Promising to deliver its unique brand of programming to a wider audience with a standard of quality that far exceeds traditional radio, Richard Branson’s Radio Free Virgin, the online radio station streaming from the Miracle Mile district of Los Angeles, will introduce widespread changes in 2001.

With the beginning of its second year of operations, the company announced the hiring of two content programmers well known within the Internet music community. It’s also planning a major marketing campaign and will announce new alliances in the coming weeks.

“We’ve ended phase one and we’re moving on to phase two. We’re a full-content play now,” said Radio Free Virgin General Manager Zack Zalon, explaining that the site had upgraded its technological capability to allow much wider programming options.

The site went live last March, but until this month it was focused on building up its technology and software. Now the station is in a position to respond to listener demand by fine-tuning or adding to the 40 distinct stations it already has.

“Discreet uploads mean that we can feed updates and new sets of information each time a user activates the player,” said Zalon. “We can respond to listener input.”

Zalon said the company has been operating in near-stealth mode, fine tuning its technology and relying solely on word-of-mouth to draw visitors. “It’s not been an easy thing to create a software application that lives on the hard drive and the Internet,” he said.

Soon, however, the station will be announcing agreements that will allow it to port onto set-top boxes, mobile phones, PDAs and other handheld devices. Radio Free Virgin is betting that the new lines of access to consumers will take its product beyond the PC and into the same places as traditional radio.

Right now, “streaming radio is, at best, a small niche play,” said Bishop Cheen, a media analyst with First Union Securities Inc. “The economics are yet to be proven, and it’s many moons away from being established.”

Yet despite the lack of marketing, Radio Free Virgin has experienced a whopping 3,000 percent growth rate, with more than 1.6 million users downloading its player since the station went live. The company thanks to generous support from Branson has inverted the old Internet model of spending on marketing to drive content to build out technologies. Instead, it has started with technology and is finally in the position to build out content.

Despite analyst skepticism, the population of streaming audio listeners has increased by 65 percent in the past year. An impressive 60 percent of Radio Free Virgin listeners are broadband users, which facilitates streaming audio.

“Broadband is proliferate enough in the states to base a business model on,” said Zalon. “America is the land to conquer in business, and from here, we can spread out to the UK and Asian markets.”

With their diversity and depth, online stations such as Radio Free Virgin and its closest competitor, Spinner.com, hope to offer something that traditional radio broadcasters like the 1,170-station Clear Channel Communications can’t. Even though Clear Channel has entered the online fray, its stations use live DJs, which limit its scalability.