Making money off of an internet radio station is still in the wild frontier. There are pioneers forging new way to monetize what they are doing.
I've heard of 'local' internet radio targeting a major city. This gives some boundaries for picking up clients. This also affords an opportunity to involve your listeners with the stream. Coupons for restaurants and special 'after hours' get-togethers at bars and such can be good for revenue building by selling the idea of a coupon listeners can print out and use. Bar specials works the same way. Then target other businesses in the community. Certainly you need listeners to make it work. I'd center on 'at work' listening.
An internet station not trying to be local is a different animal. I'd try for small on line businesses looking to increase visitation. They cannot pay much (via something like Paypal) but the more you get, the easier it is to sell, so I'd sell cheap to get them started. Target Mom and Pop businesses and don't ignore the smallest ones since they have the most to gain even from a small audience.
While on the subject, I would not think commercial length but message. Your website might do the selling while the stream is the reminder.
The more you can give the feeling of a 'club' and the listener 'belonging', the better. Internet Radio is missing emotional bonding. Think of the successful websites. Before they became so big, they were like exclusive clubs only the 'coolest' people knew about. In time more and more jumped in to join and it became a huge site.
At any rate, you are forging new ground with few, if any true examples to follow. My suggestion is to be open to ideas not matter how outside the realm they seem. Internet Radio is very different from over-the-air radio. Internet radio is audio and visual. You are in the unique position to 'write the book' on internet radio as an independent and forge the trail others will follow.
I started a little business with about $100 seven years ago. I expect about $15,000 this year in gross revenue. Now people want to be in on what I'm doing. Hopefully I can get it to about $60,000 in the next ten years. The key is to start small, never let it be a financial burden or a time burden, and take baby steps and I mean baby steps. In other words, if you can afford to let it fail, you have the scenario to win. It's funny how that works. Choose to make it financially pay for itself with you kicking in only that amount you can easily afford to spend, even in a month when there is a major expense in your life (like the AC going out in 100 degree heat or the timing belt snapping on your car). Be able to afford to keep it running no matter what. Last, treat it like a child...guide it but let it grow and become what it becomes in the future. It may become a very different animal than you initially thought. One of the biggest issues is resisting the going for broke attitude. You don't have to have the latest and greatest or the big boy marketing campaign. Don't be afraid of being the smallest of the small. In many respects, this is a wonderful memory-maker as you reflect where you were versus where you are at present. It actually gives you the drive to meet your next goal. Anyway, listeners and adverisers will recognize you began small and each step up you make will be viewed as another success...and everybody wants to hang with a winner.
