IDC’s Internet Radio Scorecard Shows Growing Interest but Challenging Business Model

FRAMINGHAM, MA – FEBRUARY 8, 2001 – According to IDC, the value proposition of Internet radio for consumers is too strong for vendors to ignore. However, while no disc jockeys, greater variety, and fewer commercials promise a growing user base, players competing for positioning in this new market face several ongoing challenges.


"Internet radio might appear a superior product ready to sweep away traditional radio, but it's not-at least not yet," said Malcolm Maclachlan, senior analyst for IDC's Consumer and eCommerce Media program. "To be successful in the online music and talk radio spaces, companies will need to develop strong business models that garner and keep users, as well as monetize those users."

IDC believes the promise of Internet radio is also its downfall. Internet radio's ability to give listeners exactly what they want creates audience fragmentation, which makes it more difficult to turn profits from advertising. Additionally, issues of portability and dissatisfaction with a PC as a listening device are dissuading users from paying for downloaded content and forcing market players to rethink their marketing strategies or drop out of the game.

IDC's eMedia group recently published Online Radio Scorecard: New Media, Old Rules, and Many Business Models (IDC #B23701). This report examines the challenges online radio companies face. It discusses the current problems with traditional music and talk radio as well as the technical and business challenges faced by competitors with an Internet radio strategy. The advantages and disadvantages of specific revenue and business models are addressed. Additionally, this report provides a scorecard for assessing Internet radio competitors and recommends actions that will lead to long-term success. To purchase this report, contact Demetra Georgakopoulos at 1-800-343-4952, extension 4496, or email her at

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies and the financial community. Additional information can be found at

IDC is a division of IDG, the world's leading IT media, research and exposition company.


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