Streaming Media West 2005 Wrap-Up Part 1

The Business Of Internet Radio
Moderator: Raghav Gupta, digital media consultant; Panelists: Eric Ronning, managing partner, Ronning Lipset Radio; Daren Tsui, CEO & co-founder, MSpot Radio; Atri Chatterjee, vice president of marketing and business development, Mercora; Gerd Leonhard, music futurist and co-author of The Future of Music: Manifesto for the Digital Music Revolution

In this talk, we had representation from Live365 (panel moderator Raghav Gupta) and several other successful online radio streamers. One of the most interesting points I got out of this talk was that radio was always considered an "in the car" medium, something people could only get for 2-3 hours a day. With digital online radio, whether subscription or ad-supported, it's actually expanding the radio market, as opposed to simply competing with terrestrial radio.

However, when it came to the audience questions about iPods, podcasts, and the time-shifting of music to make radio unnecessary, the panelists seemed to telegraph their uncertainty by being overly dismissive. One of them took an iPod out and opined that Steve Jobs does a good job of making people want things, and that the iPod isn't completely new; it has its legacy in the cassette deck. The Live365 response was similarly dismissive, that Podcasters have trouble getting rights to songs (which they do—between BMI, ASCAP, and RIAA, you have to get "podsafe" indie music to use in Podcasts today).

MSpot’s Daren Tsui has a deal with Sprint to get streaming radio onto the phone, "into the walled garden" so to speak. Unfortunately all of the speakers were very tight-lipped about any of the finances of their deals, the revenue splits, but someone in the audience mentioned the 50/50 split of ringtones. Tsui mumblingly and noncommittally assented that their revenue share might be something like that.

The one tangible detail revealed about the Sprint deal was the bitrate—32Kbps AAC. This compares to the 32Kbps AACplus that XM radio uses, so the audio quality should be pretty nice for that service offering.

One salient point came up that checks with what I've heard from a variety of sources about advertising: There is almost always a scarcity of content, and advertisers don't have enough audio and video content out there to wrap their ads around. With growth statistics for online audio growing exponentially, everyone benefits—streams and downloads, audio and video, and advertisements.

All in all, it would have been nicer to get some real concrete data about the numbers and splits and deals in online radio, radio to the cell phone.
—Damien Stolarz