Web users of the Music Genome Project’s Pandora Radio service are set to begin having their beats interrupted by audio ads while listening. Does this signal the coming end of free, uninterrupted Internet Radio?
So far, Pandora has sustained itself by displaying banner ads on both their Web and iPhone players as their only revenue stream. Now the company has found that banner ads alone are not enough to cover the royalty costs of playing the music.
Audio ads are common for listeners of radio programming, but not familiar to Internet radio fans. One of the small pleasures of radio is the ability to change channels so as to avoid these annoyances.
Pandora users won’t be able to get the same satisfaction from their Internet radio. Fans will have to wait through the ads to be able to continue listening to their music.
In this sense, Pandora has built a captive audience for its audio ads. If there’s anything that Web users shy away from it’s these sort of force-fed interruptions.
As an alternative, users can upgrade to a Pandora premium account. The account costs $36 per year and allows users to get ad-free Internet radio using the Music Genome’s discovery tool.
Pandora has not yet announced definitively whether it will begin serving audio ads to users of its wildly popular iPhone application. For the time being, these devices will allow you to stream Pandora’s service interruption-free.
If any Internet radio project could sustain itself on banner ads alone, Pandora boasts the audience to make it work. It seems that the economics of the music business don’t allow room for free streaming radio.This could spell bad news for other Internet radio stations that are trying to find unobtrusive ways to grow revenue.
At least Pandora and Internet Radio are much more respectful of listeners when turning to audio ads for revenue. The company’s Twitter stream professes that the team, “promise to be prudent,” in terms of placing these ads.