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Mixed Signals in Web Radio

Published on December 1, 2009
by Sarah McBride

Radio’s online audience is growing at an impressive pace at a time when the beleaguered radio industry needs all the ears it can get. But radio companies, suffering their third straight year of revenue declines, are having trouble turning that audience into the cash they crave.

More than 42 million people each week listen to radio streamed over the Internet, more than double the rate from five years ago, according to market-research firms Edison Research Inc. and Arbitron Inc. Many of those are either new listeners or people tuning in at times when they never listened to regular broadcast radio.

But radio has been slowest among the media industry to turn its Internet audience into cash. Gordon Borrell, who runs consultancy Borrell Associates Inc., calls radio the “C” student of the Internet. Radio gets only an estimated 2.4 percent of its revenue from online, while TV gets 3.4 percent and newspapers 7 percent.

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