Ambitious new startups like AudioNet and Pseudo Online Network, not traditional radio stations and networks, have emerged to provide online audio to computer-bound listeners.
Even when using the best technology available, the fidelity is limited to an AM radio sound; but content providers believe what they've got will draw users and advertisers to their sites.
"Our mission is to be a `network,'*" said Mark Cuban, president of Dallas-based AudioNet (http://www.audionet.com). "But if you try to mold this into a typical broadcast medium, you've missed the boat."
WEBCASTING SPORTING EVENTS
The multimillion-dollar site, which is minority-owned by Host Communications and affiliated with NBC, offers live webcasts of the NCAA Final Four games through a test agreement with CBS Radio Networks. It has also provided feeds from the Super Bowl and the National Hockey League and simulcasts online the live signals of 25 traditional radio stations nationwide.
Mr. Cuban, who sold his $30 million systems integration company Microsolutions to CompuServe in 1990, has sold sponsorships to Kraft Foods' Oscar Mayer and several lesser-known computer companies. Ad rates range from $60 per 1,000 page views for banner ads to $1,000 and up for audio commercials. Live online events (like a press conference) begin at $5,000.
BUILDING TRAFFIC ONLINE
While current equipment and technology limits the site to about 12,000 concurrent users, Mr. Cuban says that number will grow to one million by yearend 1997.
Most of the stations, including CBS, don't pay AudioNet for online broadcasts. They do, however, promote AudioNet on their stations; the idea, said Mr. Cuban, is to build traffic.
"We're curious to see what it will yield" for audience, said Deborah Reno, director of marketing and promotions for CBS, which currently lacks the technology to do its own webcasts. "Everybody is still evaluating the value of webcasting." Ms. Reno said Major League Baseball and National Football League games, may also be made available.
However, such efforts are likely to collide with ESPNet, which has been webcasting NBA games live since October. The sites may soon be competing for broadcast rights.
"Potentially, yes, we're in competition," said Tom Hagopian, general manager of ESPNet.
BANKING ON ORIGINAL CONTENT
New York-based Pseudo Online Network (http://www.pseudo.com) is focusing on original content, with Web-only daily and weekly audio programs that appeal to targeted groups, such as CD-Mom Family Hour and African-American Stories Online.
"We're not just repurposing radio," said Josh Harris, president-CEO of PON.
PON advertising rates range from $1,500 per month for monthly programs to $7,500 per month for daily programs; recent advertisers include Prodigy, NetGuide and Nynex Interactive.
Traditional broadcasters are not yet threatened by online radio, which lacks assets like portability. Still, a February study by Katz Media Group found more than 900 traditional radio stations are now represented on the Web, up from just five a year ago.