Another Outsource: Yahoo Radio Goes to CBS Radio

Yahoo Music is now outsourcing its online radio stations to CBS Radio, according to deal points confirmed Wednesday morning.

The deal involves roughly 150 stations that fly under the LAUNCHcast sub-brand, a suite that will be paired with an additional, 150 stations already powered by CBS Radio.  The transition starts early next year, and the consolidated portfolio of stations will be delivered on Yahoo within a CBS-branded player.

The move is part of a broader land-grab by CBS Radio.  Just recently, AOL Radio transitioned its streaming stations to CBS, and now falls under the CBS Radio umbrella following a purchase by parent CBS Corporation.  That translates into greater scale across backend, advertising, and programming functions.  “Partnering with Yahoo ensures advertisers will be able to reach the greatest possible audience as we leverage our local and national sales force,” explained David Goodman, president of Digital Media and Integrated Marketing at CBS Radio.  The advertising platform includes Targetspot, an automated, audio-based advertising solution that bears resemblance to Google Adwords.

The move comes at a tumultuous junction for Yahoo, one that features high-level shakeups, sinking valuations, and layoffs.  In that light, the outsource allows Yahoo to insulate itself from increasing recording royalty rates on internet streams.  Online broadcasters large and small are currently battling against those increases, though Yahoo appears to be taking a preemptive step.  “That is a large part of why we did this deal,” a Yahoo Music executive confirmed to Digital Music News.  On the terrestrial side, US-based traditional broadcasters are exempt from recording royalties, a hotly-contested legacy arrangement.