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  1. #1

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    Listeners, Conversion Rates, and $$$

    Hello everyone.

    Okay, so I am a "numbers guy", and feeling very impatient as an entrepreneur that hasn't "gone live" yet.

    In broad terms...

    1.) If you have an Internet radio station that plays some genre of "mainstream" music (e.g. Rock, Pop, Country), how many listeners per day do you think you would need to be able to turn a healthy profit from your radio station?

    (The assumption is that you are making money purely from advertising - since I don't think people will easily pay for a subscription service unless you are like Spotify or whatever?!)


    2.) What kind of "conversion rate" do you think you could get from a decent Internet radio station?

    Would 1,000 listeners a day convert to anything of value?

    Would you need 10,000 listeners per day?

    Maybe more?


    3.) If you were a radio station (either Terrestrial + Internet or pure Internet) in a mid-sized market (i.e. 100,000 - 500,000 people), how much traffic do those radio station need to stay in business?

    One crude way that I try and figure out how much revenue a business makes is based on their headcount. For example, there is a ma-and-pa pizzeria that I'm going to shortly that has 3 workers including the owner. So if each of them make Minimum Wage (~ US$15/hour), then that would mean they need to sell roughly $100,000/year in pizzas just to cover labor costs and NOT including rent, utilities, and the actual ingredients.

    That seems like a lot of money, but when you think of it in those terms, it makes sense.

    So even some "dumpy" terrestrial radio station in a town of 30,000 people still has to make a sizeable amount of revenue - not profits per se - just to employee a staff of say 5-6.

    At any rate, some of the Internet radio stations I have seen online are getting like 10-15 concurrent listeners, so I consider those "hobbyists".

    I'm curious what it would take to become a "real" Internet radio station and make a living off of it.

    Any real-world experience on this or at least some decent projections???

    Thanks!!

  2. #2

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    Your enthusiasm is admirable, but I'm afraid you were misinformed.

    Internet radio is a hobby--not a business. You will spend money on playout software, streaming bandwidth and copyright royalties. But you will receive nothing in return because advertisers are not interested in Internet radio. 99.9% of the guys running Internet radio stations subsidize them out of their own pockets because they enjoy the hobby.

    If you enjoy sharing your music with a couple of hundred like-minded enthusiasts--and don't mind paying for the privelege--then go for it. Otherwise, don't waste your time. ;)

  3. #3

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    Quote Originally Posted by JohnDrake View Post
    Your enthusiasm is admirable, but I'm afraid you were misinformed.

    Internet radio is a hobby--not a business. You will spend money on playout software, streaming bandwidth and copyright royalties. But you will receive nothing in return because advertisers are not interested in Internet radio. 99.9% of the guys running Internet radio stations subsidize them out of their own pockets because they enjoy the hobby.

    If you enjoy sharing your music with a couple of hundred like-minded enthusiasts--and don't mind paying for the privelege--then go for it. Otherwise, don't waste your time. ;)
    Interesting reply.

    If Internet radio is a "hobby" then how do Internet radio stations exist?

    I know of a handful of stations that seem to have very professional setups and presumably fairly large listenerships - although I believe most of them have both a terrestrial and Internet component.

    But in addition, how do you explain iHeart radio stations that are purely Internet based?

    Clearly *some* people are able to make money off of it...

  4. #4
    RDJUser's Avatar
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    Clearly *some* people are able to make money off of it...
    Yes but they're generally backed the HILT with investors with LOTS of Money to be able to achieve this.

    I thought I could make money from internet radio when I first inquired about creating a station 20 years ago.

    Sadly I realised quite quickly there was no way on this planet i was going to achieve a huge listener base let alone actually make any Moolah from it...

    So ever since its been a hobby. You might struggle to get advertisers. Thats possibly your BIGGEST hurdle.
    Proud USER of RadioDJ Free Radio Playout software since 2010

    Now Running RadioDJ on a 32GB computer.

  5. #5

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    Quote Originally Posted by RDJUser View Post
    Yes but they're generally backed the HILT with investors with LOTS of Money to be able to achieve this.

    I thought I could make money from internet radio when I first inquired about creating a station 20 years ago.

    Sadly I realised quite quickly there was no way on this planet i was going to achieve a huge listener base let alone actually make any Moolah from it...

    So ever since its been a hobby. You might struggle to get advertisers. Thats possibly your BIGGEST hurdle.
    I don't deny your experiences or struggles, but I find what you all are saying so depressing.

    Is this yet another thing that I have to add to my "Things Which Cannot Be Fixed" list? (e.g. Trump presidency, Climate Change, Coronavirus, etc)

    From where I stand, the reason why the world is falling apart is that everyone is giving up and accepting our eventual demise.

