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Internet Radio Profitability

U

uticatvguy

I'll start by saying that I am fairly new to the Net-Radio business. I've been hearing a lot of talk about how difficult it is to make money in internet radio. My confusion is that between streaming costs, royalties, Imaging, etc.....the cost of operation is pretty low. Just to put it in perspective let me tell you a little bit about my station:

The format is a Christian Hot AC. The focus is completely local (I do a local morning show, promote local events, etc.) I started the stream in November to build an audience. The official launch is March. I have about 4 new advertisers set to kick off our first month. (Costs Covered)

I guess the point of this post is that I want to see this medium grow. I want to give big corporate radio a wake up call. The medium is inexpensive and I believe a good living can be made at it if it's done right. ;D

Al Williams
TheRiver.FM
 
I agree, it shouldnt be that tough, Soundexchange small webcaster license at 12% is do-able, hosting isn't that expensive. I just launched in Feb at www.musiccountdowns.com. Currently going through LIVE365 personal plan, they run ads I cannot until I upgrade to pro package. I am having a tough time finding where I can get an ad rep firm or someone to sell my inventory to national sponsors. Working now on marketing and getting more listeners but I can't put together a decent business plan without ad revenue sales and/or future projections!
 
The biggest problem for small casters isn't just the cost, but the paperwork. Webcasters are required to provide complete song lists every year. I asked the folks at SE if they actually read any of the song lists submitted, and they said "No. We don't have the staff." So if the paperwork isn't used for directing the money to artists, then why require it of casters, especially the small ones operating out of their spare room?
 
TheBigA said:
The biggest problem for small casters isn't just the cost, but the paperwork. Webcasters are required to provide complete song lists every year. I asked the folks at SE if they actually read any of the song lists submitted, and they said "No. We don't have the staff." So if the paperwork isn't used for directing the money to artists, then why require it of casters, especially the small ones operating out of their spare room?
Click to expand...
Because they want to discourage small webcasters. ;D

But seriously, any decent automation software package will spit out the necessary song lists in the proper form for SX. Submission is via email or FTP upload so you don't even have to print them out. Sure, it's work to organize but not insurmoutable.
 
fmtalk said:
I am having a tough time finding where I can get an ad rep firm or someone to sell my inventory to national sponsors. Working now on marketing and getting more listeners but I can't put together a decent business plan without ad revenue sales and/or future projections!
Click to expand...

Maybe some genius... someone cut out of the same kind of cloth as the people who invented Google and Facebook and other radically new concepts will come up with a sales plan that will help you.... but if traditional radio stations have to get out an hustle their own revenue, sale by sale, why would you expect that Internet "Radio" can simply open up shop and proclaim: "Here I am. Send me truckloads of sales orders and money."
 
but if traditional radio stations have to get out an hustle their own revenue, sale by sale, why would you expect that Internet "Radio" can simply open up shop and proclaim: "Here I am. Send me truckloads of sales orders and money."
Click to expand...

Because that is exactly how syndicated shows sell national ads. we have 6 mins of inventory per hour, a cume of XXX, send us spots
 
Making a living off of internet radio?
Not gonna happen for the time being.
The quickest way to make money through internet radio right now is through ads on your website,
especially affilate ads.
 
Let's put this in perspective, the top station on live365 probably has about 250 listeners at any one time. That might translate to a cume of several thousand a week. A station like that might get some interest from advertisers. Most of the stations on live365 have a handful (literally 1-10) listeners at any one time.
No advertiser would be interested in those stations. Maybe a collection of several hundred stations like that would get some interest, but even then it would be pretty limited.

Unless you've got a show on the radio now with a following that will go to the internet to listen to you, I don't think you're going to find a way to make a living off of internet radio right now.
 
As someone who has been through the streaming radio path since "before streaming was cool," as far as making a living..well, that's what I had hoped to do.

I started with Live365 in 2001. It was way less expensive then. I initially started with a contemporary Christian format, under a Live365 personal plan. There were enough listener donations coming in to pay the bills, but not much else.

After K-Love and Way came into the market the listener donations pretty much dried up. I went country in July of 2003.

The station grew audience wise, and in August 2008 I took it PRO. Selling ads was difficult, but I sold a couple of flights a month. It was at about break-even. Dec. 2008, it made about $700 gross.

In the fall of 2009, iTunes added the station to its directory. The listenership soared to 700-plus listeners a day. We saw TLH like never before.

But the fact that the station was ranked in the Top 10, had a lot of listeners and appeared to be doing well did not translate into advertising sales. The monthly cost soared to over $400 a month, with only per-inquiry spots running for the most part.

One of our advertisers ran into financial problems, leaving me with an uncollectile account. First time in nearly 9 years that this happened, so I guess I've been pretty fortunate.

At the end of March, I looked at the red ink and roster of PI ads and went back to personal broadcasting. Given that we are barely making ends meet since I was "beached" it seemed futile to try to continue to pursue the PRO route any longer.

