Radio says goodbye to Streaming

[radioprofessor]

Just had a good conversation with several owners at a conference 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. (streams are measured seperately and run different commercials) 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. I expect the first announcement coming from this group by next Monday. This will be big. Radio is going back to it core business and it is about time in my humble view. Focus less on texting, HD, Streaming and more on making your core product sound better. The audience will follow.

 

[radioman148]

Obviously not good news for those of us who like to listen to out of market stations.

 

[ercjncpr]

Just had a good conversation with several owners at a conference 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. (streams are measured seperately and run different commercials) 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. I expect the first announcement coming from this group by next Monday. This will be big. Radio is going back to it core business and it is about time in my humble view. Focus less on texting, HD, Streaming and more on making your core product sound better. The audience will follow.

Your economic reasons make some sense, but I really don't think streaming is as dead as you think. I know people that I work with where streaming of local radio is "music to their ears". Streaming is and should be thought of as supplemental to the signal coming out of their stick. But it is NOT going away. When the economy gets better, you can expect all of these supposedly dying netcasters to come back also.

 

[davideduardo]

Add to this that streaming in a PPM world actually "takes away" from the core radio audience on terrestrial radio. (streams are measured seperately and run different commercials)

Streams of radio stations used to be 100% simulcasts of the on-air signal. The most recent AFTRA negotiations established additional payments for AFTRA talent when radio commercials are streamed; advertisers advised stations not to stream their spots.

Radio reacted by removing spots from the streams, so Arbitron no longer considers them simulcasts. Simulcasts are combined in a single line in reports, while non-simulcasts are listed separately. Most non-commercail stations have no AFTRA spots, so Arbitron can combine the streaming listening with the off air listening in a single entity. Commercial stations, as a rule, can't.

So, commercial stations gain nothing by streaming. The local sales model of radio offers little opportunity to sell much of anything in spots in streams, so their value is promotional, if any.

But, if AFTRA, by any chance, sees how much they are harming the future of the industry that feeds them and revises its policy, then most streams would be added to the on air station in a single set of data.

 

[Silkie]

Stations that discontinue streaming are not doing themselves any favors. If they don't have what it takes to make a draw on the Internet it is because nobody in their own markets wanted what they had to offer. They turn their signals to try to drown out stations in other areas too, and that didn't get them anywhere.

Ya never know when the person who can make a difference in a downturn might show up on the scene because of what they heard on a stream.

 

[davideduardo]

Stations that discontinue streaming are not doing themselves any favors. If they don't have what it takes to make a draw on the Internet it is because nobody in their own markets wanted what they had to offer. They turn their signals to try to drown out stations in other areas too, and that didn't get them anywhere.

The first significant station to announce an end to streaming is WBEB in Philadelphia. Far from being a station that "nobody wanted" WBEB is generally the market leader in ratings and revenue in Philadelphia, and its owner, Jerry Lee, who has run it since the 60's, is one of the most respected men in the industry.

As to the comment about "turning their signals" I have no idea what you mean. Interfering with another station's protected coverage contour is illegal. Nobody does that on purpose.

 

[TheBigA]

Stations that discontinue streaming are not doing themselves any favors. If they don't have what it takes to make a draw on the Internet it is because nobody in their own markets wanted what they had to offer.

That's not the issue. The way the royalty works is: The greater the audience, the higher the royalty, in terms of percentage of revenue. So a small niche stream pays a smaller percentage of revenue than a mass appeal stream. With advertising rates way down this quarter, it simply doesn't pay to have a popular stream.

 

[TheBigA]

Radio is going back to it core business and it is about time in my humble view. Focus less on texting, HD, Streaming and more on making your core product sound better. The audience will follow.

Unfortunately, their core business is dying. And spending more time, effort, or money on it won't change that.

Regardless of whether or not they stream, it is absolutely imperative that radio stations get into social networks, mobile, and exclusive internet content.

However, streaming is a huge expense with limited returns. The value comes with at-work usage. But the high royalty and low ad rates make it a loss leader. Unless you find some other way to monetize it, they're better off dead. But don't overlook the internet completely. Just focus on content that you own (ie, not music) and creates an ALTERNATE revenue stream.

 

[Silkie]

As to the comment about "turning their signals" I have no idea what you mean. Interfering with another station's protected coverage contour is illegal. Nobody does that on purpose.

Thank you for that information; and I say that in all seriousness. It is amazing how a rarity that would not do that on purpose actually makes a point of cultivating the very market they inadvertently stepped on.

 

[TheBigA]

Artists need to view radio and the web as partners exposing their music, not the enemy in my humble view.

THAT is an interesting subject. I was speaking with someone today about that. You can do that, as far as exposing new music and new artists, and get the artists to sign a waiver on the royalty. But you can't do it with older music. The stream of a main signal combines current music with recurrents and oldies for most formats. Exposing non-current music doesn't necessarily benefit the artists.

