Turning On to Live Internet Radio with TuneIn

Xconomy National — 

Radio. It’s my periodic obsession, my news lifeline, my aural ecosystem. It’s the most antique of electronic media, yet at the same time, it’s evolving as fast as the Internet, perhaps faster.

Where is radio going? How will it thrive? What will it look like (or sound like) in an era when every phone, tablet, and automobile has a broadband data connection? Does the word “radio” even make sense anymore? As somebody who’s been a public radio fiend since the age of 12, I brood over these things.

In the past I’ve written about efforts to bring the community of public radio broadcasters into the Internet age, do away with public-radio pledge breaks, and let commercial radio stations crowdsource their playlists. I’ve covered a startup accelerator that hopes to bring Silicon Valley-style innovation to the world of public radio and other media, as well as efforts by companies like Apple and Stitcher to bring some order to the world of on-demand radio shows, aka podcasts.

But the one thing I’ve never really written about is live radio. That’s probably because I never listen to it, except for the handful of hours each week when I’m stuck in my car driving to interviews around Silicon Valley. And then I only listen to one station, KQED—I might as well glue my dial to 88.5 FM. All of my other “radio” listening is actually podcast listening. (Just like all my “TV” viewing is actually Netflix and iTunes viewing.)

I know I’m a latte-liberal weirdo in this regard, but I’m not about to start sitting in my car listening to Top-40 stations just to burnish my credentials as a plebeian. If I’m ever going to experience live radio north of 91.9 megahertz (the upper limit of the spectrum that the FCC designated for non-commercial radio back in 1945), it’s going to be mediated by one of my computing devices, where I can control the experience.

TuneIn CEO John Donham

TuneIn CEO John Donham

That’s why I’ve been wanting to learn more about TuneIn, a startup in Palo Alto that’s probably doing more than any other company to marry live radio with the Internet. At its core, TuneIn is a huge annotated catalog of live radio programming from around the world—it knows what shows will be on which stations 24/7/365. It connects users to those stations’ live digital streams for free via its website; its iOS, Android, Windows Phone, BlackBerry, Palm, and Samsung apps; home systems like Sonos audio players and smart TVs; and even Internet-connected cars.

Recently I sat down with TuneIn CEO John Donham, a veteran gaming and entertainment executive who’s done stints at Sony, Playdom, and Disney, to find out where the company came from and where it’s going. Interestingly, our talk turned into something of a debate over the value of live versus on-demand radio. As you’ll see in the Q&A below, Donham handled my sometimes combative questions graciously, while at the same time bringing some pretty powerful statistics to bear. It turns out that TuneIn users spend 98 percent of their time listening to the 70,000 live radio stations that the service aggregates—this despite the fact that the TuneIn directory also includes virtually every podcast ever published (some 2 million of them).

Donham believes that live radio carries an emotional resonance that on-demand shows just don’t. Sometimes that’s about immediacy: if a big news event like Superstorm Sandy is unfolding, you want to listen while it’s happening. Sometimes you want to be transported, in your mind’s ear, to the scene of the broadcast: Comerica Park or AT&T Park during the World Series, for example. And sometimes you just like knowing that there’s a live DJ on the other end of the audio stream, programming stuff you’ll like, and that thousands of other people are listening at the same time.

Those are Donham’s explanations for the popularity of live radio, anyway. I’m not sure any of these features matter much to me, but then I’m a writer, I live in my head, and my information needs are highly targeted (and don’t include live sports). TuneIn’s rocketship growth curve—from roughly zero users in 2009 to 40 million now—speaks for itself, and there’s no doubt that somebody had to create a global, real-time directory of radio programming. So my talk with Donham created a nice bookend to another conversation, around the same time, with Stitcher co-founder and CEO Noah Shanok. By aggregating on-demand radio, Stitcher is the perfect complement to TuneIn (though it’s not yet available on as many platforms).

