Radio Websites....struggle to profit

[shiznit]

Radio Websites struggle to be profitable. Why? Mainly because they’re still primarily seen as a programming and marketing platform….rather than a profit center.

As a former Radio guy, it pains me to highlight the lowly, www.WXTU.com site. This Beasley Broadcasting property is from a great country radio station in Philadelphia. Click here www.MelTaylorMedia.com ..... to see video on how Newspaper sales reps can easily take advantage of this Radio station's “advertiser un-friendly” web site.

 

[Rob]

Humm, our numbers are growing and we don't make a single profit from this. Interent radio should be a hobby, not a business. It's a venue to expose and explore what over the air radio doesn't have to offer.

Our station has been broadcasting on interent and satellite since around 1996. (KU band satellite free to air)

-Rob

 

[Starbucks]

I agree with part of your analogy of Internet broadcasting.....but let me ask you that this is becoming an increasingly costly hobby...where do you get the funds to keep going, plus how did you get your stream on to the free to air satellite band. Wasn't that costly?

 

[H82BL8]

LastFM and Jango have added pay for play services because advertising revenues can not support bandwidth and performance royalty costs.

They could possibly charge a listener's subscription fee if they had some kind of premium service but that move has been the death knell for most companies.

 

[Carmine5]

I tend to agree with Jerry Lee's decision when he shut down WBEB's web stream last March. The cost of streaming a station's terrestrial signal is so high that it just doesn't make sense.

But that doesn't mean that a station's website, can't in and of itself, be a destination for listeners or a profitable adjunct for advertisers and the station. News, community information, podcasts, video snippets, coupons, contests and other content can make the site a go-to place. But it needs to be programmed differently from the station and continually.

C5

 

[trock]

I would think that streaming would be more beneficial now with ppm. Add yo the fact that it's hard in alot of office buildings to pickup stations.I would think ad revenue though not as lucrative as radio could offset the cost of streaming.

 

[H82BL8]

trock,

It's not the cost of streaming (bandwidth) that puts the cost of streaming out of reach. It is the performance royalties for non-interactive streaming paid to SoundExchange, which is controlled by the RIAA, and the four major labels that is responsible for the high cost of streaming.

 

[radiolistener66]

Not all radio companies are struggling to profit from web or streaming advertising.

Nor is the cost of streaming out of reach. What's usually missing is the right pricing structure. Same problem with radio stations trying to sell web advertising.

An old mentor years ago gave me a pearl of wisdom that has served me well for decades as a GM/Market Manager. He said "Price it to sell it. Don't price it so it won't sell." Too many of us radio types price our inventory so it won't sell--as high as we can according to a loose approximation of where we think we fit in compared to other radio stations in our markets--and we never come close to selling out. (In fact, if we have a cluster of stations, we could drive the proverbial truck through stations 3,4 & 5 and never hit a commercial). We won't price those unsellable units appropriately for fear it will sabotage our negotiating position with our best (pro-radio) clients--the same ones who won't buy the spots we can't sell.

Meanwhile, too many of us have no idea how to price website advertising and/or streaming--and we're too embarrassed to admit we don't know... so we don't ask.

Instead, we tell ourselves it can't be sold. And then share that self-defeating notion with our peers on boards like this.

Wake up! Swallow your pride. Ask the right questions of the right people. Pretend you're a rookie and don't know a damn thing. Because, in a very real way, you are.

 

[Goat Rodeo Cowboy]

Meanwhile, too many of us have no idea how to price website advertising and/or streaming--and we're too embarrassed to admit we don't know... so we don't ask.

Instead, we tell ourselves it can't be sold. And then share that self-defeating notion with our peers on boards like this.

Wake up! Swallow your pride. Ask the right questions of the right people. Pretend you're a rookie and don't know a damn thing. Because, in a very real way, you are.

What you wrote looks like it might be HALF the story.

The customers/potential customers have no idea what they should be wiling to pay. Since it is their money and they are the buyers, they probably don't have the embarrassment over not knowing what to pay.

< Gulp > O.K. I just swallowed my pride. I'm ready to ask the right people. Now I have a new embarrassment. Who are the right people to turn to and ask the right questions?

 

[radiolistener66]

To get a sense of what web advertising costs--and in what form it is sold (banners? buttons? unadorned links? "advertorials?" interactive buy/sell portals?)--call the outfits in your area that are doing such things and tell them you may have some interest in advertising and would like to know more about what they offer and what the costs are.

If you've made any friends in the advertising agency business over the years, call them and say "Hey, how can I learn more about this web stuff?" And if they are, indeed, friends, perhaps they'll point you in the right direction.

If you've made any friends elsewhere in radio who may have already jumped into this stuff, call them and say "Help!"

Streaming? Well, the third-party providers that are handling most of the terrestrial stations doing streaming now also provide "ad replacement" service--that is, blocking the spots on your AM or FM, so you can stick new/different spots onto your stream. Then go out and sell those "streaming only" spots for whatever you think you can get away with.

How much should you charge? Are you in Valentine, Nebraska or Los Angeles? More importantly... how much do you need?

Package it up. Sell a spot-an-hour. That's 168 spots a week... 728 spots a month. How much is that worth? In Valentine? In Los Angeles?

How many clients do you need at $xxxxx to cover your costs? How many clients do you need at $xxxxx to make a living at it? How many prospects do you need to pitch to close what percentage and make it work? Okay, now go do it.

Just like radio, it ain't rocket surgery.

 

[H82BL8]

That sounds simple enough, but are you selling apples or oranges? Isn't selling advertising in a local broadcast market different then selling advertising in a global internet market? How do you make the distinction between the two to your local market advertiser?

Remember, the Webcaster Royalty Act of 2009 requires that Pure-Play webcast companies generating over $1.25M pay 25% of revenues. If the performance royalty is adopted for radio broadcasters, how much does change the environment for streaming your broadcast? How much more advertising do you need to sell and at what cost, to pay for the added expense?