The development of audio encoding and delivery software such as Real Audio and Liquid Audio has enabled radio stations to operate as viable online businesses which appear mostly in two forms –

• Radio on the Internet – the distribution of existing radio content with the aid of a music encoder, made available to the public as live or on-demand broadcasts. Used to enhance and promote their traditional broadcasting services, radio stations such as these include BBC Radio 1 and Virgin Radio.
  
  
• Radio for the Internet – original radio content specifically designed for the Internet, allowing for diverse audiences and the personalisation capabilities of the medium. Stations such as these include SonicNet that includes music that, as is stated on their web-site, has been "composed, performed and recorded solely for real-time broadcast on the Web using real audio". Californian Radio HK declares itself "the first station to broadcast exclusively into the Internet, Real Time, Non Stop" and pioneered the legal use of audio on the World Wide Web with a trial licensing agreement with US publishing rights organisation ASCAP (the American Society of Performers, Authors and Publishers).

 The second of these is the more innovative of the two formats, though both offer the following advantages over traditional (broadcast) radio –

• No physical barriers or limitations such as distance, mountains etc, and the signal can reach beyond the scope of AM or FM signals (inside office buildings, tunnels etc)
  
  
• Not limited to local listening audiences, providing easy access to highly targeted national and global audiences.
  
  
• Not limited by broadcast spectrum limitations, so any one Internet radio station can develop an unlimited number of highly targeted niche formats (e.g. not only several specialised shows, but also several specialised sub-channels running several programmes simultaneously).
  
  
• Offers on-demand archived content so that audiences can choose their own programming at their leisure.
  
  
• Content is not subject to Radio Authority (now part of OFCOM) regulations, since it does not use airwaves, and as such, requires no radio license or broadcast tower, eliminating substantial set-up costs.
  
  
• The multimedia format of the Internet allows users access to video clips, images and other editorial information concerning the current playlist and the channel in general.
  

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