TuneIn has raised $22 million in venture backing from Sequoia Capital, General Catalyst, and Google Ventures, and it’s got a headcount of 80. Like Stitcher, it makes money by showing display ads within its mobile apps—and also like Stitcher, it has deals with automakers who are building more digital options into their infotainment systems. (Just this week GM named TuneIn as one of the partners for an experimental new in-car “app catalog.”) I think both companies will be around for a good long while, because they serve different needs.

Which brings us back to my “whither radio?” question. My guess is that radio is bifurcating into two separate media. There’s the stuff that’s valuable mainly because it’s live: breaking news, live sports, call-in talk shows, and perhaps music programmed by a DJ you like. That’s TuneIn’s territory. Then there’s the programming that’s a little more produced, content-rich, and evergreen, especially public-radio stuff like This American Life, Radiolab, and Wait Wait Don’t Tell Me. That’s Stitcher’s material, because people like me wouldn’t hear it at all unless they could time-shift it. Over time, there will be less and less reason to broadcast these programs at all. (Indeed, there are already some great NPR shows, like Planet Money, that are never actually heard on the radio.)

I guess the $30 billion question is whether there’s a convincing business model for both types of radio, and how streaming changes the equation on both sides. TuneIn shares the revenue from its in-app ads with radio stations, and in theory it’s adding an incremental, potentially global audience to each station’s terrestrial listenership (the people within 40 miles of the transmitter), which should boost advertising rates. In practice, the economics are still being worked out. Anyway, here’s the edited text of my conversation with Donham.

Wade Roush: What’s the history of TuneIn?

John Donham: TuneIn is an 11-year-old company, and for the first eight years it was called RadioTime which constructed a directory of live audio on the Web, including a lot of radio. It licensed that to manufacturers like Sonos or makers of Internet alarm clocks. The struggle was that they were waiting for one of these devices to take off in order to really generate business.

Along the way, a developer named Ben Alexander built an app called TuneIn that used the RadioTime back end. The founder of RadioTime, Bill Moore, finally saw the traction he had been waiting years and years for—it just happened that the device was a smartphone instead of some piece of consumer electronics in the home. He quickly acquired TuneIn, took the name, and pivoted the company over to become direct-to-consumer. At that point growth really started to take off. Between 2009 and 2011, the company went from nearly zero users to 25 million, with no marketing, just word of mouth.

WR: What attracted you to the company?

JD: Having just come from the social game space, when I got an introduction to TuneIn I was staggered to see that number of active users. In social games, you need a highly viral platform like Facebook and many millions of dollars in marketing to create an audience like that, so to see TuneIn do it organically was pretty stunning. Seeing that magic, and recognizing that my passion was connected entertainment, the idea of radio being reborn online was a perfect fit for me.

It’s exciting because this is the last mass-market medium to move online. As Netflix is to movies or Amazon is to books, TuneIn is to radio. It’s a $30-billion-a-year business, and as it moves online we are going to see the same movie play out that we saw with CDs and books and movies. So I expect there will be platform winners. Just as Amazon replaces the bookstore, TuneIn wants to replace terrestrial radio towers with the infinite Internet radio dial.

I also have this hobby, unbeknownst to most, of building speakers for fun. I’m an audiophile, and I would rather build my own speakers. I build so many of them, it drives my wife nuts.

WR: You mentioned that radio is the last mass-market medium to move online. Why do you think it has taken so long?

JD: We think part of the reason is that radio isn’t a perfect fit with the Internet. The Internet makes newspapers better, because all news articles are online, and Google lets you search them. But if you think about live radio moving online, there is nothing that provides transparency into what is playing on any given radio station. You get in your car and you have 70 local radio options. If I tell you there is an interview going on right now with the CEO of TuneIn, how long does it take you to find that? Longer than the length of the interview. On the Internet you have literally a thousand times more choice, yet if we don’t solve the transparency problem, all we have done is make things worse, because now you have even more options and you still don’t know what’s playing. TuneIn’s mission is to bring all radio together on one dial and solve for discovery, which includes not only providing a user interface, but also understanding what is going on, on every station, all the time.

