The recent stories concerning the IPO of Facebook, in which huge amounts of money were lost very quickly, reminded me vividly of my own experience with an Internet start-up company. It took place well over a decade ago, but the results seem to me very similar. Arthur Brisbane, the “Public Editor” (formerly ombudsman) for the New York Times, wrote an article for the June 3 issue explaining that the Times had done a pretty good job of setting out the real situation with the Facebook IPO but that it could have done better for its readers who aren’t already financial experts. I coulda told ‘em.From 1980 until 1991, I worked as a DJ for WDST, in Woodstock, which was at the time a wonderful radio station appealing to many interests and vividly reflecting the character of its home town. I’ve written about this experience already in this series. When I left WDST, it was because my Sunday afternoon program was being eliminated and I knew that was the time when I reached the most people. (In 1987, an Arbitron survey revealed that my classical music program was reaching more listeners than the programs of any other Ulster County radio station, an unusual success.)

More than five years after I left WDST, I got a call from the program director, Richard Fusco. He was someone I had worked with, and while we weren’t exactly best buddies—he was the guy who yelled at me for playing music by Steve Reich, a few years before the owner asked me to interview Reich—I was willing to talk to him.

Richard outlined for me a grand project that the owner and staff of WDST were about to start. It was to be called Radio Woodstock, and it was going to be an Internet project with several simultaneous streams of programming coming from Woodstock and promoted to the outside world. Among the people he mentioned as having agreed to become part of the project were Richie Havens, one of the best-known musicians ever to live in Woodstock, and Randall Craig Fleischer, then and still music director of the Hudson Valley Philharmonic. I was particularly impressed that Fleisher had agreed to work for them, since I have great respect for the guy. He’s a superb musician.

I had a few questions, mostly about the hours and working conditions. Then I asked what the job was going to pay. “Not very much at first,” Richard told me, “but people who start out with Radio Woodstock are going to have a stake in it and eventually they will make a lot of money.”

“That’s interesting,” I replied, “but where is the money going to come from?”

Richard told me that several large music industry companies had already committed to investing millions of dollars in Radio Woodstock to get it off the ground. I said I was impressed, but I still didn’t understand where the revenue stream was going to come from. “You can’t run advertising as part of the programming,” I said. “There are already so many Internet radio stations that as soon as ads come on people will switch to something else.”

Richard agreed. “We’ll run banner ads on the site,” he told me. That won’t raise very much, I said. He agreed with that, too, but said it was a start. “We’ll also sell the music we play,” he said. “People will be able to order CDs right on the website.” That sounded like a trivial source of income as well. When I asked where else the money was going to come from, Richard hesitated and couldn’t come up with a convincing answer.

For that reason, I decided not to get involved in Radio Woodstock. I just couldn’t understand where the money to support it was going to come from. I guess nobody else did, either. Radio Woodstock ran through most of the millions of dollars in three years, and then had to shut down most of its operations. Nobody got rich. (It still runs three audio streams, one of which is the current WDST broadcast.)

When I think back on this whole episode, I think it reflects a great deal about the difficulties of making money on Internet enterprises that don’t offer physical goods for sale. Amazon makes a fortune, but Facebook, despite its billion users, seems to be struggling. (I believe Facebook makes most of its income peddling its users’ information to advertisers, which is why I don’t use it.)

In fact, it seems to me that Radio Woodstock was a perfect set-up for a scam like the one in Mel Brooks’s “The Producers.” Get a lot of investment, use only some of it, and then tell all the investors that all the money has been lost. Perhaps that was the story of Radio Woodstock. But, being an honest person myself, I prefer to believe that the money was lost through honest stupidity.

One Response to “My Internet Start-Up”

  1. Roberta Gould Says:

    Yes. Remember your program well. Interesting, to say the least, that it was removed when most listened to.
    XXXXXXXX (the hand of the censor…my adjectives, I mean…)
    I even recorded on cassettes some of the music, hard to receive here on radio then.

    There was a cooperative set up in Atotonilico, Morelos, Mexico..hot springs and hotel set up around it…In the end, a few big boys took over and the locals who had put their money into the project..and done work as laborers, maids etc..were left legalized out..

    Well.

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