Introduction

At the beginning of the 21^st century, the traditional radio concept is changing, that is radio listeners desires to listen their favorite radios through different ways and from anywhere on the world. Internet is a very useful means to satisfy the needs above and in such a situation, feasibility of an Internet radio that will broadcast especially to the industrial engineers all over the world is the subject of our project.

Technical Feasibility

To start an internet-only radio broadcast you need to consider the two components of a broadcast: Preparing the audio component of the radio ( music, live shows, interviews etc. ) and transmitting these audio to internet. Firstly we will consider the internet part and then enter the kitchen of the radio, the studio.

Here is a brief run-down of how live audio broadcasting over the internet works:

1. The audio enters the encoding computer through an installed sound card.
2. The encoder system translates the audio from the sound card into a streaming format and sends it to the Server.
3. The Server sends the audio data stream over the Internet to the Player software on the listener’s computer.

Seems so simple? Lets enter a bit detail.

Firstly, we need to describe “streaming”. Radio station signals are sent in a continuous stream as the user listens to the broadcast; in other words, the listener does not have to completely download each piece of the music before beginning to listen to it. Then, lets discuss the systems needed for streaming.

The Encoder : The encoder translates the audio into the selected audio data streamlining format. This is usually a software program that runs on a computer with a sound card. There are two common softwares used for this purpose Microsoft NetShow and Real Networks G2 Audio.

Microsoft NetShow Encoder is a software that is designed for and operating on Windows NT 4.0, Windows 95 and Windows 98. The NetShow product suite is available for free and uses a proprieraty format they call Advanced Streaming Format (ASF). A fairly powerful computer is needed for encoding live audio with NetShow Encoder

The other opportunity Real Networks G2 Audio also operates on Windows NT 4.0, Windows 95 and Windows 98. The product has a streamlining format called Real Audio and Real Networks G2 Encoder is the most common one used in Internet Radio Broadcasting.

Encoding includes sampling the incoming audio signal and compressing the resulting information so that it can effectively be sent over the Internet. Many people use 28.8 kbps modems, so the compression scheme choosen must trade-off sound quality for bandwith which will be discussed in detail later.

As you might expect , the computer running the encoding software will be very busy and should actually be dedicated to only doing the encoding. Once it’s done encoding th eresulting audio stream is send to the Server.

The Server: The server software for audio streaming is a special Internet server that is designed to handle sending out multiple audio data streams. The software runs on a computer server that is connected to the Internet with a high bandwith connection.

Microsoft NetShow Server runs exclusively on Windows NT 4.0 and if you have Windows NT 4.0, the server is available for free download. The number of listeners NetShow can deliver live audio is limited by your bandwith since the free version supports over 1,000 simultaneous listener. However, 1,000 listeners for a 20kbps audio stream would require 20 Mbps which is not cheap and nearly impossible with the Internet back-bone in Türkiye.

Real Networks G2 Audio Server also runs on Windows NT 4.0. The free version of this server allows maximum number of 25 simultaneous listeners. With that number of listeners you need 500 kbps Internet connection which seems more reasonable.

Another choice for the server is instead of having a server by your self the server service is done by another company such as WarpRadio.com. After encoding the broadcast their servers connect with you via Internet and receive your streaming file. Then the stream is multiplied for the Internet users. They also does not set a limit for the number of streams and it is restricted by the demand for your broadcasting stream. But since the service provider uses Microsoft Windows Media Technologies 4.0, you have to use Microsoft NetShow as an encoder. A Simple diagram showing the system can be seen below.

The minimum requirements to stream with this service are:

1. Dedicated computer

• Pentium II – 200 MHz, equivalent or better
• 32 Megs of RAM
• High Quality Soundcard
• Windows 95, 98 or NT operating system

1. 24/7 Dedicated Internet connection

There are many options available to get connected to the Internet, however to stream 24-hour, 7-day-per-week, you need a dedicated account from an ISP (Internet Service Provider). An Internet connection faster than a phone line is highly recommended for the best quality and reliability.

