Media Alliance: Commercial Podcasting Experiment by Infinity in SF

April 29, 2005

Commercial Podcasting Experiment by Infinity in SF

Infinity turns to amateurs to defend itself
FRIDAY, APRIL 29, 2005
The Associated Press

Infinity Broadcasting, a terrestrial radio company whose business model
is being challenged by the iPod phenomenon, is borrowing a page from its
rival's playbook.

Next month, Infinity will convert an underperforming station in San
Francisco to a format that will play only "podcasts," or amateur
recordings distributed via the Internet to listeners' iPods and other
digital music players.

Infinity, which is part of the Viacom media conglomerate that also owns
CBS and MTV, announced Wednesday that it would convert its KYCY-AM
station in San Francisco to the new format on May 16.

Robert Unmacht, a radio consultant in Nashville who tracks radio
formats, confirmed that it would be the first radio station in the
United States with an all-podcast format.

Podcasts have become popular in the past several months with the booming
use of Apple Computer's iPods and other portable digital listening
devices. Podcasts are essentially audio files that people make on their
own and then upload to Internet sites. Listeners can then copy them to
their devices and play them whenever they want.

A huge variety of podcasts is available through aggregator sites like
iPodder, ranging from random musings on pop culture and sports to music
or movie commentary. Unlike radio broadcasts, they can be stored and
listened to at any time, paused and replayed.

Joel Hollander, the chief executive of Infinity, said the station, which
would be promoted under the name KYOURADIO, would run material submitted
by listeners but screened to make sure it conforms with U.S. federal
broadcasting standards for decency.

Hollander described the format change as something of an "experiment,"
saying the company had not decided how long it would try it before
deciding whether to keep it.

Infinity has been one of the hardest-hit traditional radio broadcasters
as Wall Street frets about stagnant advertising revenues and declining
audiences. Parent company Viacom took a $10.9 billion charge in February
to recognize the declining value of its radio holdings.

Viacom's managers have said they intend to sell off its smaller stations
and invest more money in top-market outlets.

Despite the challenges, radio remains hugely profitable. Viacom reported
last week that its radio division made 41 cents in profit on each dollar
of revenue in the first quarter - a very high margin for any business,
but still down from 44 cents on the dollar from the same period a year ago.

With KYCY, Infinity is taking little financial risk because the station
is performing so poorly. Meanwhile, radio industry leader Clear Channel
Communications has been trying to lure listeners back in by reducing the
amount of commercials. So far, Infinity, the next biggest player in
radio, has not matched Clear Channel's "less is more" initiative.