Trends

There are now about 2700 Internet radio stations in Germany: in 2006 there were only 450. Although this kind of radio is listened to more and more, it is still difficult to earn money with it.

The fivefold increase of Internet radio station offerings between 2006 and 2009 represents an annual growth of 70 percent. This is one of the results published by the Bavarian Regulatory Authority for Commercial Broadcasting (BLM) and the Berlin strategy consultancy Goldmedia in their study Webradio Monitor 2009. “I think it’s natural for more and more people to use radio on the Internet”, says Stefan Sutor, director of the Radio Department in the area of Programming at the BLM. Particularly with endpoints, which look more like radios than computers, he says, it is quite easy to listen to Internet radio programs.

As the BLM study shows, in 2008 some 7.5 million users listened to radio on the Internet; by 2013, so the prognosis, the number will increase to around 21 million. And the current average duration of use of 73 minutes a day could climb to up to 147 minutes.

According to the study, four fifths of German Internet stations can be received online only; the others are live streams of VHF radio stations. The most popular here are public broadcasters that can be received on the Internet, with 26 percent; pure Web radio stations amount to 19 percent. The latter fill a gap in the standard VHF program, as Sutor emphasizes: “On the pure Internet radio stations most people listen to special programs whose music offering isn’t covered by mainstream radio”.

Marketing is still in its infancy

Webradio Monitor 2009 further notes that 55 percent of German Web radio broadcasters are very or fairly satisfied with the visitor figures. By contrast, 81 percent were less than pleased by the profitability of their channel.

In 2008, online advertising sales for all Web radio stations in Germany amounted to approximately € 14 million. The BLM study predicts an increase of up to € 85 million in 2013. “The marketing of Internet radio stations has to be further professionalized”, says Sutor. For some Internet radio stations, he thinks, it is already possible to refinance the technical costs through advertising revenues. However, he adds, it will take a long time before the revenue from Internet radio can pay for staff positions to operate the stations.

“Most Internet radio stations, in my view, are to be classified as the projects of enthusiasts”, sums up Sutor. “They live from the zeal of the makers.”

Journalism in short supply

While music lovers can choose from a variety of Web radio stations that present different styles of music, the listener with a liking for words has to search longer: “Solid journalistic content can be found at only a few Internet radio stations”, notes Sutor.

He finds interesting Radio Lechtal, which started on the Internet as a local radio station and provides its listeners with information from the district of Landsberg am Lech. Publicly-funded Internet radio stations, which find their audience especially through the Internet, also scored well: for example, DRadio Wissen and On3-Radio of the Bavarian Broadcasting Network (BR).

Excellent program

Sutor points out one Internet station in particular: “ByteFM is certainly a lighthouse project, with solid music journalism”. ByteFM, which went on the air at the beginning of 2008, now has 500,000 listeners and was honored with the 2009 Grimme Online Award. The Hamburg station defines itself as “music-related author radio”, which presents “everything that is important in modern pop music”. More than 80 journalists and musicians design and moderate the program on an honorary basis. A small, permanent team of 10 to 15 staff members organizes the broadcasting.

“We have a big electronics company as sponsor, which is important for keeping the project alive”, says founder Ruben Jonas Schnel, explaining the financing model of ByteFM. In order to be able to invest in more staff and technology in future, the music journalist has two other sources of income in mind: since the beginning of 2010, a sponsorship association with 600 members has also supported the Internet radio station, and the online archive of ByteFM now charges for access. Schnel is also considering banner ads on the homepage: “But the program itself should remain free of advertising”. He is optimistic that ByteFM’s development of income will keep the station alive in the medium term: “The money won’t buy me any castles – but I can live with that”.

Long interviews instead of sound bites

It is also clear to the makers of detektor.fm in Leipzig that their Internet radio station, launched at the end of 2009, is not going to make them rich. “But that’s not why we’re in it”, says Marcus Engert, editorial planner and, together with Hans Bielefeld and Christian Bollert, one of the station’s three founders. For them, the content of their broadcasting is the main thing: “We want to present subjects from politics, the economy and culture with background; we don’t therefore cut off our interviews after three minutes”. Music too is an integral part of their program – “hand-picked and outside the mainstream”, as Engert stresses. The content comes from the three founders themselves – or from a journalist agency adjoining the station, which pays its rent with contributions.

Even with good content, Engert hopes the station, which was founded with a funding grant from the state of Saxony, investments and credits, can soon earn money. The great pillar of its financial model: banner ads and partnerships with advertisers who sponsor certain broadcasts.

Detektor.fm is still in the consolidation phase, says Engert. The first profits will be used to pay off debts, and then for investments in fees and technology. The makers have big wishes for the future: they want to become one of the five most attractive radio stations that are received only over the Internet. Engert is certain that he and his colleagues are on the right path: “Radio has a future only on the Web”.