2. Static IP Address

This is a permanent address given by your ISP and used by WarpRadio.com to locate and connect to your encoded broadcast.

3. Soundboard Connection

As Internet Radio Broadcasting grows in Türkiye similar services will be provided.

The Player: The player software or plug-in, resides on the listener computer. It receives the audio data stream from the server and translate it into the sound you hear from your computer.Since most of these players are free download any of these players will be choosen. Some of these players are:

• Microsoft Windows Media Player TM

Organizational Feasibility

Internet Radio Broadcasting requires not much people as in On-Air Broadcasts. To run the radio a General Broadcasting Manager, an advertisement manager, DJs, technical responsible of the broadcast and a web design team are the main requirements of an Internet Radio. The case of our proposed radio will be focused in this study

Considering the proposed radio in the technical feasibility section. That radio will require a General Broadcasting Manager that is responsible from the Event Calenders, Top 20 Lists, Headline News, Yellow pages preparation and connections with the advertising firms, ISPs etc. There is no need to a separate advertising responsible since most of the advertisement will come through advertisement providers such as Rab.com or AccessBroadcasting (True for even a station in Türkiye since these banner exchange programs are worldwide).

Also a DJ responsible from the music, news and interviews, preparation of jingles and the encoding of these programs. Since most of the time only music broadcast will be made one DJ for reading the news and making the interviews is adequate.

A web designer who also has knowledge about streaming will prepare the radio web pages and control the streaming activities. The web page should be updated frequently for announcements of the programs, Event Calenders, new CDs etc. Since the streaming will consist of installing the encoded broadcast on the server he won’t be overloaded.

Economic Feasibility

After the technical feasibility of Radio-IE is carried out, maybe the most important part of the project economic feasibility is held.

Firstly, the set-up and the monthly costs should be taken into account. The set-up costs are the purchase of the computer and software programs needed to make the broadcast and the building, office equipment and telephone lines costs, the monthly costs are the slaries of the personel, Leased Line Internet connection, rent of building, electricity, telephone, Internet connection for General Broadcasting Manager and cleaning costs:

In order a radio to survive, it must make profit and like other broadcasting devices radio earns money from advertisements. Internet radio can make advertisement of an organisation through audio information and through banners. On the other hand, since at the moment, the number of people that can listen to an Internet radio is limited, collecting advertisings would be difficult. For example, the price of a banner on the web site of Radio Capital is about $2000 per month and total advertising revenue of this radio is much more than $500000 that is the monthly expense of the organisation. It is seen that the banner has no meaning in the total advertising revenue.

Today, radio through Internet has no definite location in the broadcasting industry especially in Turkey. Experts, academicians and managers of professional, large scaled radios like Capital Radio - one of the biggest radios in Turkey - think that radio through Internet can only survive and be able to make profit if only it is supported with the radio on air. On the other hand, foreign experts of webcasting online think optimistic about the future of the Internet radio.

Before discussing Internet radio and its place in the broadcasting industry, first Internet and its usage in Turkey must be discussed. It is easily seen that Internet is not being used by people in Turkey as much as foreign countries. Advertising through Internet is not used by the companies. So the prices of banners are so cheap at the moment. For example, we are told that when Radio ODTÜ seeks for getting advertisement from any company, they offer different ways to advertise that company: On the web site of the radio, on the on-air radio, and by distrubuting handoutsto the people in METU. But nearly all of the companies prefer their advertisement to broadcast on the radio which can be stated as a wrong decision by the experts in America. Because, their estimates say that, 25% of experienced Internet users are driven to shop online by the banner advertising beating out newspapers or magazines ads (14%), television commercials (11%), radio spots (4%), and billboards(4%). According to a nationwide survey of nearly 1500 experienced Internet users by Andersen Consulting, while most of the web site banners are price oriented, less than half of the users cite price as the primary factor driving their web purchases according to the survey.

