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The Librarian
of Congress's decision on Internet radio royalty
rates is due on Thursday,
June 20th. Hopefully that decision will
be a reasonable one and we can all get back
to business!
So on Monday, June 24th, look for a special
"Back to Business"
issue of RAIN, featuring a review
of products and services now available to our industry.
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| Participating
vendors include... |
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YOUR firm! Call Kurt at 1-312-527-3879 or e-mail us here.
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From a column by Mark Fuerst in Current: "Since
Internet services emerged as a small and costly part of its service
repertoire,
public radio has viewed streaming with equal parts optimism and revulsion.
Optimism because streaming offered a way to achieve one of public
radio’s most cherished goals, namely universal distribution of multiple
program streams. And revulsion for two reasons: cost and potential
competition...
"I work with one group now tilting toward optimism, the
M*STAR Project, a CPB-funded
multistation effort to figure out a strategy for public radio music
streaming.
"M*STAR brings together the Public Radio Internet Station
Alliance (PRISA) and a set of 'core stations,' including...two of
the
system’s heaviest streamers, WXPN
in Philadelphia and KPLU in
Tacoma. Earlier this year, these stations were joined by...other music-oriented
stations for at least part of the research —
WFUV in New York; [and] KEXP
in Seattle...
"We looked at streaming volumes, costs and revenues and
asked eight major streaming providers for quotes on bandwidth — a
comparative shopping exercise that produced an almost unbelievable
range of prices. Most recently, the eight stations launched
a survey, asking their streamies, as we call these little-known new
listeners, about how they use the streams, how they found them and
whether they like the service enough to help pay for it...
"The findings reflect the experience of only a few stations
over a short period, but they nevertheless point to opportunity:
a growing audience, the prospect
of lower costs and a new stream
of audience-based revenues.
Growth
"At the largest stations in the project, online listenership
increased steadily over the last 18 months...The maximum number of
simultaneous connections — a kind of peak average quarter-hour audience
— hovers around 2,000 for both WXPN and KPLU and around 1,500 for
WFUV. So these streams are now attracting the audience
of a small-city station, and they appear to be growing
well beyond that size.
Streaming costs
"The cost of serving these listeners has been painfully
high. In early 2002, WFUV was paying about $6,700 a month; KPLU shelled
out almost $10,000 a month; WXPN ran up bills of more than $12,000
a month. (Ouch!)...However excited stations may have been about the
early growth of their streams, the ever-rising costs have been equally
discouraging, to say the least.
(CONTINUED BELOW) |
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(FROM
ABOVE)
Revenue
"Only one thing brightened the picture recently: with
encouragement from the M*STAR project, they began to analyze
membership records, and they discovered that streams were beginning
to attract membership revenue.
"Revenue varied widely among the participants, but the
two largest stations — KPLU and WXPN — each reported more than $100,000
in stream-related member revenue in the six months between Sept.
1, 2001 and Feb. 28, 2002...Notably, these revenues are almost
certainly yielding a surplus above the stations’ direct
costs of streaming.
"Sources of this membership revenue were completely
different for KPLU and WXPN...Ninety-three percent of
WXPN’s streaming revenue came from outside
the Philadelphia coverage area. For KPLU, 92 percent came from inside
the Seattle market...
Shopping for price
"What we found in our comparison shopping early this
year was that streaming bandwidth may be purchased at
surprisingly low costs. In January and February we solicited bids
for a two-year package of four streaming channels, with expected
growth rates. The range of the resulting bids was shocking: from
as high as $721,580 (using Activate)
to as low as $47,443 (using StreamGuys)...Encouraged
by our research and their killer streaming fees, WXPN decided to
move its entire streaming operation from VitalStream to StreamGuys
in early March. Within a month, costs dropped from $12,000 a month
to $1,800...
"Even if these observations are limited, they are not
isolated. Other information coming from a diverse range of sources
points in the same basic direction: A streaming economy is developing
with sustainable costs and an audience willing to pay for unique
service."
Mark Fuerst is a public radio management consultant. Read
his entire column here.
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Here's feedback from yesterday's coverage of the John Dvorak article
in which he panned Satellite radio (in RAIN here)...
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"People
were saying DMX would be the end of radio..."
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John Dvorak is right on the money. Satellite radio does not
fulfill a need, nor is there any real demand for it. Sure, people
think it's cool. But how many will agree to paying a premium for a
receiver, then paying for the service, THEN hearing commercials?
The pro-satellite folks have tried to use a comparison to premium
cable TV (which people pay extra for) as justification for charging
people a monthly fee, and proof that their model is a good one. The
problem is that radio, whether it be terrestrial, Internet or satellite,
is a passive medium. People have it on while they are doing other
things. Driving, talking, eating, working, reading the newspaper,
etc. How many other things are you doing when you sit down to watch
something on HBO?
