AOL revamps online radio
NEW YORK (AP) - June 10, 2008 Much is at stake for AOL, which is looking for new ways to boost
revenues from online music streaming a year after a panel of
copyright judges sharply increased the royalties that online radio
providers pay to record labels and artists.
Lisa Namerow, the general manager of AOL's online radio unit,
said the company's music streaming business was still unprofitable,
even though recent figures from Arbitron Inc. show AOL has the
largest average weekly online audience.
"We really needed to figure out a new business strategy in
order for us to stay in business," Namerow said. "We needed to
monetize radio better."
For AOL, a unit of the media conglomerate Time Warner Inc., that
meant teaming up with CBS' radio business, the second-largest
player in radio after Clear Channel Communications Inc.
The addition of CBS stations will bring a number of highly rated
news, talk and sports channels such as WFAN in New York to AOL's
online radio service, replacing a previous arrangement AOL had with
XM Satellite Radio Holdings Inc.
CBS will also use its vast advertising sales force to sell all
ads across the AOL radio service, something that Namerow is hopeful
will bring in more local advertising dollars.
AOL had been selling national advertising on its radio service
but had hardly cracked the market for local ads, which
traditionally make up the vast majority of radio advertising
spending.
The deal with AOL also jump-starts CBS Radio's efforts to build
up online audiences. David Goodman, the head of digital media and
integrated marketing at CBS Radio, said the deal could double the
total amount of people listening to streams from CBS stations
during peak periods. Today, that figure can be as high as 125,000,
he said.
Goodman says he expects online business to be a "huge growth
area" for CBS stations following their integration into the AOL
radio player, though he declined to give specific forecasts.
The CBS stations will continue to offer listeners audio streams
through their own Web sites. CBS' music stations are also planning
a separate customizable music player called Play.it later in the
summer, Goodman said.
AOL's new player will allow users more flexibility in skipping
songs, setting preset buttons and pausing the audio stream. For the
first time, it will also support the Safari browser, popular on
Apple Inc.'s Mac computers.
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On the Net:
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