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Ustream is betting on Adam Carolla to be the live-video streaming service’s first pay-per-view partnership. Lucky for them there’s another act coming out of Los Angeles radio that is already proving there’s a viable subscription business to be had online.
If you aren’t an Angeleno, you’ve probably never heard of Heidi Hamilton and Frank Kramer, veterans of the city’s radio scene with over a decade of experience on stations including KLSX and KABC (NYSE: DIS). When their KABC gig ended last September, they parted ways with a third on-air personality and decided to make a go of it together online-only.
Now there’s plenty of big-name radio stars who have exploited their promotional platform in terrestrial radio to extend onto the internet, including Glenn Beck and Rush Limbaugh. But it’s a different challenge to survive online alone, which other more prominent radio personalities like Carolla and now Bubba the Love Sponge, who recently exited Sirius XM (NSDQ: SIRI), are discovering.
But The Heidi and Frank Show is making it happen with a pretty unique business model that could be of interest to a traditional radio business rapidly shrinking due to the industry’s nationwide consolidation. Since launching in October, they’ve attracted well over 6,000 subscribers who are paying anywhere from $5 per month to $50 a year for access to a trove of audio and video programming, including two hours every weekday morning. There’s limited access to a layer of free content intended to get unacquainted viewers sampling and, if this freemium model holds up, signing up for added benefits like ad-free podcasts.
“We’re trying to be the first to achieve how we deliver what we do for free in a way that people will pay for it,” said Kramer.
As Hamilton and Kramer tell it, making the jump online was hardly a leap of faith; they needed a new gig and they noticed that declines in their KABC audience were being offset by growth in the station’s offerings of their on-air act on its website. They partnered with Nox Solutions, which is best known for building robust web environments for mostly right-wing political figures from Bill O’Reilly to Dennis Miller.
“Normally what we’ve done in the past is look to partner with nationally syndicated talent,” said Rand Bleimeister, COO of Nox. “The chances of success will be greater. But they’ve gotten more subscribers than some nationally syndicated talent.”
While a diehard fan base built up over the years in Los Angeles followed them to the internet, HeidiandFrank.com is seeing evidence of a new audience from outside the city limits and even internationally. Aggressively courting fans via social media is one way they’ve made that happen. But if anything, Hamilton believes it may have been the deprivation of adequate promotion during all their years in terrestrial radio, where they were typically overshadowed by bigger names on their station’s lineups including Tom Leykis, that prepared them for the transition.
“We did very well because we’ve always relied on word of mouth,” she said. “We never had billboard campaigns or TV commercials.”
While their subscription base grows, Nox is working on ramping up Heidi and Frank merchandise and increasing their advertising revenue; though they don’t have to keep FCC-friendly, they do so to be viable for marketers and just in case their old friends in terrestrial radio need a low-cost option to fill a daypart or two. That said, with a style just as risque as Howard Stern, they do have an uncensored outlet in a weekly “After Hours” show as well.
As the radio business continues shrinking, it’s going to be interesting to see what business models take root online. What The Heidi And Frank Show is proving is it doesn’t take a Stern-sized phenomenon to break from the mainstream radio business and start streaming themselves.