My mentor

Ross Macfadyen, Clyde's programme controller, is first to extend the hand of friendship. Richard Muir, marketing manager, introduces himself next before Jon Mancini, Clyde's leading dance DJ, completes the usual pleasantries.

Radio Magnetic is a Glasgow-based internet radio station. It was founded 18 months ago to cater for the less commercial Scottish dance music scene. Radio Clyde needs no introduction.

Cooney hastily puts down his phone and smiles. "Sorry about the mob," he apologises. "We thought that it might be useful - it's not a firing squad, honest."

Perman and Lousada sit down, looking more relaxed as Cooney helps everyone to coffee, as he asks about Magnetic's marketing plans.

"We don't have a huge marketing budget," says Perman. "But the route we wanted to take it was to try and establish an off-line presence as well as an online presence.

"We want to build our own identity. And we have done this through the Scottish dance music scene, in terms of what people are playing and what club nights are doing. That's our base.

"Things often get a little lost on the internet. People can't identify with it. We are very much coming out of Scotland; this is what is happening and this is what we are representing. It's very clear."

"We wanted to build an identity that we could transfer to the marketing online," adds Lousada. "Trying to create a buzz. I think that we are achieving that. We are now starting to get some reward for all the effort that we are putting in. It's a very slow process but we are starting to make some noise. We are building all the time, with at least ten people a day registering to the site. These numbers need to get bigger, but it's a good start."

Cooney nods in agreement. He smiles as he skims over a recent cutting taken from Scotland on Sunday, forecasting that Radio Magnetic is the future of radio.

"In the market you are in, any broadcaster would face the same problems and the same challenges. It is about targeting people who are difficult to get to. It is a moveable group of people. Their tastes change, their locations change. But that is the great thing for you on the internet.

"If you are looking at Clyde as traditional broadcasters, we've got a defined area. In our case, west central Scotland. If someone left here and went down to London then, in the past, they couldn't get Clyde. But you are on the net, so you are there. And I think that that is one of the advantages that you have."

"Which actually changes the rules to a certain extent," continues Macfadyen. "If you were to do a marketing campaign in this area, for example, that would be great for people who chose to use you as a service in this area. But you'll have people listening all around the world. So that paints a whole different picture when it comes to marketing the station."

"I suppose that comes back to what you want to be. Do you want to be an internet radio station for Scotland, or do you want to be an internet radio station for the UK?" says Cooney. "What are your aspirations?"

"I think, ultimately, we would like to be a radio station for the type of music that we represent," picks up Perman. "The internet was just the easiest way to get into it because we didn't need to worry about getting an FM licence.

"I would always hesitate to say it was the easiest way. We had the idea, but we had to learn for six months how to facilitate internet broadcast.

"But, if internet broadcast becomes more viable as a way to listen to the radio, when more and more people get broadband access then, hopefully, we will be in a strong position, having learnt the right lessons early on.

"We want to be a station for the Scottish scene that we are representing, but we'd like to present it to a larger audience, who might then get into the Scottish scene."

As the coffeepot is passed around the table, talk shifts from internet to analogue radio. Radio Magnetic has secured a one-month FM Restricted Service Licence (RSL) for the Glasgow catchment area. And the "rookies" are obviously keen to capitalise on the venture.

"Use it as a chance to get reaction at the time and get some testimonials from people to show that the market needs to be utilised," offers Cooney. "It is not in our licence to do that sort of thing, but for you it is - and you can fill a need in the marketplace.

"Get some recordings of it as well for the Radio Authority. Ultimately, it licences the analogue and digital radio.

"You've got a good solid case-study. It's about looking at the positives of what you are doing and not the negatives of other people."

Richard Muir nods: "Get the publicity going to raise the profile of your FM licence. It is your chance to build on your database. We had the same situation with 3C last year [Clyde's award-winning 'Cool Country'digital station] - it had an RSL for a month on FM. Quite unusually, we did some above-the-line advertising for them just to get the message out that you could listen for a month, but then we had to try and take that audience back to digital when the licence expired.

"Perhaps, when you are launching it, you could use a PR stunt, get in the papers. When the budget's really tight that can be the best strategy to get noticed.

"I'm not going to suggest a stunt, but obviously you guys would have to have a cool stunt. Burn Jon Mancini, or something..."

"...That would be really cool," pipes up Mancini sarcastically.

Perman sits forward to sip his coffee: "If we were demonstrating these testimonials to the Radio Authority, what do you think we could hope to achieve from them? It is such a slow process when applying for a licence."

"The Radio Authority is made up of members from all over the country and if you establish a need then they respond to it," says Cooney. "Five good audience testimonials for the Radio Authority would probably be the equivalent of you showing that you had 5,000 listeners.

"The key thing in radio is to get a good product. You then have to get the audience but you will not start to get any money back until you can demonstrate that you have that audience.

"It is basically a fixed-cost business. You've got your staff, the technology and all the rest. This is paid for by the advertising. But how do you get advertising? By having the audience and demonstrating that you have the audience.

"One of the key ways to encourage more backing, though, is publicity. People do buy into something if it's got an edge, a profile. Although you are on the internet and you are worldwide, you are still working locally.

"What funding do you have in place at the moment?"

