A question to ponder...

[Groove1670]

Well, yes, if you choose to ignore paying ASCAP, BMI, SESAC and worst of all, Sound Exchange.

If you're not producing revenue (and don't plan to). There are low cost providers that will take care of this for you starting at about 20 bucks a month.

Yes you can impress friends, family, and neighbors with the Ronco internet station in a can.
;D

Mr. Microphone not included.

 

[andydallas]

conforming to SoundExchange, just the reporting issues alone, can be a big headache.

I was the director of radio for broadcast.com years ago (before and after Yahoo bought us out),,the problem with the RIAA is the fees are due even if you have $0 in revenue, and you must be able to report how many people listened to every song, which is why I say, the reporting issues can be a big headache for a small station.

Having a great internet only station is like having a great resort on a deserted island that no one has ever heard of,,,,unless you have a way for people to find out about you, you will never have the mass required for advertising. Even the largest radio stations are joining forces (Iheartradio) to put the power of all of the stations into one place.

The only way internet radio will work is if you have mass numbers AND you can truely personalize the advertising for individuals,,,the cost per thousand for very specified audiences will make it work,,but thats the only way it can under today's fees

 

[KFodor]

Online streaming. Encoder, Winamp, mp3 files, 20 dollars a month host, a spare room. Nuff said :

You're forgetting music licensing fees, costs of broadband internet...and any 20 dollar a month host will garner no audience. (I've estimated it at least around $2,000 a year not counting the equipment required for studio/production/production library services, traffic and billing, etc.

I'm positive about the potential of digital...but it has not proven itself yet to be able to monitize itself. Until it does...it's not the future of radio.

 

[Chuck]

If you are an Internet only station, then there are some reasonably priced ways to do it, but if you are a commercial over-the-air broadcaster who just wants to make your programming available to Internet listeners, then you are screwed. The fees get really big if you have any kind of audience numbers at all. :-[

 

[TheBigA]

The fees get really big if you have any kind of audience numbers at all. :-[

Then what's the point?

 

[ok walters]

If you are an Internet only station, then there are some reasonably priced ways to do it, but if you are a commercial over-the-air broadcaster who just wants to make your programming available to Internet listeners, then you are screwed. The fees get really big if you have any kind of audience numbers at all. :-[

Not really true. If you stream the over the air signal the fees are actually quite low, and are based on revenue, not listeners, with BMI and ASCAP. SESAC numbers are based on population and spot rates, but work out not too much higher than the other two. With BMI shown below, there is a minimum fee of $335 per year but otherwise the streaming fees are based on revenue as well, just like the OTA fees. Look at the reporting sheet used to calculate fees - link below

http://www.bmi.com/forms/licensing/radio/NRBMLC-05_radio_blanket_AFR.pdf

Station doing $20K per month total would pay about $375 per month each to ASCAP and BMI, and slightly more to SESAC, or about $1150-1200 per month total for a blanket license. It is a percentage of revenue, and has nothing to do with numbers of listeners. That is why the internet only guys are screaming so loud I would guess.

 

[secondchoice]

I worked at a station in the 1990's that the owner did not pay SESAC. There were very few songs we could not play. It was an AC station at the time but when we flipped to country, we started paying SESAC. Is SESAC still many Country and Gospel? If so if you are a CHR or AC why pay them?

 

[andydallas]

SESAC was known for being mainly Christian songs, however they have gone out and purchased the rights to many non-christian music writters,,,which makes it very hard for a station to not play any SESAC music (or at least I'm sure that was the intention), SESAC is "for profit" ASCAP and BMI or not

 

[Chuck]

If you are an Internet only station, then there are some reasonably priced ways to do it, but if you are a commercial over-the-air broadcaster who just wants to make your programming available to Internet listeners, then you are screwed. The fees get really big if you have any kind of audience numbers at all. :-[

Not really true. If you stream the over the air signal the fees are actually quite low, and are based on revenue, not listeners, with BMI and ASCAP. SESAC numbers are based on population and spot rates, but work out not too much higher than the other two. With BMI shown below, there is a minimum fee of $335 per year but otherwise the streaming fees are based on revenue as well, just like the OTA fees. Look at the reporting sheet used to calculate fees - link below

http://www.bmi.com/forms/licensing/radio/NRBMLC-05_radio_blanket_AFR.pdf

Station doing $20K per month total would pay about $375 per month each to ASCAP and BMI, and slightly more to SESAC, or about $1150-1200 per month total for a blanket license. It is a percentage of revenue, and has nothing to do with numbers of listeners. That is why the internet only guys are screaming so loud I would guess.

