Summit panelists look at accelerating revenue from ads, subscriptions, and donations

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Issue Date: 
May 7 2013 - 12:50pm

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Triton Digital president of publisher development Dominick Milano acknowledged that there's a "disconnect" between the unprecedented amount of audio consumption made possible by Internet and mobile technology, and the fact that advertising dollars haven't moved to those platforms in levels reflective of the audience. That "disconnect" served as the premise for the Triton Digital-sponsored "Accelerating Your Revenue" panel, which Milano (at right) moderated, at last month's RAIN Summit West event in Las Vegas.

The panel covered the three principal revenue models for online radio: advertising, premium (or subscription), and listener-supported (i.e. donations).

Katz360 VP of broadcast services and online audio and video sales Dean Mandel suggested one key is the right combination of broadcast radio and online radio -- not only for ad campaigns, but in creating worthwhile listening experiences. He encouraged radio programmers to "take better advantage" of what technology has to offer to improve their online product.

"The programmers are brilliant and if they can come up with interesting content to fill instead of a lot of PSAs and ads, it will help grow the audience," Mandel (left) said.

He said he sees lots of value in what sets local broadcasting apart from national/global database-driven music webcasters: a local brand, personalities, and local content.

Mandel is also a big supporter of targeting advertising, and suggested effective listener-registration helps a lot. His "pro-tip" was for stations to look for online listening happening in markets outside your own that may command higher CPMs (his example was a Charlotte station that might have significant listening in New York City).

He also suggested that media buyers have indeed become sophisticated, and being able to provide them with targeting and third-party tagging on audio will raise CPMs.

Andrew Polsky, as VP of digital media for SBS Interactive, also deals in the advertising world. He says what his company needs is "advocacy" at the agency and buyer level, especially for the Hispanic market.

His company, aside from Hispanic-focused broadcast and online radio, owns MegaTV (video content and network) and SBS Entertainment (which is concert production). Key for him is being able to leverage all the properties as a unified platform, "offering a 360 approach to advertisers," and using content from one property on the others (see his company's LaMusica mobile app as an example).

Polsky (right) seconded Mandel's notion that there needs to be a better solution than "PSAs" to fill long stopsets when streaming broadcast content.

Michael Jackel, who is Spotify VP of West Coast advertising sales, also agreed about the power of being able to target listener groups for advertising (he addressed the perception of his company as a "subscription service," but insisted Spotify is a "dual-model" business with the large majority of its users accessing via free, ad-supported streaming).

Moderator Milano asked Jackel (left) if there were a model for subscription alone to work -- or if services need a free version to remain viable.

"If the value proposition is really there, pure subscription can work," Jackel answered. "Spotify has a great product that's free, but the premium is a great value proposition." He said, in the U.S. especially, people are used to "free," so Spotify's free streaming makes sense. "Pandora isn't winning on the subscription model because there's not that much value to their premium service," Jackel went on. "Few people will pay just to 'not have ads'. You have to offer something that's really compelling in order for people to pay for it."

Compelling content is also key to driving donation revenue for listener-supported stations, like Joe Gallagher's MVYRadio.com. After some background on WMVY-FM and its early foray into streaming (Net Radio Sales, now Katz360 and AndoMedia/Webcast Metrics, now owned by Triton Digital, were both born of these efforts), Gallagher said successful donation support relys on offering content that "serves a niche, serves a vertical" and allows for "a passionate connection" with listeners.

Gallagher is the "#1 volunteer" for Friends of MVYRadio, the non-profit 501(c)3 that runs the (now) Internet-only, listener-supported station (more in RAIN here). He's also president and CEO of Aritaur Communications, former owners of WMVY-FM. He says his listener-supported model has "worked well, really well," and allowed for year-over-year growth for the past four years. The station recently raised the necessary $600k to operate for the rest of the year.

Gallagher (right) explained that listener targeting allows him to (for example) entice donations from L.A.-area listeners by giving away tickets for a concert there.

Milano polled the panel on the likely entrance of Apple into online radio. Katz360's Manel said, "It'll grow the business, it's a good thing. It might make local AM/FM focus more on their local value proposition" -- again, meaning the personalities and local content.

Spotify's Jackel said, "It's good. When (Apple) come(s) in, advertisers and Wall Street will see the value... it lifts the industry, it publicizes other businesses, to consumers AND advertisers."

You can listen to audio coverage of this panel, and all of RAIN Summit West's content, at kurthanson.com (look in the right-hand margin).

Triton Digital CCO and general manager of data and measurement Rob Favre and SVP and general manager of international markets Jay Supovitz will be part of RAIN Summit Europe, May 23 at Brussels' Hotel Bloom. Spotify's Benelux managing director Tom Segers will also be there. Info and registration links are on the RAIN Summit Europe page.

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