Lousada answers: "We have private funding to get us to a point and develop the product. In terms of advertising and sponsorship, we haven't at the moment. We didn't want to target it to begin with, as we wanted to build the audience, build the product and become comfortable with it."

Cooney nods: "You are better to wait until you are ready."

Perman sips his coffee and puts the cup back on the table: "The trouble with some of the smaller clubs and some of the smaller labels is that they just don't have the spare marketing budget. So we've been trying to think of ways to use their reputations and their profiles to encourage other advertisers to come in. Some of the club nights have such a strong image without actually enjoying any great financial success.

"We've been looking at how we can use other people's reputations to give us a leg-up and then, hopefully, we will become big enough to represent all this music to a larger listener base."

"Now we're starting to feel that our image and our audience is of the size where we can start to talk," continues Lousada.

"One of the big problems I'm having from the sales side of internet radio is that advertising and sponsorship on the internet at the moment is a bit of an unprovable, unsustainable revenue model..."

"Yes. The whole dot.com crash left everyone very wary," interrupts Muir.

"...So we're not just basing our revenue model around sponsorship and advertising," continues Lousada. "We are looking to develop programmes and how we can use our studio maybe for the encoding of music - bringing in other ways of making money. If we base it on the traditional model - especially in the present climate - it just isn't going to happen."

"You are doing exactly the right thing just now," replies Cooney. "Because you've got a Scottish dimension to your dance - it's not world music - that will help you when things improve. You have got some kind of an identity, unlike many other internet sites. How many people do you think are listening?"

"At the moment we are getting around 5,000 over the course of the day. That includes the archives - we archive the live broadcasts. That's proved to be very popular, especially, I guess, with people who live in different time zones. It is also getting a balance between a live radio station, where you don't know what you will be listening to when you tune in, and having that interaction that the internet allows.

"We are very interested, though, in the live aspect of radio because that is where we came from - SubCity Radio. Essentially, that is what radio should be about. A lot of internet radio stations act more like a juke box so we are very keen to have live shows and live presenters. But because we are on the internet there is that option of choosing what you want to do and what you want to listen to."

But the choice of what people want to listen to leads the group to a dilemma. How can Radio Magnetic attract a larger audience without deviating from its core music offering? On the question of programming, Macfadyen grasps the nettle: "I think that is a trap that people have fallen into in the past. They set out with the best intentions, but think the reality is, if they want to make money, and make a lot of money, they're going to have to perhaps do something that has been done elsewhere.

"I think that you are in a great position, whereby you can offer something to the listener that is not being offered already.

"It is that niche broadcasting and, if you stay true to your word and provide that, you will get your audience.

"It might be the difference between having short-term goals and the long-term goals. Short term, you might do whatever you can to bring in money, but in the long term you'll turn the audience away because you start with one thing and then change it just to make your business plan work. But for a long-term outfit, if you do slowly build an image, build your audience, build your programming, you will eventually be rewarded for that."

It was never going to be too long before the conversation turned to money again, though.

"Just to survive we've been cutting all costs," agree both Lousada and Perman.

"We've got a band of allocation that can cater for 2,000 people listening at the one time. Not many internet-only radio stations will be able to boast that - it is such an expensive band.

"But we've negotiated deals to cut these costs. And it means that if we do expand the audience to the size that we have got provision for, it makes the revenue plan a great deal more viable. If we were paying for that, and trying to sustain it through some sort of sponsorship and advertising, it just wouldn't happen. We just wouldn't be able to raise the money to cover all the costs. For us it has been about trying to cut costs at every point."

Cooney replies: "The internet is not going to go away but it has been a hard two years. The last eighteen months have been really difficult. I admire the way that you realise it is a long haul. The internet has settled down to become a sensible and serious marketplace now."

Perman smiles: "We started this just before the whole dot.com thing tumbled and a lot of our friends thought that we would be millionaires.

"We didn't think that we'd be overnight millionaires but we did think that it would be easier to attract funding because of that. But I think that it is better to enter in this climate because it is much more realistic. Budgets that were being bandied around for £6m were just ridiculous. They just didn't relate to any real world."

"Do you think that we can go to the Radio Authority and prove that our RSL demonstrates some demand for us?" asks Lousada. "Obtaining an FM licence from the Radio Authority is a bit of a pipe-dream at the moment. Would trying to make the case for a digital licence be more viable?"

Cooney sits back in his chair and thinks for a moment: "If you had a proposition for us, that is a way of getting on to digital radio."

"But there is still the current cost implication," stresses Macfadyen. "It is expensive to open up a digital station. You have to pay to get onto the multiplex and you have to have some kind of income to maintain your existence once you are on there. And digital, the way it is at the moment, is going to make it very difficult because the audience is so hugely limited. Selling airtime is extremely difficult, perhaps more so than it is on the internet. At least people can access you on the internet."

As the final gulps of coffee go down and the conversation concludes, the Radio Magnetic team shake hands once more with their Clyde counterparts.

Paul Cooney smiles: "I think that it is refreshing that you are into the live aspect of radio. I think that that is the great thing about radio. However you deliver it, it is a personal medium. It is a one-to-one medium.

"Don't sit and think that you are broadcasting to 100,000, one million or even 5,000 people, you just think of one person. And, if you've got that at the heart of your business, which I think you do, you have got a great chance."

What is sure, as business cards are swapped, is that their paths will cross again. Opposites do, as they say, attract...