The online music service Pandora recently signed a landmark deal with Internet radio chipset maker Reciva. Under the deal, Reciva has enabled its Gatepass Internet radio platform to connect to Pandora's Web site, adding to the more than 16,000 online stations Reciva radios could already access.
"The problem with receiving Pandora on a personal computer is that it is typically tied to a home office or den," says Tom Conrad, Pandora's CTO.
"This isn't true of WiFi-connected laptops, but they usually have small speakers that don't provide decent audio reproduction. This is where an Internet radio comes in: You can place them wherever you listen to radio, without requiring a computer."
Since Gatepass is the chosen tuning system used by many Internet radio manufacturers, the deal put Pandora squarely into the Internet radio market. The manufacturers whose Internet radios will now access Pandora directly are C. Crane, Grace Digital, Livio, sonoro audio and Tangent Audio.
Pandora is already popular with iPhone users. The Reciva arrangement targets Internet radios. Why Reciva?
Reciva is not the only maker of Internet radio tuning chipsets/software. But as readers of Radio World know, its system has become popular among Internet radio manufacturers. This is because Reciva provides these manufacturers with a turnkey solution: Not only does the company make the chipsets, but it maintains the Web site (www.reciva.com) to which these Internet radios connect. At Reciva.com, these receivers can link to thousands of audio streams, organized by genre and location. The site also lets Reciva radio users customize their station choices, and add any new audio streams not already available on the service.
Under this arrangement, manufacturers don't have to spend time and money maintaining their own audio streaming sites. They just install the third-party chipset and let Reciva handle the rest. This is why Reciva has been chosen by several manufacturers. Also, the Reciva tuning system is robust and works reliably.
For Pandora, Reciva's level of success made it a suitable partner for penetrating the Internet radio market. "We chose Reciva precisely because they make the chipsets that are used on many popular Internet radios," Conrad says. "They were a logical partner."
For makers of Internet radios, the market is out there — as long as they can wean online listeners away from their computers and onto standalone receivers.
"According to Arbitron, there were 69 million U.S. listeners to online radio last month," Greg Kim, Livio's sales and marketing manager, said in late spring.
"As well, 82 percent of U.S. households that have Internet have broadband, and can use our Livio radio at home." Add the fact that Pandora is approaching 30 million unique listeners, and "You can do the math. People want Pandora, and we can provide it to them via our radios and the Reciva tuning system."
It is Pandora's Internet market penetration — and the fact that it is also popular with iPhone users — that makes this application a smart choice for manufacturers.
"We can cross-market our Internet radios to Pandora listeners," says Deanna Dal Pos, international marketing manager for sonoro audio. "Pandora gives them one more reason to buy our radios, and it explains why we are looking to work with other service providers to add their services as well."
"With Pandora's rapid growth and huge market share, we have long since recognized them as a partner of choice," says Matt Shortt, Reciva's marketing director.
"We believe that Internet radio in all its guises is a giant leap forward from traditional broadcasting. It allows consumers the ultimate choice, to experience radio they way they want it rather than the way the broadcaster wants to deliver it. Pandora epitomizes this new way of thinking and Reciva is the perfect delivery platform for consumers wanting some detachment from the PC."
The CC WiFi Internet Radio from C. Crane is one model that now accesses Pandora directly. Impact on radio broadcasters
Pandora's move to Internet radio appears not to be good news for AM/FM broadcasters that are available online.
The problem here is the same as on the Web proper: Pandora allows listeners to hear the kind of music they personally prefer, rather than sitting through whatever a station programs for them.
"This personalized difference gives us a competitive edge," says Conrad. "Given a choice, people like to have some influence over their own music experience; either through their computers or the radios they listen to everyday."
But all is not lost for radio broadcasters. Even in the Internet age, "Local broadcasters have the pole position for local news, weather and political discussions," says Bob Crane, owner of C. Crane. "When I travel I tune in the streams of my favorite stations back home to see how things are going."
What to do? Well, rather than panic, radio broadcasters might consider striking a deal of their own with Reciva, to ensure that listeners know that local news and weather are available on their Internet radios.
In fact, "We have a new Web site for device owners (radios.reciva.com), which enables consumers to make folders of local stations," says Shorrt. "We also have GEO IP tracking, which allows us to provide Clear Channel's lineup and any radio when it is turned on in the USA."
In these ways, Reciva can help broadcasters put Pandora back in her box ... or at least keep up with Pandora in the ever-evolving Internet Age.