What is Internet Radio?
Internet radio involves streaming media, presenting listeners with a continuous stream of audio that typically cannot be paused or replayed, much like traditional broadcast media; in this respect, it is distinct from on-demand file serving. Internet radio is also distinct from podcasting, which involves downloading rather than streaming.
Internet radio services offer news, sports, talk, and various genres of music—every format that is available on traditional broadcast radio stations. Many Internet radio services are associated with a corresponding traditional (terrestrial) radio station or radio network, although low start-up and ongoing costs have allowed a substantial proliferation of independent Internet-only radio stations.
Internet radio services are usually accessible from anywhere in the world with a suitable internet connection available; one could, for example, listen to an Australian station from Europe and America. This has made internet radio particularly suited to and popular among expatriate listeners. Nevertheless, some major networks like CBS Radio, Pandora Radio, and Citadel Broadcasting (except for news/talk and sports stations) in the United States, and Chrysalis in the United Kingdom, restrict listening to in-country due to music licensing and advertising issues.
Internet radio is also suited to listeners with special interests that are often not adequately served by local radio stations.
Internet radio is typically listened to on a standard home PC or similar device, through an embedded player program located on the respective station’s website. In recent years, dedicated devices that resemble and offer the listener a similar experience to a traditional radio receiver have arrived on the market.
Streaming technology is used to distribute Internet radio, typically using a lossy audio codec. Streaming audio formats include MP3, MP4, Ogg Vorbis, Windows Media Audio, RealAudio, and HE-AAC (or aacPlus). Audio data is continuously transmitted serially (streamed) over the local network or internet in TCP or UDP packets, then reassembled at the receiver and played a second or two later. The delay is called lag, and is introduced at several stages of digital audio broadcasting.
Popularity of Internet Radio Stations
In Year 2003, revenue from online streaming music radio was US$49 million. By 2006, that figure rose to US$500 million. A February 21, 2007 “survey of 3,000 Americans released by consultancy Bridge Ratings & Research” found that “[a]s much as 19% of U.S. consumers 12 and older listen to Web-based radio stations.” In other words, there were “some 57 million weekly listeners of Internet radio programs. More people listen to online radio than to satellite radio, high-definition radio, podcasts, or cell-phone-based radio combined.” An April 2008 Arbitron survey showed that, in the US, more than one in seven persons aged 25–54 years old listen to online radio each week. In 2008, 13 percent of the American population listened to the radio online, compared to 11 percent in 2007. Internet radio functionality is also built into many dedicated Internet radio devices, which give an FM like receiver user experience.
In the fourth quarter (Q4) of 2012, Pandora and other subscription-based and free Internet radio services accounted for nearly one quarter (23 percent) of the average weekly music listening time among consumers between the ages of 13 and 35, an increase from a share of 17 percent the previous year.
As Internet-radio listening rose among the 13-to-35 age group, listening to AM/FM radio, which now accounts for 24 percent of music-listening time, declined 2 percentage points. In the 36-and-older age group, by contrast, Internet radio accounted for just 13 percent of music listening, while AM/FM radio dominated listening methods with a 41 percent share.
Currently, 47% of all Americans ages 12 and older — an estimated 124 million people — said they have listened to online radio in the last month, while 36% (94 million people) have listened in the last week. These figures are up from 45% and 33%, respectively, in 2013. The average amount of time spent listening increased from 11 hours, 56 minutes per week in 2013 to 13 hours 19 minutes in 2014. As might be expected, usage numbers are much higher for teens and younger adults, with 75% of Americans ages 12-24 listening to online radio in the last month, compared to 50% of Americans ages 25-54 and 21% of Americans 55+. The weekly figures for the same age groups were 64%, 37% and 13%, respectively.
History of Internet Radio
Internet radio was pioneered by Carl Malamud. In 1993, Malamud launched “Internet Talk Radio” which was the “first computer-radio talk show, each week interviewing a computer expert.” The first Internet concert was broadcast on June 24, 1993 by the band Severe Tire Damage.
In November 1994, a Rolling Stones concert was the “first major cyberspace multicast concert.” Mick Jagger opened the concert by saying, “I want to say a special welcome to everyone that’s, uh, climbed into the Internet tonight and, uh, has got into the M-bone. And I hope it doesn’t all collapse.
In 1995, Scott Bourne founded NetRadio.com as the world’s first Internet-only radio network. NetRadio.com was a pioneer in Internet radio. It was the first Internet-only network to be licensed by ASCAP. NetRadio eventually went on to an IPO in October 1999. Most of the current Internet radio providers followed the path that NetRadio.com carved out in digital media.
In March 1996, Virgin Radio – London, became the first European radio station to broadcast its full program live on the internet. It broadcast its FM signal, live from the source, simultaneously on the Internet 24 hours a day.
In October 1998, the US Congress passed the Digital Millennium Copyright Act (DMCA). One result of the DMCA is that performance royalties are to be paid for satellite radio and Internet radio broadcasts in addition to publishing royalties. In contrast, traditional radio broadcasters pay only publishing royalties and no performance royalties.
A rancorous dispute ensued over how performance royalties should be assessed for Internet broadcasters. Some observers said that royalty rates that were being proposed were overly burdensome and intended to disadvantage independent Internet-only stations—that “while Internet giants like AOL may be able to afford the new rates, many smaller Internet radio stations will have to shut down.”The Digital Media Association (DiMA) said that even large companies, like Yahoo! Music, might fail due to the proposed rates. Some observers said that some U.S.-based Internet broadcasts might be moved to foreign jurisdictions where US royalties do not apply.
Many of these critics organized SaveNetRadio.org, “a coalition of listeners, artists, labels and webcasters” that opposed the proposed royalty rates. To focus attention on the consequences of the impending rate hike, many US Internet broadcasters participated in a “Day of Silence” on June 26, 2007. On that day, they shut off their audio streams or streamed ambient sound, sometimes interspersed with brief public service announcements voiced, written and produced by popular voiceover artist Dave Solomon. Notable participants included Rhapsody, Live365, MTV, Pandora, Digitally Imported and SHOUTcast.
Some broadcasters did not participate, such as Last.fm, that had just been purchased for US $280 million by CBS Music Group.
On May 1, 2007, SoundExchange came to an agreement with certain large webcasters regarding the minimum fees that were modified by the determination of the Copyright Royalty Board. While the CRB decision imposed a $500 per station or channel minimum fee for all webcasters, certain webcasters represented through DiMA negotiated a $50,000 “cap” on those fees with SoundExchange. However, DiMA and SoundExchange continue to negotiate over the per song, per listener fees.