USA: Future of Internet Radio #DMF

At the Digital Music Forum West event, a panel focused on the future of internet radio.

Panelists

Dave Conway, Founder, Little Radio
Johnie Floater, General Manager, Media, Live365
Kurt Hanson, Publisher, RAIN / CEO, AccuRadio
Jim Rondinelli, SVP of Strategic Development, Slacker
Moderator: David Oxenford, Partner, Davis, Wright, Tremaine LLP

Why is Internet Radio relevant?

Kurt Hanson, of RAIN, points out that radio is how the average music fan finds music.

Johnie Floater, from Live365, the most important aspect of internet radio is bandwidth to support huge diversity of content. Even the classical music of the Canary Islands can have its own channel on the internet, something which is not possible on terrestrial or satellite radio.

Jim Rondeinelli, of Slacker, points out that most people don't want to program their own music flow and radio provides that programming.

How do you make money on a radio focused on a micro segment?

According to Floater, subscriptions are about 50% of the revenue coming into Live365 radio stations. Rondinelli seconds the subscription model as being an important part of Slacker's revenue.

Is advertising on internet radio working?

From the discussion on the panel, it seems to be hard to find advertising for internet radio due to the small size of each channel's audience. Sponsorship seems to be a model that the panel sees as having more success. Slacker seems to be having more success with advertising selling out their inventory in the first quarter. Floater says that they get their advertising on traditional channels focused on popular music.

Rondinelli points out that local advertising pays a lot better than broadcast advertising.

What about internet royalties?

The panel dove into the discussion without hesitation. Rondinelli describes the major differences between the royalties paid by satellite radio, terrestrial radio and internet radio, with internet radio paying much higher rates. He goes on to say that paying different royalties based on method of delivery is ludicrous.

Hanson points out that if the music industry got the royalties they want then the entire internet radio would shut down.

Is Internet radio competing with terrestrial radio?

Hanson says that it is both a competitor and a supplement to terrestrial radio. When Live365 etc are built into the car, then it acts like a competitor. Floater says that if you look at the entertainment pie, music is just one slice. Over time the internet is gaining an increasing share of the music slice.

Rondinelli says it really is location dependent. If your in your car, you're most likely listen to terrestrial radio. Hanson points out that with an iPhone you can get internet radio right in your car. Rondinelli says its not so great with the AT&T network in many places.

Source: DIgital Podcast

http://www.digitalpodcast.com/podcastnews/2009/10/08/future-of-internet-radio-dmf/

via Yimber Gaviria, Colombia