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KCRW and the price of success online

Kcrw_logo The Internet poses at least as many problems for radio stations as it does opportunities. Their business model -- selling advertising time to car dealers, realtors and other local ventures -- doesn't translate well to the global nature of the Web. Nor is the Internet a broadcast medium, really. Instead, each listener online typically is served by a unique stream of data. The more listeners, the more streams -- and the higher the bandwidth costs. Finally, music stations pay royalties only to music publishers (i.e., songwriters) for their over-the-air transmissions, but they also have to pay labels and recording artists when they stream online.

So you can imagine how much dicier the proposition is for public broadcasters, such as KCRW at Santa Monica College. According to general manager Ruth Seymour, each month the station is delivering more than 1.6 million hours of programming, nearly 1 million podcasts and half a million on-demand audio and video recordings to listeners online. You might think that advertisers -- "underwriters" in the lexicon of public broadcasters -- would pay more to reach this expanded audience, but it's actually a tough sell because the station can't tell them who or, in most cases, where those listeners are. For financial reasons, KCRW relies on other companies to host and transmit its online programming, so it doesn't collect data on that audience.

Nor are online listeners as motivated to become subscribers (that is, donors to the station) as local over-the-air listeners, particularly not when so many of the programs aired on public radio are available free on the Web. In a recent interview, Seymour said her "apocalyptic vision" is that "the online culture, the culture of free, will destroy the whole notion of public broadcasting in that it will erode the whole idea of subscriptions." She says this even though KCRW has attracted subscribers in all 50 states. Maybe it's the allure of the form-fitting T-shirts and other prizes....

Anyway, to help find ways to make its online audience self-sustaining, KCRW has landed a $600,000 grant from the Annenberg Foundation. It will use the money to fund a series of experiments, such as offering a bonus to those who subscribe or renew online. The first freebies: a set of downloads from the iTunes store or a subscription to Newsweek. On the whole, Seymour said, "It is a really daunting situation, and that’s if your successful online. And we are." Given the cost of reaching listeners, KCRW finds itself in the uncomfortable position of having to measure its online efforts in terms of their potential to generate income. "As a public broadcaster," Seymour said, "that isn't really why I'm in the business."


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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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