Online Radio Grows Up

NYTimes: The radio behemoth Clear Channel, with more than 1,200 stations, has finally begun introducing its first meaningful online strategy which could be another signal of the industry shifting away from FM...However, the article reports that even though overall Internet radio usage is growing, it remains comparatively small, according to Arbitron. In a January survey, 22 percent of Americans had watched or listened to Internet radio broadcasts in the previous month, compared with 10 percent in January 2000. That's admittedly a healthy growth, but to put it in perspective - Offline, Clear Channel Radio still reaches about 110 million people each week and Online, Clear Channel's Web sites currently only reach about eight million each month...

The good news though is that advertising dollars are starting to follow that growth...Advertising fees for online radio are starting to reach prices that are competitive with offline radio and the entire scenario is normalizing...Kurt Hanson of the Radio and Internet Newsletter estimated that online radio advertising revenues would amount to about $25 million this year...

Karim Sanjabi, executive vice president of marketing innovation for Carat Interactive, an advertising agency based in San Francisco, said: "Definitely the audience is there, but we haven't seen the excitement from clients yet, which is strange, because online radio is a very good option. It feels like there hasn't been a champion of Internet radio - someone who's really pushed it out there."