On March 29, the station officially downgraded back to personal, meaning the loss of iTunes. Kind of a bitter bill. Given that I have 24 years in radio, including 8 in sales, I really thought it would be easier. But I am legally blind and generally have to sell via phone, mail, or email. I sold $10k a month doing it that way for a daytimer AM with little audience and no ratings.

That didn't work for my selling the Internet stream for some reason.

Proceed with caution unless you have some money you can spend on this.

But I'm no quitter. I'll just run as a P4 for the enjoyment of it.

Career wise..I am "professionally lost." Whatever I do, must be done from home. It's hard to find legit offers.
 
I too started my station STAR1079.com on LIVE365 back in 2001, as it was quick, easy and at the time affordable. It allowed me to refine my skills (having not been involved in radio at all previously) and build a bit of a listener base. However, I was on a personal account with LIVE365 and as you may or may not know, personal accounts are not permitted to run ads to recoup their costs. I had looked at the PRO packages on LIVE365, but they were way to pricey and/or didn't allow for unlimited growth. Even evaluated their X5000 package, but it required you to be in BASIC mode 90% of the time which was not a workable solution for me.

When the CRB $#!~ hit the fan, and caused LIVE365 to raise prices and lower listener slots, I determined it was time to make it or break it on my own. I looked at both LoudCity and SWCAST and determined that SWCAST had the better deal for my situation. I had a month of overlap with LIVE365 and SWCAST and then I was on my own with SWCAST. With in 3 months I had rebuilt my listener base.

Have I made a profit? Not yet. However, we are getting closer to a break even point. Not there yet, but I'm hopeful. I must say I couldn't accomplish this much all by my self, but give many thanks to the volunteer DJs and their efforts to bring in sponsors. I think it is possible to make a profit doing this, but no way would I say it is easy.

Keep in mind I said volunteer DJs. Nobody gets money for doing this, not even me. In fact I end up paying for the short fall in advertising dollars, so I agree that if you want to give it a try, you'll need to have some of your own money ready to be put down on the table to keep it running. Pretty amazing what has been accomplished given that I don't permit more than 6 minutes of commercial time per hour and no more than 2 consecutive minutes of commercial spots. Less commercials than typical FM radio, but maybe a bit more some personal Internet Radio Stations, or those that have "Big Corporate Sponsors".

In summary, I'd say you better enjoy doing it, because making money will take a team to make the $$ flow and it won't come easy.
 
The other problem is when some guys think that being on internet radio is a job and should get paid regards if you tell them you're non profit and can barely afford to keep the station on in general. Sure, I would love to pay ya, but when you came on, you know the only thing I can do is give you airtime -_-
 
I just recently (May 1st) put my own 24/7 internet radio station online. I've recruited nine other hosts thus far, to join me to form a Conservative Talk Radio Network. Our numbers have been modest to this point, as you would expect, but since all the shows I've placed on my network have an established listener base, I'm confident that over time, more and more listeners will find their way to the network.

Believe it or not, I've already brought in significant ad revenue, using the "Pay-Per-Call" model and in my opinion, it makes the most sense for both the radio station and the advertising client.

The premise is really simple. Essentially all of the commercials contain a toll-free number or website address that is unique to your station. You are NOT paid to run their commercials, but you ARE paid anytime a listener calls that toll-free number to request the product or information or when they visit the website and likewise request information or sign-up for a free trial, etc.

The revenue each time that happens can range from $2-$10 or much higher. One of my advertisers pays $70 a pop and there may be others out there that pay more.

Thus far, I've generated $217 in just two weeks, which is great. I'm sure it won't be like this all the time, especially in this early stage of building an audience, but once things get to where I hope to be, I'm confident the revenue should be enough to not only cover expenses, but make a small, but significant profit.

The trick is of course to convince the reps that handle this type of advertising to take a chance on you, but in a way, they have nothing to lose. If no one listens and no one calls, then they aren't really out anything. Your listeners must act in order for you to generate any revenue. It's good for them and it's good for you and even if your audience is relatively small, you still might do well enough, with the right products for your station to at least break even.
 
CaptBob92 said:
Are you allowed to name these PI companys you use here?
Click to expand...

Let me contact my rep to make sure she's ok with it. I would think it would be fine, as it's just another potential client referral for her, etc. If she says it's ok, I'll post or email you her contact info. Since it's the weekend, I doubt I'll hear back from her until Monday at the earliest, but I'll email her now.
 
Great I'll be waiting with baited breath,,,or is that bad breath I can never remember how that goes,,,come to think of it bait is probably pretty bad
 
Here's the info that anyone needs who's interested in their program. Just so you know, many of the ads that I'm running on my network are the very same ads that are running on the big, local radio stations in the area. She told me to tell you guys to be sure and mention me (Premo w/Red State Talk Radio) when you contacted her, so that she knows where the referral is coming from.

Stacey Whitely
Account Executive~Radio Division
Image Media & Marketing, Inc.
8515 Baymeadows Way Suite 303
Jacksonville, FL 32256
(904) 367-0803
(904) 367-8323
Email: [email protected]
Website: www.imagemediamarketing.com
 
Thanks for the info. I've used a few of the guys but never got the response you have even on over the air radio. I hope this agency works better
Bob
 
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