BY KURT HANSON
Radio's two major rep firms -- Interep and Katz Radio Group
-- announced their first-ever joint venture
this
morning: An industry-wide
web-based
system for the electronic transfer of radio advertising orders called
RadioExchange.
In revealing their plans to RAIN this morning, Katz Radio Group
President
Stu Olds and Intererp
Chairman/CEO
Ralph Guild (pictured
above, L to R, this morning) explained that their electronic exchange
system will take advantage of the Internet to allow
better
communication between rep firms, agencies, and
radio
stations throughout the processes of requesting avails, placing
orders, and invoicing.
The system was developed by Interep's Chief Information Officer,
Charles Parrs. "We decided during two or three meetings with
the folks at Katz," Guild explained, "that it would be
better to bring it out as a joint venture together."
Guild noted that he believes each of their two rep firms loses
$2-3 million in commission income each year through
discrepencies
caused by human error in the various data entry steps -- and that
their client radio stations lose
five to
ten times that much in lost business.
By reducing the number of data entry steps involved in the
buying process, "We'll put more money into our clients' pockets,"
Guild said. Olds noted that at the same time, their salespeople
will be able to spend less time on paperwork and will have more
time to be in front of buyers "selling the value of radio."
The two executives noted that a recruiting firm has already
been engaged to look for a President for the new firm, which will
operate as an independent entity -- looking both within Interep
and Katz and outside of those firms.
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...
Last Friday, Broadcast.com
founder and Dallas Mavericks owner Mark
Cuban (pictured below), warned webcasters (here)
that the RIAA may try
to collect as much as ½
cent per listener per song in royalties,
retroactive to nearly 2 years ago.
In response to that, Hiwire
counsel Steve Chen suggested
in Monday's RAIN (here)
that licensing fees will more likely be around 5%
of revenue. Cuban continues the dialog here:
... |
BY MARK CUBAN
In Steve Chen's response to my
comments, he made a correct comment, and then did the wrong math...
He said that the percentage (of royalties paid to the RIAA)
could be 5%, which I'm sure is a possibility depending on how you
negotiate, but the telling verbage was not the percentage. It was
as stated by Steve, that the percentage is of website
revenue... not just streaming-related
revenue. It makes a big difference.
Plus he missed the most important point: Are there any pure
webcasters with 5% margins? Not that I am aware of, so it just pushes
the webcasters further from being profitable.
So I stick by my comments that the RIAA is just a shill for
the record labels to put webcasters out
of business. I can't tell you how many times I heard
from record people that they would not be party to creating another
MTV. That they wanted that success, when and if it happened on the
net, for themselves.
Want more proof? Here is my new RIAA
slam of the day: Call any major record label and ask
if you can negotiate a direct contract with the label rather than
going through the RIAA. If I understood what was explained to me
correctly by someone in the Justice
Department who was asking about this, then the majors are supposed
to at least offer the opportunity for webcasters to negotiate a
license directly.
Well, if the majors really were offering this, and given
that we all know that there are thousands, if not tens of thousands
of webcasters offering music who will have to have a license, you
would think that the majors would know that they would need departments
or at least forms on their websites to offer this to every webcaster
as an option.
But they don't. Does anyone have any experience in talking
about this that is more than just getting a form letter or
generic response from someone in the legal department? Are there
any major record labels in a position to negotiate with the thousands
of webcasters like they are supposed to be?
Maybe one of us wants to create a station that just broadcasts
the Beach Boys all the time,
or better yet, just one song from the Beach Boys... Why should we
be forced to negotiate with the RIAA? From what I understand, and
I could be wrong on this, the labels have
to offer us the chance
to negotiate with them directly or there are very specific antitrust
issues.
Any lawyers out there or RIAA wish to comment on this?
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From the company press release: "GlobalMedia.com
president and chief executive officer Jeff
Mandelbaum,
40, has been named to the additional position of chairman of the
board. Mandelbaum replaces GlobalMedia.com's founder Michael
Metcalfe, who remains a director.
"Mandelbaum, who was recently named one of the streaming
media industry's 25 most influential executives, joined GlobalMedia.com
in January 2000 as president 
and
a director, and has been CEO since May 2000. He came to GlobalMedia.com
from RealNetworks, Inc.
"Metcalfe founded Global Media in 1997 and, in addition
to serving Global Media as a director, will steer his passion
for motorcycles and related markets
towards retail opportunities in e-commerce on the Internet."
Read the company's press release here.
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...
GlobalMedia's stock price
dipped below the $1 level briefly on the Friday before
this announcement (which nonetheless gave the company a market
value of about $24 million -- albeit down from a high earlier
this year of about $200 million. See GLMC stock price chart
from CNBC.com here).
... |
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Reprinted from yesterday's late afternoon edition:
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.
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 in Tuesday's afternoon edition.
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