A new start-up aims to turn the dial on the radio industry.
Hitch Radio founder Ayinde O. Alakoye said, "Radio's heard by 94 percent of the U.S., but its live nature makes it really hard to share, so we've created Hitch Radio, the world's first instant messaging app for live broadcast radio."
Alakoye's goal is to capitalize on what he calls radio's flawed distribution model. And he says he has the chops to pull it off. He's a former radio ad sales executive and one of the original creators of the iHeartRadio.
A New Frequency
In his latest venture, Hitch Radio, listeners get access to 20,000 stations around the world via their smartphones. Users can search by song, artist or genre. But unlike other music apps, Hitch Radio users can instant-message their friends about what they're listening to. If the message goes unopened within 3 minutes, which happens to be the average length of a song, the message disappears.
Hitch Radio is available on both iOS and Android and is free to use.
Static
Nat Burgess, an angel investor and CEO of the Corum Group, is concerned the app is "immature."
He cautioned that the start-up would "live and die" based on its ability to nab listeners.
Alakoye told CNBC he expects to nab more users by getting "star drivers". So a Katy Perry fan could essentially 'hitch a ride' in real time with Perry to hear what she's listening to. He would not disclose any celebrities he's in talks with.
Jessica Peltz, a venture capitalist with KBS Ventures, said the music industry's notorious legal challenges could pose a threat to the start-up.
But the founder said he's not concerned. "Our business model is that we pay radio stations 75 percent of our revenue and they actually pay 100 percent of the royalties to the artist for every song that's played, so there's no royalty challenge for us," Alakoye told CNBC.
According to Alakoye, since launching in March, the Hitch Radio app has hit over 15,000 downloads. "We anticipate being profitable within the next 12 months," Alakoye said.
He added that the company has an advertising deal with Google. He said the internet giant will also provide engineering resources to help build out the Hitch Radio app.
So far the start-up has raised $2 million dollars and is looking to raise $6 million in its seed round.
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