    Where is the spirit of "we can do nearly anything if we try hard enough"?

    I just read a long piece in the New York Times about Neil Young.

    If people like Neil Young or Jimi Hendrix or Janis Joplin had just accepted the status quo, think of all the brilliant music this world would be missing?!

    One thing I will say is that it is very hard to sell anything creative or brilliant when 95% of Americans' brains are dead like zombies. It does seem like why it's hard to sell things is because no one gives a sh*t anymore...

  6. #6

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    Quote Originally Posted by streamingnewbie View Post
    I am a "numbers guy", and feeling very impatient as an entrepreneur that hasn't "gone live" yet.
    If you're going to be an Internet radio entrepreneur then it's time you did your homework. Contact some prospective advertisers
    in your area and ask if they'd be interested in buying ads on your new Internet radio station once it's up and running.

    Then report back here with the results...

  7. #7

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    Quote Originally Posted by JohnDrake View Post
    If you're going to be an Internet radio entrepreneur then it's time you did your homework. Contact some prospective advertisers
    in your area and ask if they'd be interested in buying ads on your new Internet radio station once it's up and running.

    Then report back here with the results...
    I am interested in buidling my own Internet radio station so that I can use it as an advertising and promotions "platform" for my startup business.

    So, yes, I have 100% buy-in from my lone advertiser.

    But can/will my startup business succeed on it's own? I don't know...

    Would having an Internet radio station which I could use as yet another way to promote my startup business work and translate into success for my startup business? I don't know...

    First challenge is to get my startup business online and see how it goes.

    But it never hurts to think several steps ahead and research the Internet radio idea as well...

  8. #8
    RDJUser's Avatar
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    Right now there are 87,591 stations listed on shoutcast its a dog eat dog world and only the successful stations will make money out of it BUT its like a needle in a Haystack.

    You can give it your best shot but if it isn't working in 6 months have a rethink

    Don't go with Shoutcast they rarely pay people for the ads they carry on their stations.

    Advertising on an Internet only radio stream only works if the products being advertised have Universal appeal (i.e: To everyone in every country) otherwise the advertising fails.

    I'm trying not to be negative I'm trying to point out the pitfalls & there are no end of them when it comes to online radio you're up against the Might of Apple, Amazon, Spotify etc which have dented Internet radio listening figures..
    Proud USER of RadioDJ Free Radio Playout software since 2010

    Now Running RadioDJ on a 32GB computer.

  9. #9

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    Quote Originally Posted by RDJUser View Post
    Right now there are 87,591 stations listed on shoutcast its a dog eat dog world and only the successful stations will make money out of it BUT its like a needle in a Haystack.
    Out of those 87,591 stations, how do people promote their stations?

    If someone expects that an Internet user will go to Shoutcast and search through all of those stations to find your station that will likely lead to 10 listeners in a best case scenario.

    Doesn't anyone promote their stations using traditional means? For example websites with good SEO, billboards, promotions in local areas, TV ads, etc?


    Quote Originally Posted by RDJUser View Post
    You can give it your best shot but if it isn't working in 6 months have a rethink
    True.


    Quote Originally Posted by RDJUser View Post
    Don't go with Shoutcast they rarely pay people for the ads they carry on their stations.
    As mentioned my business would be the advertiser...



    Quote Originally Posted by RDJUser View Post
    Advertising on an Internet only radio stream only works if the products being advertised have Universal appeal (i.e: To everyone in every country) otherwise the advertising fails.
    Yes, what I am selling applies globally, although I am only going to seel to people in the U.S.


    Quote Originally Posted by RDJUser View Post
    I'm trying not to be negative I'm trying to point out the pitfalls & there are no end of them when it comes to online radio you're up against the Might of Apple, Amazon, Spotify etc which have dented Internet radio listening figures..
    Are listeners that dull that all they want is a music store and playlists vs a real radio station? (The under 30 crowd is probably too stupid to even know what a radio station is...)

    And doesn't it piss people off enough to want to try and topple APple and Spotify, or do people like "Big Brother" taking care of them?

  10. #10
    RDJUser's Avatar
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    Are listeners that dull that all they want is a music store and playlists vs a real radio station? (The under 30 crowd is probably too stupid to even know what a radio station is...)
    By revenue figures for Spotify ec... it would appear so. they want the music they want when they want it it seems. Internet radio traditionally is in decline.
    Proud USER of RadioDJ Free Radio Playout software since 2010

    Now Running RadioDJ on a 32GB computer.

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