From The Industry Standard: "You know you're in trouble when your accountant says you're running out of cash. That's the predicament CDnow (CDNW) finds itself in now that Arthur Andersen, the firm's independent public accountant, has revealed that the retailer has just enough cash to operate through Sept. 30, 2000. Beyond that, it's anybody's guess...

"Its quarterly burn rate – the rate at which the firm is spending cash – hovers at about $15 million, meaning that its [cash] reserve will run out in roughly six months. In a belt-tightening move, the company announced on March 20 that it would trim operating expenses. But it's clear that the company needs to find a partner or risk bankruptcy, a rarity among Net firms.

"CDnow's problem, according to Goldman Sachs analyst Anthony Noto, is that its industry doesn't lend itself to a category killer. The music-retailing industry is relatively small, constituting roughly $12 billion in the U.S. Moreover, music is available everywhere – from corner record stores to neighborhood supermarkets. Such stiff competition leads to rampant discounting. Retailers such as Wal-Mart and Amazon.com (AMZN) 'sometimes sell CDs at a loss … because they can get [customers] to come and buy other items,' Noto says...

"CDnow began as an online retail pioneer. Launched in 1994 by twentysomething twin brothers Jason and Matthew Olim, the company took an early lead in the now-crowded field of selling CDs and music merchandise on the Web. The firm rode its early momentum to a February 1998 IPO. Amazon entered the fray later that year, however, and quickly became top dog...

"Unless a white knight shows up to fund it – or buy it – the company has the resources to run through the summer. Christmas is doubtful..."

Read the full story in The Industry Standard here.

Of course, this story brings up questions about the value of CD sales as a radio website e-commerce opportunity. (Will this make it easier -- or does it bode poorly for the whole concept?) Contribute your opinions here.


We're getting pretty close to adding 100 new subscribers this week, which means we may very well be giving away the cool high-tech devices described below (here).

But if you can think of any other industry colleagues who might enjoy reading RAIN, today would be a very good day to tell them about us. (Details below.)


BY KURT HANSON
Last Monday, I flew to Baltimore to visit Arbitron headquarters to learn more about the Arbitron InfoStream webcast ratings.

Over the course of the day, I met with Arbitron Internet Information Services VP Bill Rose (pictured below standing in the rain (no pun intended)), Arbitron Internet Information Services Director of Marketing Joan FitzGerald, VP/Research Standards & Practices Bob Patchen, Vice President/Communications Thom Mocarsky, Manager of Client Services Pat Duggan, Arbitron EVP/General Manager Pierre Bouvard, and various other members of the InfoStream production team.

Click here to read Part One of RAIN's interview with those executives. And here's more of what I learned:

Bouvard and Rose on Arbitron's objectives:

"Our #1 objective," Pierre told me, "is to help customers monetize their Internet strategies.

"Everyone's busines plan says, 'We're gong to sell advertising.' They're saying, 'We want to get on the Coke buy because we're on the Arbitron ranker' -- and that's not happening yet. (I'm talking about the Spinners, the Imagine Radios...)

"But they're also not making sales calls yet! They have to do that, too. If you go to any of the streaming media conferences, the subject of spot sales is totally ignored."

"There are two types of Internet broadcasters," Rose added."First, there are the traditional broadcasters who are streaming. They're saying, 'How am I going to make money?' And with streaming, each additional listener adds to their costs, which is new for them.

"And then there are the Internet-only audio channels. They have the same questions, but they're more clueless. They've never sold advertising before. They've got no platform. No staff.

"Our mission is is to be the leading ratings company for webcasters. We're building a company from scratch -- we're trying to bring in what we already know plus add new things."

What does the InfoStream ratings report
actually look like?

Currently, all that subscribers get is a portion of a spreadsheet that shows some top-line data on their own station (e.g., Monthly Cume and TST).

The Arbitron execs were unwilling to show me a copy of what this report looks like.

(However, if you're an InfoStream-measured station and would like to fax me a copy, that'd be excellent! My eFax number is 419-735-1222. Let me know if it's on deep background only or if I can share it with all RAIN readers.)

"In the future," FitzGerald told me, "sometime later this year, subscribers will get a password-protected web application. Just like regular ratings, it will include access to all the channels we measure."

"That will be the understanding," Rose elaborated. "You need to sign up with that in mind. You'll get to see everyone else's numbers, but they'll get to see your numbers, too."

Will the full results be released to the press? "That's a good question," Rose said. He added, "It's a tough paradigm for some Internet companies to grab onto. 'Welcome to world of ratings!' But this is what agencies want. They want to compare."

What will the web-based application
look like?

I was allowed to get a sneak peek at the application being developed, and the truth is, it looks pretty cool -- with some features that I didn't even imagine would be possible to offer.

There's an HTML-based front-end to the application, so you'll use it by simpling logging onto the Arbitron website and accessing the database on their server.

There were three pull-down menus in the left-hand margin that allow you to select any survey period, any daypart (!), and any channel set (e.g., by format, by owner, by streaming provider, or by type (broadcast stations, Internet-only audio services, etc.).

The results were shown in a five-column format in which, again, you could use pull-down menus at the top of columns #2-5 to select the statistics you wanted to look at. (The first column shows the names of the channels you selected above. In the following columns, you could ask to see, for example, each channel's format, its Monthly Cume, its total aggregate hours of listening for the time period, and some other statistic of your choice.)

