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BY KURT HANSON
DiscJockey.com, the multichannel webcaster that is generally
believed to be one of the
largest four or five Internet-only radio operators, has let go
about half of its staff in
effort to focus on achieving profitability, one of its execs has
confirmed to RAIN.
Last week, several RAIN readers sent in messages to RAIN
contending that the Massachusetts-based firm was closing
its doors.
The truth is, VP/Business Development Dave
Giunta told RAIN, that although the firm is
indeed suffering from the current general softness in Internet
advertising -- and has been unable to date to close a round of
venture capital financing -- it was recent internal
productivity improvements that made it possible for
the firm to let go about ten of its 20 employees -- while retaining
most of the company's senior executives.
The company intends to rely on audio ad
insertion technology from
Hiwire in its new focus on achieving revenues growth
and profitability, Guinta said. DiscJockey.com's first channel
featuring Hiwire's targeted audio ad insertion -- its "Rock
Around the Clock" channel -- launched over the weekend.
The webcaster was founded in 1999 by current EVP/Research
and Development Richard Chadwick.
Two months ago, then-CEO John
Martino was replaced by Gregory
W. Hunt as President and 
Chief
Operating Officer (according to the firm's press release, "At
Global Medical Technologies, Mr. Hunt spearheaded a major strategic
alliance funded by the U.S. Department of Defense and launched
by the Gore-Chernomyrdin Defense Conversion Initiative")
and University of Chicago MBA Patrick
O'Brien as Chief Financial Officer. (Read the full
press release here.)
Veteran radio programmer George Taylor
Morris joined the firm last spring as VP of Content
and Music Programming. (Read RAIN news story here.)
Guinta told RAIN that the recent layoffs were related to
the webcaster's development of a commercial-free
subscription service. (See RAIN news story
here.)
"As you know," Guinta told RAIN, "a few weeks
ago we did a survey to find out if people would be interested
in a subscription model. Every 6 or 7 months ago we put out the
survey, and it 
comes
out the same way -- about 15% of our respondents say they'd give
us a credit card for a nominal fee. When our listenership wasn't
great, that didn't amount to a lot -- but now, when we have 3.7
unique visitors in August and 10 to 15% are willing to do that,
that's not a number we were willing to ignore."
He went on, "The added benefit we get out of it....
Someone said it was like developing the space program -- we put
a man on the moon, but in the process we also ended up with calculators
and transistors. The tools we built for the subscription service
allowed us to program our commercial channels with a lot less
effort than we could before. We can now program two weeks in advance
for three to four of our channels in a half-hour -- so the productivity
has absolutely gone through the roof. Given that, we've been able
to cut back on certain personnel, while keeping most of our senior
people."
Guinta told RAIN to expect a major partnership/alliance
announcement later this week.
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MeasureCast, the Portland,
OR-based ratings service company that made news (in RAIN
here)
in August by announcing
it would provide next-day reports to its webcasting clients, has
hired broadcasting vet
Ed Hardy as
CEO. MeasureCast
founder
Randy
Hill will
retain the Chief Technology Officer title.
Hardy founded Deschutes River
Broadcasting
in 1994, and joined Citadel
Communications when
they acquired his company in 1996. He rose to president of the
firm's Western region, and later served the company as a merger
and acquisition consultant. He was one of MeasureCast's earliest
investors and one of the firm's first two board members.
See the company's
press release
here
and
look for an exclusive
RAIN interview
with Hardy tomorrow.
.
Reprinted
from this morning's edition:
BY STEVE CHEN
Mark Cuban is correct that
the statutory license under the DMCA
is retroactive to 1998 (read Cuban's essay in RAIN here).
However, his analysis is incorrect in theorizing that a likely
fee is ½ cent per song.
Most reports indicate that the fee will almost certainly be
a percentage of revenues made
from
the website (the current licensing scheme adopted by ASCAP,
BMI and SESAC), although it is true that it was reported
that the RIAA was asking
for 15% of gross revenues in private negotiations, which is far
more than most webcasters wish to bear.
A Wired
article in March of 2000 (here)
reported that some parties thought that the
likely result was more like 5%.
No matter what the result, a percentage of gross revenue fee
structure will not result in the costs Mark Cuban theorized unless
the webcaster had gross revenues way in excess of that -- an easy
way to think of it is that in the worst case scenario (15%), the
RIAA fees would only cost
the webcaster ½ cent per song if the web caster was at least making
3.33 cents per song.
Another fact that radio stations looking into the business
of rebroadcasting over the Internet should be aware of is that
there is currently pending in the New York courts a case by a
coalition of radio broadcasters (including Clear
Channel, Emmis, and Cox) to be totally
exempt from additional fees under the 
DMCA
since they already pay for the rights to broadcast anyway. There
was an About.com article
(here)
on this that you could look at.
If the coalition prevails in this case, then there would
be no additional RIAA fees for radio broadcasters broadcasting
over the Internet, period.
DiMA maintains a very good
website (here) where
people can stay up to date on these developments.
=================
Steve
Chen is Assistant General Counsel at Hiwire,
the targeted audio ad insertion company.
From CNet News.com:
"The
Recording Industry Association
of America on
Friday christened its long-planned
group for distributing Webcasting royalties, naming it "SoundExchange."
