Q&A with John Brier, President of BroadcastAmerica.com
If you haven't heard of BroadcastAmerica.com (http://www.broadcastamerica.com) you can be forgiven. The company had a slow launch last year, going around to various radio stations saying they'd put their feed on the Internet for free. Stations were skeptical, but it seems the plan has worked. In May 2000, the once-tiny Portland, Maine-based aggregator says it will surpass 5 million audio/video streams.
Clearly, BroadcastAmerica.com has taken a page from broadcast.com. But could it be the next broadcast.com? President John Brier sounded skeptical but there's no denying the company has momentum. Although it seemed recently that aggregators like broadcast.com were a dying breed, BroadcastAmerica.com seems to be bucking the trend. They claim to be the biggest aggregator with more TV and radio stations than broadcast.com. Unfortunately we can't know for sure who has the bigger audience since neither company is part of Arbitron's Infostream monthly webcast ratings.
The company was founded as BroadcastMusic.com last year when it started streaming the nationally syndicated radio program "John Garabedian's Open House Party." They agreed to broadcast Garabedian's show for free over the Internet in exchange for live on-air mentions and advertising. That strategy continues to this day.
I spoke with co-founder Brier at the exhibit floor at Real Conference 2000 last week where he gave me the low down on what this "quiet" company has been doing. He also had some strong words in defense of rival broadcast.com.
Q: Start out by telling me about BroadcastAmerica.com.
A: Right now we are the largest Internet broadcaster in the world. We have over 600radio stations under exclusive Internet broadcast contract, which is the most of any company that I'm aware of. We have 72 TV news stations that we stream their evening news exclusively. We have 150+ talk shows that we do with most of the major talk radio networks like Talk America. And our sports we have 40 NCAA schools, stream their events exclusively, Dick Clark's radio network, we have a tremendous amount of content and we continue to add it. We're expanding into Europe and Asia now, too.
Q: It seems you have a portal strategy, that is branding certain content under Sports, Talk, etc.
A: Under the broadcastamerica.com we have channels, broadcastmusic.com, broadcastTVnews.com, broadcasttalk.com, broadcastsports.com and we're developing other channels like broadcasturban.com, broadcastbible.com. We have some Internet only channels that we're developing.
Q: How does that work? Do you get your traffic through your main portal or through these niche ones? And how does that affect your overall traffic?
A: You can go to BroadcastAmerica.com and access any of those channels, but you can also go into that specific channel. Our traffic is comprised all across the board. We believe in giving people the ability to go into an environment where they can find their content quickly. For example our sports shows, they tell their listener base to listen to us at broadcastsports.com. We believe in that branding strategy. So when you go into any of those channels, you can see you're part of the broadcastamerica.com family. But our branding strategy is to find stations with an already existing audience (like a TV show, radio station) and let their existing listeners know through advertising that that station is available anytime and anywhere at our site. And traffic is exploding. We started streaming our first radio station a year ago April 1999. We had 13 accesses that month.
Q: And how many of them were people from your company?
A: Yeah, probably half of them were our engineers. This past April, we did 4.2 million. We're already set to pass 5 million this month. We haven't had a month yet that we haven't had 30% growth every month. That's a byproduct of us continuing to add stations and then letting their audience to know to come to our site.
Q: What about stations that want to promote their own web sites?
A: There's two answers to that question. One, if the station has their own web site that's great. We let them (and encourage them to) link their audio stream to their site and people can go to their web sites. But in terms of promoting that they're part of a bigger network, it's worked out very well for our stations because we give them local advertising space on our site. They become part of a bigger environment and a search engine. There's a benefit to being in a mall, so to speak, instead of being a standalone. That's why Sears and JC Penney, they always want to be in the mall even though everything you can buy in Sears you can buy at ten other stores in the mall. There are certain economies of scale and affinity in being part of a bigger unit.
Q: Is it a requirement that stations give your site a promo?
A: It's part of the deal we work with them. But the difference is that it's an educational process in what we're building. We need to let people know that you can watch or listen to something on the Internet. So part of our model, when we contract with a station, we supply all the equipment, put in a T-1 line and pay all the licensing fees, but then we enter into a partnership where they have to agree to run a certain amount of promotion to educate their listeners. It's kind of neat; we can see how that educational aspect is transforming their ability to listen, so that shows a need for it.
Q: What do you charge stations?
