After taking its stations off the air in April to avoid costly payments to actors for Web-based commercials, the country's largest owner of radio stations will begin streaming audio online once again in July, with compliant ad content.
Clear Channel Communications, with 250 stations nationwide, has an exclusive agreement to have Los Angeles-based Hiwire Inc. replace commercials heard by on-air listeners with new, targeted ads that comply with an American Federation of Television and Radio Artists (AFTRA) contract. The contract calls for actors to be paid extra for commercials that start on-air and are redistributed on the Web.
Nearly 200 other stations that make up The Local Media Internet Venture—among them Emmis, Bonneville, Corus Entertainment, Entercom Communications and Jefferson Pilot—will also return soon, according to a spokeswoman. They will use RealNetwork's streaming technology and DoubleClick's inventory for ad insertion.
Getting back on the Web is critical to stations' bottom line, according to Kevin Mayer, CEO of Clear Channel's Internet Group. Hiwire's technology will enable his stations to comply with the AFTRA contract and, most important, resume Webcasting.
"There's a real demand from our listeners to get our stations back online," he says. "I'm not generating revenue if I'm not broadcasting on the Internet."
Revenue derived from the Web is potentially huge for broadcasters. According to Jupiter Media Metrix, more than 60 million Americans listen or watch streaming media. The research firm predicts that streaming advertising will grow into a $4.8 billion business by 2005.
The technology is intended not to circumvent the ATFRA contract rules, says Hiwire spokesman Wayne Hickey, but instead to replace non-compliant ads with ones for which the actors have received additional payment.
AFTRA itself is supportive of electronic ad insertion, says Mathis Dunn, the union's national assistant executive director, "but we certainly would like to think that broadcasters wouldn't encourage non-union commercial production because of this technology."
Currently, the rate for commercials initially broadcast on-air and retransmitted over the Internet is $660 for unlimited use on the Web for 12 months, Dunn says. For ads designed for the Web specifically, there is no set fee; it's whatever an actor can negotiate.
To develop its inventory, Hiwire sales personnel identify appropriate national advertisers that have compliant ads and sell the space for the radio station. Or, as in the case of Clear Channel, the Hiwire team works in tandem with a station's staff. Ad revenue is shared, the percentage based on whether Hiwire sells the ad or the broadcaster does.
Hiwire also sells ads for such Webcasters as Net Radio.com, DiscJockey.com, KPIG.com and Salem Communications, but the deal with Clear Channel gives Hiwire access to a nationwide network. "The more stations we reach," Hickey says, "the more potential revenue we can generate."