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Make Money from Radio Station Podcasting

Brian Steel is the CEO of VoloMedia, a company that delivers advertising, metrics and reporting solutions for downloadable video and audio. Radio stations, of course, have a big investment in downloadable content in the form of podcasts, and this content can be effectively monetized by companies like Brian’s.

Listen to the full audio interview below. What follows is only an abbreviated transcript.

Brian, what does VoloMedia do?

We are building a downloadable media ad network focused on a wide array of content, right now about half audio and half video.

Those audio and video programs come from a diverse array of publishers, from major media companies like MSNBC and Fox News, Scientific American, to a wide array of mid-tail premium publishers – companies like Personal Life Media or PodRunner.

How much downloadable content is out there?

Last year alone, there were six billion downloads of RSS-based podcast media, and that was probably about an 80 to 100 percent increase over the prior year. That is still a smaller number than the 46 billion progressive downloads (i.e., streams) that people experienced on sites like YouTube, but it’s growing more rapidly.

And it’s really providing a wonderful way to really take the TiVo model and extend it onto Web-based activities so that people can experience content at a very high quality anytime, anywhere. And advertisers are finding ways – through companies like VoloMedia – to reach audiences in ways they hadn’t before.

And what does VoloMedia do to monetize that content? if I’m a station and I have this content in podcast form, what can you do for me that can apply your solution and make us both money?

Well, we do a couple things that are unique. Overall, we are involved in advertising and reporting. At the end of the day, advertisers want to be able to target their messages, and they want to be able to track the consumption of those messages. And downloadable media presents opportunities but also challenges.

So, we can help them target, and with people like me that now are used to skipping through ads on my DVR or ignoring ads while I’m online, I actually watch all of the ads when I’m offline on my Nano. And so, it’s a great kind of captive audience environment, but you’ve got to be able to target and track and refresh those ads, because I may not get around to watching a piece of content in my iTunes library for a month or more after I download it. The original campaign may be stale.

And VoloMedia’s technology allows new ads to be rotated in place of the original ads so there’s always current advertising content available.

So how does that work?

We have a network-based solution. We have integrations with a number of the major content delivery networks, like Akamai and Limelight and so on. We do a lot of very advanced server log analytics that help them understand the exact nature of their downloaded traffic and the source of those requests for downloaded files and so on that others can’t do.

But, there’s a certain limitation to what anybody can do, even with our magic, at the network level. So, we also have two very exciting plug-ins. One is a plug-in to iTunes, so you may go to one of our publishers’ sites and ask for a piece of content. You’d get a little pop-up window that says MSNBC requests that you download this iTunes plug-in. And 30 seconds later you now have an iTunes plug-in, which not only gives you access to this content, but gives you a wide array of additional functionality.

In addition to the functionality it gives you as a consumer, it also now gives the advertisers opportunities to actually track the consumption of their ad campaigns. So, it’s part of creating a very healthy economic ecosystem so that a wider array of content can be made available on an ad-supported basis, because right now, for much of the content online, it’s $1.99 to view this file, even if it’s an old file or things that, ironically, were ad-supported when they were first broadcast on television. Now, there’s a pay-for model online because technologies like ours haven’t existed to date.

And so, with our ability to insert ads into the files and to track the consumption of those inserted ads, we can now allow marketers an opportunity to follow media from its original online origin to offline consumption, whether it’s on a PC or a mobile device like an iPod.

And as the market expands with players other than iTunes consuming their own portion of the market share, then we will simply expand the plug-in functionality to include those.

So give me an example of what your analytics can provide?

We can report, very precisely, not only how many post-roll ads (for example) were consumed, but which demographic consumed them, what was the age range, what was the gender, what was the postal code of those folks. And that’s of tremendous value to marketers.

And at the end of the day, it’s a tremendous value to the consumers too because, the more healthy ecosystem we can create, the more premium content will made available.

And ironically, again, most of this premium content was originally shown on television or similar forms in which there was ad support.

So, then what is your revenue model?

Our revenue model has two basic components. And just like I said, we were agnostic as to whether we work at a network level or at a plug-in level or both with our publishers. We also are very flexible as to whether the publisher sells advertising in their content, or they maybe have a third party that they work with to do so, or whether we do so.

So if the publisher or somebody that works for them sells, then we insert those ads and charge a technology insertion fee for doing that.

It’s a CPM-based fee. And if we sell the ads, then that fee is embedded in the arrangement, and we split the revenue, as to classic rev-share basis, with the publishers.

What makes downloadable content a better buy for advertisers?

The opportunity to target in the way that we’ve described, the opportunity to have a captive audience, the opportunity to follow people….

You see, when somebody’s online, you’re literally one mouse click away from a range of alternatives, from another video, from another website. The potential for distraction and defocusing is enormous. But when you’re in an offline media mode, you are a much more captive audience. And if you can combine that environment with targeting and tracking and the opportunity to refresh advertising, it’s tremendously powerful. And so, the CPMs reflect that premium.

Is it inevitable that podcasts will move in the direction of advertising-sponsored content?

Absolutely, positively yes.

Radio stations, for the most part, operate locally. And most of the revenue is derived locally. Is there anything to keep stations from applying a solution like this on a local basis?

Not really. Even at the network level, without our plug-in technology, we have the opportunity to marry IP addresses with geotargeted databases. And so, there’s a fairly high degree of localization possible even at that level. There really isn’t a reason why you can’t apply a classic local terrestrial or Internet-based radio model to what people like us do.

Why do you think broadcasters haven’t discovered companies like yours yet?

This a relatively nascent space. We go to major companies that everybody’s heard of, and you sort of assume they’ve got 3,000 people focusing on this, and it turns out they only have three. The entire digital media group is three people, and they’ve just spent the last year trying to get the website right and get all of their ad serving integration done, etc.

There’s quite often a resource constraint, and so we spend a lot of time trying to minimize the transition headache for a company. We focus on giving them an easy way to allow end-users to hook up RSS-based subscriptions to what they are currently discovering online.

Creating that powerful cycle between online and offline discovery and consumption is a big part of our vision.

Brian Steel is CEO of VoloMedia in Mountain View, California. You can reach VoloMedia at (650) 969-3225. And Brian and his team will be at NAB this Spring in Las Vegas.

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