Radio-station streams returning to the Internet

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By Julene Snyder

(IDG) -- The sound of silence may soon be forgotten, as hundreds of radio-station streams are likely to be back online in the next few months.

Clear Channel Communications, which operates about 1,200 radio stations in the U.S., signed a deal last week with Hiwire, a Los Angeles-based ad-insertion company, to replace so-called terrestrial ads with commercials targeted specifically at Internet audiences. This marks a victory for Net radio listeners who want to hear streams of their favorite terrestrial radio stations; for the past several months, they've been forced to listen elsewhere.

In mid-April, Clear Channel and other radio companies yanked their broadcasts offline, citing the royalty fees the American Federation of Television and Radio Artists (AFTRA) requires radio companies to pay ad agencies to compensate union actors and announcers if terrestrial ads are broadcast on the Internet. Clear Channel then said it wouldn't bring back its Internet streams until it made "legal and financial sense" to do so. That time has apparently came: About one-fifth of Clear Channel's stations are scheduled to be back on the Net by late summer.

That's a good start, but why not put all of the radio stations online? "It's a pretty big undertaking just to get 250 stations in the top markets up and running," says Hiwire spokesman Wayne Hickey. "We'll see how it goes."

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Hickey says Clear Channel opted to use Hiwire's technology because the company supports a variety of formats, including Windows Media and MP3. Hiwire's service will prompt would-be listeners for their age, gender and zip code, so the ads they hear can be targeted directly to them. Presumably, this means a 13-year-old boy from New Jersey gets a different corporate come-on than a 55-year-old woman from Miami -- although it's easy to hypothesize situations where they both wind up urged toward the same big-bucks advertiser.

The former scenario is what radio market researcher and consultant Kurt Hanson, who runs the Radio and Internet Newsletter -- a daily Web publication covering the industry -- says is potentially the most exciting aspect of the whole brouhaha. "Targeted ad insertion, where each listener hears different commercials, has incredible potential for Internet radio," he says. He believes it's just a matter of time before advertisers begin to see the value of targeting their audience so specifically, and says it could translate to increased revenue for everybody involved.

For the most part, Hanson blames the two-month lag in bringing radio back to the Net on corporate executives' inability to see the financial payoff in streaming radio shows to an online audience. But he says it's early enough in the online radio game that the months of silence may not turn out to be a major blunder. "Clear Channel should be commended for at least addressing the issue and getting a solution together," he says.

Meanwhile, Jefferson-Pilot Communications, a company that operates about 20 radio stations in seven U.S. cities, has begun to implement a similar deal it struck with RealNetworks in December. That agreement -- which affects the 190 stations that make up an Internet broadcasting alliance known as the Local Media Internet Venture (LmiV), of which Jefferson-Pilot is a part -- promises that alliance members can generate "in-stream advertising" while "providing a rich interactive online user experience to nationwide listeners." Jefferson Pilot says all of its stations will be back online by summer's end.

And that's a good thing, according to Nick Upton, Web master for the Jefferson-Pilot stations in San Diego. He told the San Diego Union-Tribune that listeners most definitely want their Net radio back: "We've been getting postcards and e-mail from listeners in Australia, Germany, England and Japan."