The recent award of an £1.8m grant from the British government’s Technology Strategy Board to the likes of BT, Yahoo for the creation of a “cloud radio” service has done a lot to underline how seriously this kind of technology and the platforms that utilise it are starting to become.

Founded in 2008, London-based Mixcloud can certainly be said to be one of the major pioneers of web-based radio and has since gone on to establish itself as a popular and highly regarded platform in this space. In the interview below, the company’s co-founder Nikil Shah answers my questions about Mixcloud and offers some superb insight into the world of online audio as whole…

What inspired you to create Mixcloud and how did you get started?

The founders were all at University together. As well as being Engineering and Maths geeks, most of us were music geeks, hosting radio shows and DJing all over the place. The Mixcloud concept came about from our frustrations. We were annoyed with using broken file sharing services to host and distribute our shows and mixes across the web. Similarly, as listeners, the experience trying to discover great radio and DJ content was pretty broken. We felt like these two parallel problems could be fixed by building a definitive platform to connect the creators to the listeners.

The second important factor which led to the creation of the business was the number of friends and peers who were quitting the corporate world to pursue their startup dreams. It was really inspiring and helped nudge us along the way!

Could you give The Next Web’s readers a quick rundown on how the service works?

Nikil mixing 220x137 How Mixcloud is helping to shape the future of radio [Interview]Of course. Mixcloud is the home for on-demand radio shows, DJ mixes and Podcasts – what we like to call Cloudcasts. As a listener, you can discover great music and radio content – curated by experts and available to listen on-demand. We have some of the world’s best DJs, radio stations and curators uploading content directly to the platform, creating a unique catalogue.

Discovery works in a number of ways – go to the front page to see what’s “hot” (think of it as the Digg for Radio), search by artist or tag/genre, follow Cloudcasters and friends for social discovery (‘Twitter for Radio’).

For DJs and radio content creators, we provide a beautiful, easy-to-use platform to host and distribute their shows across the web.

Where do you feel you fit in the whole online audio space?

Ooh, I wish I could draw my market map here – I’m all about 2D maps. I’ll try to verbalise it. On the horizontal axis it’s “song-based” services on the left and “radio-based” services on the right. The vertical axis is “search” at the top versus “discovery” at the bottom.

The “song-based” space is pretty saturated and evolved. From search to discovery, we have major services such as Spotify, Last.fm, Pandora, iTunes and SoundCloud to more specialist plays such as Blip.fm, HypeM, Beatport and so on. On the right, however, we believe that the radio world is stuck in “search” and there have been few attempts to shift it into the rich world of discovery, recommendation, personalisation. That’s where Mixcloud fits in.

How do you see online music streaming and IP radio evolving and what do you see as your role within this?

mixcloud widget 220x275 How Mixcloud is helping to shape the future of radio [Interview]This is going to be a hard question to answer without sounding like a consultant tosser – “It’s a multi platform future baby!”. Or something like that.

No, seriously – I’ve been really interested watching Pandora’s meteoric rise. A few lessons: Mobile is a game changer, multi platform is the future, and they describe terrestrial radio as their competition, not “music streaming” – i.e. they’re looking at the passive, leanback, mainstream experience/audience of radio.

There are lots of cool things that we’re adding to the experience of radio too – social, democratic, personalisation. For engaged listeners, the context around the content is important. Less engaged listeners just want a tap. We’re building a service that appeals to both audiences.

Do you think services like yours will ever completely replace traditional radio?

Nope. Well over 7m people listen to Chris Evans on BBC Radio 2 EVERY WEEK! Nuff said.

I’ve noticed you are using ads to help generate revenue – how’s that working out for you?

Great. We’ve focused on solving a problem for a particular type of end-user, and also focused on one vertical to launch the service, namely “DJ content”. We therefore have a very specific core demographic of users who are very appealing to advertisers.

They’re all passionate music lovers, tastemakers and early adopters. We have leading DJs and curators using the platform to directly engage with their listeners – all of whom are active social sharers. This is all a dream for brands, and we’ve worked on some really interesting “beyond the banner” projects with some of the world’s biggest brands – including Nike, BlackBerry, Diesel and Red Bull.

Nearly 30,000 Twitter followers is pretty impressive – is that representative of the size of your actual audience?

That’s a very hard question to answer. Some of the guys on our team are more bothered about that number than others. We see a lot of value from the Twitter audience and so we’ve put the work in to nurture it. Personally what I find more exciting isn’t the number of followers we have as that’s pretty one-dimensional – it only gives us one voice but we’re trying to talk to a world of listeners with very different interests. The metric I find more interesting is the number of tweets containing the term “Mixcloud”. Users, fans, listeners and creators sharing content they love on Mixcloud with their peers – that’s what we care about. And with around one tweet per minute, we’re pretty happy with how it’s building.

What features can we expect in the future from Mixcloud?

As you’ve probably guessed from above, mobile is massively important for us, so 2011 is about going mobile. On the core platform, it’s constant tweaks, improvements and new features to help our end users with the core objective of Mixcloud, for listeners it’s the discovery of great radio content, and for Cloudcasters it’s improving the tools to upload and distribute their content