BY KURT HANSON
In looking back on old press clippings of the initial negotiations between Webcasters and the RIAA two years ago (and of course when I say "press clippings," I mean a Google search), I came across a striking finding:

The initial debate between the two sides was regarding the RIAA's request from certain Webcasters for a license fee equivalent to 15% of gross revenues, which Webcasters characterized as a "much higher than fair" amount. DiMA Executive Director Jonathan Potter (below) was quoted at the time as saying, "DiMA members' position on that has been, 'Thank you very much, we'll see you at arbitration" (See Wired News article here).

As it turns out, last week's arbitration recommendation was in the form of a per-song-streamed fee ($.0014 per song per listener, or about 2¢/hour for a 15-song hour) rather than in a percentage of revenues. However, translated into a percentage of revenues, the arbitrator's decision seems to give the record companies significantly MORE than they were initially asking for!

Let's do the math: Broadcast radio is a $20 billion per year business. America's roughly 200 million listeners (age 12+) listen about 20 hours a week each to radio, on average, according to Arbitron, suggesting that broadcast radio gets about 4 billion hours per week of listening -- or a little more than 200 billion hours a year.

Divide 200 billion hours of listening by $20 billion in revenues, and you'll calculate that broadcast radio's gross revenues seem to be roughly 10¢/listener-hour.

Double-check: This figure is consistent with a broadcast radio station running nine spots at average local/national spot rates of a $10 CPM (i.e., 1¢/impression) and five spots at network rates of a $2 CPM (i.e., 1/5 of a cent per impression). The math seems to check out.

Realize that in today's advertising environment, Webcasters are seeing revenues per listener-hour that are much, much lower than broadcast radio's. Nonetheless, let's make the optimistic assumption that Webcasters could eventually see the same kind of revenues that terrestrial broadcasters are seeing. (Although that seems unlikely given the lack of FCC-imposed scarcity and the lower number of spots per hour that Webcasting will hopefully offer listeners.)

Making that optimistic assumption, the arbitrators' recommendation would be for RIAA license fees that are the equivalent of 20% of gross revenues! (Note that that's 33% more than the RIAA was originally asking for.) (RIAA President/CEO Hilary Rosen is pictured left.)

Worse yet, we imagine that there are very few Webcasters, if any, who have seen even 2¢/listener-hour in advertising revenues to date. According to the CARP recommendation, these Webcasters would owe sound recording license fees, retroactive to 1998, of more than 100% of gross revenues!

As noted previously in RAIN, representatives from both sides can continue to press the Copyright Office for proposal changes for 54 more days.

From ZDNet UK: "The Treasury Department on Wednesday reacted negatively to a European Union move to require non-EU companies to impose a tax on products delivered online to consumers, such as downloaded software or music...

"On Wednesday, the EU Council of economic and finance ministers gave its approval to a European Commission proposal on applying the value-added tax, or VAT, to so-called digital products. Those products could include computer games and software, as well as radio or television broadcasting, delivered online.

"The rule will, for the first time, require non-EU businesses selling products to EU consumers over the Internet to levy the VAT tax on purchases. The EU argues that will put non-EU companies on a level playing field with EU businesses that are required to charge a VAT tax...

"Late last week, the Treasury warned the EU it did not agree with the idea. In a statement, Deputy Treasury Secretary Ken Dam said the Bush administration had "serious concerns" about the idea and hinted it could take the issue up with the World Trade Organisation."

Read the complete article here.

MeasureCast and Nielsen Media Research have announced that representatives from the two companies will participate in a joint "road show" to tout the benefits of streaming advertising to ad agencies across the country.

In a joint press release yesterday, the two media audience measurement companies revealed their plans to meet with media directors and planning and research executives beginning March 5 in Los Angeles.

Last month, in a RAIN feature story (here), we reported that Loudeye VP/Sales Ed Bruno had embarked on a similar sales blitz -- and like Hiwire's Bob Nagengast, Lightningcast's Bill Jaris, and Live 365's Ron Denman -- would "evangelize" for the medium. Look for a follow-up to that story in RAIN soon.

In the press release, MeasureCast CEO Ed Hardy said, "We want to make sure that ad industry executives responsible for making recommendations to their clients include streaming media advertising in their media planning mix. With the aggregation of multiple stations, the streaming audience is becoming large enough to be included in mass media ad buys."

The trip also has planned stops in Chicago, Minneapolis, and New York. MeasureCast has a strategic partnership with Nielsen Media Research and NetRatings to market its products.

"Makes us eat what we're fed..."

"This truly bad law..."

"Very shortsighted..."

	Feb. 27-Mar. 3, 2002	Canadian Music Week 2002: Toronto, Ont., CA
	Mar. 1-3, 2002	ConXis: Conference and Expo for Internet Streaming: Rosemont, IL
	Mar. 14, 2002	16th Annual Bayliss Radio Roast: New York, NY
	Apr. 5-8, 2002	Broadcast Education Association 2002: Las Vegas, NV
	Apr. 6-11, 2002	NAB 2002: Las Vegas, NV
	Apr. 23-26, 2002	Streaming Media West 2002: Los Angeles, CA