ASCAP, BMI and SESAC are not the problem. It is Sound Exchange that makes it expensive for over-the-air commercial broadcasters to stream. You have to pay them as well. If you are non-profit or Internet only, the cost isn't too bad, but if you are a commercial broadcaster, the current fee is $0.0023 per listener, per song. Assuming you had an average of 100 listeners and played 14 songs per hour, that works out to about $25,000 per year. Add to that ASCAP, BMI and SESAC fees plus your actual streaming costs and it goes even higher. Unfortunately, it is almost impossible to sell $25,000 worth of spots with a listening audience of 100. There simply is no return on investment, nor any way to just break even.

As Big A says, "Why bother?"

 

[TheBigA]

It is Sound Exchange that makes it expensive for over-the-air commercial broadcasters to stream.

Correct. I've spent more than five years in meetings with their reps, and they understand our situation. However, the law as it was written 15 years ago was bad, and the people SoundExchange represent want to get paid what they feel they're due. They also feel they've been ripped off by OTA radio for the past 80 years, and this is one way to even the playing field. Unfortunately, it's stiffled streaming radio, and needs to be corrected. That's why some radio companies have negotiated directly with certain labels, and why there's a new bill in Congress to correct the inequities in the system.

 

[Chuck]

... and why there's a new bill in Congress to correct the inequities in the system.

I hope it passes, but given the effectiveness of Congress the last several years, I won't hold my breath. :

 

[TheBigA]

I hope it passes, but given the effectiveness of Congress the last several years, I won't hold my breath. :

I agree...there've been a lot of bills on this subject over the past few years, and none have even made it to the floor. My sense is they'd prefer this thing to be handled directly by the parties involved, rather than federal legislation, and that's why some companies have taken that route.

 

[ok walters]

Good info, Chuck. I never ran the numbers out all of the way as our radio station site has little traffic during the music hours and the SE costs are very low due to the lack of traffic. A vast majority of our listening is obviously over the air, but I can see where the numbers would change quickly if I went full time music and the traffic spiked.

 

[bossbill]

Don't kid yourself that SESAC is "only a little bit more". Considering that only a very small percentage of product is SESAC, and that SESAC fees are based on "highest one-minute rate", SESAC is at least an order of magnitude more than BMI and ASCAP. And SESAC is "for profit", which the others aren't. SESAC is a big rip-off. If you are careful, you can avoid the SESAC-licensed material. And tell your listeners exactly why you won't play that one song.

Sound Exchange is a whole different rip-off. Broadcasters have been selling product for music groups for many years, and continues to do so. It has been a mutually-beneficial relationship, but not any more. The groups we made famous now want us to compensate them? Especially the internet royalties are ridiculous. If I want to double my listener base from 1,000 listeners to 2,000 listeners I'll need to pay another 30% of my revenues to Sound Exchange? I don't have 30% to give. They can go to hell. Plus, with streaming, I have no control over whether these new listeners are in my local coverage area. If they aren't, they are of ZERO value to me anyway. My local furniture store doesn't care that I have a listener in Bismark or Upper Facelift Arkansas.

 

[ok walters]

Don't kid yourself that SESAC is "only a little bit more". Considering that only a very small percentage of product is SESAC, and that SESAC fees are based on "highest one-minute rate", SESAC is at least an order of magnitude more than BMI and ASCAP. And SESAC is "for profit", which the others aren't. SESAC is a big rip-off. If you are careful, you can avoid the SESAC-licensed material. And tell your listeners exactly why you won't play that one song.

Sound Exchange is a whole different rip-off. Broadcasters have been selling product for music groups for many years, and continues to do so. It has been a mutually-beneficial relationship, but not any more. The groups we made famous now want us to compensate them? Especially the internet royalties are ridiculous. If I want to double my listener base from 1,000 listeners to 2,000 listeners I'll need to pay another 30% of my revenues to Sound Exchange? I don't have 30% to give. They can go to hell. Plus, with streaming, I have no control over whether these new listeners are in my local coverage area. If they aren't, they are of ZERO value to me anyway. My local furniture store doesn't care that I have a listener in Bismark or Upper Facelift Arkansas.

