Clear Channel Starts Radio Subscriptions

In a recent report on Internet radio, the Yankee Group compared streaming costs versus revenues and invented a new metric called "thousand listener hours" or TLH units. TLH is a metric for measuring cash flow over an hour of webcasting to 1,000 listeners. Jones said that some companies lose money at the rate of $65 per TLH. The more efficient ones can earn up to $350 per TLH.

So what can stations do to start earning money rather than just losing it or stop streaming altogether? Jones said that size matters, so negotiating for better streaming fees and rights contracts is important, as is attracting the attention of advertisers. But it's a catch-22: There aren't enough listeners to attract ad dollars, and advertisers aren't advertising because there aren't enough listeners.

Still, Jones said that the problem isn't one of consumer demand. "Many stations have handfuls of listeners but as you aggregate all the stations, the industry makes sense," he said.

Bill Piwonka, vice president of marketing for MeasureCast, said that Internet radio is far from dead, despite the demise of some of the largest streamers like NetRadio and SonicNet. Last week, NetRadio shut down its operations, while SonicNet stopped streaming at its site in order to power stations at its sister web sites like MTV.com and VH1.com. Piwonka pointed to America Online's Radio@AOL service, as well as upcoming services from Yahoo! and MSN, as signs that Internet radio isn't going to go away.

"They will wake up a huge number of consumers to the benefits of streaming and show rapid audience growth," he said. "I'm absolutely convinced that delivering [radio] via streaming will continue to gain in popularity."

Undoubtedly, Clear Channel is betting on a new way of generating revenue from its streams, though it remains to be seen whether any other radio groups attempt this as well. But Clear Channel will face new challenges, such as angry listeners accustomed to getting streams for free, and new subscribers that may be unhappy that they're paying for something that they can find for free elsewhere. Other challenges are coming internally at Clear Channel. The company recently announced layoffs and reorganized its Internet division, giving control of web sites back to individual stations.

So far Premiere would not reveal how many subscribers it has signed up, nor will it be releasing numbers in the future. Glicklich did say, however, that he was "very satisfied with the results so far." Still, if things don't go well, Clear Channel and Premiere may well call this an experiment and quietly back away from streaming altogether.