Earlier today, just after Midnight, without much of a fanfare, a new digital radio station appeared on Digital One’s national commercial DAB multiplex – Amazing Radio.
Amazing Radio is the sister service to the website Amazingtunes. Amazingtunes lets new bands upload music to the site so visitors can listen and buy the tracks. The revenue for these music sales is split 70% with the artists and 30% with the site itself. The radio station will play playlists (of the unsigned bands) chosen by users from their website.
Choosing to go on Digital One is an interesting move for the site. It’s not a cheap thing to do (even with the launch announced as a six month pilot) and is sure to have set them back a bit of a wedge. Looking at CrunchBase, it says that AmazingTunes raised £600k in 2006 and a further £800k in 2007. I’d imagine that to achieve this expansion they will have needed to raise additional funds.
However, it is a good way to promote their site. The online unsigned sector is notoriously competitive, but by going on DAB nationally it will bring the brand to nearly a third of UK (and slightly skewed to those who are interested in digital technologies and music).
What’s their business model likely to be? Who’s knows.
In the traditional world the station would be funded by advertising. In other words, the scale of their audience would encourage advertisers to put messages in their programming in exchange for money. This money would pay for the station and generate and additional profit.
However, I don’t expect this to be the main source of revenue. An unsigned band radio station will generate a small audience and it’s unlikely to provide a large number of hours. Even with the best will in the world, a super-specialist-muso audience is still unlikely to make the station a primary listen.
I think more likely the reason is to drive awareness and use of the main site – amazingtunes.com. The website is a direct to consumer proposition and a transactional site. They can derive ad revenue from online and music sales (as well as a maybe even a little commercial revenue on the radio station too).
Will the radio station last for ever? Will it even make it past its six month ‘pilot’? Who knows. And to be honest does it really matter if it fails? Well, for the owners i’m sure they hope it’s a success, but to me it’s about using the flexibility of the platform and doing ‘different’ things. If there’s spare capacity and they think it can drive their business, good for them. If, along the way, some listeners get further value out of their digital radio, that’s great too. Even if their model is to get more well known so they get more users so they can sell themselves to CBS (and it might well be) then I think that’s actually fine too.
If it dies on its arse, then it dies on it arse. I’d sooner we had a platform where some new ideas could fail, than not have a platform that let them try stuff out.
Many existing radio groups are floundering due to fast declining commercial revenue, a strong, well-programmed BBC and a seeming lack of forward-thinking. Their traditional models are breaking down and the main response has been to do what they’ve always done, but more efficiently. This, on its own, is unlikely to be sustainable.
Now, i’m not saying that they should replace Heart with an unsigned jukebox funded by micro-payments, but having a portfolio of diverse services with diverse revenue streams is probably a more sensible way forward.
So good luck to Amazing Radio, and good luck to other operators who want to try and do something different.