Information technology may have finally eliminated one of humanity's most persistent vexations: the annoying radio DJ.
Rolling Stone Network, the Web version of the music magazine, Monday launched a collection of Internet radio stations based on a new audio platform from Real Networks Inc. And while Rolling Stone Radio will still feature advertising, the DJ is history. Instead, songs will be played based on a playlist, and on the number of votes they get from listeners, a feature built into RealNetworks' (Nasdaq:RNWK) Radio Toolkit software. Rolling Stone also plans to launch "stations" programmed according to the tastes of such rock stars as David Bowie.
"The beauty of the thing is, it's going to be mostly pure music," said Howard Tullman, CEO of JamTV, which operates Rolling Stone Network. "Talk radio's a great idea, but when people want to listen to music, they can turn this on and listen all day uninterrupted, and even buy the CD if they want. It's a very simple, elegant service."
Rolling Stone is just the latest to jump on the Internet radio bandwagon. The genre was first popularized by Broadcast.com, which rebroadcasts hundreds of actual radio stations on the Internet. Publisher Imagine Media recently launched Imagine Radio, which can be personalized according to the preferences of each listener.
The format was made possible by streaming audio technology, such as that from RealNetworks, which allows audio to be transmitted live over the Internet, using very little bandwidth.
Rolling Stone Radio has the advantage of being linked to Rolling Stone Network's editorial content, including interviews, discographies, video clips and the like, which users can access by clicking on the artist's name.
Despite the hype, analysts still don't see much money-making potential in the medium, because of advertising limitations.
All demographics wanted
The radio network, which at launch includes stations with titles like Pop Hits, R&B Hits, Electronica and Women in Rock, hopes to attract listeners of all demographics with the Rolling Stone name and the availability of such features as news and artist-related chat rooms.
"This is the industrial-strength version of Internet radio," Tullman said. "We have the Rolling Stone brand, and the biggest provider of audio technology. We hope to eventually be the world's largest radio station."
Hyundai, Mazda and others have signed up as sponsors, and Datek, Mentadent and QSound Labs will run ads on the network, just as with a normal radio station. JamTV has also signed a deal with Amazon.com, linking users directly to the online store's CD section.
JamTV also hopes record labels will be interested in using the network to break new bands. Users can listen to the network all day, even in offices where there's no ordinary radio reception.
And the response from users, who can choose to vote for the songs they like, could provide valuable marketing information.
Industry experts said that the Rolling Stone brand name means the new service will have a great advantage over competitors such as Net Radio Network and Spinner Networks Inc.
But they say Internet radio still faces an uphill battle to make money from advertising.
"Traditional radio is local, and local advertisers want to reach a defined market, as opposed to a geographically undefined market," said Mark Hardie, a senior analyst with Forrester Research. "The national radio advertisers tend to be clustered around one of the national radio groups. So it isn't as though there's this wealth of advertising inventory waiting for ... an online proprietor to scoop it up."
Hardie said that, of the major Internet radio networks, none were making more than a few hundred thousand dollars a year, compared with several millions a month of advertising revenues for a traditional radio station.
JamTV said the network complies with standard music industry licensing.
Artist programmers next year
Rolling Stone Radio plans to launch artist-programmed stations early next year, Tullman said.
JamTV also operates such music sites as Tunes.com, JamTV Music Network and TheSource.com.
