CBS/AOL Partnership: Great News for Internet Radio

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.

Comments

[J.P. Hannan]

As a follow-up to this article, just wanted to let readers know the new service launched this week. I recommend everyone check it out at aol.com

[Mark Lassoff]

Great news? Are you kidding...

AOL and CBS recently announced a deal that would give AOL the rights to rebroadcast CBS's terrestrial radio stations through its online radio network. While the deal does greatly increase the number of stations available to the AOL radio listening audience, I'm not entirely sure that this move really benefits the listeners. Have listeners been clamoring for more access to the same 10 radio formats-- and playlists -- that have been available in every market for years? Probably not.

The highly touted new AOL player has about 15 different BOB/JACK style options which are stations that feature an iPod-like format. Less talk, personality, localization, and more music. The same music. Over and over and over again. Does having 15 of these stations available online somehow benefit the listener?

AOL is also featuring the inclusion of WFAN-- New York's flagship sports station on its web site. That would be a really exciting development if the internet broadcast of WFAN wasn't available already on The Fan's own web site.

Continuing to propagate different, localized versions of the same programming isn't really additional user choice-- it's additional corporate radio hegemony.

Want to see what radio will look like 10 years from now? The internet will allow advertisers to become programming producers. Why sponsor someone else's program when you can brand and carry an entire line of programming without competitive marketing messages. It's time for the CBS radios and Clear Channel's of the world to realize that their time is over.

[J.P. Hannan]

Mark, thanks for your note. I still think this is a profound event for internet radio, particularly when you factor in the widgets that enable such ease of use of this player on mobile applications. You are right, most of these CBS channels are already available on the station websites (as I also touched on), but having one platform for all of these stations as well as many more certainly makes it easier for the end user, particularly if your not familiar with the call letters or formats of the terrestrial stations.

What I find most interesting in this deal is the willingness of CBS to work with AOL as opposed to purely going alone. These are not generally traits you see in a radio industry that has a tendency to be isolationist from outside industries- especially the tech world.

Your point about homogenization of media is well taken, though that is a much bigger issue to be discussed.