Internet Streams a Waste of Money

[Bongwater]

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.

But aren't there ENOUGH stations playing JACK or "classic hits" now owned by mega corporations? Wouldn't it be refreshing to hear NEWER music for a change?

I'm pretty burnt out on old music. And I speak for many. When playlists are so restrictive that it shuts out a lot of NEW talent in favor of the same BIG artists and their old hits over and over and over (and there's LOTS of newer acts out there. In every genre), it's not doing much to help create better and innovative music, but encouraging record labels to sign "clones" of these other acts. We already have Nickelback, do we really need Daughtry? And hip-hop, of which I have no idea of where most songs end and another begins, to say nothing of distinguishing between most acts themselves were it not for DJs, voicers, jingles and stop breaks.

It's nice to hear oldies once in a while, but too much of the same thing in any genre is overkill......

And if you're a big station that wants to play the same 300 old songs over and over and over, that's fine. Just fork it over. Don't tell me Clear Channel or CBS CAN'T afford it. They're still on the air, they're still making a LOT of $$$. It's just that they're trying to live up to unrealistic corporate profit margins that were pretty much by the wayside 8 years ago. And I still don't see KZOK going News/Talk anytime soon because of this bill.....

Would be a GREAT April Fool's joke though.......now that I think of it......

 

[TheBigA]

But aren't there ENOUGH stations playing JACK or "classic hits" now owned by mega corporations? Wouldn't it be refreshing to hear NEWER music for a change?

Depends on who picks the new music, dontcha think? If the labels pick it, it might not be that refreshing. Each week, I receive about a dozen new releases on my desk, and most are crap. But if I can play the new stuff with no royalty, and it costs 20% of revenue to play a solid hit, what do you think most stations will play?

It's not doing much to help create better and innovative music, but encouraging record labels to sign "clones" of these other acts.

If the money a label makes comes more from radio royalties than it does fans, what do you think music will sound like? The labels will be encouraged to sign more sound-alikes because that's what gets airplay and brings in the royalty.

And if you're a big station that wants to play the same 300 old songs over and over and over, that's fine. Just fork it over. Don't tell me Clear Channel or CBS CAN'T afford it.

It's not they they CAN'T afford it. It's that they won't pay it. And yes, it's possible that music radio stations will do what MTV did, and find non-musical ways to attract an audience.

The real issue is do you want the same group that sues single moms and college students for file sharing to also get control over music decisions at radio? Don't you feel like they're acting like a bully? They're not looking out for YOU here. They're looking out for their own interests.

 

[Bongwater]

But there's also independent and local labels with a lot of exciting new talent on their rosters. Some of which later goes on to major labels in the next year or so.

And beware, some of what you throw away could become a freak hit later on. There are always new tracks from outside the US and on indie/local labels that don't hit the U.S. charts until several months to a year after they were first released after they've gone through all the needless "test" phases of PDs and consultants, etc. So here's a brand new idea:

Why not just whip it out NOW and let the listeners decide?

We all know a really good song when we hear one. Some just stand out. I loved "Love Song" Sara Barielles when it first came out in 2007 (and I heard it first online, months before radio picked it up.) Now I'll go berserk if I ever hear it again. Otherwise, it take a few listens for a song to grow on you. That's my criteria in picking out hits. The first listen is never an indicator in itself (unless EVERYBODY automatically hates it.)

Last year, one of my favorite new major label bands was Empire of the Sun (Virgin). They're just starting to take off now in North America (give it a few months, you'll hear them), but I probably would have been the first on the continent to play them LAST YEAR. I would not have waited for Capitol (which distributes Virgin here) or the add disc from TM Century to show up with "Walking On A Dream". If I had to get the CD as an import from Australia, that's fine with me.

There's lots of NEW music coming out EVERY DAY. I keep my eye on the UK, European, Australian and College charts every week as well monitor independents/MySpace as well as the US charts in any genre (which are pretty dated by the time I read the "incoming" or "most added") and you'd be surprised at my skill in picking out hits SEVERAL MONTHS before they are played ad nauseum on the radio in tight repetitious playlists.

