Case Study: Electronica Finds a Voice at DI.fm

Terrestrial radio stations, at least the commercial sort, are notorious for limiting their playlists to only the most mainstream music. Fans of music outside the mainstream typically have to fend for themselves, relying on hip record store clerks, alternative music magazines, or—if they’re lucky—one of the dwindling number of independent radio stations still sending out their signals. For the last few years, however, the egalitarian nature of broadcasting on the Internet has allowed fans to not only find the music they love, but to also take charge of the playlists themselves.

A Love Expressed
Ari Shohat began DI.fm—the DI is short for "digitally imported"—out of his passion for electronic dance music. "Years ago I started streaming music from my room as a hobby," says Shohat. "It started with one channel using tools such as Shoutcast." As his audience grew, Shohat added an additional channel. "It just continued to grow in popularity," he says. "There was a demand for the type of music I was playing, but it wasn’t very well known in the U.S. and so it wasn’t easy for someone to pick up and start playing it."

Today, DI.fm boasts more than a dozen different channels, from Trance to Eurodance to Classic Techno. In late February it reached a new personal best for concurrent users, topping 37,000 listeners in a single week.

Along the way, Shohat decided to try and establish the site as a for-profit entity. "What I always wanted was to make this a full-time business," says Shohat. "The major issue I encountered was that the advertising market had not picked up and still isn’t at the level that Webcasters want it to be. Even simple banners weren’t selling, let alone audio ads."

So a year and a half ago, DI.fm instituted a subscription service for its listeners to try and generate additional revenue. "The way we try to entice people to subscribe is to offer them higher quality audio," says Shohat. DI.fm has three subscription levels ranging from $3.95-11.95/month that offer on the high-end up to a 160Kbps MP3 or a 128Kbps Windows Media stream. "Right now we only have a small percentage of our audience subscribing," he says. "We’re more focused on getting our name out there."

DI.fm also offers syndication services to Web site operators who want a channel to entertain their listeners or to ISPs who want to add radio channels to its list of services, although this hasn’t been a huge source of revenue, due in part to the fact that Shohat is being selective in terms of the size of syndication partners. "It’s something that’s been successful only in a few instances because we try not to go too small," says Shohat.

Finally, Shohat has started a sister company called Steadyhost.com. Partly as a strategy to keep Di.fm afloat, he says, "we went into a second business where we sell bandwidth," he says. "I’m able to leverage some of the contacts I have in the industry so we get better rates for wholesale streaming."