||Aggregators Help Radio Reach Online Audiences
For the radio industry, there may be no better symbol for the challenges of adapting to the digital age than two candy-colored mobile apps.
The apps, iHeartRadio and TuneIn, are aggregators -- conduits for thousands of online radio streams. With a few taps on a smartphone, a listener can dart among a pop station in New York, gospel in Atlanta and talk almost anywhere.
Both have quickly amassed big audiences. TuneIn, which offers 70,000 streams from around the world, announced on Monday that it has 40 million monthly users. IHeartRadio, owned by the broadcasting giant Clear Channel Communications, has been downloaded 95 million times and has attracted more than 12 million registered users.
For broadcasters, these aggregators can help reach audiences in the growing but increasingly fragmented world of online radio, which can mean anything from a customized playlist on Pandora or Spotify to an iTunes stream.
"Our mission is about getting our content to as wide an audience as possible," said Anil Dewan, the director of interactive media at KCRW, a public station in Santa Monica, Calif., whose digital outlets include TuneIn, iHeartRadio, iTunes, Spotify and an app of its own.
At the same time, many broadcasters say they worry about the rising costs of online royalties; the plans of the companies behind the apps; and the possibility of being lost within the aggregators, like needles in enormous digital haystacks.
Both aggregators let users find stations by typing a city, genre or station name into their search bars. TuneIn also points listeners to any station currently playing a given artist or song; iHeartRadio has an extensive custom-radio function, modeled after Pandora.
But as businesses they represent two poles of media. TuneIn, in Palo Alto, Calif., which started as a simple directory, transformed itself into an app purveyor two years ago, with streams that include not only radio and podcasts, but also emergency scanner signals. Recently the company raised $16 million in new investment, bringing its total financing to $22 million.
Clear Channel, which owns 850 stations, added a custom radio feature to iHeartRadio last September, making it a Pandora competitor as well as a platform for almost 2,000 stations. Hundreds of those belong to direct competitors, a few of which, including Cumulus Media and Univision, have made exclusive deals.
The apps are going head-to-head in the marketplace as consumers grow accustomed to tapping on one app for all their radio needs, and manufacturers of everything from televisions to cars begin to incorporate suites of streaming apps.
"They are both competing to be one-stop shopping in the Wild West of Internet radio," said Paul Heine, a senior editor at the trade publication Inside Radio. "They both want to be a destination that helps consumers navigate radio’s infinite dial online."
For now only a fraction of the radio audience is online; John Hogan, chief executive of Clear Channel Media and Entertainment, the company's radio and online division, said that 98 percent of listening to his company's stations is still on its terrestrial signals. But it is growing quickly. According to Triton Media, a company that measures Internet radio audiences, Clear Channel's online audience has risen 117 percent in the last year.
"What will end up happening is that every radio station stream is going to become a secondary station, if not a primary one," said Jackie Paulus, director of marketing and digital innovation for WGN, a news and talk station in Chicago owned by the Tribune Company.
But making money through online radio remains a puzzle, largely because of its royalty structure.
While terrestrial broadcasters pay music publishers negotiated rates, no matter how many people are listening, online and satellite radio operators pay publishers -- as well as labels and artists -- for each new listener. Pandora, while enjoying rapid growth, still pays more than half its revenue in music royalties.
"We look at products like online music lockers and playlist services, and while they have really interesting features, they're not businesses," Mr. Hogan said in an interview last week.
"The great thing about iHeartRadio," he said, "is that it is just one of a number of opportunities that we have to monetize the audience."
For radio stations, the question of joining these services is thorny.
According to several broadcasters, Clear Channel has been aggressive in pushing for exclusivity, offering in exchange greater promotion and visibility within the app. But most broadcasters have resisted. Aside from its first few big deals, none of Clear Channel's arrangements for iHeartRadio have been exclusive.
One reason for that, according to these people, who spoke on condition of anonymity to avoid jeopardizing business relationships, was uneasiness on the part of broadcasters about joining a platform run by the biggest player in the market. Others said their strategy was simply to be everywhere they could possibly be.
"Everybody is looking at this and saying, look, you don't know where the world is going, and you need to be in a lot of places," said Jeff Smulyan, the chief executive of Emmis Communications, whose 20-station chain has deals with both Clear Channel and TuneIn.
Mr. Hogan said Clear Channel had "pursued" deals with fewer than 10 radio companies, not counting public stations. Regardless, what exclusivity means here is unclear. While Cumulus has an exclusive deal with Clear Channel, hundreds of its stations are listed on TuneIn.
A spokesman for Cumulus said they are being streamed without authorization, but John Donham, TuneIn's chief, said that as a directory service it did not need permission to list any station, though it will remove them if asked.
Still, Mr. Donham said that TuneIn's neutrality in the radio business made it a safer choice for broadcasters.
"We are not a broadcaster, so we do not have any inherent interest for any broadcaster to succeed or fail," he said, "whereas there are other companies who are both the broadcaster and platform provider, so there is an inherent conflict of interest there."
For plenty of broadcasters, however, the critical question for any Web platform is how many new listeners it can bring in.
Mr. Dewan of KCRW said that the station had embraced numerous platforms and every kind of social media that had come its way, and that one result was that 20 to 25 percent of listening to the station is now done online, from every place imaginable. One D.J. keeps a tally of where listeners say they are each night, from East Los Angeles to Barcelona.
Mr. Dewan said: "We do get e-mails from people saying, 'I'm listening in the rain in Cambodia. By the way, how do we get a bumper sticker?'"
(Source: The New York Times, 08/06/12)
Click here to email to client
Back to Radio Sales Today
Click here to view Job Postings.
Upcoming Webinar: Online Promotions -- What They Are & How You Can Capitalize on This Opportunity
Join Matt Coen of Second Street, a leader in the creation of online promotions, and RAB's John Potter to learn how your station can secure its fair share of this potentially huge source of revenue.
You'll discover how you can easily create a promotions campaign for a quick revenue boost, as well as how to build a sustainable revenue stream from contests, deals and other promotional opportunities.
This webinar will be presented twice -- on Tuesday, September 11, at 3 PM (Central), and again on Thursday, September 13, at 10 AM (Central). For registration information, click here.