Radical.fm’s radio app has a radical business model: User donations

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From Pando Daily:

The differentiator between Radical.fm and Pandora is the way stations are created. Where Pandora users can create stations around an artist, genre, or song using the company’s Music Genome Project and an algorithm, Radical.fm stations are created around human-curated genres. You can choose a genre (say, alternative rock) and add in others, tweaking the percentage each genre is represented with a slide bar. Users can also create their own playlists, which must be 30 tracks or longer. Once they’re added to the library as a “station” they can be played on-demand (without Radical.fm having to strike on-demand deals with the labels). The company would like to strike direct licensing deals similar to Spotify’s but can’t afford it at the current terms, Radical.fm founder Thomas McAlevey says.

Perhaps the most innovative thing about Radical.fm is its monetization scheme. The app, which has raised only a small amount of venture capital from angel investors, will support itself with user donations. The app uses ten-second plugs which ask for a donation every five or so songs and can be turned off after someone makes a donation. “It’s a long term plan that could fail if nobody donates,” McAlevey concedes. “We truly believe in the goodwill of human beings.”

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