Yahoo!, Citadel Ink Web Radio Deal

Through a new deal with radio station owner Citadel Broadcasting Co., Yahoo will gain Web rebroadcast and online advertising rights to up to 140 radio stations.

The agreement, financial terms of which were not disclosed, specifies that Yahoo will be able to broadcast Citadel’s stations over its own Yahoo Radio service. With the addition of the Citadel stations, Yahoo will have affiliate Webcasting rights to more than 450 stations nationwide.

Yahoo and Citadel — the sixth largest U.S. station-owner by revenue — said that the agreement also would sidestep the host of prickly, compensation-related issues that for months stymied terrestrial radio’s expansion to the Web.

In April, radio station owner Clear Channel pressed the pause button on its audio Web sites and paved the way for a number of other sites to follow suit, after advertisers put on the pressure. Advertisers, in turn, had come under pressure from the American Federation of Television and Radio Artists (AFTRA), the union that represents actors who voice radio commercials, which in April filed to uphold contracts that required additional fees if a commercial was rebroadcast online.

The contracts pay the actors 300 percent of their normal fee if radio stations play their ads on the Internet as well as on the radio. After these advertisers were reminded of the fees, they asked Clear Channel, which operates 750 Web radio sites, to cease airing radio commercials over the Internet.

Now, however, Yahoo said it would use proprietary tools to strip out radio ads and replace them with online-only or AFTRA-compliant spots — ads for which advertisers have paid Web repurposing fees. (For its part, Clear Channel was back in business after it inked a revenue-sharing deal with Hiwire, a firm that provides the same sort of streaming ad technology that Yahoo will be using.)

At any rate, the agreement with Citadel is designed to boost Yahoo’s revenues from advertising, even as the market for Web banners and similar ad types continue to suffer softness. The thinking is that streaming media ads — since they appeal to the same sorts of brand advertisers using traditional radio and TV — will command higher CPMs than banners.

Indeed, some evidence exists suggesting that this is the case. In June, Web research firm DFC Intelligence suggested that streaming ads can fetch prices comparable to or exceeding 300×300 pixel rectangle ads.

“We have created an in-house solution that opens up millions of hours of new advertising units, providing an entirely new revenue source for Yahoo and our radio partners,” said Marc Montoya, senior director, Yahoo Radio and Television. “We are pleased to provide this technology to Citadel Broadcasting, a leading national radio broadcaster.”

Streaming media viewers also represent a potentially lucrative audience for direct response and e-tail advertisers, being 63 percent more likely to have ever clicked on an ad, versus 39 percent for overall Internet users, according to Arbitron research.

Streaming media users “are an extremely compelling advertising target,” said Pierre Bouvard, who is president of radio audience measurement firm Arbitron’s Webcast Services & New Ventures division. “Compared to Internet users overall, ‘streamies’ are much more interactive, more likely to click on Internet advertising and more likely to buy online.”

At the same time, Yahoo is touting the expanded reach and depth of its Radio services — which should prove attractive to consumers and, hopefully, advertisers.

“Not only are we able to reach a new advertising market, but we are able to stream our numerous stations to Yahoo’s huge global audience,” said Bill Perrault, vice president new media, Citadel Internet Network.