Radio Via The Net, Now That's What's Up!
Internet radio is burgeoning, according to a new report from SNL Kagan, which predicts more rapid revenue growth. But the big question, as far as media buyers are concerned, is how much of this future growth will come from advertising sales.
The report is being circulated just as, coincidentally, new Web based radio players hit stores July 1.
Looking at the top Internet radio operations, SNL identified CBS Interactive as the revenue leader, with total revenues of $550 million in 2009, thanks in part to its ownership of Last.fm and ad sales partnerships with AOL Radio and Yahoo. It also has a large number of station Web sites.
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Counting other partnerships with CNET, Radio.com and TV.com, CBS Interactive boasted an average 226 million unique users per month in 209. Competitor Clear Channel posted total revenues of $175 million in 2009 -- virtually all from advertising -- with an average monthly base of 100 million unique users.
Among pure-play Internet radio operations, MySpace led the way with $490 million in revenue and an average 70 million unique users per month -- boosted "by leveraging Fox's music-focused TV shows 'Glee' and 'American Idol,' according to SNL Kagan.
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In 2009, Pandora had about $50 million in revenue -- also mostly from advertising -- and 50 million registered users, about half of whom are actually active.
Adding up the top players, Internet radio delivered over $1.25 billion in revenue in 2009 -- but comparing this figure with separate numbers from the Radio Advertising Bureau, it's clear that online advertising is still playing second fiddle to subscription and download fees. And don't think Sirius XM satellite radio is going to take the threat of continued online radio growth lying down.
The RAB reported total digital ad revenues in 2009 of $480 million -- or 38% of total online radio revenues.
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