Internet Radio.

Internet radio is poised to take a leading part in promoting independent artists. Radio is the principal means of promotion in the traditional business model. Because airtime is limited, record companies compete for it. Payola and other promotional tactics serve to lock out independent artists. Limited airtime acts as a filter in front of the audience. The costs of broadcasting ensure that stations can not afford to give too much airtime to minority tastes. Even community broadcasters only allocate a few hours a week to specialized tastes. Internet radio, however, essentially has unlimited airtime. Terrestrial broadcasting relies upon radio frequencies that are in limited supply (and that are a source of revenue for governments). Internet radio has unlimited channels. And costs are relatively low. So even the smallest audiences can be catered to. Live 365 is currently the largest internet radio hub in the world. There are more than 10,000 stations available, with musical formats ranging from the most mainstream to the most obscure. For someone to establish their own station with Live 365 is very straightforward. The cheapest option is currently $9.95 a month.

So there is limitless scope for fans or even artists to create their own channels, tailored to specific tastes or purposes.

Of course, there are still limitations to internet radio. You have to be on your computer to listen. But very shortly, wireless networks and internet capable mobiles will overcome these limitations. I'd suggest that before too long consumer electronics manufacturers will be including wireless tune-in capabilities on things like stereo systems and boom boxes specifically to accommodate internet radio streams from nearby computers. At this point, internet radio will pose a serious challenge to terrestrial broadcasters. The lure of listening ad-free to your own specific tastes will be irresistible to many people.

Of course, this could lead to a fragmentation of the listening audience that could create as many problems as it solves. For artists with no chance of getting mainstream radio play, it should be a winning situation. Internet radio remains relatively undeveloped. There are few operations with the sophistication of Live 365. Unfortunately outside the US the Performing Rights organisations often seem intent on keeping things this way. See here for a discussion of the situation. One problem is possibly that advertising revenue is hard to come by. At the moment Live 365 seems mostly to be running their own promo spots. Given the reach of internet radio, localised advertising is probably not a possibility. So the only businesses wanting to advertise will be huge multinationals or other internet based businesses.

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