What webradios can('t) do...

Most webradios function pretty different to regular (terrestrial) radio stations.

Many radio stations on the web are music only stations with little or no talk at all. It isn't necessary to talk on radio at all since the music has in many ways more to say than one can put into words.

Webradios are mostly listened to at work and/or while studying. The webradio's seamless mix serves as ideal background music and most notably, there is hardly any advertisement played that could cause distraction.

Playing ads on terrestrial stations every now and then is essential since it presents one of the most important source of revenue. So, how come webradios can exist without playing ads?

Well, there are some other possible sources of revenue. First, a well structured website and a high number of listeners is essential so that placing advertisment on a station's website is really paying. However, the more listeners a webradio has the more it costs to run it since bandwidth doensn't come for free.

Many webradio couldn't exist without the generous help of their listeners who donate money to them. Good examples are SomaFM and Radio Paradise who proud themselves as being 100% listener supported. Their number of listeners are quite high and so are their costs. SomaFM needs about USD 250'000.- per year to keep their many music channels going and Radio Paradise is also constantly begging their listeners for financial support.

Isn't there another way?

Webradios broadcast internationally and their listeners are spread all over the planet. This makes it somehow difficult for a "local" company to invest into a webradio or to put ads on their website. Most of the listeners wouldn't be reached by such action and/or would ignore the ad completely.

Maybe a big company of wide-world reputation launching a new product could possibly announce it on a website visited by music lovers from all around the world. However, such companies promote their products mainly using TV-campaigns, magazines or the press since they can afford it.

Why don't music-labels & artists played on webradios contribute to the costs a webradio has to cover? Isn't it actually the webradio playing music of artists that wouldn't get air-time on (commercial) terrestrial radio doing all the promotional work and not getting any money for it?

So, how the heck are webradios supposed to make ends meet? Who is paying for all the work webradios are doing? How come people/companies involved in this business are able to make money except for webradios? What's happening here?