Today the number of Internet users is limited and so the number of Web Based Services. Price of Internet usage is relatively high when compared with other countries. Moreover, infrastructure of Internet is not strong enough to carry high usage capabilities at the moment. But, operations to strengthen the Internet infrastructure is going on by Türk Telekom and new ISPs are entering the market by providing low prices and the future of Internet in Türkiye seems better

Before the decision about the feasibility of Internet radio is given, first the comparison of traditional radio and webcasting radio must be carried out. Their future in the industry must be tried to be evaluated.

In traditional radio, the potential audience is easily defined within the local geographic area of the transmit antenna. Their interests include local information, such as weather and traffic conditions. With online broadcasting, or webcasting, the streaming digital audio can be recieved anywhere in the world. The local audience will mostly be people who have access to the Internet like the poor radio reception workers in modern high-rise office buildings. One key issue is that, the profound differences in the audiences of traditional and Internet radio mean that advertising that works on one will not work on the other. For example, a local service company that buys ads for the On-Air broadcast may have no interest in being advertised on the online broadcast. Moreover, big name national and global advertisers enjoy greater reach on the web. Traditional radio advertising typically offers 20% national and 80% local ads, according to Gerry Boehme of Katz Media Group.

Another important difference between traditional and Internet radio is what you can know about your audience. Since all servers can be set to record information about how many people came to your website or listened to your online broadcast, you can know exactly how many listeners you have and how long they have listened. And this information can be known in real - time.

Many of the costs involved with Internet radio broadcasting are dropping. The trend for many years has been more computing power for less. Same is true for bandwidth and, to lesser degree, software.

Radio airwaves can take only a limited number of niche listening tastes, but Internet radio can provide as many channels as there are music genres. For example Spinner.com has 128 channels.

Listeners can create their own channels and personalize their Internet radio. SonicNet have led the way in offering visitors the capability to program their own channels.

By pairing sophisticated Internet tracking tools and niche broadcasting, web sites can deliver precise psycographics to Internet radio advertisers and brand marketers. In turn they can provide more targeted messages.

Increasingly, listeners of online music will be able to buy music when they hear it. Radio listeners, on the other hand, often are not even told the name of the song on the air, fumble to find a pencil and cannot find the music when they get to the retail store.

These attributes of Internet radio provides the web site of the radio to be visited by more listeners. And, as the number of listeners increase, the advertisements gained by the Internet radio in audio format and on website through banners will increase too.

On the other hand, today the disadvantages of Internet radio results from technical insufficiencies. As told in technical feasibility part , one of the problems of Internet radio is the limited bandwidth. The number of people that listen to the radio at any time is limited according to your server capability and this limit may avoid companies to give advertisements. But in the future since the technology will provide better compression softwares and faster internet connections at lower costs, this obstacle will be eliminated and advertisements will be collected more easily.

Another problem is competition. With such low barriers to entry practically anyone can start an Internet radio station. This dilutes the audience, making it harder to aggregate enough listeners to attract advertising money or survive on the subscription model of revenue.

Adding to these, one more disadvantage of Internet radio is its need for a computer to listen to the radio. Today, most of the people listen to the radio on the way in their cars, and since there is no possibility to reach Internet in a car today, Internet radio cannot be reached and a wide range of potential listeners are lost. On the other hand, since Internet will not require a computer in the future this will also eliminated. From the San Jose Mercury News: “The Internet can bring radio broadcasts from the other side of the planet directly to the computers, but it cannot get them from the PC to the cars or walkmans. Eventually mobile wireless connections might solve that problem, letting people tune into their favorite online DJ anytime, anyplace. But, until wireless networks can support online broadcasts, the next best thing is emerging technologies that help listeners record web broadcasts onto something that can travel.”

