Report: Emmis Investment In NextRadio 'Sizable'

Industry sources believe Emmis Communicationshas spent more than $10 million, maybe a lot more, on the NextRadio effort. According to the Indy Business Journal, that includes creating the app, creating advertising to generate consumer interest—thereby putting pressure on cell carriers to turn on the chips—and, at least in some cases, paying the carriers for their cooperation.

Emmis CEO Jeff Smulyan declined to specify how much Emmis has spent on NextRadio but called the investment “sizable.”

Gaining the cooperation has been a sizable obstacle, since carriers rack up data charges when consumers listen to streaming services such as Spotify or Pandora or even when they listen to conventional radio stations via streaming.

NextRadio uses just a sliver of wireless data to give listeners an interactive experience, allowing them to do everything from tracking which songs stations are playing to buying concert tickets. Smulyan and others say the service will encourage radio listening throughout the day, expanding far beyond morning and evening rush hours.

The radio industry also is eager to reduce its reliance on streaming because the service is costly for them. For just $39,000 in annual electricity costs, Emmis’ Power 106 in Los Angeles can reach 15 million people in Southern California with its traditional FM signal. It would cost Emmis $1 million a year to send the data to reach a similar audience via cellular services.

Before Emmis launched a major marketing campaign in March, consumers had downloaded 1 million NextRadio apps. Since March, that number has grown to 4 million.

Media buyers said they’ll need to at least triple that to gain traction with advertisers.

“Our goal is to have 10 million [apps downloaded] by early 2016,” said Paul Brenner, NextRadio’s president.

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