Billboard.biz
Michael Jackson’s death continues to resonate in the world of online music as fans flock to the Web to purchase his music-and stream tons of it for free, often without many ads. That surge is seen as a boost to the fast-growing Web music sector (95 million unique users, per comScore). But it has also cast light on the segment’s nascent business model. On one end of the spectrum is the more established Internet radio format-which is built on radio-like audio ads. At the other end are the growing number of on-demand music sites, such as MySpace and Imeem, which offer users the ability to stream free playlists. That often happens while their eyes are focused on something other than a Web page-a potential problem for businesses built on visual display ads. But this downside for visual ads might be offset by branding potential. “Being associated with free Web music is attractive to a lot of brands”, said James Kiernan senior VP, group director, MediaVest USA. “Playlists have become currency in social networks,” he said. “Certain advertisers are drawn to that influencer equity.”
That more often means custom sponsorships, like brand-sponsored playlists, rather than radio-like audio ads. Kiernan believes that is the right approach. “This medium needs to be approached a little differently than radio.”