getting about Internet radio came in the middle of last month. Clear Channel Communications Inc. -- the nation's biggest radio broadcaster, with 1,200 stations -- hired Evan Harrison away from his position as general manager of the Internet's top-ranked AOL Radio Network, to lead Clear Channel's online radio efforts.
Also last month, Radio One Inc. of Lanham, Md., the largest owner of radio stations directed toward African-Americans, paid $56.1 million for a majority stake in Reach Media Inc., in part because Reach has a Web site with some 700,000 members. Reach "will definitely help us advance our online efforts," says Mary Catherine Sneed, Radio One's chief operating officer. Radio One plans to start simulcasting some of its broadcasts online, beginning with talk stations in Washington and Cincinnati, in the next few weeks.
"There seems to be a sense that technology will replace what's existing," says John Hogan, head of the radio division at San Antonio-based Clear Channel, in reference to the threat the Internet poses to traditional broadcast radio. Instead, he believes, "technology will challenge what's existing," but broadcasters will meet that challenge.
Reaching the World
Mr. Hogan's confidence stems in part from the toehold broadcasters already have on the Internet. The online simulcasts provided by hundreds of broadcast stations in the U.S., including 200 Clear Channel stations, make those programs available to listeners anywhere in the world, as well as to people who might not have a radio at work but do have a computer.
"People use [Internet simulcasts] to sample stations they can't get," says Tom Webster, an analyst at Edison Media Research, of Somerville, N.J. That broadening of their potential audiences may help traditional radio stations offset any loss of listeners to Internet-only stations.
With online radio still in its infancy, though, it isn't clear how powerful a lure traditional broadcast programming is for Internet listeners. Some listeners enjoy everything that radio hosts bring to their programs, from their chitchat to their tastes in music. For these people, picking up a local station online at work or finding a fascinating radio personality from another state or country might be ideal. But others would just as soon skip the chatter and have more say in what they listen to. For them, the online-only services have an advantage, at least for now.
Services such as the radio option on Yahoo's Musicmatch service allow listeners to pick a category -- say, alternative rock -- and then play a steady stream of tunes in that genre, with no talk and far fewer ads.
The distinctions between Internet-only radio and broadcasters' online offerings may soon blur, however. For example, after Clear Channel hired Mr. Harrison away from AOL, the broadcaster said it might consider consolidating some of its online offerings and making them generic. That means, for example, that instead of simulcasting several different country-music stations online it might offer just one Internet country-music station that isn't tied to any particular broadcast station. In other words, it might move toward the model of Internet-only radio.
A similar strategy could make sense for broadcasters in general. Broadcasters stopped simulcasting many stations in recent years because they had to start paying licensing fees to record companies for the songs they played online. A more consolidated approach would lower the burden of those fees, by reducing the number of stations playing them, and still give broadcasters a presence on the Internet.
Meanwhile, Microsoft Corp.'s MSN Radio is trying to lure broadcast listeners to its site by offering programming that mimics that of popular broadcast stations. "Music played on your favorite local stations," the site boasts, "but with fewer ads, no DJ chatter, and less repetition."
Listeners can pick from choices that sound like more than 1,000 stations around the country, identified by name and call number. By purchasing copies of station playlists from Nielsen Broadcast Data Systems, MSN can re-create the sound of the station. Choices include Los Angeles hip-hop station KPWR, New York alternative-rock station WXRK and Miami Spanish-language hits station WRMA.
"We don't like it that Microsoft trades on equity we've put into these brands over many years," says Rick Cummings, president of radio at Indianapolis-based Emmis Communications Corp., which owns KPWR and several other stations MSN mimics. He says broadcasters involved are considering their options, but don't see the service as a threat. "Feedback we've gotten from our audiences is, 'It's not the same,' " says Mr. Cummings. " 'I miss the DJs and the audience interaction and I'm there for more than just music anyway.' "
Microsoft says stations that don't like the service are welcome to get in touch with the company, which will work with them to find a compromise. But it stands firm behind the overall concept. "We do get the playlists from a legal source, and we're using them in a legal way," a Microsoft spokeswoman says.
The MSN stations have a total of about 260,000 listeners per week, compared with 1.7 million for AOL's radio service and 1.6 million for Yahoo's LaunchCast, according to research and consulting firm comScore Networks Inc., of Reston, Va., and New York-based Arbitron. No independent service measures the online versions of broadcast stations, but the top ones are estimated to have thousands of listeners each.
Down the Road
For now, most people listen to regular radio in the car, while most Internet radio listeners, according to Arbitron, tune in at the office. But that could change -- and the competition for online listeners could really heat up -- as home networking systems become more popular and especially as wireless Internet access expands.
Already, people can enjoy better-quality sound for Internet radio at home by using networking products that allow them to stream music from their computers to their stereo systems. While earlier home-networking systems proved a little too clunky for the average consumer, the new ones are much easier to use.
The real boom in Internet radio should unfold over the next few years with the development of technology that would allow Internet users to travel around large areas and keep their connections, much like cellphone users can. Various companies are working on different versions of such technology.
Widespread mobile Internet access eventually could even allow consumers to get online right from their moving cars. Internet radio receivers could wind up on the dashboard right alongside regular radio tuners, much as satellite radio receivers are becoming standard in-car options today.
Ms. McBride is a staff reporter in The Wall Street Journal's Los Angeles bureau.
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