• by Erik Sass  @eriksass1, January 11, 2010

Whatever the financial woes of the radio business in 2009, there is still money for innovative new approaches to programming and distributing content, as evidenced by the $2 million of new funding raised by Jelli, a company that enables traditional and online radio broadcasters to "crowd-source" their programming via an online interface.

The latest round of funding, which includes an investment by Zappos COO Alfred Lin, will be used to develop the service and make the sales process more efficient.

In October, Triton Media signed a deal with Jelli that allows Triton to offer its 4,500 affiliates the interactive programming feature. The deal gave Triton Radio Networks the exclusive U.S. rights to syndicate two of Jelli's daily programs, "Top 40 Jelli" and "Rock Jelli," through Dial-Global.

Triton is also using the basic Jelli online infrastructure to create customized audience-controlled programming features for its various affiliates. Jelli's first major partnership with a traditional radio broadcaster launched last year with San Francisco's KITS Live 105, which offers a "crowd-sourced" show Sunday nights; listeners can participate at the Jelli consumer Web site, jelli.net.

Despite the steep decline in traditional revenues in 2009, innovative online and mobile radio services surged ahead, encouraged by the strong growth in digital audiences.

In April 2009, Arbitron and Edison Research found that 42 million Americans over the age of 12 listen to radio during an average week -- more than double the 2005 figure of 20 million, and up 27% from 33 million in 2008. That means that online radio currently reaches about 17% of Americans over the age of 12, up from about 8% in 2005 and 13% in 2008.

This audience growth has fueled a flurry of online radio deals. Most recently, Pandora -- the popular online music service -- announced a deal last week with electronics manufacturer Pioneer Corp. that will allow consumers to bring Pandora's personalized audio content to their automobiles.

According to Pandora, Pioneer has begun manufacturing a multipurpose navigation and media device, priced at $1,200, which will allow consumers who own iPhones to stream the online music service to their car stereos via the mobile devices -- after they download a new app that lets the devices link up.

Based on the audience numbers, pure-play online radio sites and traditional broadcasters alike are hoping for major growth in digital ad revenues as the economy begins to recover. Still, digital ad revenue has remained a small part of total revenues. According to ZenithOptimedia, Internet radio will attract about $288 million of ad spending in 2009 -- or just 2% of radio's total projected revenues this year.