New ‘Toolkit’ Could Boost Online Radio

In a move that could help propel the struggling Internet radio business into a major new medium, RealNetworks today will announce new technology for building sophisticated, and potentially more profitable, online radio stations.

Whereas most online music has involved offerings of 30-second clips for promotional purposes, RealNetworks said its technology will provide a rich new format that mixes full-length songs and music videos, along with the ability to buy music, chat online and vote for favorites.

JamTV/Rolling Stone Network, which runs Rolling Stone magazine’s online music site, will announce today that it is the first to use RealNetworks’ “Radio Toolkit” to create a customized station called Rolling Stone Radio.

Separately, Sony Music Online will announce that it used the RealNetworks technology to develop the Internet’s first “pay-per-listen” online jukebox.

RealNetworks also announced that other Web heavyweights, including ABC Radio Stations, Imagine Radio and Spinner.com, will support the technology.

Although the quality of radio signals sent over the Internet is still uneven, many analysts and industry insiders believe the technology is poised to break into the mainstream. “The critical factors are in place for an explosive growth of the Web radio industry in the coming year,” said Rob Glaser, chief executive of Real Networks.”

Analysts say it has become increasingly important for Internet technology companies such as RealNetworks to become involved in the development of content for the Web in order to defend and propagate their particular technology approaches.

For example, Microsoft, RealNetworks’ main rival, helps subsidize Web sites that exploit special features of the Windows Media Technology that Microsoft is pushing as an alternative to RealNetworks’ technology.

“It’s the nature of convergence on the Web,” says Michael West, research director at Stamford, Conn.-based Gartner Group. “You have to have some say in both the content and the platform.”

Since Microsoft has more money to spend and because it has chosen to package its rival audio and video products as free components of its Windows operating systems, said West, “RealNetworks has to work twice as hard to stay ahead.”

RealNetworks has already sought to counteract Microsoft’s marketing muscle by signing distribution agreements with IBM, Netscape and America Online. The company recently signed a technology deal with Intel that it believes will give it an important edge over Microsoft.

By providing tool kits to content developers and working closely with partners such as Sony and Rolling Stone, RealNetworks hopes to expand the community of Web sites that use its technology and can only be viewed using its multimedia player, the RealPlayer. The company will also take a portion of the revenues earned by its partners.

“What they are doing is building their player into a mini-browser,” said Gary Schare, Microsoft’s lead product manager for Windows Media Technology. “Anything they can do, we can do in the [regular] browser.”

Schare said Microsoft is also working with online radio stations to offer customized “radio tuners,” although the company has yet to announce a product.

There already are 1,700 radio stations online, of which 500 are purely online businesses. But up until now, online radio stations have had trouble turning a profit. Advertisers that support local radio stations, for example, are seldom interested in paying extra to see their ads aired to a worldwide audience.

Using the RealNetworks technology, however, Rolling Stone Radio can sell ads targeted at specific demographic groups. The customer who has downloaded a special Rolling Stone tuner can access 12 music channels over the Net, including Pop Hits, Electronica, Women in Rock, Dance Hits, Country Hits and R&B; Hits. New channels featuring music selections and deejay-style commentary by musicians David Bowie and Jimmy Buffett are also in the works.

Mazda is sponsoring Rolling Stone Radio’s Women in Rock channel as a way to market its new Protege car to women. The new technology enables the radio station to insert ads between songs.

Record companies, which often have trouble getting time on MTV for their releases, could find these outlets an important way of introducing new artists, said Jo Sager, vice president of marketing at JamTV/Rolling Stone Network.

The new technology enables Rolling Stone Radio to send information about the artist playing. Consumers can find out more about the artist by linking to Rolling Stone magazine reviews and interviews. They can also vote on how well they like the music, influencing how often it is played, and can click on icons to buy the CD.

Microsoft’s Schare agrees that the ability to insert advertising in audio and video content could provide Web sites with the revenue they need to justify the high cost of carrying audio and video content.

RealNetworks’ “media streaming” technology also is attractive to record labels because it involves broadcasting music to millions of listeners in a format that cannot easily be recorded. Fears that consumers will copy music available online is one reason record companies have been cautious in promoting online radio.

Sony is exploiting the technology by offering a jukebox that enables customers to browse through several hundred songs at https://www.sonymusic.com/jukebox) and play 10 songs over a 24-hour period for $2.50.

Times staff writer Leslie Helm can be reached via e-mail at leslie.helm@latimes.com.