America Online's AOL Radio Network, Yahoo!'s LAUNCHcast, and Microsoft properties MSN Radio and Windowsmedia.com have signed on as charter subscribers for the new service. The first estimates from the service are supposed to be released next week.
"These ratings will help agencies make online radio a key part of the media mix because they provide the accountability needed to justify their advertising investments," stated David Goldberg, vice president and general manager, music, Yahoo!.
Global media research firm Arbitron has long specialized in measuring network and local radio audiences across the United States. The company has attempted online radio measurement before, through a product it called "Measurecast."
Measurecast was terminated in March 2004 in favor of new research and development products, most notably its Portable People Meter--a device that sends a signal back to Arbitron when users interact with ads appearing in various media. Measurecast was launched in November 2002, but was later abandoned because it was unprofitable.
Arbitron said its new radio measurement service improves upon Measurecast, because the panel-based service measures the Web activity of individuals rather than computers. Measurecast was server-based, which made usage patterns unclear because several individuals often share the same computer. Arbitron said demographic information could not be collected via Measurecast, and that the service would report a worldwide audience only.
Tony Jarvis, principal of consulting firm Jarvis Sherman, Jarvis & Shaker, said that advertisers will be eager to learn just how big a market the Internet radio audience actually is. In light of Internet radio's growth potential, Jarvis called the Arbitron-comScore partnership "an important piece of the puzzle" for both buyers and sellers.
Similar to the information used to buy and sell traditional AM/FM radio, the online radio ratings service will provide its customers with average quarter-hour and cumulative audience estimates. Jarvis said he expects the old model quarter-hour metrics to dissolve over time, to be replaced by minute-by-minute measurement.
Sixteen percent of Americans reported having listened to Internet radio in the last month, while 8 percent reported doing so in the last week, said Bill Rose, Arbitron's vice president of new ventures. He said Arbitron will disclose its estimate of the overall size of the Internet radio audience later this week.
Rose added that Arbitron expects that "terrestrial media buyers" will pick up the Internet radio mantle, not interactive buyers, which he said is why Arbitron decided to provide standard quarter-hour audience estimates rather than minute-by-minute estimates.
The Arbitron-comScore venture is not the only Internet radio measurement service for Internet radio broadcasters and advertisers. Several weeks after Arbitron abandoned Measurecast, Net Radio Sales and Ando Media created a similar service called Webcast Metrics that monitors the size of a station's audience and converts it to standard radio metrics.