An Internet radio legend has announced that they will stop offering free streams and tuck access to their station behind a subscription service.
KPIG has had a few lives in its pursuit of Internet radio success. It was one of, if not the first broadcast station to stream starting back in 1995, when Internet radio pioneer Bill Goldsmith, owner of Radio Paradise, was the webmaster.
“KPIG’s quirky programming was a perfect fit for the Internet when it began webcasting in1995. KPIG was the first commercial FM station to webcast its programming, and it was quite unlike anything anyone had ever heard before”, says Goldsmith. “Internet radio’s early adopters had to put up with lousy audio quality, frequent interruptions, and buggy player software — but they would do that in order to hear KPIG’s music, DJs, humor, live broadcasts…”
In 2001 Mapleton Communications bought the station. The next phase came when KPIG stopped streaming in 2002 in reaction to pricey performance royalties. That’s when they first started experimenting with subscriptions, making the stream available only through RealPlayer’s RealPass for a monthly fee. Again, from Goldsmith: “From 1995 until 2002 KPIG was one of the most listened-to stations online, with an audience size far outstripping any other FM/web simulcast. Unfortunately, the fear and confusion surrounding the 2002 CARP decision on Internet radio royalty rates caused the station’s owners to drop the webcast for over a year.”
At some point, KPIG started streaming again and has been streaming its eclectic americana format based in Freedom California to dedicated listeners worldwide, albeit a much smaller audience than back in their early streaming days. The question now is, will that audience pay for the streams they’ve been listening to for free?
A recent Nielsen study showed that about 25% of listeners are willing to pay for unique radio content – provided it’s commercial free and has value to them. They’re looking for something they can’t find on the free channel, and if they find it, they’ll pay to listen. I’ve talked to a few web-only stations who have told me that their subscription offerings are doing just fine, with a solid base of listeners who are willing to pay. More and more stations are trying it – Pandora’s Pandora One offering is just one example.
In the case of KPIG, Goldsmith for one is skeptical: “Given the number of free choices that listeners have these days (virtually all other online radio streams are free) it seems doubtful that they’ll attract more than a handful of subscribers.” On the other hand, they’ve got a unique brand and a loyal following, so who better to test the waters?
It doesn’t take a crystal ball to know that the web is moving to mobile devices. The US mobile web audience grew by 1/3 in a year, according to Nielsen Online. Pandora’s Joe Kennedy recently revealed that Pandora sees half a million listeners a day just on its iPhone and BlackBerry applications, tuning in for an average of an hour and 45 minutes a day. Bill Goldsmith, founder of Radio Paradise, another online station with substantial following, said 8 to 10 percent of his station’s audience is listening on mobile devices.
The new battlefield of online radio is streaming to mobile devices, according to Vincent Grenier, VP of Marketing for Stream The World. With a mobile app, you can build a new environment around your brand and leverage new ways to monetize says Grenier.
Recent studies have shown that consumers are interested in receiving location based advertising on their mobile devices. Restaurants, weather, clearance sales, and pizza all qualify as items consumers would like to hear about on their mobile devices. Delivering locally relevant ads is a perfect fit for radio, says Grenier. “Stations should become a reliable source of information … by providing on-time, on-place advertisements as SMS, direct messages, and displays….delivering mobile alerts as a service. It’s a perfect fit for your local advertisers.”
It’s important for stations to have mobile platforms in place that can deliver audio programming, interactive elements, and advertising. As the mobile audience surges over the next few years, mobile web spending will outpace online ad spending. Radio – particularly online radio, is poised to grow exponentially as a medium that is as mobile as the devices themselves. It’s never been more important to have a mobile strategy to take advantage of this imminent growth.