For listeners, ClickRadio offers quality sound and more control over content; for advertisers, it's a data mine.
Those who think Net radio is an online-only audio-streaming experience may want to think again. New York-based ClickRadio has. The company recently launched its audio Webcasting solution with major venture funding and deals with two leading recording labels, all without a trickle of an audio stream.
The free-to-user, advertiser-supported, Internet-enhanced digital radio service may be the first audio Webcast service to capitalize on the fact that downloaded music on a hard drive currently sounds better than its streaming counterpart. The company's proprietary technology, which downloads, rather than streams music, allows intensive data-mining for advertisers, and CD-quality sound coupled with more control over the music lineup than that afforded by traditional radio for users.
"Since ClickRadio delivers 'packetized' music to a user's hard drive," says Jim L'Heureux senior vice president of marketing, "the sound is not broken, and audio quality is extremely high." The company's ClickRadio application, which launched May 11, sports an audio player that behaves like a personalized radio. And like radio, ClickRadio plays song lists in its own order, with audio ads interspersed between songs.
Unlike radio, though, music genres can be chosen, and music selection influenced to some extent by users' tastes. Furthermore, according to L'Heureux, there is less advertising than on terrestrial radio. "We do on the order of five minutes of ads per hour, about a third of what you hear on a radio station."
The company has secured voluntary interactive radio license agreements from BMG 2Entertainment and Universal Music Group, and is negotiating similar deals with Sony Music, Warner Bros. Music Group and a number of independent labels. The deals with BMG and Universal cover the music giants' entire catalogs, allowing ClickRadio to deliver whole selections, free, to a user's hard drive.
"And by the time we are widely available, we expect to have deals with most, or all majors," claims L'Heureux.
ClickRadio works by immediately connecting to the company's server as soon as an Internet connection is detected. While a user is busy on the Web, ClickRadio is busy downloading and uploading files compressed with Lucent ePAC (enhanced perceptual audio coding). The process throttles up and back depending on the dataload of user activity. "Old songs are pulled out of the cache and new ones are put in based on user preferences," says L'Heureux.
Those preferences are registered via a wafer-thin control bar--or "virtual tuner"--that rests on the top edge of the PC screen (Mac version due out in the fall). After you select a genre (Alternative; Blues; Country, Dance, Eclectic; Electronic; Hip-Hop; Hits; Jazz; Latin; R&B; and Rock), the application queues up the tunes, and away it goes.
If you like the current song, there's a "thumbs-up" button that moves it to the A-list, increasing its play and longevity in the cache, while a "thumbs-down" button kills a song and speeds its exodus back to the "mothership" (ClickRadio's sobriquet for its server). There's also a neutral "skip" button. "Users can't choose the song they want to hear, but they can control the experience," says L'Heureux. Also included is an e-mail connnection for communciation between ClickRadio and users, a button for viewing artist bios and lyrics and an option to purchase a CD containing a queued or cached selection.
Selections within each genre are overseen by a panel of traditional broadcasting mavens, or "MusicGuides," such as Scott Shannon, a New York pop-radio fixture; Max Tolkoff of the syndicated radio show Modern Rock Live, who will oversee alternative music titles; and Dan Neer from WNEW among other stations, for mainstream rock.
The strong-box feel of ClickRadio--like having a free vending machine in your kitchen that dispenses snacks and an occasional ad at random, changing the selections every few days, but allowing you to reject or prefer what it sends down the chute--may be less about the legality of letting users have what they want, when they want it, for free (read Napster), than good marketing. Imagine a little man with a clipboard sitting in that vending machine, noting not only which advertisements you choose, but which selections you favor.
"Software within the application, linked to a database, captures every interaction you have with the tuner," says ClickRadio founder and president Hank Williams. "When that information is uploaded, we can aggregate; we are able to do an incredibly robust set of data mining about who is responding when and what circumstances they are responding to."
He says ClickRadio captures demographic information when a user registers: ZIP code, age and gender, as other services do. "The difference," he says, "is, unlike traditional radio, we guarantee an audience." ClickRadio doesn't only register response to songs, it also notes which advertisements a user heard and which he or she preferred. "We don't give you back a sample, we give you actual audited numbers of people who have heard the ad."
According to Williams, when a listener is interested in an audio ad, he can press the "i" button on the toolbar, which runs an interstitial-type presentation powered by Macromedia Flash. "Since, when you sign up we've asked for your age, gender and ZIP code, and because we know the type of ad you've heard or chose to view, we can be very precise. We can tell the advertiser whether an ad is more or less effective than the average ad in that category, measured by the number and type of people who hit the information button," says Williams. He says ClickRadio will announce in the next couple of weeks its first set of advertisers.
The other side of the direct-marketing equation for ClickRadio comes, as it does in terrestrial radio, from music marketers seeking to test new artists on a sample audience. "What we intend to do is break hits, break new artists. If a company comes to us with a song and wants to test it, we can play it within a genre to, say, 10,000 people, and get real responses to the song. It isn't personal information, it's aggregated: 5,000 people selected it, 5,000 rejected it, for instance."
Rather than damaging ClickRadio's prospects, which to some extent counts on limitations of audio streaming, increases in bandwidth will improve ClickRadio's offering, according to Williams. Currently it takes about 7 minutes to download a song on a 56k modem, requiring about half an hour a day to download three songs. Williams explains that, with broadband, a song would take seconds to cache. "Caching will always be a very compelling way to do things. But we don't wish for broadband not to come, because the better the bandwidth, the better our product works. It's the continuous connection we benefit from, not just the bandwidth. Also, when broadband comes it will still be problematic for everyone at 8 o'clock to receive streaming content."
And wireless? "By the end of this year there will be stereo component devices that will allow ClickRadio to operate without a computer. That's important because we are not really in the [dot-com] business. We are a technology and entertainment company with a new consumer electronic music delivery platform," Williams concludes.
The company closed an $8 million round of VC financing last October with Sierra, Telesoft and iHatch, among others.