A: We don't charge the stations anything. Absolutely nothing. We ship them the box, get them a T-1 line. It doesn't cost stations anything to go with us, and that's another difference to broadcast.com. Initially and in some cases still charge stations a monthly fee. We don't do that. We try to make it very easy and simple. We don't say we're going to sell CDs on your site and you'll make money selling music—that doesn't happen. There's no web site in the world that I know of that are making money selling music.
Q: I want to talk a little about your claims about being the biggest. Do you have the metrics companies behind you? What are your numbers in terms of traffic?
A: Media Metrix, they measure traditional web statistics like page views. We're more interested in audio and video accesses—we're a streaming site. Unlike a lot of web sites (because they rely on statistics like page views) they purposely make you go to 4-6 pages to get what you're looking for. We don't do that. We always try to keep the content no more than two clicks away. So we want people to find the audio content and listen without being frustrated. Right now we rely on statistics that we get directly from (Real Broadcast Network (RBN), the broadcasting division of RealNetworks and also Microsoft. And those are most important to us.
As far as being the largest, everyone in the last year claims that broadcast.com was the largest—and they were. The reason they said that was the number of TV and radio stations they broadcast. And across the board we're bigger than them in every category. We have more radio stations, more talk shows, more sports shows and more TV news stations. We have surpassed them in the amount of partners that we have. From a broadcasting perspective there are not a lot of companies that are accurately measuring audio/video downloads. There is a company D&B WebTracks, that released something in April about March and had us accurately for 1.2 million audio/video accesses. Number one was the CBS News slideshow in AOL at 5 million. Well we will surpass 5 million this month. I don't know if AOL's slideshow has continued to grow like that. So I'm very comfortable saying that we have to be at this point (from an audio/video perspective) in the top five or even number one.
Q: What about the Arbitron ratings system? Aren't they doing a clearer job of reporting numbers?
A: Yeah we looked at Arbitron, but it's a confusing—we haven't been satisfied with the way they've tried to portray how they want to do it. I want to get a little more comfortable with that, because they seem to be using traditional radio metrics. Trying to correlate how that affects the Internet broadcasting. Clearly Internet broadcasting is not traditional radio. And I don't think it will be for quite a while. But what the statistical people have to do is get their arms around the Internet as a broadcasting medium and come up with metrics that measure that. RBN does a good job, it shows you how many people have listened in a given month, how many simultaneous users and how long they spend on average listening. Those are all valuable statistics for us, in terms of what we do.
Q: Some people say that companies that aren't part of Arbitron's webcast ratings (like Yahoo! Broadcast) don't do it because it will show them as being smaller than they claim to be, with not as many listeners. How do you respond to that?
A: Well I can't speak to that. I do know that we can never find broadcast.com willing to let people know who's listening. I don't know what their motivation is. I don't know.
But clearly Arbitron has a good name, but we feel they need to get a little experience in doing what they're doing before we jump in. Because there's some labor involved and staff time to get it going. And right now we're comfortable with RBN's stats program and with the stuff we get from Windows Media.
Q: You've talked about RBN a few times and I was going to ask about your network. Do you use RBN as your network?
A: Yes, we're RBN's single largest partner from a broadcasting perspective. They make a commitment to build out the technical infrastructure around our content as our traffic continues to grow. At the same time we have our own facility in Maine that serves a lot of our stuff. There's pipeline there from Portland to Seattle. Our deal with them is a good one, they've been real good to work with. We had some problems initially, technically, and everybody does, I guess. But that got straightened out months ago and we've been enjoying our relationship with them. We recently got our BroadcastAmerica.com button on the RealPlayer and have the same with Microsoft at WindowsMedia.com.
Q: Now Windows Media doesn't have its own network infrastructure like Real does. How do you stream all that stuff?
A: Most of the stuff with Windows Media, we stream directly from Maine.
Q: I want to talk a little bit about your advertising. Do you do in-stream ads? Also, do you have targeted banner ads, since you have a niche portal strategy?
A: Our model from day was to: 1) get content, 2) build out technical infrastructure, 3) build traffic. Once you've done those things you're ready for advertising. So we do play gateway ads that appear before the content, and those can be demographically targeted. We have Arbitron data (in the traditional radio space) to point to that says, "Here's who listens to WBLM in Portland, Maine". Also, we do that with banner ads and text links, although we don't believe in the banner ad business model. We believe in using banner ads to support rich media ads in a demographically targeted environment.
