Radio says goodbye to Streaming

[davideduardo]

Want to save money? Turn off that HD exciter and stop paying iBiquity.

HD fees are insignificant in the budget of a top 100 market station, vastly, enormously less than what will be paid for maintaining a stream that has a significant amount of use.

As Jerry Lee said, by 2015, half his revenue would to to pay for the streaming royalties.

In the case of an LA or NY station, iBiquity fees are around or below a tenth of a percent of the average HD equipped station revenue.

And many stations have found viable commercial models for HD... and more will come.

 

[Silkie]

It still comes down to this: If what I want to hear on local radio is not there I turn it off. If what I want to hear on the Internet is not there I turn it off. All the voiceovers announcing that I demanded to hear what they are peddling - because they waited for the listeners to fight, but the listeners did not fight - will not change that.

Listeners who scream and holler about it are called thieves who are trying to steal music. Or they are told, "It is out of our hands". Radio is really not worth the bother to listeners, who simply are not going to pay additional for Internet service, or even additional for stations as though they were pay per view or something, to hear what they want. It is there, or it isn't.

I paid all of my fees to everyone when when I sold records in my store a number of years ago - in addition to my regular business licensing requirements and taxes. When the cost became prohibitive I stopped selling records, but I still made money on other merchandise. Again, it is of no consequence to most people whether they have streaming audio, just as it is of no consequence whether a local radio station survives. When they still don't have listeners after not paying royalty fees and trying to convince listeners that we want what they're peddling, they will pay out hundreds of thousands of dollars to contestants who only tune in for a certain part of the day to win the money and go back to whatever they were doing with the radio off.

Just a statement of fact from a radio listener, who recognizes that the public is pretty cold-hearted at times too. We are nothing to those who make the money, and they are nothing to us in the final analysis.

 

[LA_Guy]

Meanwhile, the 700 pound gorilla is Internet media. It's the only media that's still growing and the only media that, made profit gains last year. Give things a few years-Internet radio will be available for every car. THEN watch radio's relevance fade away-while they stand on the sidelines and watch.....

I think some of you are mssing the point of this thread. Radio isn't dropping internet streaming because it wants to, or because it's short-sighted or greedy. It's dropping these streams because the RIAA has imposed huge royalties on these streams for the use of their music. These royalties are increasing every year. They are a percentage of REVENUE, not a percentage of profit. Internet radio stations have been saying for years that these royalties are making it impossible for them to make any money at all. Even the President of Pandora has been testifying in Congress that it's possible he will go out of business because of these royalties.

THAT is what this thread is about, folks. The internet is a wonderful place. Recording artists who don't get broadcast radio airplay are finding new life on internet radio stations. But those who operate those stations are in danger of going out of business because of greedy record labels who are charging this royalty. And radio stations have no choice. The labels are acting as a cartel, and if you want to play music, there's only one place to get it.

It is possible that within the next three years, all music will disappear from the internet and other digital services. The reason this station is dropping its stream is it's hoping to motivate the public to speak out against these excessive royalties.

You are wrong. IT HASN'T HAPPENED YET!

2015 is STILL six years away!

Right now, streaming is affordable for stations. Yet they begin cutting their noses off to spite their faces! Radio could appeal to Congress to override Sound Exchange's rates-but since instead they run from streaming, they LOSE THEIR STANDING!

If you want to motivate the public get them hooked on your audio stream-THEN threaten to get rid of it! They will have a LOT more motivation to fight for something they use every day over something that most don't know about. If the car industry did what radio is doing, we'd still all be driving horse drawn carriages. If Sony had done what radio is doing, there would have been no VCRs or DVDs!

Radio is rolling over and dying before the first shot is even been fired! They are NOT showing any leadership-instead they are wimping out!

I HATE whiners-and that's what radio is doing here. They are being a whiner!

 

[TheBigA]

Radio could appeal to Congress to override Sound Exchange's rates-but since instead they run from streaming, they LOSE THEIR STANDING!

Actually, radio DID appeal to Congress. There was a bill proposed last year that was supposed to cut the streaming rates, and overturn the Copyright Royalty Board's decision. The measure died in committee.

SoundExchange is a cartel. It is supported by the Digital Performance Royalty Act and the Copyright Royalty Board. Radio has NO CHOICE. They either pay the rates as set, or not play music.

Radio is rolling over and dying before the first shot is even been fired! They are NOT showing any leadership-instead they are wimping out!

