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Out of work and off local radio, Jeff Lamb had nowhere to go with his career as a successful FM morning-show host.
While the Toledo market may have been finished with Mr. Lamb, the veteran DJ wasn’t through with local radio.
Following in the footsteps of his father, a pioneering at-home radio broadcaster in 1960s-era Flint, Mich., Mr. Lamb recently launched ClassicHitsToledo.com.
The 55-year-old is part of a small but growing group taking to the Internet to build a station free of corporate radio and FCC restrictions.
Mr. Lamb broadcasts a live morning show from 5 to 10 on weekdays from the living room of his home in Oregon and his Man Cave with Jeff Lamb show from 9 to midnight Saturdays. The show features live performances from area bands, from his considerably larger man cave in an adjoining converted garage.
For the remaining 140 hours of the broadcast week, ClassicHitsToledo.com streams a library of 1,300 songs, a mix of hits from the 1960s through 1990s that includes Bob Seger, Tony Orlando and Dawn, Sly and the Family Stone, Bruce Springsteen, Damn Yankees, and Kid Rock.
Mr. Lamb has no staff and is financing the venture himself — thousand of dollars in equipment purchases, $500 for the development of the free-to-download apps for iOS and Android users, and approximately $30 a month for Web service and hosting fees.
And while his audience is relatively small — perhaps as many as 1,000 unique listeners in a week compared to the thousands who listened to him more than a decade ago on WIOT-FM 104.7 — he is paying the bills, he said, selling advertising and sponsorships based on audience size, local interest, and the fact that it’s new.
Beyond that, he’s happy, he said, doing what he loves — talking and playing tunes — but to a new audience that tunes in by streaming his station through his Web site and apps on their computers, phones, and tablets.
“Radio is dying,” Mr. Lamb said. “This is the future. This is it. The future’s here. It’s already the new radio.”
Internet radio began in the early 1990s. Increasingly faster connection speeds have allowed Internet stations to stream music with better quality sound and for much longer periods, giving listeners a reason to tune in and fostering an explosive growth in the industry.
In 2012, a report by Edison Research, which has kept tabs on Internet radio since 1998, found that the percentage of Americans 12 and older who listened to streamed music increased from 22 percent in 2011 to 29 percent in 2012.
In July, Nielsen Broadcast Data Systems reported streaming growth of more than 50 billion audio and video streams by listeners in the first six months of 2013, with stream volume up 24 percent from the same period last year.
Internet radio also consists of live-stream broadcasts of traditional radio stations, providing a means for a listener to tune in to one’s favorite morning show team even after that listener is out of the car and sits at the desk at work.
In direct competition with those AM-FM Internet streams are the passive streaming services such as satellite radio, Pandora, Slacker, Songza, and 8tracks, and on-demand streaming services such as Spotify, Rdio, Deezer, and Rhapsody.
Many of these services, including Pandora and Spotify, offer music streaming free with ads or without ads in monthly subscription options.
On a much smaller scale is the independent local Internet radio station — as a means to stream music for friends and family or as a commercial venture, as with AM-FM commercial stations — accessed via the station or a service’s Web site or app.
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Launching a radio Internet station requires as little as a PC, a broadband connection, and the music to stream, along with the mostly free software to bring all of these components together.
It’s simple enough that almost anyone can do it, said Jerry Gysin, who helped set up Monroe County Radio, monroecountyradio.com.
It also can generate revenue.
Launched last October, Monroe County Radio is one of at least four area Internet radio stations selling advertising, including ClassicHitsToledo, Sylvania-based WSYL, sylvaniaradio.com, and Andrew Zepeda, the former WWWM-FM 105.5 morning man who broadcasts his Andrew Z in the Morning and other local programming online at andrewzonline.com and via free apps.
But attracting advertisers on an Internet radio station requires an investment in equipment, namely to upgrade the audio broadcast to stream in CD-quality 128K, comparable to the sound of FM radio.
“That’s when you want it to sound a little more professional,” Mr. Gysin said. “If you’re going to stream to your friends, you can do it on the cheap. But if you really want to sell advertising and sell the community, you probably want to invest a little more money.”
At stake is traditional radio’s advertising revenue, which is eroding in the face of digital and satellite competition. AM-FM radio revenue was $14.2 billion in 2012, according to Radio Advertising Bureau, down from $16 billion in 2008.
Mr. Lamb said he spent between $8,000 and $10,000 for ClassicHitsToledo.com’s audio and computer equipment, and Mr. Gysin said Monroe County Radio’s budget was a little more than that.
Monroe County Radio broadcasts from downtown Monroe and features a mixture of adult-contemporary music with live DJs — including Mr. Gysin — most of the weekday daytime hours and four shifts on the weekends, including community affairs programming on Sunday evenings.
