 Digitially Imported's Ari Shohat reveals how he built a huge global audience ·Jun 30, 08:53 AM One of the top webcasters in the past two months of AndoMedia’s recent Webcast Metrics ratings releases has been the combination of Digitially Imported (DI.fm) and Sky.fm, an operation run by New York City-based entrepreneur Ari Shohat (pictured below, at right, with members of his staff). In this three-part interview, we talk with Ari about how he’s managed to build an online audience bigger than almost any terrestrial broadcaster’s online audience, the various possible business models for webcasters, the value of having international listeners, marketing advice, and much more. KH: How did you get into this business, Ari? AS: Before I got into this as a business, I first got into this as a hobby. When I started college I got to be a big fan of European dance music, having only recently discovered the genres thanks to mp3s floating early on the net. I was shocked and appalled that I I figured that a lot more people would like my kind of music too, if I could only expose them to it. One day I accidentally discovered SHOUTcast streaming tools from Nullsoft (now owned by AOL). I set up my personal music collection to stream from my PC hosted on a college campus, and immediately started to attract a fair amount of the audience that went to Shoutcast.com. At some stage I decided to add on a couple of other related channels, as my own personal tastes expanded. I also met a few great guys from the formed community – these guys created even more channels. This went on for a few years as a hobby, meanwhile the audience continued to grow. Eventually I was able to code a subscription service together which includes access to our channels in higher quality and with all commercials removed. That’s when this became a full time effort as a real business as some funds started to trickle in. KH: Your speciality seems to be dance/electronica… Are these styles of music that you offer your personal favorites, or did you just see a business opportunity? AS: Across our network we offer over 50 different channels. About half of them have to do with electronic or dance music, which is what Digitially Imported (DI.fm) is about. Our strategy has been focusing on providing a fuller and richer “package” of channels. For DI.fm that KH: How big a staff do you have between DI and Sky? AS: We’re still under ten people full time now. About half of them are web developers for sites and improvements which are yet to come. Many of our channels are programmed by volunteers from our radio community though. There are over a dozen of these talented folks who do it for the love of the music, and they do this from just about any part of the world. I think this is probably one of the most important reasons for our success. KH: I think you’ve said before that you have a lot of listeners from around the world. Is your audience primarily non-U.S.? AS: That’s correct. In some cases at least half of our traffic comes from other countries. The international audience is much harder to monetize via advertising, while still eating just as many resources. It’s a fine balance between paying too much for bandwidth or royalties, versus saving on marketing costs due to increased word of mouth effect in the long term. KH: What’s your business model? Are subscriptions working for you? Is it hard to monetize Shoutcast and iTunes traffic? Do you make any money at all from your non-U.S. traffic? AS: At the moment most of our properties are on what’s called the Freemium model. We give away 99% for free in ad-supported streams, while the other 1% subscribes to get an enhanced experience we call the Premium package. We started out with subscriptions using this Freemium model, and it’s still a major source of revenue for our company. I personally love doing subscriptions, but you have to build up a compelling package. If you only have one or two stations, there’s the alternative of doing a donations-only model. I am looking forward to experimenting with subscription-only models (without Freemium) on other brands we will be launching. I read the story on RAIN the other day that quoted a study that subscriptions aren’t growing much. I have to question how that might have been conducted. I think that’s certainly true for generic “all you can eat” type of services such as Napster or Rhapsody, but it doesn’t say much about niche services. Niche is where it’s at, and where it’s going. You have to imagine splintering Napster into thousands of niche products and services, each telling their own unique story. If you operate and focus on one or two of such niche stories – you can grow something successful in the long term. I think it’s the natural trend, I can imagine a day when we see thousands of niche Last.fm type of sites too, after people are tired of coming to “central all you can eat hubs.” We see this happening in other verticals, such as Ning being the service that lets everyone create their own social network – suddenly not everyone wants to be on MySpace forever. The only downside with subscriptions is that your service is never going to be HUGE. With the Freemium model, you can still do it. But if you go for subscription-only model then your service will continue to exist only for the laser targeted niche (and there’s nothing wrong with that! It might make more money than the bigger services who overspend on bandwidth) Shoutcast and iTunes are very hard to monetize, sometimes downright impossible in the grand scheme of things. The players by and large don’t offer any visual ads, and what little you can get via untargeted audio ads will not pay off the bandwidth or royalty bills as they are now. So the only remaining chance you have is to upsell to a Premium package, or reap the word of mouth rewards. You can monetize international traffic with visual ads, if you can get people over to your site and use your web player. You can also get foreigners to subscribe to a Premium package. —————————— Parts 2 and 3 of this interview coming soon in RAIN. To read Ari’s blog, visit http://www.arishohat.com/ share: del.icio.us.  Reddit  Digg  Yahoo  Wink  Windows  Google  Newsvine 
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couldn’t find any FM stations broadcasting anything close to what I liked. The radio experience in this country, I felt, put people in a self reinforcing bubble.
means trying to expand into as many electronic music genres as our resources allow. For 
