Auto manufacturers enter Internet radio race

By Antony Bruno

NEW YORK (Billboard) - Welcome to the new generation of corporate radio, coming to you live from an auto dealership near you.

Car manufacturers are racing to establish Internet radio stations and online playlisting tools as part of a new marketing strategy aimed at hip, tech-savvy young adults. The latest, and so far the biggest, effort comes from Toyota's Scion division, which in July added 17 Internet radio channels to its experimental Scion Broadband microsite.

Each channel features three hours of music that is looped 24/7 and updated monthly. The company tapped Live365 for the Internet radio technology, and 15 DJs from such partners as Vice Records and Ninja Tune Records for programming.

It's an interesting time to get into the Web radio game. New webcasting royalty rates may doom thousands of independent Internet radio outlets if the ongoing negotiations don't go their way. But deep-pocketed auto manufacturers seem unconcerned about paying the higher fees. Scion Radio 17 and the entire Scion Broadband site -- which also includes comedy shorts and celebrity interviews -- is simply a marketing effort disguised as a source of entertainment.

BLURRING LINES

"We don't look at it as a revenue generator, because that's going to be impossible," said Jeri Yoshizu, Scion sales promotions manager at Toyota. "We sell cars. (But) as you get further into the generation we're targeting, which is the 18- to 34-year-old male, corporations are advancing in their sophistication in marketing and advertising. It's beyond TV, billboards and the Internet."

Using music to create interest in a brand is hardly new, particularly for the automotive industry. But initiatives like Scion Broadband are raising the bar by blurring the line between online ads and online music services. That line faces further distortion as corporate branding moves increasingly into the sponsored-entertainment field online.

"Corporations have to start creating branded items to find new ways of branding to people who are completely inundated by communication," Yoshizu said. "We have to spend money to advertise our brand regardless, so why not do things that are going to benefit people?"