Anyone who wants to understand why terrestrial broadcasters are opposed to performance royalties simply need to read the Digital Performance Royalty Act. If a performance royalty is passed, radio broadcasters will spend the rest of their careers in court arguing with record labels. SoundExchange is a legalized cartel. When you study it, you understand why cartels are illegal.

 

[davideduardo]

Thank you for that information; and I say that in all seriousness. It is amazing how a rarity that would not do that on purpose actually makes a point of cultivating the very market they inadvertently stepped on.

Could you try that again, but in English this time?

 

[radioman148]

Some streaming stations that I hear do stream spots for local establishments during the on air commercials.
I realize this probably doesn't bring in much revenue, but I do hear it sometimes.

 

[radioprofessor]

I disagree strongly that the core radio product is in trouble. I consult in major, small and medium markets. I have worked in LA, SF, Boston, Seattle and many more markets. In small markets there is a resurgence of radio listening with numbers going up as new broadcasters like Gap, Connisseur, RR, Simmons and more invest in their stations, not fads like streams and internet. These stations are hiring talent, where only Clear Channel had automation, they are involved in the community, hiring newspeople. What killed radio, in my humble view, was consolidation. It weakened the product. The product was further weakened by money going to HD, Streams and an assortment of non-radio platforms that not only weakened the core product, but in some cases stole audience from it.


Streaming is 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 a decade 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 already 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. Go back to creating compelling programming on the delivery system you have and can monetize. This change is already working in small and medium markets and numbers are turning around. Radio is far from dead. Independent owners met this week and expect to see big changes among the industry creative leaders...not those in the big radio groups, in my humble view.

 

[TheBigA]

I disagree strongly that the core radio product is in trouble.

I didn't say that. I said the core audience is dying. They're getting older. The younger audience is interested in something very different. It has nothing to do with product. It has to do with interaction. Radio is one-way. People under 40 want two-way communication. Radio has to find a way to do that.

By the way, Clear Channel is spending tons of money on talent. CC Atlanta just hired a very big money morning man. Some of the best paid people on the air work for CC. And they're very involved in the community. I don't work for CC, but compete against them. They're very tough competitors, and not stupid.

What killed radio, in my humble view, was consolidation. It weakened the product. The product was further weakened by money going to HD, Streams and an assortment of non-radio platforms that not only weakened the core product, but in some cases stole audience from it.

Consolidation didn't do a thing to the product for a very long time. In the meantime, the audience aged, and new technologies arrived that were more entertaining. Meanwhile, radio was playing another ten in a row, with sweepers and imaging. All very 20th century. Money wasn't spent on HD. It's all automated. That's part of the problem.

Here's a fact: New technologies aren't going away. Radio can either join the party, or ignore it. But if radio ignores new media, that doesn't mean the audience won't still use it. It just means radio won't share in the profits.

 

[davideduardo]

... as new broadcasters... invest in their stations, not fads like streams and internet.

Fad? The internet has more daily "TSL" than terrestrial radio, and streams are the preferred way for nearly anyone under 25 to find new music. The internet has killed printed newspapers, starting with classifieds and now with news delivery and opinion, movie schedules and real estate listings.

To call streaming audio (or viedeo) and the web a fad is like flat-worlders calling the New World a chimera.

What killed radio, in my humble view, was consolidation. It weakened the product.

I was involved in consolidation about 45 years ago, and it benefitted the markets by a greater diversity of formats and innovative programming. Consolidation is not bad... just some consolidators.

The product was further weakened by money going to HD, Streams and an assortment of non-radio platforms that not only weakened the core product, but in some cases stole audience from it.

All the audience will eventually be on new technology platforms. Although the delays in WiMax have been increased by the breakup of the Clearwire Sprint deal and the lack of infrastructure financing, we will see programming, or content as it is being called, distributed principally via untility devices like iPhones and the like. One device will represent all forms of communication, from the phone to texting to entertainment; it will be audio, video and will be portable and dockable anywhere.

Radio stations that do not migrate will die when the RF transmitters shut down because nobody cares any more.

Hey, I just installed the Amazon Kindle app on my iPhone, so my phone is now a book, too... actually, it can be 250,000 books. And a camera, a notepad, a radio, a TV, a record library, a calculator... oh, yeah, it's a phone, too.

Streaming is 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 a decade ago.

Canadian digital was Eureka, a band not available in the US. US HD is backwards compatible, and can grow over time. Many of us have revenue producing HD ventures, too.

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

Why do you think streaming and the web are fads? The usage of the web is increasing each year, while the usage of terrestrial transmissions is declining. Except for seniors and geezers, AM is essentially over and can never recover.

This change is already working in small and medium markets and numbers are turning around. Radio is far from dead.

