Business 2.0: Online radio’s other name might as well be “irrational exuberance.” Not a day passes when I don’t come across an announcement of yet another online radio service. And I see the excitement in the media. Despite the fact that only a couple of companies — Apple (AAPL) and Napster — have had success in the online music game, everyone thinks there’s money to be made selling online tunes. In the past decade, most online radio efforts have come to naught. Why? Go to read the rest on Business 2.0 website. Also my report on Real’s new Rhapsody service, here!
By and large, I think you are right. But I think the point can be clarified a bit. Replicating a terrestrial radio station experience online has little appeal. The only music/audio services that will (or have) succeeded leverage what is unique about using the internet. This either involves broadening the base of content that you can hear, or using the computer to help you find things that you wouldnt otherwise know existed. Hence the success of niche programming, rhapsody, etc.