Internet Streams a Waste of Money

[radioprofessor]

Just had a good conversation with owners and have it on good authority you will see many stations dropping streaming in the near future. The rising costs in a down economy make streaming a waste of money. Web and Internet revenue cannot and will not support it. Radio will follow Yahoo and others in shutting down streams. The cost, plus the intense competition from niche web only broadcasters makes this effort dead. Add to this that streaming in a PPM world actually "takes away" from the core radio audience on terrestrial radio. Radio on the web is dead and it is the artists who are killing themselves. Web only broadcasters are also dropping like flies. Artists need to view radio and the web as partners exposing their music, not the enemy in my humble view.

Expect all small companies to abandon streaming in the next year. A few major groups may keep going, but not for long.

 

[LITTLEBOYBLUE]

Not to mention that I really don't "get" the way your beloved CBS plays have gone down. They have done many things right and well ... but the one thing that makes no sense to me is the streaming presentation of "if you like KISS in Seattle...then you'd probably like our CHR's in other markets". We really want you to spend less time developing any brand loyalty here. It would be different if the out-of-market streams carried local market ad inserts during stopsets; but the strategy there was "sell the ads to do-it-yourself businesses" so again missing the mark.

The national TV networks have done a MUCH better job of merging web and broadcast assets in a way that is supportive. Missed an episode? Catch it online ... with a dedicated sponsor for that stream. Like a show? Join the social communities that surround it. But they DON'T do the "you like CSI? Then you'll probably like Law & Order over there on NBC too. we'd rather you watch that instead". To me that is same message as saying "go listen to New York City stream instead of Seattle..."

 

[TVradioguru]

Streaming conventional radio or TV stations has proven a complete bust as a business model. There has not been one single case of an increase in cume or TSL by a radio station because they stream. And all the effort to cover radio-based spots with special streamed spots has also proven to be a non-starter. We now return to reality, already in progress...

 

[TheBigA]

Radio on the web is dead and it is the artists who are killing themselves.

I wouldn't completely blame the artists here. The RIAA is the culpret. They hold the artists under contract and force them to support this. Artists who control their own copyright know where their bread is buttered. They can sign waivers to the royalty if they want to promote their music.

 

[radioprofessor]

I might add that radio did it to themselves a bit too, much like the failed HD experiment. Radio was unable to create compelling content on HD or even agree on a delivery system. HD Radio is dead in the water after the first stations in Canada started it five years ago. HD was AM stereo all over again, except they sold a few more AM stereo recievers! (RP humor) What radio fails to understand in my humble view is they have a great vehicle to deliver outstanding content, why not spend your money developing the core product than fads. Expect to see many owners moving to core content and eliminating HD, Streaming, and a variety of fads that never really caught on. Better to save money in this area, than to keep cutting in the prime delivery system that reaches 95% of the population each week, in my humble opinion.

 

[TheBigA]

I might add that radio did it to themselves a bit too, much like the failed HD experiment. Radio was unable to create compelling content on HD or even agree on a delivery system.

They agreed on a delivery system. The problem is the audience isn't interested in buying new radios. It didn't matter if the content was compelling, as it was with XM. Radios, especially table models, have been dead since the 1940s, done in by the transistor. If you don't have a portable HD radio, built in a phone, no one's interested. The content is secondary.

What radio fails to understand in my humble view is they have a great vehicle to deliver outstanding content, why not spend your money developing the core product than fads.

They really didn't spend much on HD. The issue is the audience wants narrowcasting, not broadcasting. There aren't enough frequencies in a town to cover all the combinations of music people want. Advertising forces radio to focus on the most popular. HD was a way of attracting niches without compromising the main channel.

 

[PSAIRCHECKS]

Taking this back to streaming. What about stations providing streaming access to their shows instead of the live broadcast. Podcasts if you will... for up to 7 days of past shows like the BBC does? Music, commercials and all. This way, if you miss the show or want to listen again, or at your convenience, you have access to it from the station website (also available from cell phones etc.)for several days.

