This is an update of a piece that originally appeared in the October 7 edition of our free weekly email newsletter, the Radio Survivor Bulletin. Sign up now to get this digest of important and insightful links and commentary about the future of radio.
I’ve talked with a number of people, companies and groups making many different kinds of internet radio lately. This has got me thinking about both the advantages and challenges of having an exclusively online station. Advantages include the ability to get off the ground quickly, with minimal capital investment and without needing an FCC license (or worrying about FCC fines). But there are also challenges that deserve consideration by anyone interested in being an internet broadcaster. These aren’t reasons not to do it; just things to keep in mind.
- Popularity Costs Money
- Music Royalties Cost More
As we’ve covered, terrestrial broadcast stations are exempted by law from paying performance royalties for the recordings they play. Internet broadcasters have to ante up. There are statutory limits to how much non-commercial broadcasters must pay, but it can add up. The toll is higher for commercial and for-profit broadcasters. And for both groups the bill gets bigger the more listeners you have. Another price for popularity.
- (Most) Drivers Won’t Hear You
Although the so-called “connected dashboard” is slowly becoming a reality, a very small percentage of vehicles sold actually have sound systems that can directly access or control internet radio. On top of that, wireless data service is still not widespread enough to provide consistent connectivity to a live stream. That makes it a challenge even for the intrepid listener who just connects her smartphone to her car’s line in. That means today internet stations miss a large portion of the radio audience. (Read more about Matthew’s adventures listening to Pandora in his car).
- Internet Stations Are Harder To Find
Millenials may not turn to radio like the previous generation. But millions of radio listeners still discover stations the old fashioned way: the seek button. While platforms like iHeartRadio and TuneIn assist in finding stations, the sheer number of broadcasts, especially with the same format, mean that it’s easier for your station to be overlooked online than on the air. Though there are contenders for the Google of radio, it’s not quite here yet.
- The Digital Divide Leaves Some Audiences Out
Those of us who use the internet like it was water often forget that not everyone has reliable and regular access. Folks who can’t afford it, live in rural areas with poor coverage or who limit usage by choice will not be listening to internet radio much, if at all. The same people can tune in broadcast radio with an inexpensive receiver that will run on batteries, or even solar power. Future improvements in infrastructure may address this digital divide, but we can’t yet say it’s bridged.
With over-the-air broadcasting 10 listeners cost as much to serve as 10,000 listeners, provided they all live within your coverage area. On the internet each additional listener requires more bandwidth, and bandwidth equals money. I don’t imagine any station doesn’t want to grow its listenership, but with an internet station that growth can take a bigger bite out of your budget.