From CNET News: "Online entertainment start-up iCast today launched its Web site and an instant messaging service that will allow music and video lovers to immediately contact their buddies while a broadcast is in play.

"The iCaster instant messenger, supported by Tribal Voice software, plays video, MP3s, CDs and other audio such as radio broadcasts and allows people to instantly drag and drop music or video into a friend's instant messaging account."

iCast, owned by CMGI, is the site that CMGI's Magnitude Network was folded into two weeks ago. The new division containing Magnitude Network will be called iCast Music and the Magnitude Network portion of the division will concentrate on providing streaming services to radio stations. (Read RAIN's story here. )

Branded versions of the iCaster player (shown at right) will be the new default player for iCast Music's streaming clients.

CNET noted, "iCast Music holds more than 1 million song clips and about 10,000 MP3s, and iCast Radio has 200 broadcast radio stations and about 20 genre-based, Web-only radio stations, the company said."

The iCast site is attempting to be a full-service entertainment portal, with four primary subsections in today's debut version -- Community, Movies, Music, and Radio.

The Radio category is described on the first page of the site as follows: "Tune in to iCAST Radio, broadcasting live from our studio, or listen to thousands of streams from around the world." Those thousands of streams must include the old Magnitude Network clients plus others. The "our studio" reference may refer to CMGI's recent acquisition of the Internet-only broadcaster Green Witch.

Although the technology is in place, there is some question as to whether AOL will allow the iCaster's instant messaging feature to communicate with AOL members.

Read the full story from CNET News here or Reuters' story on the topic here. More details on iCast coming later this week in RAIN.


Internet Strains the Ties
of Record Companies and Stores
From the New York Times: "The advent of e-commerce and the prospect that consumers will buy music by downloading it directly from the Internet has strained the traditionally congenial relations between record labels and record stores and set off a power struggle between them. The reason is that for all the newfound efficiencies imagined for a world in which consumers download music from the comfort of home, it is a doomsday outlook for record retailers, whose livelihood depends on consumers' leaving home to buy their music in a store..." Read the full story here.


Clear Channel's acquisition of SFX Entertainment has Internet implications
From Radio & Records: "...The merger fits perfectly, as Clear Channel CEO Lowry Mays says, because 'it leverages the marketing and promotional strength of Clear Channel’s broadcasting and outdoor advertising platforms and adds a new component to the marketing solutions ... Additionally, it creates an exceptional platform for Clear Channel to pursue initiatives relating to the Internet and music.'

"Analysts at Prudential...believe the merger fits well with Clear Channel and was well-timed. 'With the threat of fragmentation in the music world as the Internet emerges,' Prudential analysts wrote in a report today, 'we believe marketing and promotion for artists has never been more important to the music industry..."

Read full coverage in R&R Online here (subscription required).



Reprinted from yesterday's edition:

BY KURT HANSON
I just read another news story about Internet radio yesterday that included the following paragraph:

"According to Arbitron, 11 million people in the United States are listening to Internet audio on their PCs, where they can listen to Internet-based audio on their own schedule, listen to programs that aren't available on their local radio stations, and create a personalized playlist of programs."

Yeah, yeah, yeah, sounds great. But there's only one thing:

The statistic quoted in that sentence is ABSOLUTELY untrue! Nonetheless, it's a statistic that's sweeping the country, as one journalist picks it up from a previous journalist's story and repeats it and then another one picks it up from that story and repeats it again.

But it's just plain dead wrong. What the Arbitron study actually said was that 11 million people have tried listening to Internet radio at least once.

The important, critical difference is that the vast majority of those consumers apparently found the experience less than perfectly satisfying because they are not currently listening!

Only about a quarter of those 11 million people said they'd listened in the past week. And given the apparently low TSL that Internet stations seem to be getting, it's possible that only 100,000 people (or even fewer) literally are listening to Internet audio at the average moment. (This figure is consistent with a popular Internet-only webcaster or streamed broadcast station having an AQH audience size of 150 to 300 persons, whereas a big-market broadcast station might have an AQH of up to 100,000 persons.)

True, that figure is certain to grow as faster modems become more prevalent and audio players become more reliable and even simply as more people become aware that Internet radio exists. But misquoting current numbers is, in the long run, not going to help anyone.

Part Two:

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