I understand the point of loosing ratings from listening to streaming content, but isn't there a way to monitor web based streaming content? A stations ratings should also include that stations streamed content within the local broadcast area. Can this be done through IP addresses? Just thinking out loud from someone not in the biz.

 

[TheBigA]

Taking this back to streaming. What about stations providing streaming access to their shows instead of the live broadcast. Podcasts if you will... for up to 7 days of past shows like the BBC does?

Good example. Regardless if the content is streamed or podcast, if it contains music, the royalty will apply. And the royalty rate in the US is the highest in the world. Internet stations in the UK and Germany are blocking their streams to the US because the royalty rate here is prohibitively expensive.

A stations ratings should also include that stations streamed content within the local broadcast area. Can this be done through IP addresses?

That makes way too much sense. Streamed content isn't included in the station's ratings because of various rules regarding the content. If a station covers the commercials on their stream for union reasons, that disqualifies the stream for inclusion in the ratings.

 

[radioman148]

I might add that radio did it to themselves a bit too, much like the failed HD experiment. Radio was unable to create compelling content on HD or even agree on a delivery system. HD Radio is dead in the water after the first stations in Canada started it five years ago. HD was AM stereo all over again, except they sold a few more AM stereo recievers! (RP humor) What radio fails to understand in my humble view is they have a great vehicle to deliver outstanding content, why not spend your money developing the core product than fads. Expect to see many owners moving to core content and eliminating HD, Streaming, and a variety of fads that never really caught on. Better to save money in this area, than to keep cutting in the prime delivery system that reaches 95% of the population each week, in my humble opinion.

I agree so can we finally get rid of HD and eliminate the noise once & for all.

 

[SeattleRadioPro]

Radio on the web is dead and it is the artists who are killing themselves.

I wouldn't completely blame the artists here. The RIAA is the culpret. They hold the artists under contract and force them to support this. Artists who control their own copyright know where their bread is buttered. They can sign waivers to the royalty if they want to promote their music.

Uh-huh. Don't think so. For some time now artists have been lobbying Congress to pass a terrestrial radio performance royalty (Billy Corgan was the most recent performer to visit the Hill) so they're aiding the RIAA in its efforts, not divorcing from the association.

 

[TheBigA]

I'm well aware of the artists who've been lobbying Congress, and I read Corgan's testimony.

There are also artists who disagree with this idea. But it's the RIAA that has assembled this coalition, and is the driving force behind this legislation. They have brought together a wide range of sides in the music business by making this an "issue of fairness," insisting on this "right." There is an assumption here that radio NEEDS music, and will pay whatever it costs to play it. We're starting to see that assumption is wrong.

 

[Bongwater]

It depends on the station. An average AC with an average format musically - especially one that is automated or depends on mostly syndicated programming is going to have a harder time being visible on the web in a sea of carbon copies.....

.....On the other paw, streaming on the web does have advantages, such as the ability to hear your favorite hometown station anywhere on the planet. Public and LPFMs depend on web streaming to supplement their on air signals. Besides, the next wave of portable entertainment devices will be wi-fi equipped car stereos and personal headset players. I think this move to stop web streaming is premature at best and cannibalistic at worst......

 

[TheBigA]

Public and LPFMs depend on web streaming to supplement their on air signals. Besides, the next wave of portable entertainment devices will be wi-fi equipped car stereos and personal headset players. I think this move to stop web streaming is premature at best and cannibalistic at worst......

All that's fine, but if the charges for music use on those streams exceed the income, public and LPFM will be faced with the exact same problem. They are not exempt, although the percentage is a bit lower.

Something needs to be done to address this move by the music cartel to force radio into giving up a large part of their revenue to music, and then adding a huge pile of bureacracy on top of it. In addition to the money, streamers have to document every song they play, and the exact number of people who listened to each song. The amount of paperwork involved is impossible for an LPFM to handle.

