CBS Radio and AOL Radio will combine their online radio networks into one, the companies tell us. The deal calls for CBS Radio’s sales team to handle ads across both networks. In terms of scale, AOL (NYSE: TWX) has about 200 stations in its network and CBS has roughly 150. Both are working on a new player to house the combined station list; the player will be released sometime this spring. Aside from the usual features like artist and album information on its music channels, the player will also let users buy individual songs, albums and concert tickets and link to related content, including photos, videos, promotional materials. The deal replaces AOL’s previous online partnership with XM Satellite Radio (NSDQ: XMSR).
The news comes as the radio industry experiences a decline that resembles the one newspapers are going through. According to Radio Advertising Bureau figures released this week, while “off-air” – which includes web-based broadcasts – were up 10 percent to $1.6 billion in 2007, it wasn’t enough to stop overall radio revs from sliding 2 percent to $21.3 billion.
Update: The release is out. Some more points worth mentioning:
— This comes out of CBS Radio, not CBS Interactive (NYSE: CBS). Dan Mason, president and CEO, CBS Radio: “CBS Radio continues to invest in high-growth areas including internet streaming. … We have been very clear about our goals in this area and teaming with AOL is a tremendous step forward in that regard. Couple that with years of progress building out our own streaming operations, and CBS Radio is instantly positioned as the leader in the online radio space. A combined CBS Radio/AOL Radio affords us vastly greater scale, as well as massive distribution for our brands. We look forward to all that we will now be able to offer our audiences and advertisers alike.”
— CBS and AOL will continue to program new stations.
— Advertising: Advertisers will be able to do buy their own online ads using TargetSpot, the CBS-backed end-to-end marketplace for streaming audio. Also, Ronning Lipset Radio, which has handled AOL’s streaming ad inventory for four-plus years, adds the CBS Radio online network. An AOL rep tells me that its Platform-A unit will still handle ad sales for the radio pages, while CBS will sell ads that appear within the player. Furthermore, the deal gives AOL access to markets, which it didn’t have before.
— Not like Amazon: Last November, AOL agreed to outsource its video download business ton Amazon (NSDQ: AMZN). The AOL rep adds that the CBS Radio pact is not similar to that deal. In that situation, AOL decided that video downloads wasn’t a priority. Whereas with CBS, this is a strategic partnership that entails AOL getting new content.