Coollink brings high-tech to low-tech radio
Wednesday, October 4th 2000, 12:00 am
By: News On 6
By Alan Goldstein / The Dallas Morning News
Plano start-up Coollink Broadcast Network is posing some interesting questions that may prove fundamental to the economics of commercial radio over the Internet.
Does it really make sense for someone in Dallas to listen to advertisements for a car dealer or a restaurant in Albuquerque?
After all, ad budgets are intended to drive business, not to provide local New Mexico flavor to the rest of the world.
More importantly, could those ads be replaced with others that are actually relevant to the listener's interests?
Last month, Coollink unveiled an ad insertion technology that it will roll out with KRST-FM in Albuquerque as part of a broader deal with the country music station's owner, Citadel Communications Corp.
An inaudible tone will be embedded in the station's signal, triggering the start of the Internet ad.
Because it's coming over a computer, the ad can have video graphics as well as audio. Ads can be targeted based on the listener's age, gender and location.
Revenue is to be shared between Coollink and its broadcast partners.
Most other Internet radio broadcasts start with a "connect commercial," an audio message played before the regular programming begins. Once the connection is made, though, ad opportunities are limited to screen graphics accompanying the audio.
The capability of targeted ad insertion, as well as other company plans that remain under wraps, was compelling enough to attract a multimillion-dollar investment from Leo Hindery Jr., a big wheel in the cable and telecommunications industries.
"The technology is irrefutably very, very clever," said Mr. Hindery, the chief executive of Global Crossing Ltd., which operates an international fiber-optic communications network. "It will bring a lot of value."
I spoke by telephone last week with Mr. Hindery, who has also taken the title of chairman of Coollink. Mr. Hindery is known for keeping long hours, and it was well past 8 p.m. in Sunnyvale, Calif., where he was reviewing last-minute revisions to a press release for a $6.5 billion Global Crossing deal.
History of improvement
Mr. Hindery brings experience â€“ and connections â€“ to Coollink, which was founded just two years ago. He leapt to prominence in early 1997, when Denver cable mogul John C. Malone lured him to run Tele-Communications Inc.
As TCI's president and chief executive, Mr. Hindery was credited with revamping the cable giant, making it alluring enough to be bought out by AT&T Corp. He then served as president of AT&T Broadband & Internet Services before moving to Global Crossing.
Mr. Hindery has a family company that makes some private investments.
"These technology companies, particularly the nascent ones, could benefit from some management insight," he said.
At Coollink's offices in a sprawling Plano office park, executives also give credit to Dallas entrepreneurs Mark Cuban and Todd Wagner for creating the marketplace in which they operate. When streaming audio first came on the scene a few years ago, people reasonably wondered whether radio over the Internet was more trouble than it was worth.
Why not simply turn on the radio?
The thinking changed with the arrival of AudioNet, which later morphed into Broadcast.com and then was sold last year to Yahoo Inc.
It's now practically local legend that Mr. Cuban and Mr. Wagner, both Indiana University graduates, were homesick for Hoosier basketball. By retransmitting a local radio signal over the Internet, they could listen to the games in Dallas.
Broadcast.com proved that the technology works on a massive scale, and that there's a sizable audience that wants it. Broadcast.com also demonstrated that it could reach people during the day while they are at their jobs.
Many office workers either don't have radios at their desks or can't receive broadcast signals within their buildings.
Broadcast.com then set out to build a company largely dependent on business services, including the broadcast of executive speeches and conference calls with Wall Street analysts.
But Coollink says it can build a more lucrative business model for broadcasters.
It's not just about more smartly targeted ads. Grant Wynn, president and chief executive, says much of the value for broadcasters is in customizable reports on their audiences.
The company's software, DemoTrak, provides broadcasters with data on demographics and the amount of time spent listening to a station.
"They want to know how many people are actually listening, not sampling, but real data," Mr. Wynn said.
Meanwhile, the technology for retransmitting radio signals over the Internet is only getting better.
Coollink relies on a worldwide network of redundant servers from Akamai Technologies Inc. to help relieve problems related to congestion. And for users, faster Internet connections these days mean sound quality that is better than a few years ago.
Eventually, Mr. Wynn says, the ad insertion technology could be applied to television signals as well, as more home users have the broadband connections that make watching TV over the Internet bearable.
Whether or not they use Coollink technology, radio broadcasters have little choice but to take Internet technology seriously, particularly as portable access becomes widespread. Before long, many experts expect music will be available, streamed over the Internet, on car stereos as well as wireless hand-held devices.