AOL Radio, a popular free streaming music service for AOL users, has discontinued their partnership with XM Radio, effective April 30, 2008 (today). The announcement was communicated to users of AOL Radio throughout the month, but the ISP boasting more than 20M users did not provide details as to reason for the termination of the partnership. [UPDATED 8:19PM MST]
In a brief statement provided on AOL Radio’s Web site, they suggest users who want XM to subscribe to it from XM:
AOL & XM partnership has ended
Today the partnership between XM and AOL Radio ended. XM Radio channels are no longer available via the AOL Radio player but you can find a list of similar, recommended AOL stations here.
If you’re interested in listening to XM Satellite Radio, XM has come up with a special limited offer for AOL Radio listeners.
I don’t have any insight into why AOL/XM has discontinued, but I have a some speculations:
- XM Radio was a premium programming deal originally intended for paying AOL subscribers.
- XM Radio is subscription-based, permitted to use expletives and obscenity by the FCC since it’s a paid-service with proprietary equipment.
- XM Radio wants to increase subscriptions.
- AOL Radio’s advertising revenue is likely flat or down.
- AOL Music team has likely been (or soon will be) trimmed in a layoff.
- AOL’s own home-grown programming allows them to fully monetize it with in-stream advertising.
- AOL’s own home-grown programming allows a few DJs to setup a few playlists for channels and rotate them on auto-pilot without live interaction. (XM Radio is somewhat live interaction.)
- Somewhat didn’t pay XM Radio royalties on time, contract terms severed.
These are just some speculations, but that’s all it will be unless AOL releases a statement on the discontinuation of the service.
I have to say the quality (and reliability) of the audio streams on AOL Radio are very nice, and any broadcaster should be proud to use it. Too bad big players are punching out.
UPDATE – The AOL Radio Team Responds to ‘Why?’ for Listeners
Earlier today, AOL has released a statement on their product blog for AOL Radio detailing why the XM partnership was terminated. No, it isn’t because AOL hates XM; but the Dulles, VA based company did offer criticism toward SoundExchange, empathizing with every other Internet broadcaster who must pay royalties.
AOL informs listeners that a good part of the decision was due to an increase on steaming radio royalties and they must align their business to meet the needs of the market. They also mentioned that XM’s business model conflicts with AOL’s ‘Free’ model and promised that the CBS partnership will offer additional programming. (Maybe not music, but a lot of News/Sports/Talk if you’re into that.) AOL has also posted a table of popular XM stations and their similar counterparts on AOL radio, here.
Read the blog entry on the AOL Radio & XM Update 4/30 for more information. Thanks to the anonymous tipster for letting me know.