Of course, what I saw was a preliminary version of the software that's likely to change before its final release. But it was still pretty cool.

To be continued...



From PR Newswire: "The MTVi Group (MTVi), the number one online music entertainment company, today announced the launch of a multi-million dollar sonicnet.com advertising campaign with the theme 'me music, it's mine.' Christina Aguilera, Sting, Yo-Yo Ma, James Brown, and more than 30 artists from the worlds of pop, rock, soul, jazz, and classical music, provide their own take on the slogan 'me music, it's mine.'

"The ad campaign is a testament to sonicnet.com's new 'me music' genre approach, which also launches today...

"MTV Networks will be airing the campaign on MTV and VH1 as part of its $100 million-dollar commitment to promote MTVi properties over the next five years. The spots will also air on all major national and local broadcast outlets during top shows including 'Everybody Loves Raymond,' 'City of Angels,' 'Frasier,' 'Friends,' 'ER,' and 'Ally McBeal...'

"The recently launched radio.sonicnet.com offers listeners the chance to program their own Internet radio station in whatever genre or mix of genres they choose. Or listeners can select from hundreds of pre-programmed stations, many of which were created by high-profile artists from a wide variety of genres..."

I believe this represents the first major ad campaign launched for a multi-channel Internet-only broadcaster. Read the full press release here. (Note that the annoying use of lower-case "me music" in the press release is totally unnecessary, since the website itself uses traditional capitalization.)

From the Associated Press: "WATSONVILLE — An esoteric little radio station with no play lists and the weakest signal in its market is topping online radio charts as people around the world discover its irreverent delights.

"'Their programming is very, very tasty, and I have such wonderful connections with the DJ’s and the listeners so I feel a little bit like a part of the family,' said Sandy Georges, who listens through her computer in Paris, France.

"KPIG, 107-oink-5, has long been an important part of the Santa Cruz and Monterey communities, featuring an eclectic mix of music — folk, country, rock, Hawaiian, Cajun, local artists and more. Listeners along California’s central coast have loyally supported the station since its roots as KFAT in the 1970s in Gilroy. It’s not possible to drive more than a mile in the area without spotting one of its 'Praise The Lard' bumper stickers.

"But being popular in Santa Cruz County — even wildly popular like KPIG — never meant much in the world of radio. Despite its inclusion on Rolling Stone’s 'Ten Radio Stations That Don’t Suck' list, KPIG hovered around the middle of the 7,000 radio stations in the country when it came to listeners.

"Then the Internet opened up the world. In 1995, when the notion of streaming radio broadcasts over the World Wide Web was just a possibility, disc jockey "Wild" Bill Goldsmith decided to give it a try. With $5,000 of his own money and no training, he launched KPIG onto the Information Highway, pioneering a new medium..."

Read the full article in the Santa Cruz County Sentinel here. (The piece also ran in other newspapers, including the Chicago Sun-Times today.)

Some of the stations at the top of the Arbitron InfoStream report get high Monthly Cumes, I believe, simply due to a favorable alphabetical position on RealPlayer presets; there may be nothing particularly special about them. KPIG is, in my opinion, one of the exceptions -- there's really something to it.

Visit KPIG.com here.



(Want to recommend a station as RAIN's next Internet Radio Site of the Day? Use the feedback form here.)

Final day!

Tell some of your industry colleagues about RAIN this week and you could win a fabulous prize package consisting of a amazingly stylish Sony Music Clip digital music player (pictured at right, below) plus a gorgeous Nextel i1000plus Internet-ready cell phone (pictured at left)!

The cell phone, this week's addition to the RAIN Viral Marketing Contest prize package, is totally packed with features -- including the ability to give you wireless Internet access when Nextel begins that service in some markets next month. (See full specs sheet here).

But the best part about the Nextel unit, in my opinion, is this: It's got an integrated speakerphone. That means you don't have to hold it up to your ear like one of those old-fashioned telephones. Instead, you can talk into it holding it halfway at arm's length -- exactly like Kirk, Spock, and McCoy used to talk into their communicators in "Star Trek: The Original Series!"

Here's how to win it: You're invited to recommend RAIN to your friends and colleagues. If RAIN gets 100 new "subscribers" this week (i.e., new readers who fill out the "Enjoying reading RAIN?" form above), we'll give away the entire prize package to one lucky winner (chosen randomly from everyone who has sent out an e-mail recommendation to date).  If not, we'll roll over all the entries, add something more to the prize package, and try again next week. (Three more paragraphs of fine print here.)

So think of a few people you know who would benefit from knowing about RAIN -- co-workers, subordinates, friendly competitors, clients, vendors, college friends -- and tell them about this fine Web-based daily newsletter. And win!

(Want to write an e-mail to a couple of colleagues right now, but need help composing the e-mail? Click here for some suggested language.)

More coming soon! Contribute your suggestions here. (Suggestions already in the hopper include CableMusic.com, RadioWoodstock.com, Nerve Radio, Radio Gogaga, and HotCountryHits.)

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Visit the RAIN News Archives here.

You can easily click through previous issues of RAIN by using the blue arrows next to the issue date at the top of the page. (This navigation element has been added retroactively to all of March's issues.)