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Net radio use falters with ad dispute

Web radio usage has dropped as radio stations have pulled the plug on their Webcasts because of licensing issues, according to a new report.

Web radio usage dropped last month as radio stations pulled the plug on their Webcasts because of licensing issues, according to a report released Tuesday.

Audio measurement company MeasureCast found a slight increase of online radio listeners in the last week of April, but Net radio usage for the four weeks ended April 22 dropped about 18 percent. Net radio usage grew about 13 percent in the four weeks ended March 25 and about 18 percent in the four weeks ended February 25.

The figures provided by MeasureCast constitute a representative sample, or index, calculated somewhat like a stock index and showing Internet radio listening on a week-to-week basis.

From Jan. 1 to April 1, the index showed that the average growth each week of online listening was 5 percent. This demonstrates that more people are tuning in to Internet radio, said Bill Piwonka, vice president of marketing at MeasureCast.

However, a recent dispute among actors, advertisers and broadcasters over royalty payments has caused some stations to cancel their streams. The discord stemmed from regulations that require advertisers to pay higher fees if ads originally recorded for radio are played over the Web. Last month, major radio corporations, including Emmis Communications and Clear Channel Communications, temporarily stopped their Web streams because of the unresolved issues.

"I don't think anyone in the industry believes that this is anything more than a temporary haltage from the terrestrial stations," Piwonka said. "The Internet provides some incredible benefits and opportunities for radio stations."

Piwonka said Internet radio is largely a work-hour, too, with 80 percent to 90 percent of all listening events occurring between 11 a.m. and 5 p.m. PDT. He said the opportunity to reach this audience should push broadcasters to resolve issues that caused them to cancel Net radio streams.

Web radio's silence, however, proved to be a good omen for companies that help place ads into streaming media broadcasts.

Online radio chart Alexandria, Va.-based Lightningcast, for one, has benefited from the dispute. Lightningcast said its technology can not only insert audio advertisements via streaming, but also take out commercials and replace them with other content, such as public service announcements or weather reports.

"Net radio will continue to grow," said Karl A. Spangenberg, chief executive of Lightningcast. "We are in and have been in discussions with the stations so we can enable them to put their streams back up...They can still touch their audience and build it."