 

[TVradioguru]

Something needs to be done to address this move by the music cartel to force radio into giving up a large part of their revenue to music, and then adding a huge pile of bureacracy on top of it. In addition to the money, streamers have to document every song they play, and the exact number of people who listened to each song. The amount of paperwork involved is impossible for an LPFM to handle.

That's a good point A. By having to use a service like Livestats(tm) to track the amount of listeners and when, it's yet another expense.
And of course the more listeners you have, the more they charge. Unlike with traditional radio, you're penalized for being successful.

 

[bossbill]

My local client really doesn't care whether his spot is heard around the world. He's only gonna pay for his market area.

 

[TVradioguru]

When some of my stations wanted were pitching the whole streaming concept a couple years ago, the idea was to drive in-office in-market listening. If the listener had a diary, they would give credit to the station though they were listening on line while at work. Since the diary method of ratings relied on the holder recalling what they listened to, usually a day before returning their diary, streaming was considered just another convenient delivery method.

The problem is more people at work were visiting their social networking sites like Facebook and MySpace, not streaming local radio stations. Many larger companies also shut off the ability to stream while at work to save bandwidth costs.

 

[Grindlfan]

Just had a good conversation with owners and have it on good authority you will see many stations dropping streaming in the near future. The rising costs in a down economy make streaming a waste of money. Web and Internet revenue cannot and will not support it. Radio will follow Yahoo and others in shutting down streams. The cost, plus the intense competition from niche web only broadcasters makes this effort dead. Add to this that streaming in a PPM world actually "takes away" from the core radio audience on terrestrial radio. Radio on the web is dead and it is the artists who are killing themselves. Web only broadcasters are also dropping like flies. Artists need to view radio and the web as partners exposing their music, not the enemy in my humble view.

Expect all small companies to abandon streaming in the next year. A few major groups may keep going, but not for long.

It figures. Streaming is pretty much the only way to listen to somewhat good radio since I don't get it here in Seattle. I have a few out of state stations that I stream regularly. Now that will be taken away from me too. Way to go boys.

 

[radioman148]

Agreed, the best radio for me is out of market radio.

 

[Bongwater]

http://www.smashingpumpkins.com/pages/news/billy-corgan-speaks-at-congressional-hearing

Mr. Pumpkin might be taken out of context, it says here:

"Almost 80% of the stations in the country have a special accommodation in the bill," Bainwol said. "Stations under $1.25 million in revenue enjoy a flat fee amounting to about $400 a month for unlimited use of music. Public stations pay less than $100 a month. Talk radio won't pay for incidental use of music at all - and religious services are completely exempt."

I think Billy Corgan and Co. just might be targeting the BIGGEST TERRESTRIAL broadcasters, the ones producing the MOST revenue......

It says NOTHING about web radio...unless it's coming from one of these stations. And even then, it doesn't mention streaming audio at all. Just terrestrial signals......

 

[TheBigA]

It says NOTHING about web radio...unless it's coming from one of these stations. And even then, it doesn't mention streaming audio at all. Just terrestrial signals......

That's because web radio already has a performance royalty...has had it since 1996. The deal the NAB just made with the RIAA requires terrestrial streams to pay as much as 30% of their revenue to the labels. This is, by the way, the same NAB that Mitch Bainwol said won't negotiate with them.

But yes, you're correct. The RIAA is aiming their bill at the 20% of the radio stations owned by the big companies. They are the ones who have the most audience, who make the most money, and are also, by the way, the most valuable to the labels in terms of selling music. And if you study the Digital Performance Royalty Act, and use it as a moel for what they'll do if this new law passes, they will use this royalty to attempt to control the music decisions radio stations make. The more familiar music they play, the more they'll have to pay. The more money those stations make, the more they'll have to pay. And because SoundExchange is a cartel, radio stations will have no alternatives. Either play by their rules, or don't play music.