Jerry Lee, the owner of WBEB in Philadelphia, is showing a lot of leadership. He has the most successful stream in his market, and he is shutting it off today. People don't know what they have until it's gone. This has been a problem for three years. Internet broadcasters had a "day of silence" two years ago. No one cared. Pandora has told Congress they might go out of business. No one cares.

What do you suggest? They went to Congress and it didn't work. Since you hate whiners, give us a plan B. We're all listening.

 

[wgliradio]

HD fees are insignificant in the budget of a top 100 market station, vastly, enormously less than what will be paid for maintaining a stream that has a significant amount of use.

As Jerry Lee said, by 2015, half his revenue would to to pay for the streaming royalties.

[/quote]

You'd be amazed at the savings in the power bill if you turn off the HD and everything associated with it.

Nobody has any realistic idea where things will be in 2015, radio has burned itself before by reacting to things that may or not be and ignored common sense... and not being on the net is suicide, unless Jerry Lee likes playing those Millie Small records to 70 year olds.

Radio has also failed to develop innovative programming for HD channels, many larger markets like NYC are using their HD channels to simulcast co-owned AM's that can't get out of their own way with digital transmission.

Radio has well developed over the air brands that can lead them on the internet. Don't end up playing catch up again. As I said, those who stay on the net today will be tomorrow's leaders

 

[TheBigA]

Radio has also failed to develop innovative programming for HD channels, many larger markets like NYC are using their HD channels to simulcast co-owned AM's that can't get out of their own way with digital transmission.

This is NOT about HD radio. Don't hijack this thread.

Once again, this is NOT about broadcasters with their heads in the sand. This is about prohibitively high royalty rates that prevent them from streaming on the internet. They want to do it, but can't because of a law that the RIAA got passed, and Congress won't change.

We know where the rates will be in 2015 because the NAB signed an agreement with SoundExchange. The rates are set, and they say that broadcasters will give up to 30% of their revenues (not profits) to SoundExchange. Those rates are crazy! That is why broadcasters are considering dropping their stream.

 

[Clearance Channel]

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.

No doubt they hired a "big money morning man". But if Tom Taylor is correct, how many other people will simultaneously loose their jobs this Friday or shortly there after????

 

[davideduardo]

Right now, streaming is affordable for stations. Yet they begin cutting their noses off to spite their faces!

Right now, in a sour economy, the rates are a burden, particularly when there is no revenue model for streams that even comes close to covering the cost.

Add in the fact that streams in rated markets seldom if ever are 100% simulcasts, meaning the stream adds nothing to the station ratings, and operators realize the pain is greater than the gain.

As to going to the Hill, that's been done and the "poor starving artists" argument won again. Until the artists and lables realize that the rates will, in the end, cause them harm, radio will have to continue to remove streams.

 

[joybandit]

Wow, that makes me very sad. I live in a small market in Erie, PA and the local stations are pretty crappy to say the least. I enjoy the oldies stations -- mostly 70s and early 80s. Since Erie completely ignores oldies, I rely solely on internet radio. I love WCBS, WOGL, and a couple other stations. I have even invested in stand alone wifi internet radios that I use in my kitchen, bedroom and at work. I couldnt tell you who or what is playing on our local stations. I would hope stations continue to stream their channels. I would hate to lose the great channels I can receive via online streaming.

 

[davideduardo]

You'd be amazed at the savings in the power bill if you turn off the HD and everything associated with it.

To a significant station (and unless a station is a viable facility, HD is a bad idea) the electrical cost is less than the studio AC unit. And what related power consuming equipment is there, other than separate audio proccessing and a monitor?

Nobody has any realistic idea where things will be in 2015,

We know that the cost of streaming will be over 30% of revenues and that, in most cases, means 100% of profits. Why build up something that can not be sustained in the future.

.. not being on the net is suicide, unless Jerry Lee likes playing those Millie Small records to 70 year olds.

Jerry is one of the best broadcasters in the business. He believed in FM when nearly nobody else did, and has been quite visionary in keeping up with and ahead of audience changes in taste in programming. I think he knows what he is doing... it's likely he knows that bargaining when you have already given in is harder than when you have abstained.

Radio has also failed to develop innovative programming for HD channels, many larger markets like NYC are using their HD channels to simulcast co-owned AM's that can't get out of their own way with digital transmission.

AM signals have so many noise issues that putting the content on an HD2 gets them into areas they do not cover, as well as offering a quality gain that will bring some under-55 listeners in, as well.

