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Pump100 leads charge to keep Internet radio afloat

INTERNET radio in Australia is struggling to keep its head above water with the demise of Austereo’s live audio stream and the threat of lengthy litigation by voiceover talent similar to that which has paralysed the US market.

Just over three weeks ago industry heavyweight Austereo, which owns Mix94.5 and The All New 92.9, withdrew live audio streaming of its radio stations via the Internet due to the high cost of bandwidth needed to accommodate the audience.

Austereo group Internet director Mike Summers said the major problem streaming audio was that the cost of the necessary bandwidth increases as the number of people listening grows.

In the US, voiceover talent are demanding a 300 per cent premium for commercials aired on audio streaming or dedicated Internet radio stations.

“At any time actor’s equity could pull that stunt and record companies might start jumping up and down as well,” Mr Summers said.

“At the moment there are no fees, only the bandwidth and the hardware and software, but at any time some of those laws may change.”

Austereo first utilised audio streaming via the Internet three years ago and was responsible for the first radio station website in Australia.

“The more listeners you have the more costs in bandwidth. How do we get that money back?” Mr Summers said.

Austereo is unlikely to re-enter the market until there is a clear revenue model.

Despite this rather gloomy outlook, Perth’s own Internet radio station, Pump100, is confident it can limit the cash burn and capitalise on the soft market.

Launched in December 2000, Pump100 is part of the Omon Group of companies and plans to leverage the development of the Internet radio station from Omon Group’s ISP, Omon net.

Pump100 director Nick Morgan said the station was performing well in part because a number of other players, including Bigfatradio and Austereo, had dropped out of the market in recent times.

“Austereo has just stopped streaming all radio Australia wide because they said it was too costly, so there’s a big audience that’s started looking for other stuff and come across us,” Mr Morgan said.

“The major stations in the US have stopped streaming too, so they’ve left a barren landscape with us standing there.”

Pump100 is moving its technical headquarters to a telco grade room in QV1 and is looking at cross-promotional opportunities with other Internet companies.

“There are ongoing bandwidth costs per megabyte coming in. Our bill every month is thousands and thousands of dollars,” Mr Morgan said.

Pump100’s plan is to drive the station through an Australian and WA audience, which it hopes will attract local and national sponsors.

The station streams CD quality dance music without the commercials that punctuate most terrestrial radio stations.

Pump100 will rely on negotiating sponsorship deals including content on the website and on the actual player that’s visible on the computer screen when you are listening to the station.

“We don’t want commercials in the audio stream. Most people listen to Pump100 because it doesn’t have ads,” Mr Morgan said.

The audience is predominantly made up of Australians and, more specifically Western Australians, however an online survey has suggested the station is struggling to attract a female audience.

Initially, Pump100 attracted a large international audience, and although there are advantages to a highly diversified, global market, the stations needs a strong local following to pick up local and national sponsors.

“We’re looking at sponsors from every local CD store to Sanity. There’s the possibility we could sell CDs through our site,” Mr Morgan said.

An east coast-based community radio station landed in hot water with the Australian Broadcasting Authority late last year after raising $40 million from the sale of CDs featuring music from the radio station.

However, Pump100 is not restricted by the same guidelines because the ABA has ruled audio streaming on the Internet is not broadcasting.

“We’ve gained a lot of experience in what we’re doing because we did all the research and development ourselves,” Mr Morgan said.

“We’re using an off-the-shelf system to drive our own system and most of what we’re using is based on free software.”

All radio stations pay licence costs to broadcast music but many of the record companies have been slow to negotiate fees for Internet audio streaming.

This means Internet radio stations must pay the same fees as a radio station but have access to reduced number of artists’ music.

“Only a very small proportion of record companies have signed up for Internet streaming so we’re paying the same fee as terrestrial radio stations but only getting some of the artists,” Mr Morgan said.

There is little doubt Pump100’s electronica, dance and club mix of music has attracted something of a cult or underground following in the 20-35 demographic.

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