Long time readers of radioinfo will remember coverage of startup internet radio venture Talk Australia in 2000. The proprietor of that business, which went bust after only a few weeks streaming, has pleaded guilty to making false statements to investors.
Paul Hodges pleaded guilty to 10 charges in the NSW District Court this week, in an action brought by the Australian Securities Commission (ASIC) and prosecuted by the DPP. He will face sentencing on September 24.
Hodges made false statements that “induced 10 people to invest about $240,000 in the Talk Radio project between August 1999 and August 2000.”
At the time Talk Australia rode the wave of internet hype when radio streaming was imagined to be a viable stand alone business model. Other on-line radio ventures then included Bigfatradio and Spike Radio.
Time has shown that, while some internet streams are beginning to generate revenue, they can be viable as a complementary radio business, but are not usually viable on their own.
Hodges’ over-ambitious business model for Talk Australia involved building and operating an internet radio station which offered talkback and news presented by high profile announcers. His false statements over-stated the likelihood of success of the venture.
A studio was built in Glebe and went to air in October 2000, operating for one month before closing down on 17 November 2000. A number of companies which supplied broadcast equipment and software to Talk Australia were left out of pocket, and the investors did not get a return on their money.
Hodges false statements included that Ray Martin would be an announcer on the station and that OzEmail had a contract with Talk Australia and would be putting in $600,000 to the venture.
He also falsely claimed that six foundation advertisers had put in $100,000 each.
At the time radioinfo (then called AMT) reported the startup and finish of the station this way:
TalkAustralia launched: NEW
Online talk radio station TalkAustralia has been launched in Sydney and will broadcast live a mix of news, current affairs, talkback, finance and politics seven days a week, 24 hours a day from studios in Glebe.
The station provides “a contemporary radio format accessible online through the Web site Talkaustralia.com.au… and allows a talkback format to be delivered via the Net or the telephone.”
Feedback so far been “very strong” according to Talk Australia managing director Paul Hodges.
The station is designed for the four million people aged around 30 years old who log on to the Internet while at work.
TalkAustralia off line: NEW
After just one month `on air,’ Internet radio station TalkAustralia stopped streaming programming on Friday 17th November. Sources told AMT “a key backer pulled out,” leaving funds shorter than planned.
The station was staffed by some high-profile names, including Spoonman, Larry Emdur, Tracy Bowden and Lochie Daddo and a team of correspondents around the world, and some of the industry’s most experienced people off air.
Among the highlights of the station’s one month history were the introduction of Internet-based talkback and on the spot coverage of the Taipei plane crash (beating ABC to the punch). It’s not yet known whether the station will be resurrected.