By: Karim Mostafa Company Shifts Strategy To Digital Cable Biz
Many online newspaper users were tuning in to Everstream's radio
feeds, but now the online airways are silent.
Cleveland-based Everstream decided to ditch the online newspaper
business and focus on ad delivery for the digital cable industry
instead. Everstream started shifting strategies last November,
but only recently decided to acquire the New York-based
AdAcoustics, which owned three patents for technology in digital
ad delivery.
"The economics weren't there," said Steve McHale, CEO and founder
of Everstream. It was difficult to sell advertising inventory and
there wasn't enough critical mass in audio for newspaper Web
sites, McHale said. The tuner was a niche product for at-work
listeners, and national advertisers weren't interested, McHale
added.
Everstream featured streaming music channels -- such as rock,
R&B, country, and jazz -- combined with targeted advertising
according to demographic groups and geographic regions. The audio
commercials were delivered by Everstream and accompanied by a
visual ad that linked to advertiser's Web sites.
A number of newspaper Web sites were offering the Everstream
service for free. E&P Online reported one year ago that
Everstream had 160 newspapers signed up for the service.
"We loved the tuner and so did our users," said Mike Coleman,
audience manager at AZCentral.com. When Everstream changed its
business strategy and offered newspapers a new contract that
would bill newspapers for listening hours, Coleman decided they
couldn't afford it, particularly because it was so popular.
Bob Schafer at startribune.com in Minneapolis stopped offering
the Everstream tuner to users in late March. He posted a notice
regarding the discontinued service and only heard back from a
handful of users.
Everstream's new terms didn't appeal to Schafer, who said that
ultimately startribune.com decided streaming music didn't fit the
site's core mission of providing the Twin Cities with news and
information.
The audio advertising format also proved to be a hard-sell with
local advertisers. Schafer said that it would have required a
considerable effort on their part to educate the advertisers on
how the format worked.
Coleman too had trouble finding advertisers. "To be honest, we
couldn't really get it to sell," he said. An AZCentral.com
advertising representative worked closely with Everstream,
especially since AZCentral.com decided to launch a local audio
news channel offering Arizona headlines.
Coleman said he's looking for a replacement, but none have
impressed him yet.
McHale doesn't rule out providing the tuner again in the future,
but for now the prospects of digital cable seem more promising
than the newspaper industry. "We recognized that we wouldn't be
successful," said McHale, who also said he notified all of
Everstream's affiliates of the shift in strategy.
McHale said that the newspaper companies that initially invested
in Everstream -- Pulitzer Inc., Gannett Co. Inc., and Knight
Ridder -- remain supportive investors of the company's current
shift in focus.
Karim Mostafa (kmostafa@editorandpublisher.com) is associate editor for E&P Online.
Copyright 2001, Editor & Publisher.
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