On Friday, March 7, CBS Radio (CBS) and AOL (TWX) announced a new partnership whereby CBS would become AOL’s principal radio partner, replacing XM Satellite Radio (XMSR) which previously provided its services though AOL. As part of the agreement, the companies would combine two of the largest online radio networks “giving millions of listeners unlimited, and free access to the most diverse lineup of programming available.” The two companies also said they would “work together to create a number of product enhancements including a new player, as well as complete support for the Mac.”
The press release further states:
Once AOL Radio's stations are integrated into its operations, CBS Radio will drive advertising sales for AOL's more than 200 award winning stations in addition to its own online streams of more than 150 radio stations and custom channels.
This is fantastic news for internet radio coming on the heels of my Seeking Alpha commentary that internet radio seemed to be stuck in the mud. This will put real, robust content from the CBS radio stations easily into the hands of one of largest internet audiences. It will also give CBS a wider variety of internet offerings with an existing built-in audience to monetize.
The deal also gives advertisers a much better option to reach a national network of internet radio listeners using either CBS Radio’s traditional sales force or the company’s online advertising platform, TargetSpot. AOL also wins as it can offer unique content to its user base created by some of the top programming talents from one of the most respected radio groups in the country.
This announcement is a perfect example of radio redefining itself and broadening itself from the isolated medium it has been historically. Both of these companies have a stronger platform because of working together as each contributes its core competency to the deal- CBS in programming and ad sales, and AOL in technology and user experience. In the end, everyone should prove a winner here - CBS, AOL, listeners, as well as advertisers.
I’ve long thought that the internet would be to radio what cable is for television. While it adds potential competition to the radio industry, the internet offers benefits in expanding reach and ability to create a richer user experience. The pros vastly outweigh the cons in the end. Using Wi-Max, Wi-Fi, and other internet enabled devices, listeners will be able to tune into the CBS radio stations anywhere in the world, effectively turning them all into Superstations. While CBS could have achieved this without AOL, and vice-versa, the product offering is better through partnership and could become a free alternative to satellite radio once cars are enabled with internet capabilities.
Hopefully, other broadcasters will follow suit in partnering with technology leaders, and ultimately more listeners will find their way to internet radio making it a much more viable business model long-term.
Disclosure: none
DISCLAIMER: This article reflects the individual views of Mr. Hannan and may not be attributed to any person, company or other entity with whom Mr. Hannan is affiliated.