You mentioned in-stream ads—we're just getting to the ability where we can remove advertising and replace them with Internet ads. The ads can be stripped out and replaced with an Internet only ad. Slightly over 100 of our stations have asked to participated in those trials. An independent station or broadcast network even, doesn't have enough traffic to make that viable. But we, across 600 stations, can. The average stations plays 12 commercials an hour; that's 7200 commercials an hour we can strip out and replace. So we can go to a Ford or Pepsi on a national level and offer them demographically targeted ads and at the same time revenue share with the stations. We actually let them generate revenue since they couldn't do it on their own to do go on a national level.
Q: So will you be doing this yourself or partnering with someone?
A: We're looking at a couple of different opportunities.
Q: For a while it seems like Yahoo! Broadcast fell out of favor with radio stations. Is there a need for aggregators like you?
A: Well, clearly I would say that our partners certainly think there is. We're seeing a huge growth in Europe and Asia. And Latin America with our BroadcastLatin.com channel. We certainly think so. The economics are not there for an individual station, I believe, to try to do this on their own. If they do, they're looking at either extremely high costs, or very limited ability for people to listen. The technology is changing; you need to get your feet in the water. From a consumer's perspective there's certainly a need, otherwise people wouldn't be coming and listening. If a station does it on their own and promote it to their existing listeners, it's limiting—what's the point? It might be a gimmick but they're not plugged into anything bigger.. You're limiting your ability to do anything substantial. We've been able to work with stations on the local label—the free banner ads we give them, the free space, that's valuable to their local over the air advertisers. So we try to keep it simple yet at the same time, the stations get into the ad-stripping. Those are opportunities that have come to us because we're such a large aggregator. The wireless opportunities that we're working on, like radio stations over cell phone or wireless devices—that's definitely going to happen.
Q: What about some big radio networks that are doing it themselves? Doesn't it behoove them to keep things in-house, like Premiere Radio? Why give their content to you?
A: We don't feel we have to be everything to everybody. You look at television, how many networks are there? We want to be one of the CBS's of the Internet; we don't have to be everything. A Premiere that does it on their own, again, it depends on the economics. There're high costs they have to justify. From a technical standpoint they have to hire staff, programmers, designers, all of the components. At the end of the day they have to see if the bottom line is worth doing what they're doing. We hear that Broadcast.com ripped us off—I don't know if you've heard that.
Q: Yes, I've heard that a lot.
A: My answer to that is, first of all, we try to do things differently than broadcast.com.
Q: That was one of my questions: How do you differentiate yourselves from them?
A: First of all, we don't take airtime from the stations and re-sell them. We give them local ad space for free. We let them participate in these ad-sharing things we're putting together. We let them link directly from their web site, so people can listen without leaving the station's site.
Q: That was a big sticking point for a lot of radio stations.
A: Sure. We make it very ,very easy for their content to be found. Unlike broadcast.com where you used to have to click 4 or 5 times to find something. And we give them specific content areas to put their content—urban goes to urban, music goes to music, talk goes to talk.
But taking that aside, and how Broadcast.com ripped people off, it really strikes me as greed, and jealousy. Because what did broadcast.com do to any of these stations? Did they take money from them? Did they take money from their bottom line—steal money from them? If broadcast.com was a pioneer in the field, and if the Premieres go off and figure out how to do it on their own, they can thank broadcast.com for leading the way. Without them, where would we be? Yes, they started it. Yes, they made a lot of money and Mark Cuban made a lot of money. Probably more than any man should have made, but I still have yet to find a radio station that can show me how broadcast.com hurt them. I get a little tired of that because they were pioneers and they helped paved the way.
Clearly we looked at what they were doing and said, how can we make this better? How can we make this better for the user? Better for the partner stations and our model worked. Because we continue to sign up stations every week.
Q: So are you the next broadcast.com?
A: I don't know. [Hesitant]
Q: The next Mark Cuban?
A: No, no. I think that was just a strange place and time. A good one for him, I guess. But no, I don't think anything like that will take place. We have equity partners, that's another difference: One on One Sports, Dick Clark Networks, Nexstar Broadcasting have equity.
Q: One final question: What's your audience size?
A: I can show you, on our site. We're on pace to be over 5 million this month.
Q: But is that 5 million streams, users—
A: That's 5 million audio and video accesses. Statistically that will probably be--cut that in half for unique users. About 2, close to 3 million unique users a month.