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RealNetworks Unveils New Services for Radio Broadcasters

RealNetworks (www.realnetworks.com) announced itsnew initiatives for its Real Broadcast Network radiodivision. The "Radio Business Application 2.0" allowsradio stations to: add CD sales, have access toRealNetworks' ad sales team, offer local news andweather content, and provide enhancements such as a"now playing" feature.

RBN's ad insertion technology was first developed forTom Joyner's syndicated radio show earlier this year. It is similar to other ad insertion systems likeActivate's (www.activate.com)and Coollink Broadcast Networks' (www.clbn.com), in thatit strips out on-air commercials, and inserts newInternet-only commercials.

"I think RealNetworks did the right thing--it's agreat move on their part," said Mike Murphy, chiefmarketing officer at Coollink Broadcast Network(CLBN). He says RealNetworks is one to watch becauseof the power of its Real.com user base. But Murphystill thinks RealNetworks is late to the party. "Alot of what Real has are 'me too' announcements," hesaid.

During September's NAB Radio Show, Activate unveiledits own ad-insertion technology by partnering withradio systems software company RCS, ad company Engageand Microsoft's Windows Media. CLBN, meanwhile,developed its own in-house technology.

The biggest downside to RBN's solution, however, isthat it doesn't target ads to specific groups orindividuals. With solutions like Activate's, andCLBN's radio stations can target key demographics byasking for zip codes, gender and income level. Othercompanies like Net startup, Lightningcast, also offerstargeted ad solutions for radio stations, while Hiwireeven does video targeting.

Harry Emerson, founder and chief technology officer atSurferNetwork (www.surfernetwork.com) spent thelast two years helping develop a targeted in-stream adsolution. SurferNetwork, which recently came to therescue and acquired ailing radio webcaster,BroadcastAmerica.com, even developed its ownproprietary streaming solution. Emerson says thatRealNetworks and Microsoft just didn't have a completesolution that addressed the concerns of terrestrialradio stations.

Michael Leo, senior product manager at RBN, expressedsome doubts about these existing targeted solutions. He said that the current market for precise adtargeting is too small. "If you sent targeted ads toindividual users, you'd be splitting up the pie toosmall," said Leo.

Emerson, however, says that precise ad targeted isimportant. "We deliver a unique stream to eachlistener," he said, "so you and I might be in the sameroom listening to the same radio station on ourcomputers and receive different ads based ondemographics or interest."

Emerson also says he's getting very positive reactionfrom ad companies. "Advertisers we're talking to arethrilled about this," he said. "They realize you needmass acceptance but they're excited about it." Emerson said that RealNetworks is skeptical simplybecause it doesn't offer targeting. "If[RealNetworks] had it, they wouldn't be saying that,"he said. Murphy from CLBN also pointed out thatRealNetworks only offers audio ads. CLBN (andActivate) can synchronize animated ads to audiocommercials.

Leo did admit that targeting is something RealNetworksis looking to add to its solution. The timetable issometime next year.

Radio stations being streamed by RBN will have to payan additional fee in order to take advantage of thisnew system. Leo said that stations pay a set-up fee,then usage charges for ads streamed. Although thisincreases a radio station's streaming costs, Leobelieves that radio stations could make money.

One of the benefits to this new solution, Leo said, isthat it's the only one that works with multiple radioautomation systems. It supports system vendors suchas Broadcast Electronics, Computer Concepts, Dalet andScott Studios. RealNetworks gained this solution withits summer acquisition of Multi-Point Inc., a radiosystems integration company.

The changes with this new solution will be apparent tolisteners, too. When someone listens to aparticipating radio station, the RealPlayer opens in"compact" mode which shows song title and artist aswell as album art information and advertising, whilehiding RealPlayer's pre-set buttons. (The player canalso be embedded into a Web page, so the radiostations can better customize the look, while minimalRealNetworks branding is displayed.) Listeners canalso purchase CDs thanks to a non-exclusive deal withSpun.com, an e-commerce company. Media syndicationcompany, Screamingmedia.com, provides local contentincluding news, weather and sports reports.

The success of in-stream advertising will dependheavily on whether advertisers see immediate benefits. Because of that, having accurate reporting anddemographic information about who's tuning in and howlong, is crucial. To address this, RBN also partneredwith both major webcast rating companies, Arbitron andMeasurecast.

One wrinkle about these in-stream advertising systems,is that practically everyone claims they have patentsissued or pending. Companies like Hiwire, CLBN andSurferNetwork all have claims. What ends up happeningwith patents may be just as interesting as whathappens with online radio.

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