Salem Communications, one of the largest Christian radio networks in the United States with some 80 stations, plans to begin testing technology in the next few weeks to take advantage of cost savings promised by harnessing the computers and excess Internet capacity of its customers. If successful, it would represent one of the first commercial content delivery applications for peer-to-peer technology, a method of sharing files and data popularized by Napster that has yet to step out fully from the shadows of its underground past.
Salem plans to announce a deal Wednesday with peer-to-peer provider Blue Falcon Networks and online advertising insertion company Hiwire in a bid to create a profitable Net radio operation. Several stations from the company's KKLA Communications Group subsidiary are scheduled to begin testing the technology Jan. 1.
"The Blue Falcon-Hiwire solution will enable us to expand Internet broadcasting initiatives," Jim Tinker, vice president of operations of KKLA Communications, said in a statement. "We look forward to the cost savings and the new revenue opportunities created by this partnership."
The Blue Falcon deal comes as Web broadcasters are struggling with high costs and low advertising sales--a combination that has proven deadly to many Net radio stations even as their audiences have grown. MeasureCast, which measures online radio demand, said the Internet audience for radio tripled from January to October. But many longtime Net radio stations such as NetRadio have gone silent, while deep-pocket broadcasters such as Clear Channel Communications have pulled back online projects.
The same economic downturn that hammered Net broadcasters has dampened enthusiasm for P2P start-ups promising to revolutionize the Internet through networking tools that link PCs without the need for central servers. After a wave of hype that rolled in after Napster, however, little has been heard about tangible applications.
Blue Falcon's peer-to-peer technology may prove to be an exception, promising to sharply cut distribution costs by passing network expenses to users at the end of the pipe. Other companies offering similar technology include Allcast and Yaga.
Radio Free Virgin, one of the Net's largest surviving radio broadcasters, has been working with Blue Falcon for the past six months, according to general manager Zach Zalon. Although the site has yet to use the technology on all of its 46 channels 24 hours a day, Zalon said the early indications have been promising.
"We've seen a 40 percent to 75 percent reduction in bandwidth costs on average" using Blue Falcon's technology, he said.
Bandwidth, or the carrying capacity that broadcasters rent from Internet access providers, is one of the biggest costs associated with streaming media. Although bandwidth costs have been dropping consistently at a rate of about 50 percent every 18 months, they remain prohibitively high for many companies.
"There is a huge demand to find ways to cut costs of bandwidth and costs of serving content," said Ben Sawyer, founder of Internet research company DigitalMill in Portland, Maine. "Every factor you can cut costs creates a whole new order of content you can make profitable."
Hitching a ride
Blue Falcon's software allows streaming broadcasters to take advantage of excess carrying capacity from a corporate network or Internet service provider, according to CEO Jay Haynes.
"We piggyback on other people's bandwidth," he said.
The system works by monitoring in real time the demand and capacity of the network and directing data more efficiently. For example, if two co-workers sitting near each other at the office both tuned in to the same radio broadcast, Blue Falcon would set up a single feed to one client and pass the data through to the other.
In its partnership with Radio Free Virgin, Blue Falcon built its networking software into Radio Free Virgin's proprietary media player, making it essentially invisible to the player's users.
Because a large percentage of online radio usage takes place at work, the prospect of a collision with corporate networking policies remains a distinct possibility, particularly if the technology takes off.
"Network administrators are going to notice that five or ten or 100 people are taking up bandwidth for this and start to wonder how much is appropriate. How about none?" Sawyer asked. "It's just one more hurdle they're going to have to get over."
Blue Falcon's Haynes downplayed the risks of alienating corporate network administrators, however, saying the technology can help save bandwidth by doing away with excessive outside connections that can degrade network performance.
Sharing bandwidth has cropped up as a problem for Net broadcasters in a separate sphere, as the industry struggles to win acceptance for new broadcast standards called "multicasting."
Although multicasting promises to drastically cut bandwidth costs for content delivery, much of the excess would be sopped up by ISPs that have been reluctant to take on the role, according to Radio Free Virgin's Zalon.
In the meantime, he said, peer-to-peer technology such as Blue Falcon's can effectively ease the burden on the network and the pocketbooks of distributors.
"Webcasters have to be careful they don't succeed themselves out of business," Zalon said. "A lot of people have."