Stripe is slimming

Australian online radio publisher and distributor, Stripe, late last week admitted it had slimmed down somewhat as it had finished building its technology platform and populating its online stations.

(Credit: ZDNet.com.au)

The company, which launched in July 2008 and aims to publish radio stations online and via 3G mobile handsets, has made a number of staff redundant over the past few months, sources have revealed.

"As per Stripe's initial plans, now that the platform and initial stations have been built, Stripe does not require the same level of IT and programming resources — efforts have shifted from platform build to sales and marketing," said the company's recently promoted general manager, Jarrod Graetz, formerly the company's head of programming.

The company's managing director at launch, Iain Bartram, is still involved with the company at a board level, but his role now appears to be divided between Graetz and Glenn Wheatley, an original investor in the company and now leader of business development for the start-up.

Documents filed with the Australian Securities and Investments Commission (ASIC) revealed Stripe had attracted some $4.6 million in funding when it launched, and has moved offices a couple of times, with the most recent being in January 2009; from Ultimo to downtown Sydney.

Stripe will revolutionise radio as FM did in the '80s. You can quote me on that.

Stripe's Glenn Wheatley

Among other interesting facts about the company, investors include David Coe, infamous chief of Allco Finance Group, radio giant Alan Jones and eBay Australia chief Simon Smith, who quit his role late in 2008. Stripe's first listed headquarters with ASIC were Allco's offices in Macquarie Place, Sydney.

When Stripe started broadcasting last year, Wheatley said it was "exciting" to finally give Australian radio listeners a choice and service they had never heard before.

"With Stripe, we're providing a platform for Australian artists, a place for different music to be heard, exclusive programs, live concerts and stations totally dedicated to feature artists," he said. "Stripe will revolutionise radio as FM did in the '80s. You can quote me on that."

Since that time, the start-up has announced a deal with Optus which sees the carrier broadcast 25 of Stripe's radio stations over its Zoo mobile platform, with users being able to use the services for a $7.95 flat monthly charge.

Radio stations include mainstream offerings such as Australia's top 50, as well as niches like hip hop, country, soft jazz and more.

"Stripe is moving into a growth phase by increasing the customer base through our distribution partners and looking at producing specialised stations for specific events and customers," said Graetz last week. "Stripe has other distribution partner relationships signed up which will be announced within the coming weeks."

Commentary
The problem with the company's business model is simple: users aren't used to paying for radio content (which has been free for many years) and this won't change with the medium's move to the internet. Devices like Apple's iPhone make it ridiculously easy to obtain free multimedia content online already and this functionality will only increase.

Proprietary content distribution platforms like Optus' Zoo will increasingly become redundant and fade into dust as carriers realise users don't want a walled garden on their mobile devices — they want the entire internet.

I anticipate most of Stripe's funding will have gone on licensing agreements so that they can legally broadcast popular music on the internet and to 3G devices. However in many cases, users are already accessing this sort of content online, either legally or illegally.

With this in mind, the company's move to find extra partnerships to leverage its existing, likely fairly fixed cost contracts, while reducing staff costs through layoffs makes complete sense. Although, I don't think this is a business that will hold on in the long term.

bootstrappr opinion: BUST