Broadcasting on the Internet costs the Broadcaster money. Although traditional FM/AM/DAB etc broadcasts require investment in expensive transmission equipment, once the Aerial is there the cost of broadcasting does not increase with the number of listeners.
Currently, with Internet radio, each time another listener connects, it costs the Broadcaster money, as they have to pay for the bandwidth to send the signal to your internet radio. When you select an Internet radio Broadcast, a stream is started specifically for you!
As the popularity of Internet radio grows, the Broadcasters and ISPs (Internet Service Providers) will probably adopt a new model called “multicast”, which means that multiple listeners can join the same broadcast stream. This will result in lower costs for the Broadcaster, but reduced revenues for the ISP, which is why it will take some time to be adopted.
The quality of the broadcast signal is dependent on the data rate that the Broadcaster “encodes” their programmes. A low quality broadcast would be around 24Kbps and a reasonable quality broadcast is around 56Kbps (E.G. the BBC). A high quality stereo broadcast will be 96Kbps and above.
Broadcasters use digital encoding software to reduce the amount of bandwidth required to stream their programmes. There are three main formats used to encode programmes, MP3, Microsoft WMA and RealAudio. Other formats are also used, but are less popular.
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