There appears to be a growing movement questioning the cost of ad insertion for terrestrial radio stations that are streaming.  Saga Communications recently decided not to insert different ads into their streams but to let the same programming going out over the air to be distributed on their streams as well.  This movement if successful will sound the death knell for terrestrial stations that are streaming.  Given the other Internet radio listening options consumers will not choose to listen to a stream that is running 10-14 ad units an hour complete with some 60 second spots.

I understand that many stations are not making money from their streaming operations.  What I suggest is that rather than inserting PSA’s and other filler content that music stations insert songs.  The technology exists to do this and there should not be a charge for this type of non revenue producing insertion.  Some stations are doing this and there are no audio quality issues.  Ad insertion fees are not significant when compared to bandwidth and music royalty fees.

The course that is chosen will have considerable influence on the upcoming battle for in car listening.  Stopping ad insertion may save a few shekels in the short run but long term it will have more significant costs.