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Web radio prime example of how music biz refuses to adapt
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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Web media sites aggregate audiences for ad sales network
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

...


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AOL's deCastro not thrilled with post-consolidation radio
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.'"

Read Feder's column in the Sun-Times here.

 

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Reader feedback

"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.

  John Schneider
Radiopoly
 
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