 

[LA_Guy]

Radio could appeal to Congress to override Sound Exchange's rates-but since instead they run from streaming, they LOSE THEIR STANDING!

Actually, radio DID appeal to Congress. There was a bill proposed last year that was supposed to cut the streaming rates, and overturn the Copyright Royalty Board's decision. The measure died in committee.

SoundExchange is a cartel. It is supported by the Digital Performance Royalty Act and the Copyright Royalty Board. Radio has NO CHOICE. They either pay the rates as set, or not play music.

Radio is rolling over and dying before the first shot is even been fired! They are NOT showing any leadership-instead they are wimping out!

Jerry Lee, the owner of WBEB in Philadelphia, is showing a lot of leadership. He has the most successful stream in his market, and he is shutting it off today. People don't know what they have until it's gone. This has been a problem for three years. Internet broadcasters had a "day of silence" two years ago. No one cared. Pandora has told Congress they might go out of business. No one cares.

What do you suggest? They went to Congress and it didn't work. Since you hate whiners, give us a plan B. We're all listening.

Radio appealed to Congress LAST YEAR. They have to go back to Congress THIS YEAR and NEXT YEAR and EVERY YEAR!!! They have to KEEP FIGHTING, not captulate as they seem to be doing. The Internet is in GROWTH MODE NOW!!! THIS is the time to push forward, not go backwards. You know, I heard the SAME story with FM when it was new-FM was a drain on AM stations' profits and they turned in FM licenses by the barrel. Most of those DUMB stand alone AM stations are screwed today. You'd think that radio could learn from past mistakes, but NOOOOO-they just keep making the same ones all over again!

This is the very reason that radio becoming irrelevant-it's CHOOSING to be that way.

I agree that Jerry Lee is an innovator-but he's WRONG here!

 

[TheBigA]

Radio appealed to Congress LAST YEAR. They have to go back to Congress THIS YEAR and NEXT YEAR and EVERY YEAR!!! They have to KEEP FIGHTING, not captulate as they seem to be doing.

Why should radio do all this work just to put money into the pockets of the RIAA? It makes no sense. I say take all music off the internet. Then see if anyone goes out and buys any of that crappy music. The RIAA is telling Congress that people don't find out about music from radio, but instead get it from the Internet. Not if there's no music on the internet any more.

 

[wgliradio]

This is NOT about HD radio. Don't hijack this thread.

Once again, this is NOT about broadcasters with their heads in the sand. This is about prohibitively high royalty rates that prevent them from streaming on the internet. They want to do it, but can't because of a law that the RIAA got passed, and Congress won't change.

We know where the rates will be in 2015 because the NAB signed an agreement with SoundExchange. The rates are set, and they say that broadcasters will give up to 30% of their revenues (not profits) to SoundExchange. Those rates are crazy! That is why broadcasters are considering dropping their stream.

I am making the comparison between embracing a dead technology vs walking away from THE future platform. If this is the case, radio will quickly become irrelevent.

Listeners aren't going to care why radio isn't on the net anymore, they'll just move to other services provided on the net. It will move on without radio.

Sad.

 

[wgliradio]

To a significant station (and unless a station is a viable facility, HD is a bad idea) the electrical cost is less than the studio AC unit. And what related power consuming equipment is there, other than separate audio proccessing and a monitor?

When 90% of the power ends up in a dummy load.

We know that the cost of streaming will be over 30% of revenues and that, in most cases, means 100% of profits. Why build up something that can not be sustained in the future.

Then how do you see radio migrating to become viable on the internet? Where was Jerry Lee and company when these absurd deals were being made with the blessings of the NAB? Too busy promoting the HD alliance and spots about jellyfish giving birth to HD radios?

Jerry is one of the best broadcasters in the business. He believed in FM when nearly nobody else did, and has been quite visionary in keeping up with and ahead of audience changes in taste in programming. I think he knows what he is doing... it's likely he knows that bargaining when you have already given in is harder than when you have abstained.

Does he really believe the future is analog AM FM? Is he hoping for receivers in Apple products? Does he not see what the internet has done to newspapers? What better options are out there?

FM was a different time with few choices. You could only carry around so many 8 track cartridges in your case.

AM signals have so many noise issues that putting the content on an HD2 gets them into areas they do not cover, as well as offering a quality gain that will bring some under-55 listeners in, as well.

I agree, but it goes to show you that even with added channels of delivery, radio can't come up with innovative product. This goes back to the original post in this thread, where the author hoped for radio to get back to its core

1) Radio has little or no imagination in new formats, as is evident with what is on the "stations between the stations"

2) Radio DOES realize HD is a fleeting thought. So many programmers I have spoken to agree.

