According to tech blog Techcrunch, Pandora has begun to air audio ads on its stream. This is great for Internet radio. Pandora is the darling of the Internet radio industry — they’re probably the best known Internet radio station, and certainly the best known streaming audio app on the iPhone. They get lots of positive press which brings lots of new listeners to Internet radio.
The decision to run audio ads signifies that Pandora will contribute to developing a successful business model for Internet radio that includes audio messaging as a key component. Audio commercials streamed within the content are a much better way for advertisers to reach an Internet radio station’s audience than display ads for obvious reasons – if you’re listening, you’re not necessarily watching the website.
This could also help in the ongoing royalty negotiations between the record companies and Internet radio companies. One of the objections that the record companies argued when Pandora claimed they could not afford the rate was that Pandora was not attempting to monetize audio ads.
Pandora has said they plan to air audio ads infrequently, which will benefit both advertisers and listeners. Most importantly, this will benefit the evolving Internet radio industry, as one of its best known players gets serious about contributing to the development of a successful business model for commercial Internet radio.