Nowhere is the Persons Using Radio number lower than in smaller markets. Once you have the choice of an iPod or satellite or web streams, you will not be happy with most small market radio; I reside part of the time in Prescott, AZ, and listening to the local stations is pure agony. But now I have choices.

 

[Skynet74]

Radio stations won't stop streaming. They will just figiure out a less expensive and more creative way to stream. WPRO Newsradio 630 in Providence now streams some of it's talk shows via Stickam with perfectly synched audio and video. So they have virtually turned their radio station into television. The quality is outstanding. Best part for the station is that from what I understand, you can broadcast from Stickam for FREE. So it's creative ideas like this which will just transform the medium of online streaming. It won't kill streaming. It will do quite the opposite. It will make streaming better!

 

[4dude]

Streams of radio stations used to be 100% simulcasts of the on-air signal.

Yes before METALLICA started thier crap and ended thingsas we had enjoyed them

 

[radioprofessor]

I find these posts a combination of humor and some insight. Some of you can't be serious. Newspaper migrated its content to the web and once it was there for free why by the printed version? Radio must learn from this error. The web already had great classified ads in Craigs List, Auctions sites like E-Bay and thousands of niche and major news and blogs sites. Local newspapers went into a crowded web arena where they were second rate players and at the same time devalued their core product by providing it for free.

Television has been much smarter. Only a few stream the shows live, most stream extra content, recaps or limited broadcasts of shows. Smarter than newspapers and radio. Several cable networks charge for specific streams and benefits. Smart.

Here is how to use streams, in my humble view.

1. Have shows develop seperate content that can be streamed. A morning show airs an interview, but the backstory is in continous stream online. Use the edited version on the air...full version online. (All spoken word, no fees to Sound Exchange)
2. Stream acoustic performances which are non-royalty. Get artist waivers up front. (no Fees to Sound Exchange)
3. Make the stream site only available to members of your listener data base. Make it a special item. Limit the streams.
4. For godsakes don't stream your station (newspaper analogy applies) and don't stream music that eats up royalties.
5. The stream is a low cost compelling adjunct to your station. No Sound Exchange Fees...screw them. We pay enough to artists on our terrestrial signals to promote their music, in my humble opinion. They should pay us to promote their music! Another case of devaluing our worth.

The web is not dead, but radio will be if we continue to do business as usual. The audience is not "dying" either. By the way recent ratings in smaller markets show an increasing number of 18-34 listeners coming back to radio. As cellphones are being added to PPM it turns out that those I-Pod, Iphone users are also the highest users of radio. What died was listening to their cd's and cassette. Seems the radiop medium isn't dying afterall, unless we kill ourselves, in my humble view. Our cume is higher than we ever thought.

 

[TheBigA]

I find these posts a combination of humor and some insight. Some of you can't be serious. Newspaper migrated its content to the web and once it was there for free why by the printed version? Radio must learn from this error.

Newspaper subscriptions have been in decline for more than 20 years. Afternoon dailies died in the 80s, long before the internet. So putting newspaper content on the web didn't cause their current crisis. There are lots of free options on the web for news. Not all of them as credible as the print pubs. But people read them. And they do so in place of subscribing to newspapers. Same with radio. Radio stations can ignore new technologies. But they will continue to lose audience to them because that's where listeners are.

The problem with your suggestion for seperate content on the stream is it requires its own staff. A typical web operation simply can't charge as much for web advertising as it can for on-air. So paying for staffing is as unprofitable as paying music royalties. Acoustic performances, if owned by record labels or performed by contracted acts, are also subject to royalties unless a waiver is signed. Artists and labels won't sign waivers unless the performance directly promotes something that makes them money, such as a concert or CD release. Once again, it will take staff at the station to handle all these details.

The REAL solution to these problems is to find ways to derive revenue from new technologies. Create content and services people want, and either charge them for them, or sell the audience.

 

[4UH8SIMBKAGN]

What I find amusing radioprofessor is just how out of touch you are with reality. Once again someone who is a backward thinker and can't get a grip on the future. You must have also worked for the record industry.

Not only is radio going to move online, that's the only place we're going to get it.

Radio station frequencies, not unlike what is happening to the VHF band, would be better off as places to help foster the development of WiMax and similar wide area wireless internet technology.

You obviously don't know how to get any tv program you want on the web. You can get major market tv station live on the web. Learn how to do it.

What a wonderful time to drop out of streaming, as more and more are listening online and the potential for advertising revenue continues to climb online.

I think it's great that a number of traditional companies will be dropping their internet streams. I would prefer to see the future of radio out of the hands of big conglomerates, most of which are going to go into Chapter 11 anyway. Let the true online broadcasters shape the future of radio, online. Finally there will be a compelling product to listen to. Why don't you go look at those iTunes numbers for some of the former KLSX hosts, if you'd like just a hint of what online radio not only can be but is.

Some people just need to retire from the business. You should get yourself a Slacker and go listen to some real radio after you do so.