The biggest economic advantage of Internet radio is that, it is a combination of a radio and a web site. That is to say, Internet radio has two means to earn money. The following section is about the ways of making money through Internet radio.

Donations: Solicit donations from the listeners of the radio. Many public radio stations do this.

Subscriptions: Require listeners to pay to be able to listen to online broadcast. Non-subscribers can listen for ten-minute sessions before the broadcast times out. Subscribers are able to listen to the broadcast uninterrupted. An Intenet Radio in Türkiye radyomerhaba uses this system with a $ 20 / year fee and it has 541 members leading to revenue of approximately $ 11,000.

Web-Advertising: Web advertising generally means those ubiquitous banner ads. Internet radio broadcasters are showing a lot of innovation is this area. “Stations with Proprietary Players” provides a review of some of the ways broadcasters are finding new and unique ways of putting the advertising banners in front of their listeners.

Broadcast Advertising: Broadcast advertising is audio information carried as part of the overall broadcast. This ranges from the advertising spots we are familiar with on traditional radio. The big difference is that, on the Internet “distance is dead”. Your audio advertising can be heard throughout the world. There is also a banner exchange program in Türkiye LinkReklam so that you can make your own advertising in other sites with the cost of putting a banner of other sites using that exchange program and attract more people to your site.

Sell Stuff: Items can be sold from the web site. If building an online store to sell station paraphernalia is too daunting, become an associate or affiliate and sell music CDs. Amazon.com, Cdnow, CafePress and Music Boulevard all have programs that pay a commission for each CD sold through the web site. A Turkish Internet radio station TUradyo has an amazing on-line store that it sells CDs, books etc. Also selling your programs such as shows, interviews to people after the live broadcast is another opportunity used by RadyoPoyraz broadcasting from Bursa.

Moreover, new revenue models are developing that will only grow as the back-end bandwidth problems are solved. For example, advertisers now pay based on click-through rates. Katz Media’s Boehme suggests a more finely tuned model in which advertisers pay not only for transactions but also, for “awareness” and “consideration”. That is consumers sometimes buy online after seeing advertising and marketing messages over a period of time. Web sites could charge for this awareness and consideration process, Boehme suggests. “If someone buys that covers the fee for the other two steps, but if the consumer stops at the awareness stage, that could be charged for on its own” he says.

Another option borrowed from TV, pay-per-view is relatively new, but may work for Internet radio web sites with original content. For example, House of Blues broadcast a live 90-minute Ziggy Marley Concert from its Chicago Club as a technology and marketing test. Using alpha software jointly developed with Microsoft, HOB.com transmitted free to listeners connected at less than 100 kilobits per second. It charged $4.99 per hour for 300-kbps and faster connections which also received full-screen video.

Internet sites with novel content might be able to offer music, video, and services on a membership model such as used in public television. As long as a web site’s content differentiates from what anyone else offered, a listener supported membership model might work.

After the methods to make money on the Internet radio are determined, below information about a survey that is done to evaluate the number of listeners of Internet radio are given.

 E-Audio Ad Solution Services In the World

One of the problems with webcasting, especially for Internet-only radio stations, has been connecting with advertisers. While broadcasting on the Internet means a worldwide potential audience, traditional radio advertising has been mostly local in focus.

GlobalStreams.com’s E-Audio Ad Solutions Program was created to meet this need. This program is designed to promote the advantages of advertising on Internet radio while also making it very easy for advertisers to purchase advertising time on over 120 internet-only radio stations. This program helps connect advertisers with internet radio broadcasters- each with their own programming niche and a loyal following (taken together, the broadcasters currently represented by GlobalStreams.com deliver over 300000 unique audio streams each month.

RAB has secured agreements with over 100 national online retailers. As participants in the RAB eCom Solution, the internet radio starts to earn a commission on each purchase that visitors to the web site make through the mall. RAB will keep track of each purchases made through mall, send to the radio monthly sales reports, and pay the sales commissions earned quarterly. You will be learned 85% of the total commissions and, in exchange for tracking and processing services, RAB will keep 15%.

