Billboard Radio Monitor

December 2, 2005

SECTION: CURRENT ISSUE; SALES AND MARKETING

LENGTH: 603 words

HEADLINE: Cashing In On Podcasts A Reality

BYLINE: Katy Bachman, Mediaweek

BODY:


Podcasting is fast being embraced by corporate radio, the industry often cited as having the most to lose from the nascent medium in ad dollars and listeners.

At first, radio business models for podcasting focused on providing convenience to listeners. But if radio's latest forays are any indication, podcasting could create healthy incremental revenue from advertising as it matures.

"With radio trying to find new revenue streams, this is one of the obvious ones," says Matt Feinberg, senior VP of national radio for Zenith Media, who has bought podcast advertising for one client. Radio companies "were slower to put it together, but now they've gotten up to speed."

Premiere Radio Networks, which already does a brisk eight-figure business offering subscription podcasts of Rush Limbaugh, Jim Rome, George Noory and other high-profile personalities at $60-$70 per year, has cut its first advertising deal with Starburst, which will pay six figures next year to sponsor a three-minute, customized podcast based on Ryan Seacrest's "American Top 40" countdown.

"We're going to deploy ourselves into an ad environment through short-form podcasts that contain specific, relevant programs that are sponsor-supported," Premiere president Kraig Kitchin says.

Premiere is also about to take podcasting visual. The Clear Channel-owned syndicator announced Nov. 28 a deal with Maven Networks to provide 60-second video segments of "The Rush Limbaugh Show" to subscribers of Limbaugh's 24/7 premium content service beginning Dec. 12. That will make Premiere the first major radio broadcaster to embrace direct delivery of video to the new iPods, which hit the market last month.

ABC Radio Networks is also making money using the subscription model for many of its top personalities and ESPN Radio. Launched just five months ago, Verizon was the initial sponsor for ESPN podcasts this year, and McDonald's and Novartis are lined up for next year.

Even local radio podcasts (five to 10 minutes in length) are catching on with local advertisers. About 64 Clear Channel stations offer podcasts based on local content. Among the local advertisers buying 15-second sponsorships airing before the content are Virgin Mobile in New York; the Apple Computer store in Dayton, Ohio; a Honda dealer in Los Angeles; and a Mercedes-Benz dealer in Phoenix.

"Podcasting is absolutely not a threat. We've created inventory that never before was available. We're just skimming the surface," says Evan Harrison, executive VP of online radio and music for Clear Channel. "It will be a meaningful part of our business as we move forward."

Among advertisers, the talk about podcasting is getting louder, even though it is not a line item in media plans. But most agencies agree that it is the media companies with the content and know-how that stand to gain the most from the undeveloped medium." Major broadcasters and publishers have access to content, and they have access to distribution channels to succeed in the space," says Brandon Starkoff, media director for Starcom.

Buying media-branded content is also a more credible, reliable buy for advertisers if they are not producing their own podcasts. "Media-branded podcasts have an easier time. How do you wade through the [amateur] podcasts? Is the content reliable? You don't know what they might broadcast tomorrow," says Natalie Swed Stone, director of national radio for OMD. "Integrated buys that involve personalities, where the product makes its way into the program, that's what's getting the money."****