More radio stations need to find a way to coexist profitably with the Internet; yet the clock is ticking.

That’s one big takeaway of a white paper from manufacturer Wheatstone Corp. titled “The Case for Audio Quality and Audio Processing in Streaming Radio.” Its topic: the viability of streaming Internet radio, and the impact of sound quality on monetizing those streams. Summarizing, Wheatstone said the findings argue in favor of “proper audio processing, a solid IP network and, of course, a sound business/game plan” in setting up a strategy.

Like other observers, author Josh Gordon notes that Internet radio soon will be a part of every new car’s dashboard, and that younger listeners with a more digital orientation will become more prominent consumers. He then sifted through his own recent research and interviews with industry observers to explore what role streaming should have for stations in this landscape.

Among people quoted are consultant Bill Tanner, Cumulus engineering exec Gary Kline, consultant mark Ramsey, station owner and engineer Larry Langford and engineer Joshua Pierce.

Soon, radio will face competition from Internet radio stations for valuable drive time hours, the paper states; yet while a number of stations stream signals, many do so with “little enthusiasm and minimal attention to sound quality.”

Gordon described a past survey in which radio station personnel were asked how soon streaming would enable them to charge more for advertising. About a quarter said they could do it now and about a third thought they could do it within three years. But another third said they thought streaming would “never” enable a station to make more money on advertising sales.

“‘Never’ is a long time,” Gordon wrote. Referring to the accompanying chart shown here, he said, “this is a big divide.”

Talking to stations about the audio quality of streams, he continued, “I found a stark contrast between organizations that had a business rationale for streaming and those that did not. At stations where streaming could be described as a money maker, investment in sound quality was high because, in many cases, sound quality is actually more important to the business success of an online stream than it is for an over-the-air signal.”

The paper concludes that while profits from streaming are starting low for many, some stations and services are making money. “The key is to use streaming to target and service an audience better. Whenever an audience is targeted, audio quality must be maintained at competitive levels to ensure that listeners don’t slip away to other media competitors.”

Download the PDF here.
“The Case for Audio Quality and Audio Processing in Streaming Radio”

Related:
What’s Next in Radio Technology (2011)