RAIN: Radio And Internet Newsletter

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From Reuters: "Although many of the Internet media companies that have reported quarterly results so far

have made inroads in cutting their losses, they warned that increasing the pace of revenue growth in the near-term may be difficult given the slowdown in advertising spending.

"The decline in ad spending by Internet companies as they focus on becoming profitable has cut into growth for media companies largely dependent on ad revenue, especially because traditional companies have not embraced the Internet for advertising fast enough to offset the softness...

"Companies like NBC Internet Inc., which restructured its operations over the summer, and online women's network iVillage Inc. have also seen high-profile executives resign in recent months...

"While

analysts applauded the ability of the companies to reduce their losses, they expressed concern about top-line growth.

"'Until we get more and better data on how TheStreet.com is monetizing its consumer relationships...we remain neutral on the stock,'' said SG Cowen analyst Scott Reamer who cut his rating from a buy on online financial news operator TheStreet.com that reported earlier Thursday. He said visibility for meaningful ad revenue growth remains muted at best in the near-term and the stock can't rebound without significant revenue growth..."

Read the story in Reuters here.

BY PAUL MALONEY
Zoni Media has introduced an Internet-based news syndication service called "There You Have It." The

service will provide affiliated radio stations with four 90-second news updates per day -- which can be downloaded directly from the Web, without the need for a satellite link.

The product is designed for morning drive to, according to a Zoni spokesperson, "round out a large market morning show...and for medium to small markets it can assist the existing newscaster or be used in place" of an in-studio journalist.

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From the company press release: "PlaceLinks today launched its Local Commerce Directory System, a new Internet-based, self-service advertising and promotional placement network designed for traditional print, TV, radio and cable companies seeking to build local content and boost profits from their new media offerings.

"The system is a web-based application... (by which) media companies can quickly and cost-effectively increase their advertising revenue opportunities by promoting local businesses through their web sites...

"Designed to be self-service, the system allows advertisers to manage the content and listing of their promotions using...category listings, online coupons and other time-limited promotions, placement in other advertising networks and software to measure and refine their profiles and promotions at any time."

Read the press release here.

Napster for Macintosh Now Available
From AP: "Legally troubled Napster Inc. set its sites on Apple computer users, making its popular music swapping software available for Macintosh operating systems.

"The company announced Napster for the Mac on Wednesday and the program was available to be downloaded from Napster's Web site."

Clear Channel responds to allegations of fraud
From R&R: " Clear Channel released a statement last night in response to Florida Senate candidate Andy Martin's allegations that the company's contests defraud listeners.

"'It troubles us when we become targets of malicious, false or untrue accusations,' says the statement. 'Therefore we are providing background on Martin so that the media and general public may judge for themselves the credibility of his charges.'

"Clear Channel claims Martin 'once asked the U.S. Senate to deport all U.S. citizens of the Jewish religion and claims to be the person responsible for the breakup of Microsoft.' The company also alleges Martin 'is upset because Clear Channel has barred him from one of its Florida talk shows.'"

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Reprinted from yesterday's issue...
For brand new "RAIN Read Feedback" on the numbers, please scroll down...

BY PAUL MALONEY
Minneapolis-based multi-channel webcaster NetRadio holds seven out of the top ten spots in Arbitron's

August Webcast Ratings.

NetRadio's "80s Hits" channel took the number-one spot of the published top 75 webcasters with a 311,600 "ATH," or aggregate tuning hours, for August. Also ranked in the top ten were British Hot Adult Contemporary Virgin Radio, and heavy metal webcaster KNAC.com. New to the top ten were NetRadio's "Quiet Classics"

and "Route 1 Country" channels. Toronto Alternative rock CFNY slid considerably, falling out of the Top-75 from the number-nine slot in July.

