The technology company Auddia is planning a full launch of its streaming radio app in February with what it says will include thousands of U.S. radio stations. Powered by artificial intelligence, Auddia says it will tweak the traditional local station’s streaming model to help make the listening experience more customizable for users.

“We’ve built this AI technology platform that we’ve taught to know all the different pieces of content on radio and we use that platform to provide a service to consumers where they can download our Auddia app and then they’re able to listen to local AM/FM radio stations in a personalized matter,” explained cofounder and Executive Chairman Jeff Thramann. “You can skip content, you can request other content to come in on-demand or program it into your listening experience, and you can eliminate all commercials.”

The company is already working with Lakes Media, Sonoma Media Group, Radio Alabama and Bluewater Broadcasting. And during a presentation for investors, Thramann said they will launch with about 4,000 radio stations on Feb. 15. He said their legal team has concluded that Auddia will be able to add some stations to the app using their public feed, without violating copyright law.

Accelerating Rollout

Auddia, formerly Clip Interactive, began testing the concept in the fourth quarter of 2019. The initial plan was to build localized apps for each of the beta stations and then later fold them into the Auddia app. But as they got to work with broadcasters, Thramann said they realized they could accelerate the effort by putting more data into their AI model and bypassing that step and directly debuting the Auddia app while continuing to add stations and content choices.

“This is a really big acceleration off the previous strategy,” said Thramann.

The latest iteration of the app will add a free tier that will serve as an aggregator of station webcasts. Using public feeds, it will include station commercials, which Thramann compares to iHeartRadio, Audacy and TuneIn.

Auddia is banking that users will pay a subscription price to gain new control features on the app. The $5.99 per month fee will give manual DVR-like functionality to skip content, pause, fast forward and rewind. For $8.99 per month they will have the ability to inject on-demand content into the listening experience. And for $11.99 per month there will be an AI-powered feature that allows for automatic skipping of commercials.

“You can still remove commercials in the $5.99 tier but it’s a manual process. On the $11.99 tier, it becomes the automated process leveraging our AI,” explained Thramann. He also noted that because local radio stations are already paying copyright royalties on their streams, Auddia would be able to leverage those webcasts without incurring any of the costs itself. Thramann sees it as a benefit to stations since their app will bring more listeners to their ad-supported streams. For the paid tiers Auddia says it has struck its own contracts with SoundExchange and the performance rights organizations. It will only pay copyrights on songs that Auddia delivers, not every song that is played by the station. Song skipping is limited to six per hour, since to have unlimited skips Auddia would need to ink direct contracts with each of the record companies.

Revenue Share Model

Thramann said subscription revenue will be split with broadcasters participating on its platform. Auddia will take 20% off the top, with the remaining 80% going into a pool that is shared with stations based on their time spent listing hours. To participate, a station would need to promote Auddia on its airwaves.

“When we activate all stations at once there’s obviously going to be a lot more non-participating stations because we’re not going to have had the time to go out and contract with everybody to be a participating station,” said Thramann. “That revenue for time spent listening for those stations will actually go to us, and we can use some of that to buy advertising on their stations so they can get advertising instead of a share of the subscription revenue at first. We can also use that revenue to pay the increased SoundExchange fees that those folks will get when we drive more people to their platform.”

Thramann does not expect to have a good read on the Auddia app’s rollout for at least 60 days after it launches. He told investors they would not be able to project users or revenue until they have that data in hand in the second quarter.

Also Targeting Podcasters

Auddia has separately created the podcast listening app Vodacast. It combines a content feed that correlates to the podcast’s audio. It said Thursday that it has struck a deal with the Bleav Podcast Network.

Thramann said the publicly-traded company is also looking at some acquisitions that will help accelerate its business.