Tunein – Developing a Revenue Model
Tunein is perhaps one of the largest directories of Internet radio stations with over 50,000 stations listed with most available to be streamed. The company has been signing up stations to be part of their directory although we do not know the business terms of these deals. I think it is safe to assume that they are not exclusive. Tunein was created by the merger of RadioTime (on line station guide) and TuneIn (mobile Internet radio app). While Tunein provides information about radio programs and can stream your favorite station, for many years they allowed users to connect to a station’s stream through their guide without having the station’s explicit approval. Some radio station companies such as CBS have asked Tunein not to carry their streams. Although obtaining a $6 Million investment from Sequoia, they struggled for many years on how to monetize the service. Since they did not have a relationship with the underlying station they had no way to insert audio ads. The revenue component could only come from preroll ads (audio or video), display ads, and featured listings. Even preroll ads are questionable as many stations insert preroll video so Tunein would have to insert a preroll video ad in front of another preroll video ad, something that would not make for a great user experience. They appear to be running only ad network display ads. There were preroll videos in front of some streams but again these are most likely the ones inserted by the stations themselves.
While no public data exists on the size of the Tunein network in a press release dated 3/22/12 announcing the carriage of The Wall Street Journal Radio Network, Tunein claimed to have 30 million listeners and be in the top five in Apple’s App Store’s music category. It would be great if Tunein would release more audience metrics but I can only surmise that they need to develop their business model first by entering into an agreement with stations whereby they can obtain part of the ad inventory or solidify premium placement for accessing streams. Any measurement would a duplicate of that also measured at the individual station level but at least we would have a better feeling for the use of the Tunein platform. Tunein is a great service and one that we watched the founder, Bill Moore, develop and where we came close to investing on several occasions. Whether we made the right decision or not remains to be seen.