Arbitron has also posted on their website revised Webcast Ratings for July, after realizing that the initial study included some incomplete data from some providers. The beneficiaries of the new data included Global Media's "Kool Hits," "Innercity Soul," and "The Edge" channels, WOKQ-FM, ABC Radio Network's Tom Joyner program, eYada.com, Christian Pirate Radio, WBLS-FM, One-on-One Sports, KBLX-FM, and WBLM-FM.

Here are details on the top ten Arbitron rated webcasters for August 2000:

Rank / Channel (Format)	July 2000 ATH (Aggregate Tuning Hours)	August 2000 ATH (Aggregate Tuning Hours)
1 NetRadio - 80s Hits	201,000	311,600
2 Virgin Radio (Hot AC)	236,100	264,800
3 NetRadio - Vintage Rock	143,300	264,400
4 NetRadio - Hits	146,900	263,400
5 NetRadio - Smooth Jazz	157,500	257,600
6 NetRadio - The X	133,600	254,800
7 KNAC.com (AOR)	148,600	254,500
8 NetRadio - Quiet Classics	100,700	208,400
9 WABC-AM (News/Talk)	119,500	194,100
10 NetRadio - Route 1 Country	76,900	179,300

Here are the top ten "percentage increases" for Arbitron rated webcasters in August 2000:

xxx Rank/Channel and Format	July 2000 ATH	August 2000 ATH	Change over 1 month
22 KBTU-FM (AC)	35,300	107,200	+204%
10 NetRadio - Route 1 Country	76,900	179,300	+133%
24 NetRadio - Symphony	48,200	106,700	+121%
40 NetRadio - Quiet Storm	35,800	76,600	+114%
44 NetRadio - Power Hits	31,300	66,000	+111%
8 NetRadio - Quiet Classics	100,700	208,400	+107%
5 NetRadio - Smooth Jazz	131,000	257,600	+97%
29 NetRadio - Acoustic	51,100	98,100	+92%
13 NetRadio - Cafe Jazz	71,500	137,100	+92%
32 NetRadio - Celtic	48,000	91,900	+91%

...

.
BY PAUL MALONEY
Some observations regarding the recently-released Arbitron Webcast Ratings for August 2000:

-- Why was the percent-increase of ATH so high? Some theories: Arbitron recently renamed their measurement system, and improved the delivery and data gathering. MeasureCast has now hit the scene as a competitor. This activity has resulted in more press releases, and more mainstream press coverage. This certainly can't hurt webcasters' efforts to drive people to their sites.

Also, in Arbitron's press release, Director of Marketing and R&D Joan FitzGerald explains the company is now "able to include all of NetRadio's streaming media data." This means that some of NetRadio's gains may not be true audience growth, but rather better reporting. Could it be that since not all of NetRadio's streams (not channels, but actual streams -- for example the RealAudio stream and not the WindowsMedia stream, or vice-versa. Or possibly one or more providers' weren't counted, for whatever reason.), were measured in the past, the evident growth is merely listeners who've been there, but just not counted?

-- We've been accused of beating this point to death, but it's a valid one. Translating those ATH numbers into a traditional broadcast metric still yields pretty underwhelming results: The #1 webcast in August, NetRadio's "80s Channel," pulled an ATH of 311,600. To translate that into AQH (Average Quarter-hour, roughly the average number of people listening at any given moment), divide the ATH by the number of hours in the month (for August, 744). This means, at any given moment, only about 419 people are tuned in to the globally available webcast. We're not cutting into broadcast territory here -- yet.

-- What do the admirable rankings of stations and channels like NetRadio's "Smooth Jazz," "Quiet Classics," and "Lite Hits;" WABC; ABC's Tom Joyner's show; and religious-KLTY tell us about the validity of preconceived notions of who's listening on the web -- in terms of age and ethnicity? Do people listening to smooth jazz on their machine at the office listen to this type of music in a more casual atmosphere, say at home or in the car (were it possible)?

