Friday, September 07, 2007

Internet Radio Pays for FM Stations

The potential for Internet radio to generate revenue is huge -- as long as copyright holders don't want too large a share of the pie.

MediaPost has detailed analysis of several analysts' projection for Internet radio revenue, which could someday rival terrestrial radio. Online advertising is the fastest growing segment for newspapers and radio alike, growing by 16 percent during the first quarter of the year.

Advertising via online radio has several advantages over terrestrial: it's interactive to spur purchases or other actions, it adds a visual element (banners etc.) to compliment the audio messaging, and it can be used to sell music.

Internet radio should be the music industry's best friend, but instead the two groups are constantly sparring. Radio stations are offering "click to buy" options for recently heard tracks to encourage sales, but the copyright holders group is doing everything it can to prevent the growth of online radio.

Sooner or later the music industry will realize that Internet radio can generate much more revenue through advertising and direct sales than iTunes ever could and will play nice.

Posted By John Gartner at 09:39 AM
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