In my case, they are "only a little bit more" but as you say they offer substantially less as far as content goes. They are still higher than ASCAP and BMI, but their day is coming just like it did for the other two.

 

[Chuck]

In my case, they are "only a little bit more" but as you say they offer substantially less as far as content goes. They are still higher than ASCAP and BMI, but their day is coming just like it did for the other two.

For me, SESAC is considerably more percentage wise, but not a huge amount of money. It certainly is no bargain. Whether you can get along without them may depend on your format. SESAC represents some very prolific song writers, including Neil Diamond and Bob Dillon. You may not play their performances, but they and other SESAC composers wrote a ton of songs that have been recorded by other people. They are also heavy into country music. Trying to filter out the songs might turn into quite a project.

The good news is the Radio Music Licensing Committee is suing SESAC, just as they did with the others. I actually had a credit with BMI for most of 2012 thanks to their settlement. I liked that. I wouldn't mind the same thing happening to SESAC and Sound Exchange. In principle, have no objection to paying composers and artists, but it needs to be fair and reasonable. A lot of record sales would never happen without radio.

 

[TheBigA]

A lot of record sales would never happen without radio.

Their point is record sales is a declining part of their revenue. So selling records is less important than licensing performance rights. Obviously, that's not our fault, and no reason why we should bear the cost of their changed paradigm. But that's how they'd respond.

 

[northwoods]

Online streaming. Encoder, Winamp, mp3 files, 20 dollars a month host, a spare room. Nuff said :

Well, yes, if you choose to ignore paying ASCAP, BMI, SESAC and worst of all, Sound Exchange. The last I looked, the Sound Exchange rate for 2013 is $0.0023 per "performance." They define a performance as one listener per song. If 50 people listen to just one song, that is 50 performances.

$0.0023 doesn't sound like much, but if you averaged 100 listeners over a 24 hour period and played about 14 songs per hour, that works out to $3.22 per hour, or $77.28 per day, or a little over $27,500 per year just to Sound Exchange. Don't forget there is ASCAP. BMI and SESAC to pay as well, but their rates are much more reasonable. I suspect you could operate a local AM station for much less, and I know you can operate a LPFM for way less. The music royalties take a lot of the fun out of Internet radio.

How many listeners do you need to attract sponsors? Could you actually sell 100 listeners to a sponsor? Maybe you can, and I'm certainly interested in finding out how.

Let's take two points here. One, with regard to royalties/performance fees. If you ran your internet station through Live 365 or Loudcity, they cover all the royalty fees with Sound Exchange, ASCAP, BMI, and SESAC. There are different priced packages that each carry (depending on how much you want to spend).

Two, regarding the $27,500 mentioned for Sound Exchange. If that is your largest expense, it's a fraction of what you would be paying in property taxes, insurance, utilities (especially keeping those towers powered up), and legal fees (to advise on FCC rules and regulations), just to name a few things if you have a coventional brick and mortar terrestrial station.

As for obtaining/keeping sponsors, I'm no advertising expert and don't claim to be one (and I didn't sleep at a Holiday Inn Express last night). However, in my opinion, with the advent of the internet and social media, you have more opportunites to try to attract sponsors than the old fashioned door to door, phone solicitaion, or direct mail processes in the days of old, especially with the use of banner ads on your webpage (which should be a given if you are an online station), with a direct link to their website.

 

[Chuck]

Let's take two points here. One, with regard to royalties/performance fees. If you ran your internet station through Live 365 or Loudcity, they cover all the royalty fees with Sound Exchange, ASCAP, BMI, and SESAC. There are different priced packages that each carry (depending on how much you want to spend).

Two, regarding the $27,500 mentioned for Sound Exchange. If that is your largest expense, it's a fraction of what you would be paying in property taxes, insurance, utilities (especially keeping those towers powered up), and legal fees (to advise on FCC rules and regulations), just to name a few things if you have a coventional brick and mortar terrestrial station.

