AOL Inc. is restarting its online radio service today, which happens to run with half the number of audio commercials. The audio commercial list have finally shortened, as before AOL had closed its service, it had a number of complaints being registered, that related to the number of commercials. AOL will be challenging a strong dominator as it would be challenging Pandora Media Inc. for listeners.
Lisa Namerow, general manager of AOL Music and AOL Radio in Dulles, Virginia said in an interview that the company would insert about 3 minutes of audio ads an hour. As compared to Pandora, Chief Financial Officer Steve Cakebread had said at a Sept. 22 investor conference, that they air three commercials in all on an hourly basis, which times around 15 seconds each.
AOL Radio makes use of advertising and music from Slacker Inc., which is based in San Diego. It would set radio wars on with other online services, which includes Oakland, California-based Pandora. Pandora has an approach, which is a bit different from that of AOL. Pandora relies on display ads and videos to maintain the number of audio spots played between songs. The other famous competitor here is Rdio Inc. and iHeart Radio of Clear Channel, who offer free music services for a limited time.
Namerow said that users had a few common complaints against the company’s radio service, but one of the most hated one was audio commercials. She said, “The most common complaint we would get from users was the number of audio commercials we ran.”
The Wall Street had no good news for the company, as today its shares dropped by a noticeable 1.9 percent in New York Trading. Its shares now value at $14.08. Looking at its performance, all throughout the year, the value has only dropped and the drop noticed from the start of the year is around 41 percent. Namerow stated that the current efforts of the company is to reverse the happenings, which have been negative so far. The restructuring of the company’s online radio has a couple of new features, ads are reduced and music navigation is redesigned. The company mainly aims at reversing a 25 percent drop in AOL Radio users from a year ago. Surprisingly, even though users had a number of complaints against AOL’s online radio service, it still maintained an average of about 3 million users a month, as Namerow noted.
Namerow boasted about the company’s reputation, linking the big names that have been under their banner as she said, “AOL Radio, which carries ESPN Radio and ABC News stations, has 230 music channels customized by a team of program directors, while competitors rely on computer algorithms.”
she continued saying, “That’s our secret sauce, we program our stations individually, while larger competitors might use more of a formula.”
There were even a few details about the company coming up with a free AOL Radio app for Apple’s iPhone, which would be out in about a week’s time. For Android OS, an app is expected to be out later this year.
Next month, AOL will offer a $3.99-a-month radio plus service that excludes audio advertisements. However, if one wants to opt for the ad-free service, they can choose the $9.99 plan, with which the company offers ad-free on-demand music and the ability to listen to saved songs without an Internet connection.