WR: Others before you have tried to solve that problem for portions of the radio dial. There’s the Public Radio Player app from PRX, for example.

JD: We believe we are the only ones trying to solve for all live and on-demand listening for all stations worldwide. One of the things we believe is that a consumer doesn’t want one app for NPR and another for the BBC and another for Top-40 and another for ESPN and another for CBS. There are just too many brands out there. And that’s not how it works in you car. You have one radio in your car. So I think our goal is to try and solve that same problem, but do it for all broadcasters and all users worldwide.

Our goal is to provide the fastest path to the user to find what it is they want to listen to. If you want a really deep PRX experience, you will probably lean back toward their app, because they will be able to provide a core experience for their users, beyond what we could do for every content type. But that is the exception, not the rule.

WR: I’m betting that this effort to build a unified front end for Internet radio—essentially, interposing the TuneIn interface between a station and their listeners—creates some tension or friction in the industry. Wouldn’t individual radio stations or networks prefer to be the ones serving this content to their listeners?

JD: Broadcasters are exceptionally good at creating content. If you are a local radio station in New York City, your entire staff is built for creating local news or play-by-play sports or music. Now suddenly you are presented with a world where there are hundreds of different types of connected devices, not just phones but cars and home electronics like the Sonos player. How does an average radio station bring their content to all of these devices?

We don’t make any content ourselves. We say, the broadcasters are spectacular at this, but what they aren’t good at is bringing amazing user experiences to every device worldwide. TuneIn tries to be that glue between broadcasters who are streaming content online, and getting that content to users in a consumable way.

WR: Sorry to harp on this point, but if you’re bringing all those live streams into your app, aren’t you in essence diverting material that the individual stations probably wanted people to find on their own websites?

JD: This is exactly why TuneIn has gotten the traction it has: None of those streams even comes to TuneIn. Think of this analogy: as Google is to Web pages, TuneIn is to live audio streams. Google itself doesn’t serve you any of those Web pages. The websites’ own servers do. So it is with the TuneIn server, which doesn’t have any of those streams—they go straight to the client.

One of the reasons TuneIn has been really successful is that we haven’t required broadcasters to change their technology, or change what they’re doing. Rather, we are finding ways to create better experiences by centralizing all that technology, with a very consumer-oriented view.

WR: I want to ask a question about live radio versus podcasting or on-demand radio. You provide access to both, but in contrast to competitors like Stitcher, there’s a heavy emphasis at TuneIn on live streams. To me, that’s a little bit odd, since one of the great things about the Internet is the promise of content anytime, anywhere—it frees you from being tied to a broadcast schedule.

JD: I would agree that our emphasis is more on the live streams. Normally, if a listener is given a choice between a piece of on-demand content or live content, they choose the live content. That is one of the interesting things about audio.

I am going to go off on a bit of a tangent, but I promise to come back. If you think about radio, it has existed for 100 years. People have tried to kill radio over and over, first with cassettes, and then CDs, then Pandora, then Spotify. Yet none of those things killed radio. You could make the case that having on-demand music on a CD is dramatically better than radio, since you can listen whenever you want, but it didn’t replace the radio, and neither have Spotify or Pandora or other on-demand services.

If it’s no longer a question of whether live or on-demand is “better,” and we just take the evidence that exists, it’s clear that consumers have voted, and they are listening to live. Or a very high percentage of them are.

Then the question is why. Then you start capturing what makes live radio incredibly special. Radio is human. There is always someone on the other end of that broadcast. Because of that, it is an inherently social experience. Unlike just about any other medium, you are listening to the same thing at the same time as 10,000 other people, and you feel like you are part of this community event, even though you can’t see them.

It’s also transportative. The most popular station on TuneIn during Hurricane Sandy was WCBS. People wanted to hear what was going on in New York City. You feel like you are there, and we say in the office, TuneIn takes you there. It’s the same when you’re listening to play-by-play sports. You feel transported to that event.

