The new technology allows listeners to create Net radio programming based on their preferences of artists and genres. They also can listen to preprogrammed stations or to channels programmed by others.
Such features could be at odds with provisions of the proposed Digital Millennium Copyright Act, passed by the House this month. While the law could force massive financial changes to all Net broadcasters, Imagine Radio stands to be particularly affected because of its strong bent toward customization.
The version of the bill passed by the House comes down hard on so-called interactive services, which it now deems "one that enables a member of the public to receive a transmission of a program specially created for the recipient, or on request, a transmission of a particular sound recording, whether or not as part of a program, which is selected by or on behalf of the recipient."
Although Imagine Radio does not allow listeners to request a specific song, its new features allow them to rate artists and create custom stations based on those ratings. That could result in legal complications under a provision of the proposed copyright law, which seeks to cover material that "enables a member of the public to receive a transmission of a program specially created for the recipient."
If the act becomes a law, Net radio firms will have to pay a so-called statutory license fee to the record labels through the Recording Industry Association of America. Imagine Radio, however, would be forced to negotiate licensing arrangements with record companies for their content because of its model.
The technology has been integrated into the new Imagine Radio tuner, which displays information such as the artist, song title, and album name. The tuner also links to artist information and the CDnow page selling the CD that contains whichever track is being played.
In addition, listeners no longer have to download proprietary software, according to Brad Porteus, vice president of marketing and business development for Imagine Radio. For example, he said, users can listen with both RealNetworks' RealPlayer or Microsoft's Media Player.
The strategy is to keep listeners just one click away from any content they want. "We want to be one click away from listening at any given time," Porteus said. "And if you're listening to Sarah McLachlan and you click on 'Reviews,' you'll be taken immediately to the review section on her and see what other users have said."
Imagine Radio and Silver Island merged last month when Imagine Radio was spun off from parent Imagine Media, which publishes a number of technology magazines and Web sites, including Business 2.0 and PC Gamer.
As for the regulatory challenges, Porteus is hopeful that, while the copyright bill is undergoing reconciliation with the version passed earlier by the Senate, either the language will be tamed or the record labels will soften their stance.
"Defining interactive services in that way will limit the ability of this industry as a whole to grow," he said, adding that having a distribution channel on the Web is beneficial to the record labels to enhance revenues.