-- To reiterate a theory proposed in this space before, these numbers may not be a true representation of Internet radio listenership for the entire industry, simply because Arbitron is only measuring in the neighborhood of 900 streams. That leaves out thousands and thousands of others -- like Spinner, Sonicnet, Cyberradio2000, and WWW.com. Of course, other webcasters might be having similar results as those rated by Arbitron, but who knows?

...

Here's feedback regarding the newly-released Arbitron Webcast Ratings results, and RAIN's analysis of the numbers...

"Analysis is right on the money..."

Your analysis is right on the money. It's close to OUTRAGEOUS that hardly anyone (you are a great exception) is calling Arbitron on the selectivity of the streams it measures. Only 900! Yet they are quoted everywhere.

In a way, it's the same as the way they rate radio. Stations with a 2 share REALLY have ratings that MIGHT be between a 1.3 and 2.7 66% of the time and could be anywhere else the other 33%.

-- John

"Kids getting back to their schools (equipped with T-1s)..."

The big monthly increase could partially be from all those college kids getting back to their schools (equipped with T-1s). Look for another increase in September.

-- Bill Fleming, Principal
William Fleming & Associates Specialized Investment Banking

This feedback is in response to RAIN's review of the newly-released ClickRadio. Read Part 1 of that story here (scroll down), and Part 2 here.

"Radio on the PC is not a goal -- it's a stepping stone..."

Instead of putting together a fluid list of songs, ClickRadio 1.0 is a test in the theory that people could care

less about what sounds good together unless they are dancing to it. I for one am glad to see someone challenging the long-standing theory that the definition of a playlist should come from the broadcast side rather than the consumer side.

Personality is a tool used by broadcasters to give differentiation to their radio station, not something that consumers necessarily desire...when it comes to wanting music, anything that doesn't sound like music is a major turnoff.

I highly doubt ClickRadio's end plans are to be computer-based...Radio on the PC is not a goal -- it's a stepping stone. What companies like ClickRadio realize is that listening MUST take place away from the computer. So, if you had to take all the Internet music technologies in the world today and move them into an automotive application or a mobile Walkman environment -- who do you think would come out the clear winner?

--Dan Rudman
President/CEO ChannelFire, Inc.

...
Mr. Rudman makes some excellent points here. We failed to mention in the ClickRadio piece that our opinions stemmed from the idea that the software is designed to emulate the traditional radio experience. Perhaps this is not (or no longer) the case with Click. -- RS and PM
...

This piece of feedback is based on Mark Cuban's warnings to webcasters regarding proposed RIAA licensing fees, reported in RAIN here...

"$4,683,096 in RIAA fees for the year..."

I did a little math experiment of my own to see what would happen if the same rules were applied to a REAL Radio station. Imagine for a minute that a successful rock radio station in a top 15 market had to pay the same rate for music that the RIAA is currently proposing - about 3/10ths of a cent per song per listen. Here's the math based on a real radio station in Seattle.

GIVEN: Station has 18,000 average quarter hour listeners Mon-Sun 6 am to midnight. Basically, there are 18,000 people listening at a given time, hearing each song that is played.

The RIAA proposed rate is .0033 (three tenths of a cent per song per listener) X 18000 listeners = $59.40 per song - the Radio station's cost to play that song.

Station plays 12 songs an hour = $713 for an hour of music; Times 18 hours in a day = $12,830 per day for music (not including overnights); Times 365 Days in a year = $4,683,096 in RIAA fees for the year.

--David Rahn
Co President SBR Creative Media


November 5-7	NAB European Radio Conference, Berlin
November 12-14	Canadian Association of Broadcasters (CAB) "Broadcasting 2000: On-air / On-line," Calgary
Nov. 28-Dec. 1	Radio Ink Internet Conference, Santa Clara, CA, featuring a brand-new national study on Internet radio usage presented by Eric Rhoads & Kurt Hanson
February 1-4, 2001	RAB 2001. Details coming soon.

xxx

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