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Netcasters bring diversity online

Business of piping music over Web is big, getting bigger

It's easy to get depressed about the state of broadcasting in the United States, especially if you flip on the radio during a long cruise down the interstate. After a while you begin to think that there's just one radio station in the country, transmitting the same gray drivel clear across the AM and FM bands.

To feel better, climb out of the car and plug into the Net, where you meet a better class of broadcaster, people like Sean Mulrooney. In his day job, Mulrooney is a Seattle mortgage broker. Off duty, he's a music DJ, specializing in free-form stuff: Alana Davis, the Chemical Brothers, samplings from the '70s. Mulrooney streams the stuff across the Internet, living out his dream of being a radio broadcaster. Because he's online, no country is out of range; the whole wired world can hear him.

Only 30 people actually do listen, but Mulrooney doesn't mind.

"I've met fascinating people through this whole thing," he said. "Lifelong friendships have been made, even though we'll probably never meet." Besides, he gets to call the tunes here, something he'll never get to do at a commercial station.

Actually, Mulrooney does work at a commercial station, though it doesn't pay him a dime. In fact, he pays it about $400 a year to stay on the air. He's one of about 22,000 Internet broadcasters in 230 countries who subscribe to Live365, one of the world's largest webcasting services. And while Mulrooney has scraped up just 30 listeners, the entire Live365 network draws 2 million or 3 million a month.

The struggle between the recording industry and the thieves swapping illegal music files may have distracted you from the equally remarkable developments in the streaming Internet media market. It's far bigger than many people realize. In August, 50 million Americans viewed a video or listened to an audio stream on the Internet, according to the consumer research firm Arbitron Inc.

One reason is the slow, steady growth of home broadband connections. Arbitron says that one fifth of US households had broadband by July. To be sure, dial-up users can listen to Internet audio. A lot of these audio streams are encoded at less than the 56,000-bit speed of a dial-up modem, so the sound quality is tolerable. But the faster connection means better sound and a connection that's on all the time, just like cable television. With broadband, flipping on a favorite audio stream is about as easy as flicking on the radio, and usually it's a lot more entertaining.

A couple of years ago, a still-clueless music recording industry nearly managed to destroy the streaming music business when it demanded ruinous royalty payments from Internet broadcasters. Congress stepped in and put together a compromise. Internet broadcasters must pay royalties to the record companies, something traditional radio station don't have to do. But the revised plan cut the payments in half, leaving just enough money on the table to support a viable Internet broadcasting business.

David Porter, director of business development at Live365, said the Foster City, Calif. firm isn't profitable yet, but is heading in that direction. "Thankfully, over the last year, we've gotten our act together," Porter said.

The company had once hoped to draw 75 percent of revenues from advertising. Today, ad sales are up, but Live365 gets 90 percent of its money from subscriptions. Broadcasters like Mulrooney pay to get on the Net. Listeners who want their favorite tunes uninterrupted by ads pay about $5 a month for a preferred subscription. Live365 provides free audio streams, but limits their number, to encourage the regulars to pay up.

The Live365 model is designed for small-time amateurs who broadcast for the fun of it. Other webcasters, like the classical music service Beethoven.com, are serious about making money. Kevin Shively, vice president of the Hartford company, says that advertisers like American Airlines and drugmaker Pfizer Inc. are eager to reach his 100,000 affluent listeners. "We expect to be able to reach profitability over the next year," he said. "In the last year, we've seen advertising revenue jump over 100 percent."

Members of Congress and political pressure groups on the left and the right warn that US media companies own too many radio and television stations and have become too powerful. The argument may have some merit; there are only so many frequencies to go around, and most people still don't use Internet broadcast services.

But the idea that Rupert Murdoch's Fox media empire or Arthur Sulzberger's at The New York Times can overwhelm the voice of the people seems a little more absurd with each new broadband Internet subscription. Any medium that can find room for Sean Mulrooney and his 30 listeners will offer plenty of free expression for the rest of us.

Hiawatha Bray can be reached at bray@globe.com.

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