In the late 80's people were saying that DMX would be the end
of radio as we know it. Now the only place you can get it is as part
of a digital cable package. Today, people are saying that satellite
radio is the next big thing. But most of them are already preaching
to the choir, which will never be large enough to sustain the message.
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John Schneider
Radiopoly.com |
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"Satellite
radio can become a major player..."
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It appears he has not listened to what the new technology has
been offering, that they do have endless streams of music
without personality interruption.
If he is upset about Sirius and XM taking up the majority
of the programming, and a small number responsible in deciding what
to play for broadcasting, he needs to ask: Is this not the same as
the present radio media owned by the major conglomerates having six
to seven stations within a market?
With some "old fashioned radio heads" and "true grit programmers",
I am one that feels that Satellite Radio can become a major player
in offering a lot more diversity in our music. I know if I am given
an opportunity to program I am going to remember the politically incorrect
money hungered reasons I was turned away from my first love...One
more step for technology and the expanded media.
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"Satellite
radio is no 'biggie'..."
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John Dvorak is absolutely correct. Satellite radio is no "biggie"
or advancement of radio technology.
802.11 however, is the new frontier akin to where cable was
in the 1970's when Bill Daniels started the "last mile"
stampede from Colorado. Satellites will become dinosaurs for the direct
delivery of radio broadcasts and network feeds. But they have a bright
future as the data highway carrier to that little portable device
in your pocket that will multitask, including radio.
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"XM
is the perfect link while traveling..."
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What do you mean it's the same as traditional radio?!?!
I have 2 words to combat that: PROGRESSIVE ROCK! I LOVE XM's
Music Lab station (channel 51) and if he thinks traditional
radio plays bands like IQ, AMON DUUL, SPOCK'S BEARD and ILUVATAR,
he's been living under a rock!
Also regarding his comments about the DJ stepping all over
the music, I've been listening to channels 51 for over 2 months and
there are NO commercials and NO DJ's. Also his comment of "How can
anyone rationalize paying about $120 a year to listen to the radio
in their car?.." Hell, I'd pay DOUBLE that for Progressive Rock!
Traditional radio has abandoned Prog bands of yesterday and
has completely IGNORED any new talent while it has now developed a
HUGE underground following around the world. Thank GOD XM has the
decency and open-mindedness to consider the genre an important part
of music by giving it it's own channel.
I LOVE Internet radio and listen to it at work and at home
but XM is the perfect link while traveling between the two! Wake up
Dvorak!
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From Business Week: "Turner Broadcasting CEO Jamie
Kellner needs to have a long talk with my friend John, who sells
wonderful peaches at my local farmer's market.
"Kellner, you recall, has accused TV viewers who buy
SonicBlue's ReplayTV boxes of stealing. Why? Because they use the
devices to make digital copies of his shows, as a way to zap through
the commercials...
Punishing buyers
"I don't know about the law. And I surely don't understand
the technology. But I do know this: It's very bad business to treat
your customers as the enemy. If you do, they'll vote with their
feet, as Ronald Reagan used to say. 'The customer is always right'
has been a watchword of successful
businesses since cavemen sold the first mammoth skins.
"This brings us to John, the fruit man. In peach season,
he takes a couple of pounds of fruit -- maybe six or eight peaches
depending on their size -- sticks 'em in one of those little wooden
boxes and sells each carton for a few bucks...But sometimes, a customer
will ask for just two peaches, instead of a full box.
Payment is key
"Does John scream at them to get away from his fruit
stand or threaten to arrest or sue them? Nope. He sells them their
two peaches. He makes a little money, and his happy customers come
back next week for more. The customer has made a selection, and
the customer is always right. John obviously has no future at AOL
Time Warner or Disney...
Time for time-shifting
"Today, people want to listen to the music they like,
when they want. That means they increasingly prefer Internet radio
to the homogenous elevator music corporate programmers have loaded
onto generic FM radio. And it means they would rather burn their
own multi-artist CDs that are personally tailored to their tastes,
rather than spend $18 for a disk by the latest invention of the
Sony marketing department...
"But instead of seeing this as an opportunity, the music,
movie, and TV industries see it as a threat...
Unstoppable force
"When will the entertainment honchos learn? The industry
can't stop the latest technology. In the long run, nothing can.
What these companies need to do is sit down with folks like SonicBlue
and Live365.com and
work out a compensation arrangement that's fair to everyone."
Read this entire article in Business Week Online here.
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| June 13-15, 2002 |
R&R
Convention 2002: Beverly Hills, CA |
| July 8-9, 2002 |
PLUG.IN:
Jupiter Music Forum: New York, NY |
| July 25-28, 2002 |
The
Conclave 2002 Learning Conference: Minneapolis, MN |
| Sept. 12-14, 2002 |
NAB
Radio Show 2002: Seattle, WA |
| Oct. 1-4, 2002 |
Streaming
Media East: New York, NY |
| Oct. 30-Nov. 2,
2002 |
CMJ
Music Marathon 2002: New York, NY |
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