Online radio stations have been taking a hit lately, with record companies cracking down on streaming copyrighted material. But Goom Radio, a new internet radio startup, has decided to take its chances, relying largely on user-defined playlists — much like its peer Pandora Radio. And despite steep odds, it just nabbed $16 million in first-round funding to roll out its service in the U.S. and beef up its advertising sales.
Goom lets users pick and choose streams of music based on their individual taste, much like several of its competitors (Last.fm also comes to mind). But it has also distinguished itself by hiring DJs, reporters and station programmers to provide rich original content. Somewhat interestingly, these employees work out of Clear Channel‘s former studios in Jersey City, N.J. Like Pandora and Last.fm, Goom is also working on a phone application to deliver its content, which would set it ahead of most full-content stations. For now, it draws revenue exclusively from online advertising, offering its subscription service for free.
The New York-based company initially launched in France this past fall and has only recently brought the service stateside in the form of a private beta (you can sign up to join on its web site). While its press release insists that “Goom Radio is going to change the way people think and consume radio,” this remains to be seen. It faces not only competition from established (not to mention beloved) rivals but also a flagging market for audio advertising.
This last challenge is a bit of a double-edged sword for Goom, which seems to have benefited tremendously from the demise of Google’s Audio Ads service. Most recently, it landed Joe Anastasi, a former sales executive on the Google team. He will join sales head Drew Hilles, former chief of dMarc Broadcasting, which was acquired by Google to flesh out its Audio Ads offering. Goom chief executive Rob Williams previously served as president and market manager for Clear Channel New York. So the company certainly isn’t short on talent.
It’s also doing pretty well on cash. $16 million is a substantial amount for an ad-supported company entering a crowded field, especially in a first investment round. And its backers, Wellington Partners Venture Capital, Elaia Partners and Partech International are pretty sturdy names. Maybe their confidence is based on Goom’s leadership, or a few tricks up its sleeve, but it will be interesting regardless to see how it goes about promoting itself and growing its market share in this economic climate.