Broadcasting from a basement studio at Santa Monica College, KCRW has built a national and even international audience on the web. According to General Manager Ruth Seymour, KCRW generates more than 1.6 million streaming hours per month via partnerships with Real Networks, AOL Radio, Shoutcast, Windows Media and Apple’s iTunes and QuickTime. In January, nearly one million KCRW podcasts were downloaded, and the station’s own website received more than 470,000 connections to its streaming audio service.
The station’s distribution partners defray the cost of bandwidth, but an essential problem remains: how to monetize the growing number of Internet listeners with a public radio model that depends on individual contributions and corporate underwriting?
Describing her predicament, Seymour quotes a Bob Dylan lyric, “she knows there’s no success like failure and that failure’s no success at all. The old business is shrinking, the new business is growing, and most of the revenue comes from the old business.” [Sounds just like the analysis in IBM’s consulting report that I covered here last week.]
The old business she is referring to is terrestrial radio, an inherently local activity that appeals to local and regional marketers. With a strong signal that covers much of Southern California, KCRW has learned how to attract local businesses as underwriters of its music, arts and news programming. According to Seymour, these locally-focused underwriters are not necessarily interested in paying additional money to access the station’s national and international web audience.
Much of station revenue comes from the listeners themselves, who are enticed to become “subscribers” during KCRW’s semiannual membership drives. Offering a wide variety of premiums and other benefits, KCRW has conditioned at least some portion of their over-the-air listeners to chip in. The KCRW “rewards card” given to subscribers has become a badge of honor among LA’s fashion-forward, politically progressive cognoscenti. Yet Seymour worries that the same kind of community altruism may be harder to generate among netizens.
“Culture is a very profound thing. Can you affect the online culture? It’s still an outlaw, renegade culture,” explains Seymour, who cites that fact that few of the nation’s most powerful media properties have been able to charge users for web content. “We have spent years educating the [over-the-air] audience about the relationship between listener contributions and programming,” she says, “but that relationship doesn’t appear to resonate online.”
To help KCRW navigate these issues, the Annenberg Foundation had provided the station with a $600,000 grant to “develop business models to sustain the station’s webcasting activities and to further its innovative online music service.” Every hour, KCRW’s DJ’s and hosts announce the station’s call letters and frequency numbers, with the tagline “KCRW is a community service of Santa Monica College.” Must the local community support the station’s national outreach, or will the web audience pay their own frieght?