Created to fill a hyper-local niche, Monroe County Radio has grown to about nearly 4,700 unique listeners total.
“We’re holding our own financially,” said Michele Paled, the station owner and president, who, like Mr. Gysin, is a former longtime employee of terrestrial radio.
“I would think next year it will grow by gangbusters,” Ms. Paled said.
John Gallagher, vice president and market manager for Cumulus Media, which owns and operates several stations in the Toledo market, said broadcast radio has faced numerous challengers in the nearly 30 years he’s been in the industry.
And he’s not worried now.
“It’s not really a concern of ours,” Mr. Gallagher said. “Our stations reach nearly three-quarters of the Toledo market every week. We’re still reaching enough people to make a difference in their lives.
“There will continue to be different methods of distribution for our product, including the Internet, cell phones, and ear pieces eventually, but it will still be the same product. Right now they’re putting computers in cars [for] Internet radio, but we’re still there.”
National radio giant Clear Channel launched its own passive streaming service, iHeartRadio, to compete with the likes of Pandora.
But those efforts and others by terrestrial radio won’t be enough to stop the audience migration, said Kurt Hanson, publisher for the RAIN: Radio and Internet Newsletter, a daily online trade publication for the industry, and chief executive officer of ACU Radio, a personalized music site aimed at the 35-through-64-year-old demographic.
“My belief is, for music, [Internet radio] will take over as the preferred form of radio,” Mr. Hanson said. “Online radio is already up to 12 to 15 percent of radio listening and growing at a very fast pace. The form of online radio that consumers are embracing is specifically personalized music radio.”
Streaming radio services face their own set of challenges, such as increasing competition for listeners, including from upcoming Apple’s iTunes Radio, and the Digital Millennium Copyright Act (“DMCA”), signed into law by President Bill Clinton in 1998, which details the rules regarding Internet broadcasts that are eligible for compulsory licenses.
But the biggest obstacle for the streaming services remains music royalties.
Pandora, for example, paid 60.6 percent of its $427 million in revenue to music-rights holders, which is why the publicly traded company reported a $38 million loss in the first quarter of this year.
“Pandora’s making more money than anyone,” said Dave Seyler, editor-in-chief of Radio & Television Business Report, “but they’re still having trouble making a profit.”
Local Internet radio stations pay for the music as well.
Mr. Lamb pays nearly $30 in monthly royalties to LoudCity, a national Web service that pays ASCAP, BMI, and other music-rights holders based on ClassicHitsToledo.com’s playlist, and other factors, including how many advertisers the station has and the number of listeners.
But the biggest obstacle for Internet radio is simply letting listeners know the stations exist.
Unlike Pandora, Spotify, and iHeartRadio, these start-ups don’t have a million-dollar marketing budget.
Getting the word out about her station is Monroe County Radio’s biggest challenge, Ms. Paled said. So far she’s paid for cable spots, maintains a Facebook page, and has run a few print ads.
“On our second day on the air we took out a full-page ad in the Monroe Evening News, and largely the people who called were 70 years or older, and they wanted to know if it was AM or FM,” she said.
“We called them all back and did a little bit of an education process,” she said.
The largest source of new listeners, Ms. Paled said, “is people who already listen and they tell their friends, that kind of thing.”
Tom Brady, who owns WSYL, has reached out into the Sylvania community to build awareness and has used print and cable television advertising.
“We try to get out to some functions, donate some time to the Chamber of Commerce, and be interactive with the city and township,” Mr. Brady said.
At least one local FM radio station executive said these start-ups face a significant challenge.
“We’re a new radio station, and it took us three years to get on our feet, said Laura Hart, general manager of WPFX-FM, 107.7, the Wolf. “And we were [out in the community] reminding people we were there. How are they going to let people know? They’re not on the dial ... and you can only get so much marketing out there. It’s niche.”
Likewise, Mr. Hanson said he hasn’t seen strong evidence of local Internet radio taking off.
“I’ve seen some cases where a popular talk personality can make a living transitioning to Internet delivery ... [but] for music, it’s a little bit different. The local shops don’t offer the technical ability and personalization features, the ability to skip a song, blend artist formats, which is what consumers want.
“I can imagine paying the bills. The next question is can someone pay himself a $20,000 to $40,000 salary out of it? I hope so. That would be great,” Mr. Hanson said.
Mr. Lamb said he is proceeding with plans to expand his station by hiring a local sales staff and more DJs and, when he has enough listeners — 10,000 or more — taking ClassicHitsToledo national.
Mr. Lamb stood next to a small table in his decked-out man cave — broadcast equipment and computer only a few feet away from a brown couch and home-theater set up — as his live webcast stream quietly played in the background.
This, Mr. Lamb believes, represents the future of radio.
Contact Kirk Baird at: firstname.lastname@example.org or 419-724-6734.