Internet Radio Wants More Ad Dollars

If a song plays on the Internet, rather than the radio, does it count for anything?

That question is at the heart of an intensifying dispute between traditional radio broadcasters and online radio service Pandora Media Inc. over how their audiences are measured. At stake: a share of scarce radio advertising dollars. Traditional radio ad rates are based on audience estimates provided by Arbitron Inc., which doesn't currently measure listeners for Pandora or other online music services. Pandora, looking to win more ad revenue, recently commissioned a research firm to generate audience measurements. It paid Edison Research to translate data from its servers about users into radio-like metrics. But in a report earlier this week, Arbitron said it "urges those reviewing estimates from Internet music services not to make direct comparisons to Arbitron audience estimates in any market." It didn't mention Pandora directly. Arbitron noted, for instance, that there is no way to tell whether a live human being is on the receiving end of the online music signal, whereas Arbitron measures that for traditional radio using a device called a "portable people meter."