As for obtaining/keeping sponsors, I'm no advertising expert and don't claim to be one (and I didn't sleep at a Holiday Inn Express last night). However, in my opinion, with the advent of the internet and social media, you have more opportunites to try to attract sponsors than the old fashioned door to door, phone solicitaion, or direct mail processes in the days of old, especially with the use of banner ads on your webpage (which should be a given if you are an online station), with a direct link to their website.

My comments are for commercial over the air radio stations who also want to stream their signal. They are "brick and mortar" businesses.

If you are an Internet only broadcaster then you can use one of the companies that pay all your music licensing fees. The costs are actually fairly reasonable. If you are an over-the-air commercial broadcaster, they can't help you. You have to go through Sound Exchange. That is expensive.

The $27,500 figure I quoted would be for an average of 100 listeners at any given time. That number simply isn't sufficient to attract many (or any) advertisers. I suspect you would need about 10 times that number to be of much interest to most. That would cost you $275,000 per year, just to sound exchange. Can you sell that? I'm pretty good, and I don't think I could. If you are a local radio station, having listeners in far off parts of the world is of little interest to your local sponsors. Having these listeners are great for the ego and bragging rights, but do little to pay the bills.

If you are running a business of that size, Internet or not, you will still have office expenses, insurance, employee costs, taxes and all the stuff any real business would have. Maybe you can do it on the cheap out of your spare bedroom, but I doubt you will be able to make much money out of it. As for selling ads, I take it that you've never done that. It isn't as easy as it sounds.

Perhaps the conclusion you can take from this is the business model for Internet broadcasting excludes small commercial broadcasters. It certainly seems that way. I can tell you that it is the reason why many small - but often interesting - commercial broadcasters do not stream music programming.

 

[northwoods]

Let's take two points here. One, with regard to royalties/performance fees. If you ran your internet station through Live 365 or Loudcity, they cover all the royalty fees with Sound Exchange, ASCAP, BMI, and SESAC. There are different priced packages that each carry (depending on how much you want to spend).

Two, regarding the $27,500 mentioned for Sound Exchange. If that is your largest expense, it's a fraction of what you would be paying in property taxes, insurance, utilities (especially keeping those towers powered up), and legal fees (to advise on FCC rules and regulations), just to name a few things if you have a coventional brick and mortar terrestrial station.

As for obtaining/keeping sponsors, I'm no advertising expert and don't claim to be one (and I didn't sleep at a Holiday Inn Express last night). However, in my opinion, with the advent of the internet and social media, you have more opportunites to try to attract sponsors than the old fashioned door to door, phone solicitaion, or direct mail processes in the days of old, especially with the use of banner ads on your webpage (which should be a given if you are an online station), with a direct link to their website.

My comments are for commercial over the air radio stations who also want to stream their signal. They are "brick and mortar" businesses.

If you are an Internet only broadcaster then you can use one of the companies that pay all your music licensing fees. The costs are actually fairly reasonable. If you are an over-the-air commercial broadcaster, they can't help you. You have to go through Sound Exchange. That is expensive.

The $27,500 figure I quoted would be for an average of 100 listeners at any given time. That number simply isn't sufficient to attract many (or any) advertisers. I suspect you would need about 10 times that number to be of much interest to most. That would cost you $275,000 per year, just to sound exchange. Can you sell that? I'm pretty good, and I don't think I could. If you are a local radio station, having listeners in far off parts of the world is of little interest to your local sponsors. Having these listeners are great for the ego and bragging rights, but do little to pay the bills.

If you are running a business of that size, Internet or not, you will still have office expenses, insurance, employee costs, taxes and all the stuff any real business would have. Maybe you can do it on the cheap out of your spare bedroom, but I doubt you will be able to make much money out of it. As for selling ads, I take it that you've never done that. It isn't as easy as it sounds.

Perhaps the conclusion you can take from this is the business model for Internet broadcasting excludes small commercial broadcasters. It certainly seems that way. I can tell you that it is the reason why many small - but often interesting - commercial broadcasters do not stream music programming.

Chuck, it's regrettable that your station can no longer stream and the likes of Live 365 and Loudcity can't help you (I'm guessing they are unable to help and not unwilling to help). And yes, you are right that I've never sold ads. You would think that Sound Exchange would be able (or willing) to negotiate a reasonable flat monthly fee with you to be able to stream, instead of taking the my way or the highway approach (I guess instead of having half a loaf of bread, Sound Exchange would rather dig in it's heels and starve on principle).