Granted, much of the import stuff won't be available stateside for months and the indie music will still be indie, but that's what makes the station a LEADER, not a follower. Link the listeners to their web pages or MySpace in the meantime. Schedule new artists to come in and do live acoustic sets as often as possible

With so much new music out there from so many sources, it's not really a "format" but more of a marketplace for new music. I don't even have a name for it and I really don't want one. Categories are irrelevant. So call it anything you like. Just keep it moving with new music, every day. And LOTS of it......

And you'd be doing a LOT to help break new artists and keep the radio FRESH and EXCITING.....

Believe me, there is NOTHING more ANNOYING to a radio listener than chronic repetition of the SAME songs.......

And if some songs stiff, they stiff. Happens all the time in any format. But who's to say? I'd NEVER throw the disc away just yet. Some songs just take time to grow. Others never do. It's the listeners who make that call. Not me. In the meantime, there's a LOT of other NEW music that comes in DAILY. So any repetition depends on listener demand and not from what anyone or any "current" pop chart dictates. So the playlist NEVER gets stagnant. There's always something interesting playing. I'm not going to hammer the same songs into everyone's skulls every hour because some industry s--t sheet says I have to....

The exact formula is my secret, but trust me - it's light years ahead of anything currently on the air....

So.....what's 98.9 doing now?.....Oh yeah......saxophones......

 

[TVradioguru]

If indeed as you suggest Bong, there exists a silent majority which feel the same way as you about the need to showcase new independent artists, then wouldn't that model flourish in a streaming-only environment? With start-up costs ultra low as compared to traditional media, world wide distribution capabilities, and a younger plugged-in base to serve, streaming would be a natural forum wouldn't it?

The facts are that many have tried to start streaming "Internet radio-stations" with exactly the model described above. None of which to date have seen any real level of success. Mark Cuban started the idea of multi-format options with Broadcast.com in the 90's, and even large corporations saw the potential of a world wide distribution and tapping into a unique audio and video niche content, making Mark very wealthy when he sold Broadcast.com. Guess where all those unique streams are now- you guessed it, gone.

As difficult as it is to admit, people with tastes such as you are in the minority, one could consider it a large number, but a drop of water in the ocean compared to those who want to hear predictable, "popular" music.

The challenge remains on this discussion forum Bong; if you know so much more about what people want, then pony-up some money, buy a radio station or put together a streaming operation. Until you actually get to hire the talent, pay the bills, pay the music royalties and artists when they rightfully come looking for their fair share, let's see how long you stay in operation.

 

[TheBigA]

But there's also independent and local labels with a lot of exciting new talent on their rosters. Some of which later goes on to major labels in the next year or so.

This has nothing to do with this new royalty. And radio stations that play indie music will be just as liable for the royalty as those that don't. Streams that play indie music now get no discount for playing it. That's what this thread is about.

With start-up costs ultra low as compared to traditional media, world wide distribution capabilities, and a younger plugged-in base to serve, streaming would be a natural forum wouldn't it?

There are lots of these types of stations now, and as the topic of this thread indicates, the streamers must pay the artists and labels a performance royalty, and that royalty is a percentage of the stream's revenues, not profits. What we are hearing, the royalty fees eat up 100% of the profits.

 

[radioprofessor]

Excellent discussion in my humble opinion on the parameter of the value of local stations streaming. To summarize:

1. Many successful stations will be turning off their streams because they don't make enough money on it. The audience is not large enough, so you can't make money.

2. If the audience grows the stream just costs more, much more. Sound Exchange and artists are creating a disincentive to be successful. The cost get geometrically worse by the way. The audience gets large, but it costs more, so you can't make money.

3. The Diary just relied on what listeners remember. If you heard a station over the air or on a stream your station got credit and ideally office listening increased. Now the stream actually competes with your station. Since they run different commercials, thanks to AFTRA regs and others, there is no benefit. In fact, in my humble view, if you successfully stream you hurt your station's prime ratings and you make less money. This does not apply to diary markets, where there is still some value, albiet small.

4. Many have posted that their favorite stations are streamed in from out of market. I can tell you that KISS in LA is better than KISS in Seattle or KISS in Des Moines. Guess what. Clear Channel is hurting their local stations if they have a successful internet station. Plus with geometric royalty payments the internet station gets hurt by its success. You now double your chances of not making money.

5. Internet only broadcasters pay less, but none has really been able to create a successful internet only model. Plus if they become very successful they will face the increased costs as well.

