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From a column by Esther Schindler in InformationWeek.com:
"Ten years ago, I loudly scoffed at an industry analyst when
he said, 'The Internet will change
everything.' If I could remember his name, I'd apologize publicly
now and even add that I'm sorry about the incident with the hamster
and the duct tape.
"As we've all learned, the Internet has forced nearly
every industry to make major changes. Some have coped well; others
are still struggling to embrace this thorny porcupine...
"The music business? Bzzt. In Reinventing Business 101,
I'd have to give it a failing grade. Rather than embrace the Internet,
the music business is doing everything possible to strangle
it. Nothing
proves that point better than the current issue with Internet
radio...
"They have a rectocranial inversion in regard to celebrating
the unique business opportunities
presented by the Internet.
"Need a fer-instance?..I listen to that online radio station
because it serves a specific need that's unmet in the 'general store'
of rock radio. That's a missed business opportunity, and I don't see
anybody exploiting it. Traditionally, niche markets are willing to
pay a little more for their specialized needs, and they often see
relevant advertising as information, not an annoyance...
"The Internet's successes came about because some smart
individual saw this medium as a new way to connect
businesses and people. In the book business, which relied
on in-store browsing and
serendipity, Amazon.com
managed to create loyal customers with personalization and nearly
unlimited availability. Surviving B-to-B services found a way to replace
the old way with something better.
"As I see it, however, the music industry is trying to
stop everything so hard that it hasn't taken the time to look for
new, uniquely online opportunities that would earn more royalties
than $0.0014 for each Internet radio listener...
"The only thing they're managing to stop is innovation..."
Read this entire article by Esther Schindler here.
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From Digital Coast Reporter: "Five of the biggest media
sites have joined together to launch an online ad sales network
in an
effort to capitalize on the at-work online audience. The network,
called "At-Work Brand Network", consists of CBS
MarketWatch, CNET Networks,
NYTimes.com, USAToday.com
and Weather.com.
"These five media companies will work together to 'entice'
clients to buy online ads across their sites, and will include a
single interface, point-of-contact and billing. The agency/client
using the network can submit their ads to one of the constituent
sites for distribution across the entire network.
"'We wanted to let the industry know the capability
of the medium in general,' said Jason Krebs, VP of sales at NYTimes.com.
'While we do many deals
on our own, this was an opportunity to open up the eyes of the rest
of the marketing community...'
"In theory, the system works similar to a company/agency
buying ad time with a local cable company, such as Time Warner Cable
in Manhattan area, which would then place the ads across select
channels being carried through its network."
Read this entire story in Digital Coast Reporter here
(free registration required).
...
... If one advertising sales organization was able to somehow
aggregate the at-work audiences of most of the major Internet
radio stations (including Spinner, Shoutcast, MSN Music, Yahoo!
Launch, MusicMatch Radio, the Clear Channel stations, and all
of the Hiwire and Lightningcast affiliates), I believe their
combined audience size would now be just slightly bigger than
the biggest single broadcast radio station in America (which,
in in terms midday AQH, I believe would probably be WLTW/New
York City).
That big an audience ought to be sellable!
But it would require a team of sales execs who have
contacts at the client level and who could take advantage of
relationships that they've built up over many years. At this
point in history, it's not a job for young and unproven AEs.
--KH ...
From the Chicago Sun Times's Robert Feder: "Jimmy
deCastro, who was in the vanguard of the radio industry's
consolidation
and explosive growth in the 1990s, no longer likes what he's hearing.
At the annual Radio & Records
Convention in Los Angeles last week, the former Chicago broadcasting
kingpin attacked the monster he helped create.
"'It's very clear that consolidation has hurt this business,'
said deCastro, who's now president of AOL Interactive Services.
'It's impacting the product that's out there. It's plain and simple.
There are too many commercials, too much focus on . . . cash flow
and too much pressure on the people.'"
"He
will determine airplay to be sufficient compensation..."
While it is possible that the LOC will decide on a performance
royalty rate for webcasters that is equal to ASCAP &
BMI rates, I respectfully submit that it is also very possible that
he [Librarian of Congress James Billington, right] will determine
airplay to be sufficient compensation, and that no such performance
royalty fee is necessary. I have provided two very solid arguments
that support this position.
First, an indisputable fact: Terrestrial radio pays no such
fee and never has, because Congress deemed airplay to be of sufficient
promotional value to performers and record companies. Webcasters perform
the same service, and, in fact, do a much
better job of it than does terrestrial radio ("Title" and
"artist" for every song, album cover art in some instances,
the ability to click and buy immediately, etc.).
Secondly, a direct quote from section 405 of the DMCA: "...In
determining such rates and terms, the copyright arbitration royalty
panel shall base its decision on economic, competitive and programming
information presented by the parties, including --
"(i) whether use of the service may substitute for or
may promote the sales of phonorecords or otherwise may interfere with
or may ENHANCE (my capitalization) the sound recording copyright owner's
other streams of revenue from its sound recordings; and (ii) the relative roles of the copyright owner and the transmitting
entity in the copyrighted work and the service
made available to the public with respect to relative creative contribution,
technological contribution, capital investment, cost, and risk."
Now -- did not the LOC's May 21st decision rejecting the CARP
proposed rate also reject the CARP itself, by saying they did not
follow the law? And if this is the case, would it not support a decision
that says airplay is sufficient compensation?
That's how I read it, and my Congressman's office agrees with
me. I have been in regular contact with their Internet/Technology
person...[and] she has indicated to me that she also reads the above
section to mean that airplay is indeed sufficient compensation.