The new company, which will retain Imagine Radio's name, will incorporate Silver Island's personalization technology into Imagine Radio's network of music, news, and talk radio programming, the firms said. Imagine Media will maintain a "long-term commitment" to Imagine Radio, though specific financial terms were not disclosed.
The Internet radio market has been intensifying recently, with new ventures launching and established players expanding their offerings. Imagine Radio rival Spinner, formerly TheDJ.com, last week relaunched with a new design and updated features.
But the growth in Net radio also has raised the ire of some in the traditional music industry, who generally have been slow to adopt the medium as more than a sales and marketing channel. The Recording Industry Association of America, for example, which represents record labels, sent a letter to Net radio firms last month claiming that they owe the trade organization a licensing fee beyond what they already pay copyright holders through such industry groups such as ASCAP and BMI.
Executives from both firms will make up the senior management team at the new Imagine Radio. Along with Perelmuter, Silver Island cofounder Michael Briseno will be Imagine Radio's chief technical officer, and Imagine Radio managing director Brad Porteus will become vice president of marketing and business development.
Silver Island allows users to create Net radio programming based on their preferences among varying artists and genres. Users also can listen to preprogrammed stations or to channels programmed by others.
Porteus noted that the integration of Silver Island's technology into Imagine Radio will allow the firm to deliver its product via a streaming media format such as RealAudio without requiring users to download additional software. In turn, the firm will be able to add features and otherwise update the service without worrying about listeners using different versions of its technology.
"We're moving the brains of the system from a client-driven structure to a server-driven structure," Porteus said.
He added that the change in technology will allow Imagine Radio to gather data that potentially could be valuable to record labels, such as which artists or songs are popular among users within demographic categories including age, gender, geographic location, and the like.
The strategy is similar to that of Enso, which provides music retailers with a service that lets their customers listen to sound samples. Enso also has the ability to provide data about which artists and songs are popular among various demographic groups.
Both Enso and Net radio firms say they want to work more closely with record labels. Enso has run into difficulty with some in the music industry who say the firm is making money off copyrighted material. And Net radio firms are facing the claim by record label group the RIAA that they owe additional copyright fees.
The new Imagine Radio, which will let users customize listening channels, is moving further into what could be seen as dangerous ground where the RIAA is concerned, as are other Net radio firms looking to offer more customized formats.
The RIAA's claim is based on the Digital Performance Right in Sound Recordings Act, which went into effect in 1996.
According to the act, "the performance of a sound recording publicly by means of a digital audio transmission, other than as a part of an interactive service, is not an infringement...if the performance is part of a nonsubscription transmission...."
An "interactive service" is one that lets users request a specific song. The trend toward customization potentially could cause Imagine Radio and others further trouble with the RIAA.
But Porteus pointed out that with the Silver Island technology, a rating system is used, not specific requests. Also, users have to select a minimum of 25 artists to set up a personalized channel.
"That alleviates to a large degree some of the concerns the RIAA has," he said.
"Everyone wants to push the envelope [with new technology and features], but no one knows yet where the envelope starts and ends," he added. "We have to find a comfort level where everybody's happy."
The new Imagine Radio format will debut next month, including a redesign and incorporation of the personalization features, the firms said.