Radiowave Shuts Down
Radiowave, a provider of streaming services for terrestrial radio stations, shut down on Friday. On its Web site, the company thanks everyone, and has posted the e-mail addresses and resumes of all the employees that were let go. About 25 employees were affected by the shutdown. "It's been a pleasure and we'd like to thank our millions of loyal listeners," reads the Web site.
According to David Marcus, VP of business development, a few employees are remaining behind. As of Monday, Marcus was still in the office and a few others will remain until Wednesday.
Radiowave's customers haven't been left in the lurch, either. Many stations have already been switched to other streaming providers, said Marcus. KSAN, from San Francisco, was moved over to Yahoo! Broadcast, which Marcus said was a "unique arrangement." "We helped refer them to other providers," he said, although he didn't name any other provider specifically.
"It's the end of free," said Marcus. "We stopped free [streaming] in late winter 2001."Radiowave was one of the remaining streaming providers that offered free streaming for radio stations in exchange for ad revenue splits.
The closure comes on the heel of NetRadio's shutdown a week ago, and the closure of New York-based ClickRadio.com. Marcus said Radiowave suffered from low revenues and a lack of funding. "We built the first critical mass [Internet radio company] with 1.5 million streaming hours a month. But the bottom fell out of ad market," he said.
Essentially, advertisers aren't buying in sufficient volume, even for the larger networks like Radiowave and NetRadio. "Our cost model was rapidly approaching the cost of delivery," said Marcus saying it would only need "modest advertising" to turn a profit.
"These are well financed companies, with decent management and a fair success in execution," said Marcus. But even companies with large audience numbers like Radiowave and NetRadio couldn't make a profit from advertising sales. Marcus said he believes that the larger media conglomerates will survive the current Internet radio shakeup. He pointed to Spinner.com, one remaining Internet radio station, which is succeeding because it was acquired by America Online.
Marcus said there were plans for an acquisition, although he didn't name the other company. "Part of the reason why it happened so suddenly was that up until the last minute we were working on a merger with another company," he said. But without the financing, and with the troubles over the attacks of September 11, it was never to be.
Marcus said Radiowave is in the process of getting two patents in the streaming space. The first one was adding supplemental information to webcasts, like artist data and buy now buttons. The second patent covers the history of a webcast, as in showing the last 10 or so songs that have been played. Marcus said that Radiowave would be looking to sell its assets, including these patents.