Description: An eCommerce shopping mall with links to selected national retailers.

Have your station makes money: Earn commissions on each transaction by your visitors through your mall.

• National pages featuring eCommerce links to selected retailers.
• Monthly reports of all eCommerce transactions mad eby your site visitors.
• Quarterly payment of earned commissions.

In addition to having the national shopping pages explained in national pages, RAB will add a customised local page to your mall. This area is totally customisable and provides you the opportunity to generate local revenue by selling links to other web sites, banner ads, click-throughs and more. This is called as level 2 service and level 2 participants will pay to RAB $25. This minimal monthly charge will include basic page maintenance. Sections that need a higher degree of customised service, such as building banner ads, creating special graphics, providing animations, etc., can contract with a local web developer, or have the work done by RAB.

As you see from the diagram, there are dozens of steps and significant cost in setting up a new on-line retailer. However, RAB’s new eCommerce Solutions makes it easy with complete support every step of the way. At points 1, 2, 3, visitors log on to your station’s web site , enter your shopping mall and select a local merchant. They are now able to view and purchase items from the merchants in your eCom mall. Once a visitor selects an item, it will pass into (4) shopping cart. From here, the merchant has two choices for payment processing ın option (a), the order is (5) faxed to the retailer, (6) processed with their in-store credit card terminal, (7) fulfilled and (8 and 12) shipped to the consumer. Option (b), allows the retailer to process the payment completely online. Again an order is (5) faxed to the retailer, but now it passes through (9) a secure transaction gateway where it is processed with visa, master-card or American Express. Once the order is (10) is fulfilled and (11 and 12) shipped to the consumer, the funds are (13) deposited in the merchant’s bank account. Of course, (14) RAB services monitors every set-up of the process and sends you complete site activity reports each month.

The mission of Access Broadcasting is to create and implement a comprehensive set of Internet tools and services that provide new revenue and information resources for its strategic partners and their user communities. Through Access Broadcasting’s proprietary programming and strategic partnership with other service vendors, Access Broadcasting is bringing commerce information and entertainment solutions to local communities and aggregating the results to a national audience.

Classifieds: On-line classified advertising with unlimited copy and pictures, priced to hit print competition where it hurts.

Coupons: Online coupons from local and national retailers printable at the user level- a great value added or upsale opportunity for your sales staff.

Auctions: Online auctions with local, regional and national search capability and a flat rate- one of the most popular and most profitable categories on the web.

Personals: Flat fee personals with local/regional/national search capability- a proven money-maker that requires no monthly dues or membership fees.

Events / Top 20 Lists / PSA’s and Concert Calendar: Comprehensive event, concert and convention listings- local/regional/national – all with an easy to use web interface for upload and maintenance by staff.

Headline News: local news with Associated Press National feed including audio news clips- you upload your local news with our web based interface, print the stories to read on the air.

Discounts / Local Shopping Mall / and “Radio Yellow Pages” : Local Regional Shopping Mall with links to vendor specials and coupons-a great value added or upsale opportunity for sales staff.

Banner Advertising: Management system for uploading and accounting of banner inventory.

Internet Management and Revenue Opportunities: It has extensive ISP and networking expertise on their staff. They are able to show how to turn a radio tower into a wireless Internet transmitter, reduce or eliminate station to station long distance phone charges with IP phones and more.

Streaming: Through strategic alliances with streaming media companies, Access Broadcasting provides streaming audio solutions to its station member partners.

Original Audio Content: In addition, Access Broadcasting will begin implementing its own original content for both entertainment and news channels that your station can add to its list of programming at no charge.

Programming Services: Access Broadcasting can help to design a web site that is both professional and functional. The web site must fulfill both sides of the needs; it has to reflect the station’ personality while making money.