Company Profile: EonStreams Helps Terrestrial Radio Ads Reach Targeted Online Audiences

Like Douglas McIntyre, the former On2 CEO I interviewed several weeks ago, EonStreams head Steve Newman also has a background in traditional media. Steve’s media career started as the founding managers for HGTV and Head of Sales for HGTV and The Food Network, now a part of Scripps-Howard, in Knoxville, Tennessee. When he left Scripps-Howard, he chose to stay in the Knoxville area, but was interested in the challenges that new media were facing.

"At that time, very few new media companies were focused on long-term strategies," says Newman. "I wanted to take my skillset—media marketing—and find a way to apply those skills against a new media tool."

The ultimate result of that quest was his position as CEO of EonStreams, which is based in a revitalized part of downtown Knoxville known as Market Square. From the outset, EonStreams’ focus has been on providing an exceptional hosting experience, but under Newman’s leadership since he arrived in 2002, the focus has become one of providing that hosting experience alongside a business strategy that was born in the cable TV and superstation era. In essence, EonStreams provides terrestrial radio stations the ability to insert commercials or other content (also known as interstitials) into their online radio stream.

This content is usually audio ads—although some customers are now testing video ads during commercial breaks—but the key to the business strategy is that it benefits both the station and the advertiser.

"If you sell a particular product, think of our service as a way to insert your advertisement in very targeted markets all over the country", says Newman. "The biggest benefit is that you can provide the commercial to one entity and have it selectively broadcast in select target markets. So if you only want listeners to one country station in Dallas and one pop station in Chicago to hear or see your ad, our platform provides that functionality.

When asked about the concept, Newman said the pinpoint target-marketing approach grew out of a desire from the early days of cable television.

"In the early days of cable TV or superstations, you either chose to provide your commercial to one entity—such as Atlanta-based WTBS—that broadcast across the entire country or you sent a commercial to hundreds of cable headend providers across the country and they broadcast your commercial locally," says Newman. "Neither was very efficient but these solutions were the only cost-effective way to get the message across since cable companies didn’t have digital insertion."

"What we’re doing is meeting a business need that can only be met by a complex system that dynamically inserts content targeted to an individual demographic," says Newman. "Since we maintain the player and the infrastructure and serve up the content, we’re able to provide the listener, advertiser, and radio station with a better, more targeted listening experience."

Up until recently, EonStreams maintained all its servers and development in-house. Recent interest from current and potential customers required the company to look outside its own walls in downtown Knoxville and search out a partner to host a portion of its content. The partner EonStreams chose was VitalStream.

Newman acknowledges that marketing has not been one of EonsSreams’ strong points, but he notes that the company has focused more on a few key customers and has prided itself more on the customer service praise it received from its core customers than it has in acquiring too many customers too quickly.

"Our customer service record is very impressive," says Newman. "Our customers continually are impressed by our ability to respond and meet their needs very quickly, which has been one reason we’ve been able to stay ‘under the radar’ and maintain our own in-house development team and servers for as long as we have."

Newman also notes that the last few months have been rocky, with the public announcement that former EonStreams customer Clear Channel has decided to create its own in-house ad insertion service, but he is upbeat that recent announcements and several pending announcements will far outweigh revenues from the Clear Channel deal.

"The first six months of 2006 will be tight," says Newman, "but I think we’ll come out of it better diversified in our customer base and with a higher revenue stream. The added benefit is that EonStreams name is beginning to be more widely recognized across more than just our target market, which provides the opportunity to leverage our in-house expertise into other targeted advertising revenue streams."

Once recent announcement, made after the interview with Newman, is that MediaSpan is partnering with EonStreams to provide audio streaming to a network of over 1,500 radio stations.

"From the beginning of the due diligence process, it was evident that the goals that MediaSpan and EonStreams have for their customers are identical," said Newman. "We aim to provide an experience for the listener that is pleasing and easily accessible and for the advertiser that allows for interactivity and accountability. Doing these things well helps radio stations make more money, and that's really the bottom line."