Infinity heads onto Web with its news, talk slate

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Infinity Radio CEO Joel Hollander is banking on Internet to save radio.

His radio group, the second-largest with 180 stations, today launches online streams of 11 of its top talk and news/talk stations, with as its charter advertiser. With consumer-empowering technologies such as digital radios and MP3-players posing a growing threat to the $20 billion traditional radio audience business, online streaming could become a vital platform for the industry giants.

"This was not part of the strategy of previous management," said Mr. Hollander, "but I think it's going to be important as content gets forced through different pipes, whether it's broadband, iPods or other devices." And with 2005 online ad spending poised to surpass that spent on terrestrial radio, he is convinced online content "could be a big growth engine."

Streaming could also be a kick in the teeth to satellite radio-often cited as the raison d'etre for terrestrial radio's woes. With wireless technology such as WiMax nearing fruition and portable devices more adept at projecting high-quality audio and video, consumers may be less willing to pay for 100 satellite channels given that they can stream thousands of free terrestrial stations through their cars or cellphones.

Terms of the deal weren't disclosed, although it follows a multi-million dollar national ad buy on Infinity stations in 41 markets. For Monster-which in the first 10 months of 2004 spent $4.2 million on national spot radio, according to TNS Media Intelligence-reaching a mostly at-work online audience services its goal of targeting local small and medium-size businesses to post jobs on


Some observers wonder what took Infinity so long to enter the streaming game. According to Jupiter Research, 17% of the adult online population listens to an online radio station at least once a month.

"[Streaming] was a roller coaster for our company, but we decided to stay on the ride," said Dan Halyburton, senior VP and general manager for York, Penn.-based Susquehanna, which has streamed all of its 34 stations since 1997. Legislative challenges regarding rights to rebroadcast both music and ads created the current model: stations pay to stream non-proprietary content (mostly music, as talk and news/talk content are often proprietary) and replace on-air spots with separate in-stream ones or in-house promotions. The fee structure, according to radio groups, is set up to penalize success-the more listeners you attract to your music stream, the higher the rights fees. However, upcoming copyright royalty renegotiations could change that and open up the streaming landscape to bigger players.

"The cost of providing this service as it grows, given the way the rights structure exists and the onerous record-keeping involved, means we're constantly evaluating the return against those costs," said Gregg Lindahl, VP-interactive for Atlanta-based Cox, which has streamed its 78 stations since 2000. Despite that, Mr. Lindahl said that Cox has slowly been building a "nice little business" out of its streaming but that he can understand why larger companies have concerns.

Additionally, Clear Channel Radio will announce later this month its new national online advertising initiative, led by Evan Harrison, who used to run AOL Music.

"We'll have the ability to accommodate both local and national advertisers with on-air and online campaigns," he said, explaining the sites will offer visual programs as well as downloadable music performances and exclusive online programming-similar to the complementary programming stations will be able to broadcast through HD radio. Clear Channel has left the decision to stream up to its 1,200 individual stations; currently it reports 200 do. "We think the Internet's going to play a huge role in keeping our brand relevant to our audience," Mr. Harrison said. "Whether somebody's listening in their car, or at their desk, or watching a program on that station's site, we're keeping that listener within our brand. From there, you can imagine the commerce opportunities that make sense."

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