Monetizing Internet Radio With Music

Doug Perlson, CEO of our portfolio company Targetspot, which offers a monetization service (like adwords for audio) for internet radio has penned an interesting and thought provoking column in Alley Insider today.

Anyone can go to Targetspot, record a 15 or 30 second radio spot, and run the campaign immediately on a large network of internet radio streams. Targetspot has been offering that service since the start of this year.

What Doug proposes in his column is something more. In addition to submitting a 15 or 30 second spot, bands, labels, managers, and other music industry participants could submit a full song to a system like Targetspot and that song would run as "paid inclusion". As Doug points out, this is not very different from how keyword marketing services work today:

We have seen a similar arrangement — of course not denigrated with the
term payola — work well in the financially successful and
user-friendly online advertising search field. In that case,
advertisers can easily place bids on search results, and target their
message directly to a discrete and highly specific audience. An
Internet radio “pay to play” advertising service could accomplish a
similar goal.

I’m curious to see what the reaction of the music industry is to an idea like this.