BY KURT HANSON
RAB Internet keynote speaker Charlie Warner, the former radio exec and broadcast professor who is now AOL's VP/Interactive Marketing, gave a luncheon speech to about 2,000 attendees yesterday that explained to the crowd, with the help of a slide, how advertising works -- and suggested that radio's best hope for embracing the Internet is to sign up for a partnership with AOL's Digitial Cities program.

At the end of his speech, when he offered to take a questions, he was challenged Emmis Chairman Jeff Smulyan, who was sitting on the dias with Warner.

"We gave our content to Broadcast.com and they got $5 billion out of it," Smulyan said. "What do we get out of a partnership with you -- does the economic benefit go to us or to you?"

"It's not an exchange of money at this point," Warner replied. (I believe that AOL relationships generally begin with the partner receiving payments from AOL, or an even trade, but eventually evolve into the partner paying large sums to AOL to continue the relationship.)

The exchange continued with Warner eventually concluding that Emmis would not be participating in the Digital Cities venture and Smulyan agreeing with that assessment.

The speech was not well-received by the audience -- so much so that even RAB President/CEO Gary Fries was prompted to express an opinion in a press conference later that afternoon that Warner had not properly addressed the intended topic of his speech. "I just think the message was wrong today," Fries said.




Chicago-based RadioWave has become the first Internet firm to actually begin streaming different radio spots to Internet listeners than those heard by over-the-air listeners, the firm announced at the RAB in Denver yesterday.

At the same time, RadioWave also announced the signing of a 23-station group deal with Susquehenna Radio. The deal represents RadioWave's first major group-wide commitment and one of the industry's largest such deals to date.

"Ad insertion" capability has been promoted for months now as a possible key factor in making audio streaming profitable for radio stations -- because it allows stations to charge a premium CPM for its Internet listeners -- but RadioWave says it is the first firm to actually launch the technology on a live radio station (WLAV/Grand Rapids).

RadioWave's Director of Sales Jim Smith explained that the technology can be used either to upsell local advertisers at a premium price if they want their spots to run to be on the station's webcast, or to cover other local spots with spots sold to national advertisers who want to reach webcast listeners. The Internet-delivered spots on RadioWave's system can be "rich media" spots that are accompanied by a visual for the advertiser and even a link to the advertiser's site.

The Susquehanna group deal, which was apparently in negotiation for months and signed yesterday, is an expansion of a two-station deal between the two firms which included KSAN/San Francisco and KKMR (Merge 93.3)/Dallas-Ft. Worth.

Susquehanna is the nation's largest privately-held radio group, with stations in San Francisco (including KFOG and KNBR), Dallas-Ft.Worth (including KPLX), Houston, Atlanta (including 99X), Cincinnati, Indianapolis, and elsewhere. (Click here for a complete list of the Susquehanna properties, including links to individual station sites.)

BY BOB BELLIN

Last year I had high hopes for web radio and thought it was an ideal application for the Internet. Now, I have a hard time believing that another Internet-only radio provider would make the world be a better place.

Why has excitement been replaced with indifference?

1) Niche formats could flourish on a national platform. Lots of people would go out of their way to listen to any number of music genres that have a pretty good following but will never command a large enough share to make financial sense for a broadcast station. Electronica, House, Folk, Rap, Celtic, old Jazz are some formats that might make sense as webcasts...

2) The revenue model is already established. Lots of discussion is taking place about the value of banner ads. Do they work? On what basis? Do click-thru's matter? How much copy? Should they be priced at the same CPM as TV, radio or print? Are three enough? Are six too many? You get the idea -- none of this is clear yet. On the other hand, sixty-second commercials are an uncontested, accepted advertising format...

3) 30% of America can't tune in their favorite station clearly at work, according to the Internet study Edison Research did for Arbitron...



I've just made a compelling case (if I do say so myself) for Internet-based radio. So what's the problem?

Pay close attention because this concept is very subtle:

They all suck!

Why? Because none of the management of any of them knows anything about programming music.

Read Bob Bellin's full Guest Essay here.


I'm sure many of RAIN's readers will disagree with Bellin's opinions and I look forward to publishing opposing points of view. You can use the RAIN feedback form here or you can use your own e-mail software by clicking here.

At the RAB's Marketing Leadership Conference in Denver, Arbitron Internet Information Services VP/GM Bill Rose and Edison Media Research president Larry Rosin presented the fourth in their semi-annual series of research studies on radio and the Internet.

The study is entitled "Dotcom $: Getting more Internet Advertising on your station -- The buying Power of 'Streamies'" and is based on a new national study of 2,000 diarykeepers.

As noted here in RAIN yesterday (here), the study suggests that listening to Internet radio, rather than growing rapidly, has not increased at all during the past six months.

However, the study has lots of useful findings for radio. It documents the fact that dotcom advertisers may be making a big mistake by ignoring midsize and smaller markets. It shows that radio is the top companion to web usage (over CDs, phone calls, and watching TV). It has useful findings on what consumers want on a station's website.

The presentation (in the form of an Adobe Acrobat file) is now available on the Arbitron website here. More from RAIN on the study next week.

Part Two:

Click here for RAIN News Archives
Looking for Part One of the "RAIN Guide to Internet Audio?" Enter the News Archives and go to any issue from the middle of last week for the latest version. And if you're at the RAB today, I hope to see you there! -- KH

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