Streaming media ad firm Hiwire is getting a loud vote of confidence in the form of $9.5 million in financing from investors that include one of the biggest names in radio advertising, Clear Channel Communications.
Joining Clear Channel in the investment round is venture capital firm Zone Ventures, and previous investors that include VC firm New Enterprise Associates and Grey Ventures, a unit of ad agency giant Grey Global Group.
To date, Los Angeles-based Hiwire has raised a total of $18 million.
Hiwire executives described the news as a powerful validation of its model. The company functions similarly to a Web media network, like DoubleClick
or 24/7 Real Media,
by aggregating and selling streaming media ad inventory.
“Hiwire’s ability to secure meaningful funds from strategic partners including Grey and Clear Channel as well as from leading venture capitalists like NEA and Zone is a clear indication of our momentum and market leadership in streaming advertising,” said Hiwire president and chief executive Steve Goldberg. “Given the current state of the advertising industry, our ability to raise these funds is validation of our model, current results and expected path to profitability.”
The company said it would use the financing to improve its technology, expand its sales force, and support new station and network partners. For their part, the investors aim to secure a spot in a small, but potentially lucrative sector of online media — with recent studies by Arbitron
and Edison Media Research showing that over half of Internet users now regularly listen to streaming media.
However, it’s unclear whether there are strategic stipulations attached to the financing. For instance, the firm’s streaming audio network already includes about 250 Clear Channel radio properties, through an agreement inked earlier this year. Whether that figure will be increased through the financing remains unknown, though Jerry Kersting, chief financial officer of Clear Channel’s Radio division, touted Hiwire’s scalability as one of the reasons for its investment.
It’s likely that Clear Channel will increase the number of stations rebroadcasting on the Web at some point, however. The San Antonio, Texas-based media giant is the largest single owner of radio stations in the U.S., with a presence in all 50 states and in 47 of the top 50 domestic markets — and a network of about 1,170 stations, representing a multitude of stations potentially suitable for Webcasting.
Additionally, Clear Channel executives have been suggesting a willingness to increase the company’s business online, earlier this week striking a deal with online music firm FullAudio. Under that agreement, Clear Channel would distribute FullAudio’s subscription-based, Napster-like music service, which is expected to launch early next year.
At any rate, the Hiwire investment also continues Clear Channel’s efforts to wade back into streaming media, after hastily shutting down its Web radio sites earlier this year. In April, the company and several rivals suspended their online operations because their advertisers’ contracts with American Federation of Television and Radio Artists, a labor union, didn’t include stipulations for rebroadcast via the Web.
But in June and July, the company relaunched 250 stations, tapping Hiwire to strip out ads from terrestrial streams that weren’t AFTRA-compliant, and to replace the ads with spots sold specifically for broadcast via the Internet.