Venture capitalist, Fred Wilson, explains his firm’s latest investment and the business opportunity in internet radio.
Streaming radio is very popular already. A recent comScore study reported the cumulative monthly audience of the top four online radio networks at 6.2mm US listeners. If you include all internet radio, that number is certainly well over 10mm montly listeners and could be larger than the subscriber base to satellite radio (~13mm subscribers at year end 2006). And as more and more stations come online with streams and more digital devices support internet streams, streaming radio is going to get even more popular.
But streaming radio isn’t yet a profitable business for broadcasters for several reasons. First and foremost, the broadcasters haven’t had a good monetization system for streaming radio. Because internet radio isn’t an inherently local service (I listen to KCRW in Santa Monica over the internet in my home in NYC all the time), the local advertisers who populate the “over the air” service have a hard time with the internet stream. In addition, streaming is more expensive for a broadcaster than putting out a signal over the air.
Enter TargetSpot, Inc., a powerful ad serving technology and marketplace for advertisers and internet broadcasters.
TargetSpot’s cutting edge technology allows businesses and individuals to create, buy and place their own advertising messages within streaming media. CBS RADIO will utilize the technology on its more than 100 music, talk, sports and news radio stations broadcasting live online. Additionally, TargetSpot will offer a solution for streaming video advertising later this year.
With TargetSpot, advertisers can create customized audio, video, banner and text ads using an array of jingles, sound effects and visuals provided by TargetSpot. Clients can also upload their current creative directly into their web account. Ads are then targeted to a specific demographic, location and/or property. Campaign costs vary with advertising revenue being shared among TargetSpot and the participating broadcaster.
I hope this new business helps make webcasters some coin, because I love my streaming media. Everyday, I tune in to a variety of community radio programs—KEXP in Seattle, KGNU in Boulder, KCRW in Santa Monica, KAOS in Olympia, KXUA in Fayetteville, WNCW Spindale and WOXY in Cincinnati, just to name a few.