Despite the thousands of independent stations online, Chancellor Media Corp. is banking on its considerable muscle as a radio consolidator to take Internet radio to the next level.
Chancellor Media Corp. rolls out six branded Web sites March 15. The initial test market for the new division, dubbed AM/FM Interactive, is Philadelphia, where Chancellor owns six stations.
The media company's new-media division spent the past three years trying to figure out how to leverage its broadcast assets in an increasingly online world. Along with the decision to extend its reach online comes the benefit of getting closer to the consumer.
Through online dialogue, the radio station can compile a database of listeners.
"One thing radio has not done well in the past is putting a name and a face on the listening audience," said Chuck Armstrong, senior VP-entertainment and new media for Chancellor.
He quickly added that Chancellor would not share information with other marketers but rather treat it as a "covenant" to learn more about its customers.
"We're not changing the radio advertising model," said Mr. Armstrong. "We're enhancing the [programming] experience."
That may be true initially, but a revenue model that makes sense once all the kinks are ironed out in the test-market phase will be electronic commerce.
The initial strategy is to create Web sites as a marketing presence for individual stations. Chancellor is partnering with Cyber Dialogue, a Web-based database management company and marketing consultant.
"Radio is an ideal channel to cross-promote to drive traffic to a Web site," said Peter Clemente, VP at Cyber Dialogue and an Internet industry analyst.
At this point, there are no plans for a national Chancellor site.
"There'll be as many Web sites as there are radio stations," said Mr. Armstrong. "Each radio station is a miniportal. Our space in the Web world will be as a local on-ramp."
He said if in the future it makes sense to go national, he would do that.
LISTENERSHIP UP 50%
The number of online consumers who have listened to radio stations over the Internet in the past six months jumped 50%, hitting 27% in January, according to the just-released "Arbitron/Edison Media Research Internet Study II: Radio & E-Commerce." It is the second phase of a study from Arbitron New Media, a division of Arbitron Co., and Edison Media Research.
INFORMATION DRIVES VISITS
Information appears to be a key driver of visits to radio stations' Web sites, whether it's concerts or details on song titles and artists, although e-commerce is also a factor.
Fifty-three percent of respondents said they'd be somewhat likely to go to a radio station's Web site for more information on an advertised product, while 31% said they'd be very likely to go to its Web site for more information.
The study was conducted by telephone with 1,350 "diarykeepers" who report their listening habits for Arbitron.
In addition, radio represents the medium least likely to be displaced by the Internet, according to another study--Cyber Dialogue's "American Internet User Survey," published in December.
Mr. Armstrong said the long-term financial benefit for Chancellor will likely be e-commerce, such as offering the ability to customize a compact disc in real time or take advantage of merchandise linked with specific artists' fan clubs.
Copyright February 1999, Crain Communications Inc.