Final word on the internet stream parameter. Spoken word stations dont have the big fees, but they also don't make money off the stream. More important is that if you can get Rush at anytime off the web, why would you listen to the local station? This hurts local radio. Bigger than that, many syndicators don't even allow the local station to stream. On the LA board someone described Sound Exchange as a cartel, an illegal monopoly. They are correct, in my humble view. Smart broadcasters in the next few weeks will begin shutting down their streams. Web streams will be niche and for speciality broadcasters, which is not a bad thing. Terrestrial radio will get back to the business of making good radio with their core product. Radio is not dead, far from it. Recent cell-phone PPM data show 18-34 year olds listen to far more radio than anyone ever thought. A key point is that young people who use I-Phones, 3 G phones and text are also among the highest users of radio. Let's get back to doing good radio is the parameter of the GM's in the conference call this week. Forget distractions like HD and Streaming because they distract, don't make money and may actually hurt the core product. The absolute correct view in my humble opinion.

 

[Silkie]

All in all it is unfortunate that the days of Internet streaming are over. It was a fun little luxury while we had it; however, to paraphrase Gloria Gaynor, we will survive without the streaming audio. She survived with her little disco tune all the way to bank, and so will the rest of us who refuse to pay more for an Internet stream to hear a bunch of crybabies.

For any who are thinking that the public will demand an end to the royalty fees charged per listener per song per nano second of being tuned in, that isn't going to happen. Why set oneself up to be told, "It's out of our hands."? That's just silly. The talk stations will go against you too. I remember the flap over Metallica, and how the talk stations told any who were angry about it that they were thieves, looking for welfare handouts and should be ashamed of themselves. So, what is Metallica doing these days? Have they outcompeted anyone, or are they just the ones who whined and put everyone else out of the market, because misery loves company?

If a local station doesn't carry the programming I want I tune it out. If an Internet station doesn't carry the programming I want I tune it out. I tune in occasionally to hear whether they finally got what I wanted without having to ask for it. If what I want isn't there I tune right out again. It is of no consequence to me whether a local station makes it or not.

Let's get back to doing good radio is the parameter of the GM's in the conference call this week. Forget distractions like HD and Streaming because they distract, don't make money and may actually hurt the core product.

That is real special and all, but it addresses making money and hurting the core product. It says nothing to the person who tunes in, so they can still just get out there with a lot of hype and tell us in their canned voice overs that it was what we asked for, when nobody gives a rat's behind, nobody listens, etc. They'll be back to their. Be the lucky caller to win $100,000. Then people will find out what time the giveaway is and that will be the only time of day they have an audience. The public is a little smarter than your General Managers give us credit for. If you think that losing the Internet stream is going to get your audience back, guess again, Guido.

"Distractions distract" - Intellectual observation of the day.

 

[TheBigA]

If a local station doesn't carry the programming I want I tune it out. If an Internet station doesn't carry the programming I want I tune it out. I tune in occasionally to hear whether they finally got what I wanted without having to ask for it. If what I want isn't there I tune right out again. It is of no consequence to me whether a local station makes it or not.

Suppose there is no place for you to go where you can hear music at all. No internet site or stream, no radio station, no satellite station or any outlet that will play music because the royalty fees are more than they make from either advertising or subscription fees. That your only choice is to either BUY the music, or hear it from a site that is controlled by either the artist or his label.

The issue we're discussing here goes beyond local radio streams. It's about the ability of people to hear their favorite music for free.

 

[RadioFanBoy]

I dare so most if not all major terrestial stations will have little or nothing to do with the internet period by the end of this year. The end of streaming is just the first step.

 

[Silkie]

The issue we're discussing here goes beyond local radio streams. It's about the ability of people to hear their favorite music for free.

Well, since I already paid for the tremendous music library that I have, it is, as I said, very unfortunate that this is what it has come to. When Metallica first started all this the talk stations called anybody who did not like it a bunch of pirating thieves, looking for handouts, not wanting the bands to make any money. It is tantamount to whining that you hate little babies because you get tired of hearing that stripping your rights away is for the good of the children.

 

[diva chick]

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.

 

[diva chick]

To mean: if the same commercials aren't being heard on the web as over the air, the advertisers aren't getting the total listening pie. Radio stations would be more or less delighted to air the same content on both, and get ARB credit for both combined, but AFTRA voice over talent has not reached a streaming agreement. Technically then "illegal" to 100% simulcast.