Coming back to your question, we actually see the on-demand case as the exception. The rule is that people want live. We have 70,000 live stations and 2 million podcasts. So the potential for people to listen to podcasts is quite high. But the answer is that only 2 percent of listening is on-demand. 98 percent of listning occurs on a live stream. So we focus on delivering the best live experience we can.

When you really want something on demand, we provide it, but that is a narrow use case. We ask ourselves, “should we invest more time in helping podcasts to be first-class citizens with live?” And we do, but more and more we find examples that suggest that when users are given options, they want live. The listening times are also longer on live.

WR: I’m not convinced yet by your idea that live radio is more human. I don’t feel a particular connection to a DJ I don’t know in some booth somewhere.

JD: I can give you some other examples. Let’s take the World Series. Would you like to listen to that a few days after the fact? All play-by-play sports, that entire vertical, is an exception to what you’re saying. Would you like to listen to WCBS coverage of the hurricane now, or next Monday night? Everything that’s happening now is dramatically less powerful if it’s provided to you a week later.

We find our highest on-demand listening in the case where it’s a [daily news] program like Marketplace. But even in the case of something like music—and there are some interesting studies around this—if you hear a song on the radio and you love that a DJ chose it for you, the serendipity of someone else choosing that song provides a more delightful experience than if you picked out the CD.

WR: But it seems like the Clear Channel business model in commercial radio, where music is programmed centrally, is doing away even with that concept, of a local DJ you might know something about.

JD: We agree, many of those big broadcasters have optimized for the terrestrial business, which means there is some central person syndicating a playlist across the whole country. But there are also some unbelievably good independent radio stations that now, instead of being constrained to an audience within 40 miles of their terrestrial tower, can broadcast to the entire world. I’m talking about stations like KEXP in Seattle, KCRW in L.A., Hot 97 in New York. At those places, people are not just providing broadcast radio, they are creating compelling content. I agree, if you just listen to a Top-40 station from a big broadcaster, it is going to feel like a generic experience, but that is not really what TuneIn is about.

TuneIn has 70,000 stations and over 50,000 of them get at least one listen every day. The reason Amazon beat the Borders down the street [the Palo Alto Borders closed in September 2011] is that Borders could only have 30,000 books at a time, whereas Amazon can have every book. The long tail in books is dramatically larger than the head. The same is true in radio. We find the top station on TuneIn gets substantially less than 1 percent of the audience.

WR: Because radio has been so local in the past, confined to that 40-mile radius around the transmitter, it’s had very local audiences supporting it. Local advertisers could know they were reaching local consumers, and local public radio stations could ask for donations from their local listeners. Doesn’t it break that model if you’re streaming the audio to someone who lives 400 or 4,000 miles away and has no local allegiance?

JD: If you find the content compelling, your distance from the tower should have nothing to do with how willing you are to support it. A great use case for us would be people who got introduced to radio in college, listening to sports or whatever on their college radio station. A very high percentage of them move away, yet they are still passionate alumni. Are we doing a disservice to the college radio station by allowing their alumni to reach them even if they are far away? If anything, we are bringing that user closer.

So what you are defining as a weakness is actually a strength. If anything, we are magnifying the value of local content. When I want to listen to jazz, for example, the best jazz station in the world that I have heard is in New Orleans. It’s the local flavor coming all the way through. That is not going to be undermined by the Internet. If anything what it does is show the whole world, here is what a great jazz station should look like.

WR: You said earlier that you want to understand what is happening on every radio station on TuneIn, all the time. With 70,000 stations, how is that possible? Can you automate it?

JD: It’s a very human problem. Google can just create all of these automated bots that just scrape the Web and compile the data in real time. For us, there is no real way to automate knowing what is playing on this station at that moment. It gets even worse when you think about geography. If we have a directory for a station in Brazil it should look locally authentic. You want someone constructing the radio directory who is keyed into those listeners. So TuneIn has a worldwide work force in Brazil, India, China, Japan, Switzerland, the U.S., trying to build the absolute best directory so the experience always feels authentic.

