AOL, Live365 seek web radio ads

Ronning Lipset to sell package deals to reach 8.5 mil people

By BEN FRITZ

HOLLYWOOD -- In a bid to boost the fast growing but still revenue-poor Internet radio market, AOL and online broadcaster Live365.com have signed with fledgling radio advertising company Ronning Lipset Radio.

Combined with existing client Yahoo! LaunchCast, Ronning Lipset will now sell package deals on the three largest online radio services, which reach a combined audience of approximately 8.5 million people. Netcasters are looking to Ronning Lipset to increase their appeal to large corporate clients, who have thus far largely eschewed Web radio. Company will work to convince these corporate clients to place 30- and 60-second radio spots produced for radio online.

"The numbers in this industry are starting to reach a critical mass where it can become interesting to a network radio buyer," said Live365 chief operating officer Raghav Gupta.

Netcasters hope to build up their rates to match those charged by terrestrial broadcasters and eventually earn a premium based on more attractive demographics and opportunities for interactivity. Broadband video ads already charge a premium as compared to TV spots based on their interactive features.

Ronning Lipset was founded in November by former employees of Interrep, one of the biggest third party terrestrial radio ad sales companies.

Microsoft tunes up

Other big news in the online music arena came from Microsoft, which revealed at the South by Southwest conference last week in Austin that it will debut its own much-rumored online music store in the second half of this year. Microsoft was talking to a number of independent music labels at the conference about joining its service.

Details on pricing and features of the store, which will be part of Microsoft's MSN Internet service, were not yet available. A company spokesman did confirm, however, that Microsoft is building its own Web music service despite rumors it would be partnering with Napster. Software giant is in talks with all the major labels about offering their content at its Internet music store, which will undoubtedly use the company's Windows Media encoding technology.