Internet Radio Is Fixing to Make a Comeback

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Apple Music versus Spotify. Spotify versus Pandora. Rdio versus its own buggy app. Based purely on the headlines and the hype, the music world would seemingly belong to on-demand streamers. That’s news to TuneIn, longtime bundler of over 100,000 free, live, streaming radio station broadcasts. It doesn’t just believe in the power of radio; it’s got a plan to convince you to pay for it.

To this point TuneIn has, much like radio itself, been exclusively free. Simply download the app, visit the website, or summon it on your Echo or other connected device, choose a station podcast, and listen. Now, though, the company offers TuneIn Premium alongside that existing free model. For $8 a month, Premium gives users access to 600 commercial-free music stations, over 40,000 audiobooks, and live broadcasts of professional soccer (EPL and Bundesliga) and major league baseball games.

It’s a bold move, a direct assault on the subscription dollars that consumers are pouring into streaming services at rapidly increasing rates. But TuneIn thinks it has something to offer that its rivals can’t: a personal touch.

“TuneIn anchors a human at the other end of the broadcast,” says CEO John Donham. That’s true, at least in some sense, of each of its offerings. The question, though, is if that’s enough.

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Baseball games. Audiobooks. Ad-free radio. At launch, TuneIn Premium’s lineup seems more like someone drew random slips of paper out of the “streaming audio” hat than a cohesive package. It’s hard to see the through-line, until you look at it in the full scope of TuneIn’s ambitions.

“People might use one service for their audiobook app, and another service for play by play sports, and another for commercial-free music,” Donham explains. “For us that seems like a very similar theme to why we started TuneIn. Rather than have 20 apps for 20 different radio stations, TuneIn brought them all together in one location.” Why not, then, apply that same philosophy to literally anything your ears can listen to?

TuneInThat’s plenty compelling, as far as endgames go, especially compared to the raft of on-demand services that primarily house playlists curated by you, an algorithm, or an invisible stranger. It doesn’t mean, though, that the current grab-bag is necessarily worth your cash. In fact, you can get an MLB Gameday Audio subscription for just $20 per year. An Audible subscription costs a heftier $15 per month, but features an audiobook library more than four times larger than TuneIn’s.“They’ve managed to end up with quite a niche proposition,” says Mark Mulligan, co-founder of music industry-focused MIDiA Research. “In some ways that’s good; it can be easier to monetize that than a mass market… But this could absolutely go either way. TuneIn could build on this, get more sports content, more books content, be a more rounded proposition. Right now, just with what it’s got, that’s not enough to be offering great value for the money for a large group of people.”The good news? TuneIn couldn’t agree more. “This is just the starting line,” Donham assures. “When you think about TuneIn a year or two from now, you’re going to see an awful lot more content coming into this subscription package.”Planning to sign media partners, though, is a far cry from actually coming to terms; just ask Apple’s phantom TV streaming service. In the meantime, many of those on-demand services have begun investing in the power of radio—or something like it—themselves.Nobody Killed the Radio StarDespite the recent—and not so recent—proliferation of alternatives, rumors of radio’s decline have been greatly exaggerated.“It’s managed to hold its own,” says Mulligan. “You look at the reach of radio, the number of people listening to the radio, it’s absolutely held its own for a long period of time.”You can see evidence of that not just in TuneIn’s 60 million active monthly users (and live radio rival iHeartRadio’s 70 million registered users), but in the promotional might Apple put behind Beats One, its 24-hour, live, DJ-centric broadcast, and the recent embrace of traditional radio stations by, well, Rdio. (Spotify and Amazon Prime Music have “Radio” and “Stations” features, respectively, but they’re both just variations on Pandora rather than live broadcasts.)Mulligan points out that one reason for radio’s staying power is that much of its audience consists of older media consumers, people less likely to dart to the next shiny new thing. But it’s also a medium that scratches a very particular, cross-generational itch. “The majority of people like to lean back and listen a lot of the time,” the analyst notes. “Some people like to lean back and listen, period.”Individually tailored playlists like Spotify’s new Discover Weekly feature feed into that passive experience, as does Pandora’s algorithmic model. Those big nonstop music blocks can also, though, foster a sense of isolation. At least relative to tuning into BBC Radio, or Hot 97, or WBHM.“I think part of what people are coming to realize is that a radio experience is a very social experience,” says Donham, “whereas an on-demand music experience tends to be more of an entertainment experience. When you listen to a human at the other end of a broadcast, you feel connected to them. You feel like you have company.”While Beats One seemingly encroaches on TuneIn’s emotional turf, Donham compares it to “launching a single webpage and saying ‘I’ve done all the best of the Internet by putting it on this one page.’” It’s a solid burn, even if it does ignore the variety of other experiences Apple’s music platform incorporates.So radio is alive and well, at least for now, with TuneIn and iHeartRadio at its streaming vanguard. Great! That still doesn’t answer one important question: Who’s going to pay for it?Pay to PlayAs it turns out, TuneIn may not need many people at all to consider its premium tier a success. Some quick back-of-the-napkin math says that converting just one percent of its 60 million users would add over $57 million of revenue per year. And there’s plenty more upside from there.“If you were to look at a mature subscription business, something like a Pandora or a Spotify,” says Donham, “you would see a conversion rate that goes anywhere from four percent on the Pandora side to 25 percent on the Spotify side.” Even the low end of those numbers will take time—and a significant content boost—for TuneIn to realize, but starting from such a large base means every sliver counts.If the idea still seems untenable, consider this: Sirius XM boasts more than 28.4 million subscribers, each of whom pays anywhere from $8 per month for 50 a la carte commercial-free stations (excluding live games) to $20 per month for 150+ commercial-free stations plus a full slate of live sports. TuneIn Premium offers 600 commercial-free stations, plus baseball, plus books, all for $8. As Apple CarPlay and Android Auto increasingly empower dashboards with simple app interfaces, TuneIn will present an increasingly appealing satellite radio alternative.On-demand and radio streaming aren’t mutually exclusive; there’s room for both to thrive, or at least survive. TuneIn Premium, though, acts as a welcome reminder that live radio has its advantages. Some of them, someday, might even be worth paying for.

Internet Radio Is Fixing to Make a Comeback

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