3) Content delivery will be the internet. How does radio work it out?

 

[wgliradio]

Why should radio do all this work just to put money into the pockets of the RIAA? It makes no sense. I say take all music off the internet. Then see if anyone goes out and buys any of that crappy music. The RIAA is telling Congress that people don't find out about music from radio, but instead get it from the Internet. Not if there's no music on the internet any more.

Wrong.

People will still find out about music via the net and use Itunes etc to buy it. They will also find ways to get it free. The horse is out of the barn.

People already know what they like. Information about what's hot spreads faster then radio can keep up with. Music will never be off the net, but radio may make that mistake.

It's funny how this industry fights for the wrong things......

 

[davideduardo]

When 90% of the power ends up in a dummy load.

Even then, it is a tiny cost. And many FMs use separate antennae for HD, such as the ones on the Hancock in Chicago.

Then how do you see radio migrating to become viable on the internet?

I don't. I see stations broadcasting on WiMax, similarly to the plan for Eureka in other places. This change will force a new set of rules for royalty collection by simply resetting the distribution methods.

Where was Jerry Lee and company when these absurd deals were being made with the blessings of the NAB? Too busy promoting the HD alliance and spots about jellyfish giving birth to HD radios?

I don't believe Jerry is in the HD Alliance, and many broadcasters are not. Most of us can walk and chew gum at the same time, too. The NAB moderated what would have been a rout; things like what Jerry Lee is doing will show the regulators that they got it wrong... particularly if Mr. Lee is joined by other broadcasters in protesting.

Does he really believe the future is analog AM FM?

I think he believes the future is content, and that stations will find new delievery methods. A decade ago, satellite was going to kill radio. Satellite killed itself, and has the debt to proove it.

Is he hoping for receivers in Apple products? Does he not see what the internet has done to newspapers? What better options are out there?

AM signals have so many noise issues that putting the content on an HD2 gets them into areas they do not cover, as well as offering a quality gain that will bring some under-55 listeners in, as well.

I agree, but it goes to show you that even with added channels of delivery, radio can't come up with innovative product. This goes back to the original post in this thread, where the author hoped for radio to get back to its core

That's a nonsequitur. The fact is that AM is now nearly devoid of under-55 listners, and the main reason is not content but the quality and the noise. Using an HD2 on an FM is a marvelous way of making the content available where there are no underperforming FMs that could do the AM formats like news and talk and sports.

[/quote] Content delivery will be the internet. How does radio work it out?
[/quote]

Radio produces content. Most Internet only stations are someoen's computer in the basement playing their favorite mix of 50's oldies or alternative rock. There is no business model for that, but radio can adapt delivery methods to the business model of advertising and radio.

 

[wgliradio]

Jerry is a member

http://www.hdradio.com/press_room.php#alliancemembers

Scroll to the bottom.

Again, if Lee is trying to change via protest, I'm not sure bringing his stream down, or the streams of other stations, is enough.

And I don't know how many others will follow him... and he needs big names.

And if radio pursues WiMax and pushes the reset button, it better have a gameplan, collectively, to negotiate rates. There needs to be MORE of an effort than radio put into the HD nonsense

 

[gerald]

Perhaps all of this, is the reason XM/Sirius started charging last week to listen to their stations online. Formerly free, now $3/month. To sweeten the deal, they claim they will feed at a higher bit rate.

To me, that's like Consumer Reports charging magazine subscribers a separate fee to use their website. Ask me to pay once, but not twice.

 

[Silkie]

Well, I am not paying extra to hear radio. I stand firm in my statement that if what I want is not on the radio I turn it off. If what I want is not on Internet radio, I turn it off. I already pay for Internet, and my rate is fixed. I do not pay for radio. I paid handsomely for my 45, LP, casette and cd collection, and I am not paying anyone to listen to it on the radio. So I think RIAA knows what they can do with their fight...and it has to do with where the sun don't shine, but not mine.

 

[TheBigA]

And if radio pursues WiMax and pushes the reset button, it better have a gameplan, collectively, to negotiate rates.

The first rule of negotiation is you have to be willing to walk away, to say no. That's what he's doing. Up til now, no one has said no. Better gameplans don't work if they feel they have you by the short ones. And they feel they do.

The next step is to come up with royalty free content that competes. That's the way to break a cartel. Cartels hate competition. Break the cartel, and you can negotiate.