Another way we do it is through technology. Some stations report “now playing” information to us. And some of our client [apps] report back what is being listened to. If you are listening to a music station, your client, depending on where you are, may report back “I’m listening to this station and here’s what’s playing right now.” We use that data to serve better search results.

The problem is doing that at scale, across thousands of stations all day, every day. It just isn’t practical. If you listen to talk radio and Rush Limbaugh is talking about Barack Obama, and the search result for that is three minutes old or five minutes old, that is not relevant anymore. It’s incredibly real-time. The industry is heading down that path but we’re not there yet.

WR: How does TuneIn earn money?

JD: Right now it’s primarily through display ads. One of the unique things about a smartphone is that there is a display—the radio in your car has no room for a display ad, but the radio on your phone. We revenue-share back with our content partners, so it’s incremental income for the radio industry. We have a separate product called Amplifier, which allows broadcasters to log in and see all their station’s listening up through the previous day. They can see where their listeners are coming from, what devices they are using, and what revenue they made. As Google Analytics is for the Web, Amplifier is for live audio.

WR: Do you work with all 70,000 stations in your directory to get permission to connect to them, or is it more automatic than that?

JD: It’s kind of like Google. Do they go out and do a deal with every Web server in the world and say “We’d like your permission to put you in our search engine”? No. On the other hand, we are happy to pull them out if they don’t want to be part of it. But because we provide broad distribution with revenue sharing, the vast majority of the audio world is excited to be part of the platform.

WR: What reasons do stations give for not wanting to be part of TuneIn?

JD: The best example would be Clear Channel. They have their own platform called iHeartRadio, and they want to limit distribution of their stations to just their platform, to try and drive users to iHeartRadio rather than any other platform. We see that as an analogous situation to AOL 20 years ago. AOL had no interest in being part of the Internet because if it put all its content on the Internet, why would you pay $20 a month for AOL? Well, who won? It wasn’t Prodigy or Compuserve. It was everyone else.

We believe the movie will play out the same way it did 20 years ago. We think radio providers should focus on the content. We will focus on the technology and discovery and bringing this to every user. You focus on what you do best, which is creating amazing local content, and the users will decide.

WR: Your own personal background is mostly in social gaming and interactive entertainment rather than broadcasting. What made you a good fit for this job in Internet radio?

JD: We are a technology company, not a radio company. If you were to go out and find a typical radio CEO to take over TuneIn, I don’t think you would be amplifying what is great about TuneIn. TuneIn is, I hope, best served by someone focused on product, and providing the best entertainment products and the best user experience we possibly can. I feel like it’s a natural fit for me. I’m super passionate about the space and have a lot of experience building engaging games and applications across many different devices, and I’ve seen some of this movie before, like AOL transitioning onto the Internet.

WR: Last question. You mentioned that you build audiophile speakers. I’m just curious, what’s the situation for audiophiles when it comes to Internet radio? Can you get decent sound over a streaming Internet connection?

JD: With news, talk, and sports, it doesn’t matter. You don’t worry about sound quality. But most stations stream multiple bit rates. If you are on Wi-Fi and you want a high-bit-rate stream, you can get extremely high quality sound. Once you get much above 128 [kilobits per second] the difference starts being inaudible to the human ear. So, one of the funny things about terrestrial radio is that the sound quality is pretty low, because it’s analog over the air. But online broadcasters can pick any bit rate, and it’s coming straight off the equipment, not going through a tower.

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  • Anthony

    Great article. I am an avid music fan from the states that happens to live in Tokyo, Japan. Tunein enables me enjoy and discover great music each day on the way to and from work,etc. My iPod touch combined with and LTE mifi is how I listen to my favourite Allegro Jazz, Lounge,FM Italia and LBC. It really expands my options on content I can enjoy.

  • Jeannie

    WWOZ New Orleans has more streaming listeners around the world than they do terrestrial listeners in New Orleans because they produce a sound that is unique and loved the world over – and now everyone gets to hear it!