BY KURT HANSON
GlobalMedia.com, the Vancouver-based provider of streaming and e-commerce services for radio stations, has agreed to buy 212 assignable radio station contracts from OnRadio.com in a transaction with an announced value of $9 million.

However, the press release on the deal (here) reveals that all but $500,000 of the purchase price for the contracts will be in GlobalMedia stock. Although it's not mentioned in the press release, investors' news service On24 reported that OnRadio may receive as much as an additional $3 million cash if GlobalMedia can sign OnRadio's remaining radio station sales prospects.

GlobalMedia previously had contracts with 48 radio stations in the U.S. and Canada.

GlobalMedia President Jeff Mandelbaum told an interview for On24, "Purchasing the contracts gives us a cume of in excess of 50 million listeners at a very attractive price." (This might be the combined broadcast cumes of the 212 stations involved, but this couldn't possibly be the cume of the webcasts that they're acquiring.)

"Conservative projections increase our revenues in excess of 30% over the next three years," Mandelbaum told the On24 interviewer. (According to Hoover's Online, in its 1999 fiscal year, which ended in July, the company had 70 employees and revenues of $.1 million.)

OnRadio gets $42K per contract
As for OnRadio, they're apparently going to get $42,000 in cash and stock for each of their radio station contracts as they transition themselves into a B2B play.

Their site currently contains links to two private-labeled multi-channel radio stations that they've set up for Spin magazine (pictured at left) and First USA bank. (Note: The First USA station gives site visitors their choice of five music channels.)


Contribute your comments about your experiences with GlobalMedia or OnRadio, or your thoughts about this deal, here.

Warner Music settles with MP3.com
The agreement will allow MP3.com to include the labels' songs in its Internet-based database. Read the morning's news piece from The Industry Standard here. ("According to published reports, MP3.com is expected to pay Warner Music...between $15 and $20 million to settle the suit..." Read background piece in E-Commerce Times here.)

Feed The Monster hires financial PR firm
Radio website developer/manager Feed The Monster has engaged Continental Capital & Equity Corp. to launch a market awareness campaign targeting individual investors, analysts, institutions and other financial professionals. FTM is awaiting approval on its NASDAQ Small Cap listing application. Read more from R&R Online here. (Visit a sample FTM website -- FM talk KLSX/Los Angeles's -- here.)

McGrath takes charge of MTVi
MTV Networks President Judy McGrath was given the additional role of chairwoman of interactive music at MTV Interactive yesterday. MTVi President and CEO Nicholas Butterworth will now answer to McGrath. The MTVi group consists of MTV.com, VH1.com and Sonicnet.com. More details here.

Industry Standard looks at
"Faces made for Web radio"
"Web radio was supposed to be DJ-free, but a new generation of shows is challenging this. Can Imus.com be far behind?"

Read the full article on personality-based Internet radio -- featuring Enigma Digital's GrooveRadio.com and KNAC.com, Bob Meyrowitz's eYada.com, and Laurence Norjean's KIISfmi.com -- from this week's issue of The Industry Standard here.

Frequent RAIN guest columnist Bob Bellin has some thoughts on the MP3.com decision...

"This [MP3] issue is much more complex than it appears..."

This issue is much more complex that it appears. Some quick points:

1) It's unfair to say that mp3.com "broke the law" by doing what they did. We considered the same concept in drafting our original business plan, after consulting with several attorneys as to whether the courts would find it legal. Every opinion was that is was a grey area...meaning that mp3.com (who presumably did their own due dilligence before launching) was in uncharted waters with this feature, not flagrantly violating established law.

2) Just my opinion, but the judge did everyone a disservice by issuing summary judgement without hearing expert testimony. It's unlikely that he understood the issue of what a digital copy is as fully as he would have if he heard experts form both sides testify.

3) The issue in this case was never piracy. "Storage" with this system required a user to put CD in their PC before mp3.com would accept it. You couldn't download something from Napster and then shoot it up to the mymp3.com feature. True, you could give your password to someone else, potentially abetting piracy, but adding a cookie to the password could have prevented password sharing (not a big factor in the real world anyway) but I'll bet the judge who issued the ruling has no idea what a password/cookie system is. That's one area the expert testimony might have been useful.

4) The amount of money that mp3.com is paying (reported to be over $100 million) to license this will never be recouped. You can buy a 27gig hard drive that will hold about 75,000 songs for $100 and that number will probably be $50 in a year. There isn't much long term value to mymp3.com or myplay for that matter.

5) This issue was/is more complicated than the judge who ruled on it seemed to grasp and who knows, a more detailed and exhaustive hearing might have netted the same result. But...while it's unreasonable to expect judges to be net savvy and up to date on the nature of all things digital, I think it should be SOP for them to hear both sides completely in open court when new legal issues with a technological backdrop are being bundled into case law.

                                        -- Bob Bellin, MP3Player.com

Final version of yesterday's lead story now available

BY KURT HANSON
There's a very real possibility that your market could soon have its own multichannel Internet-only radio station, with localized news and information content (including spots from local advertisers) -- and rather than being owned by one of the current radio operators, it may belong to your local newspaper.

That's part of the business model behind a new, Cleveland-based media company called Everstream, founded one year ago by entrepreneur Stephen McHale, who was joined by veteran Cleveland radio executive Lee Zapis last fall...

Yesterday's article was posted in chapters, with the final version posted at 6PM. To read the feature in its entirety, click here.


What do you think? Can each newspaper build a radio operation with an audience the size of a mid-level broadcast station, as they hope to do? Is radio missing an opportunity here? Do you have any questions I haven't addressed? Contribute your feedback using your own e-mail software here or via a form here.

June 12-14	Streaming Media East 2000, New York City
June 14-17	R&R Convention 2000, Los Angeles
June 14-17	PROMAX & BDA, New Orleans
July 13-16	Upper Midwest Conclave, Minneapolis
August 3-5	Morning Show Bootcamp, New Orleans
September 20-23	NAB Radio Show, San Francisco
October 5-7	Billboard/Airplay Monitor Seminar, New York
November 5-7	NAB European Radio Conference, Berlin
Nov. 28-Dec. 1	Radio Ink Internet Conference, Santa Clara, CA

xxx

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