While Internet Radio Market Grows, Indie Web Stations Suffer

  Slacker.com, One of the Powerhouse ‘Music Jukeboxes’.
  Credit: Slacker.com
OTTAWA, Ontario — Internet radio (a.k.a. “Web radio” or “online radio”) is growing in popularity.

According to a joint study by Triton Digital and Edison Research, 120 million Americans listened to “online radio” at least once a month in 2013; that’s 45 percent of the total United States population aged 12 years and up. Ten years ago, only 17 percent tuned in.

Thirty-three percent of those surveyed reported tuning in during the last week, compared to just 8 percent in 2003. Average weekly online listening time also rose from just over six hours (6:13) in 2008 to just under 12 hours (11:56) in 2013. This same research shows growing listener awareness of and listening to Pandora.com, and a small percentage of people (18 percent) who listen exclusively to Internet radio (i.e. no AM/FM). The study, entitled “The Infinite Dial,” can be seen at www.edisonresearch.com.

These are U.S. figures, of course. However, since audience research is relatively difficult to find for Internet radio globally, it is a useful starting point for evaluating the state of Internet radio as a whole.

  SomaFM, One of the U.K.’s Popular Indie Internet-Only Stations.
  Credit: Soma FM
When speaking about the state of Internet radio, one first has to define what Internet radio is. Unfortunately, the online streaming market has yet to do this successfully, said James Cridland, managing director of Media UK, a portal for connecting to media resources in the United Kingdom.

“There’s terrible confusion between a ‘radio’ station — something with a human connection and a shared experience — and the likes of Pandora, Slacker, iTunes Radio and music subscription services,” Cridland said. “I find it very unhelpful that the radio industry has let folks like Pandora and Apple steal the ‘radio’ brand, and use it to describe a poorer music jukebox experience. They are not comparable.”

If Pandora and the other “music jukebox” services are factored out of the equation, the remaining Internet radio market is dominated by simulcasts of over-the-air radio stations. “Much of this listenership has been facilitated by fewer regular radios available in the workplace,” said Fred Jacobs, president of the radio consultancy Jacobs Media.“Wi-Fi and better Internet connectivity have allowed the space to grow from the days of dial-up when buffering was about as common as listening to the stream itself.”

There are a wealth of independent Web-only radio stations online today. But when it comes to grabbing U.S. listeners, 18 percent of the market is the best they can achieve, said the Triton/Edison research survey.

One of these stations is WDYN.net. Based in Rochester, New York, WDYN.net was launched by veteran musician Dave Kaspersin. He also owns and operates Dynamic Recording Studio, which records and promotes independent artists.

“We went on the Web in 1995 to sell our catalog, and it worked,” said Kaspersin. “Our first sale was to Japan, and we have sold in more than 100 countries. I started WDYN.net in September 2000 because I saw it as a way to get our artists heard.”

  WDYN.net’s Friendly Home Page.
  Credit: WDYN.net
Although only heard on the Web, WDYN.net is run like an over-the-air radio station with either live or recorded-to-sound-live DJs. “I had someone ask me when I took time to sleep because I was on the air so much,” Kaspersin said.

After a few years going it alone, WDYN.net signed up with the content aggregator Live 365 to attract listeners. The strategy worked. “Our Live 365 stats hit a high of 18,000 per month in 2010,” Kaspersin said. But then the music jukebox services started to gain traction, and it hurt: “We have been losing listeners since Pandora went live and are now at 1,200 per month.”

Times are tough for WDYN.net, but at least there is an active independent Web-only sector in the U.S. “Here in the U.K., there aren’t any indie Internet radio stations to any extent,” said Cridland. “The market has already been affected by the large amount of terrestrial simulcasts available here, alongside punitive music costs and radio services.”

Of the Web stations that do exist, the ones that “appear to do best are those with recognisable, heritage brands (such as SomaFM or Digitally Imported); brand extensions of existing broadcast services available on AM/FM (Absolute Radio 80s or BBC 1Xtra); or those that appear at the top of Internet portals (such as .977 and 181FM’s raft of services),” Cridland said.

As for jukebox services? “We’ve no major Pandora equivalent here: While Google Play Music All Access has launched, as a paid-for subscription service, it appears to have had little effect on terrestrial radio listening,” he said. “I await iTunes Radio with interest, but I’m not sure it’ll have much of an effect. I could be wrong.”

In a world where music jukebox services and “familiar” broadcaster simulcasts are dominating the Internet radio market, the future doesn’t look promising for independent Web-only stations. “Perhaps so because there’s just so much content out there, it is difficult for any indie to get noticed,” said Jacobs. “Because revenue generation may be a tough task, recruiting, hiring and nurturing a staff is a difficult task,” he said. “Anybody can start a radio station in their basement. But to create a great station requires time, resources and a vision.”

As a result, it seems unlikely that the growth of Internet radio as a whole — with or without music jukebox services factored in — will be accompanied by an increase in financially-sustainable indie Internet-only stations. Those that do remain will likely be built upon passion, such as WDYN.net. For his part, Kaspersin feels strongly that today’s listeners still “want to connect with real DJs,” he said. “Therefore I am keeping our live station ‘on the air.’”

James Careless reports on the industry for Radio World from Ottawa, Ontario.

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