The organization will be responsible for collecting royalties
from online radio stations such as America
Online's
Spinner.com or
CMGI's
iCast,
and distributing them to artists and record companies. The Recording
Industry Association of America (RIAA) has spent the last several
months signing thousands of independent record labels to be members
of SoundExchange.
"The need for this group
stems from the passage of the
Digital Millennium Copyright Act
(definition
here),
which for the first
time requires Webcasters to pay royalties. The music industry
and technology companies have collectively been unable to come
to terms on what this rate should be, and no group is yet officially
in charge of collecting these fees. The record industry is the
only group that has stepped forward in the United States to create
such an organization, but it ultimately must be certified by the
U.S. Copyright Office."
Read the
entire
CNet
article
here.
From Reuters: "But
the proposed collective by the RIAA, which declined to comment
on the subject, is already causing discord in the online world
amid concerns the music industry's trade group may wield too much
control over royalty payments.
"'I don't think the RIAA will be unopposed. Quite
a few artists and Webcasters are not comfortable
with the RIAA being the administrators, collectors and distributors
of Webcaster royalties,' said
Jonathan Potter,
executive director for the
Digital Media Association
(DiMa),
an alliance of digital media firms ranging from
Amazon.com Inc.
to Spinner.com."
Read the
entire Reuters
story
here.
BY
PAUL MALONEY
According
to a company
press release, XM Satellite
Radio has appointed ABC Radio Networks executive
Steve Harris (pictured) as
VP/External Programming. Harris will supervise all content providers
outside of the company. XM has announced partnerships with BBC
World Service and BBC Concerts, BET, Radio One, One-On-One Sports,
CNN/Sports Illustrated and CNN Financial Network, Bloomberg, Hispanic
Broadcast Corporation, C-SPAN Radio, and others.
Harris had been VP/Urban Programming at ABC, where overseeing
the Tom Joyner Show
had been among his responsibilities.
XM,
one of two companies introducing nationwide, subscription-based
and satellite-delivered radio next year, also recently announced
their second wave of programming staffing.
Other new programming talent recently hired by XM includes
Bill Evans, former Assistant
Program Director of KFOG/San Francisco, who will head up
XM's adult alternative and progressive channels; Martin
Goldsmith, best known as Program Director for NPR's
"Performance Today," who will program XM's classical
music channel; and for its contemporary jazz channel, WNUA/Chicago
Assistant Program Director/Music Director Steve
Stiles.
Also added to XM's roster were: "Bubba"
Jackson (blues channel), Wayne
Jobson (reggae), "Kane"
(90s), Ray Knight (classic
country), Phlash Phelps (60s),
Scott Struber (alternative),
Bill Wax (blues), and Cleveland
Wheeler (60s).
XM's service will consist of up to 100 channels
of digital-quality music, sports, news, talk, comedy, and children's
programming. The company plans to launch in the second quarter
of next year. New
York-based Sirius
Satellite Radio will launch a similar service
next year as well.
Swedish radio programming executive Björn
Mohr contributes his thoughts regarding the apparent
demise of FastBand GlobalCast
last week (see fourth news story here):
 |
"There's
a lot to learn from ventures like FastBand GlobalCast..."
|
Hi, Kurt.
Thanks for a great cocktail party in SF!
Read your remarks about "FastBand GlobalCast" and just have
to say that I couldn’t agree more. Most every day I see new Internet
only stations being launched by entrepreneurs ready
to conquer the world. Most of them not
having a clue to what listeners' needs are! It's great
with many new ideas, but when it comes to Internet radio it seems
like researching the target’s needs is a totally unknown concept.
I think the lesson many webcasters are learning the hard way
is that listeners might not have the needs most obvious to the
webcaster. The most important thing is to start talk
to your target audience – and to learn how to interpret
their response into successful programming and marketing strategies
to win them over.
As long as you’re positioning yourself as radio, you’re
also competing with radio. And you are
the underdog as radio has enormous programming resources,
distribution that is superior, and most important of all, the
position in the audience mind – when you say radio, people think
a small portable or mobile box that doesn’t cost a dime to use,
they don’t think wired computers. So what need can you serve,
that is unique enough to win them over to the net? – and broad
enough to gain profit?
I think there’s a lot of lessons to learn from ventures like
"FastBand GlobalCast". Especially if you put money at risk, you
should make sure that a working strategy is in place.
| |
Björn
Mohr
Program Director
RTL Group
Stockholm, Sweden |
|
"This
is going to happen more often than not..."
|
I hate to see any company "go away" but at the same time
it is becoming very clear that this is going to happen more often
then not. The key to your story in RAIN is that none of their people
had broadcast backgrounds. Anyone that is doing a streaming format
without the benefit of radio pros I fear will be doomed from the
start.
True, the radio community as a whole has not grasped the
importance of streaming and that it will, I believe, take over in
the not-too-distant future like FM did to AM not so long ago. There
are lots of people with great ideas and technical skills to do really
nice web sites and streaming content but without the knowledge of
sales, marketing, and promotion it will be a short life with no
listeners, no sales, and no company.
| |
Tim
Johnston
The Network Group |
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