Westwood One Moves Into Streaming MediaWestwood One Inc. made its first investment in an online company this week when it bartered a 6 percent minority stake in WebRadio.com, an online listing and portal for Internet Radio stations.
Conditionally, Westwood One will earn another 4.5 percent stake in the company by marketing the site to more radio stations.
"This deal is tremendous for both parties," said Hamid Kohan, president of WebRadio.com. "This is the largest radio company in America and now all their full-service stations will be available worldwide through WebRadio.com. In addition, we will benefit tremendously from the marketing and revenue sharing possibilities."
As part of the agreement, the radio stations and WebRadio.com will heavily cross promote each other online and on the air, and work together to develop other marketing ties. WebRadio.com also will assist the 1,000 radio stations nationwide that are part of Westwood's 24/7 network in streaming their stations as soon as possible and developing Web sites, online games, audio and video Webcasting technologies and e-commerce solutions. An additional 6,500 stations that Westwood One provides programming to on a part-time basis will be integrated into the deal in the future.
The agreement also stipulates that WebRadio develop co-branded audio players with the radio stations. The players are the source of much revenue for WebRadio. The technology behind them allows users to listen to music without leaving the site and advertisers. It also features e-commerce applications allowing people to immediately purchase music while they listen over the Net.
According to a recent study by Arbitron/Edison Media Research, Columbia, MD, 79 percent of online radio listeners are likely to visit an advertiser on the site and 60 percent of those visitors have made a purchase from that advertiser. The study also noted that 62 percent of online listeners have visited a site they were exposed to while listening to the radio over the Internet and that Internet radio listeners stayed online nearly twice as long per week as the average surfer. It is numbers like these that Kohan believes drove an offline company like Westwood One to the Internet.
"Internet radio is growing rapidly," said Kohan. "To prove this, it is important for us that the stations profit from the agreement. It has to be a shared effort to succeed and we want our partnership with this huge company to be successful. It is a great opportunity for WebRadio.com to have a part in global agency, and opens the door to a lot more content and many other stations for us. But we really hope it will give unexpected added revue to these stations."