Internet radio not end of ANRs, but will require shift in strategy

CBS Interactive recently acquired Last.fm, a UK-based Internet radio and music community site that serves as a social music platform with more than 15 million active users, for $280 million.

CBS Interactive recently acquired Last.fm, a UK-based Internet radio and music community site that serves as a social music platform with more than 15 million active users, for $280 million.

Web 2.0 music outlets, such as Last.fm, Pandora.com, and Slacker.com, which allow users to create customized radio stations and playlists based on their song preferences, along with Internet radio stations, are all geared to challenge terrestrial music radio.

Some sites, like Last.fm, also feature few or no marketing interludes. If the sites continue to erode listener support for traditional radio stations, that could affect PR professionals and the efficacy and reach of ANRs.

Why does it matter?


"It's like a TiVo for radio where the listener can go on the Web and pick and choose what they want to hear and nothing else," says Maury Tobin, president of Tobin Communications, which specializes in radio services. "I don't think ANRs were ever setting the world on fire, but now the PR industry is going to [have to] work on strategies on how to fit in their messages."

Web 2.0 music services do not have DJs to take ANRs, but a big market could still exist for them online at Internet radio stations, which are still popular. Richard Strauss, president of Strauss Radio Strategies, says statistics show that 58% of Internet radio listeners are male, so if there are ANRs that focus on a younger male population, it's an area that shouldn't be ignored.

Strauss views Internet radio as akin to AM and FM dials in the respect that someone can easily change the channel or choose another medium, such as the TV or iPod. He adds that Internet radio attracts an upper-income audience. Internet radio listeners are 36% more likely to have annual household incomes of $100,000 or higher compared with the general US population, Strauss notes, "so there is an opportunity to focus messages toward them."

Five facts:

1 On May 23, Sprint, through a partnership with Pandora, became the first wireless carrier to offer personalized radio on its phones.

2 More than 4 million people across the US visit Pandora and Last.fm every month, according to data from Score Media Metrix.

3 Many Internet radio sites may face a difficult road ahead when Internet streaming broadcasters are charged a per-performance rate hike in 2008.

4 The overall Internet radio market brought in more than $400 million in ad revenue last year, according to JPMorgan Chase.

5 Half of the Internet radio ad revenue comes from online ads on Web sites owned by conventional radio broadcasters like CBS Radio and Clear Channel.


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