SF Music Tech: Future of Web radio teetering on innovation and monetization

I'm over at the Kabuki Hotel in rainy (this late in May?) San Francisco for the 6th Music Tech Summit, the brainchild of Brian Zisk (@zisk) a social networking pioneer, who has also co-founded Collecta, a site for organizing real-time searches. Here's the Twitter tag: #sfmusictech which I'm going to make use of since live-blogging panel discussions is like well, so 2006.

I'm over at the Kabuki Hotel in rainy (this late in May?) San Francisco for the 6th Music Tech Summit, the brainchild of Brian Zisk (@zisk) a social networking pioneer who has also co-founded Collecta, a site for organizing real-time searches.  Here's the Twitter tag: #sfmusictech which I'm going to make use of since live-blogging panel discussions is like well, so 2006.

There's also live streaming here: http://www.justin.tv/sfmusictech#r=L3eXHGM~

RAIN publisher Kurt Hanson kicked off a session on the state of radio webcasting with a “State of the Industry” address. He said that radio is now at its fourth golden age of its tumultuous 80+ year life transformed by television,  FM, and the Internet.

Today, listener fatigue, consolidation, and the Internet are the key challenges facing the industry.

The latest golden age is defined by four aspects:

  1. Personalization - Pause, skip, thumbs up and down. Now, the web brand exemplifies the GUI rather than the style of music
  2. Variety - more genres and more channels - Even long tails have long tails. Audiences can now find obscure content, like 50's non-hits and  did not make the cut for broadcasters
  3. Fewer commercials
  4. Ubiquity - You don't need a radio to listen to "radio;" Now, laptops, desktops, and mobile devices can stream programs.

Hanson also shared a lot of data, for instance Internet radio has 3.2 % share of all radio listening, about the same as FM in the 70's. And a 3rd of all radio listening occurs in the car.  (I'm going to request the slides.)

Pandora's founder Tim Westergren stole the show during the ensuing panel, that also included Bryan Clahoun from SoundExchange, and Chris Smith, founder of San Francisco house music label Om Records.

Westergren, who was once a rock musician, spoke about his company's "near death experience"  in the summer of '07 when the royalties paid to labels were tripled. The popular music site paid $30M in royalties on $50M in revenue.  They had a profitable Q4, proving that his model for Internet radio is stabilizing.

He said; "We first thought that we needed to make Pandora look like an Excel spreadsheet to let people listen at work."

Pandora's meteoric growth means greater costs. Now, half of the 180 workers are involved in ad sales.

Westergren said that the law is behind the technology that that they're trying to help it catch up.  He's looking to create a middle class of musicians who don't need to drive thousands of miles to play for a few tens of people. The record labels however, want more transparency (dashboards) so they can track consumption patterns.  Westergren agreed.