RAIN: Radio And Internet Newsletter

August 3, 2007

Daily news and commentary on the key issues involving radio and the Internet

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CRB coverage 2007:
CRB decision
SaveTheStreams
Legal options
Markey
Petitions
Copyright law
Canada?
Fred Wilhelms [2] [3]
JPMorgan analyst
SaveNetRadio
Rehearing denied
SNR.org website
B'casters interests
Day of Silence?
What is "fair"?
House IREA
SX Point/Counter
July 15th D-Day
Hill walk recap
Senate IREA
Hanson/Simson
Offer to SCW
Berman/Coble
100th co-sponsor
File for stay
Noncomm offer
$1 bil admin cost

CRB coverage 2002:
CARP decision
Industry reacts
Industry stunned
Huge RIAA win
SJO editorial
Day of Silence?
Congress support
Day of Silence on!
Press coverage
Day of Silence
Librarian decision
Cuban speaks up
Labels: Die Now!
Forbes coverage
SWSA
SCW license

"The Future of
Radio" series
1 | 2 | 3 | 4 | 5

"Net radio frontier:
Ad sales" series
1 | 2 | 3 | 4 | 5

UPDATED:
Internet radio
royalty basics

Copyright Law
DMCA
CRB 2007
Webcast decision

BY DANIEL McSWAIN
Barring "great progress" in negotiations between webcasters and the recording industry by Labor Day, two prominent senators announced yesterday that they will take "expeditious steps" towards the passage of the Internet Radio Equality Act.

The Senate bill's original sponsors, Sens. Ron Wyden (D-OR, pictured right) and Sam Brownback (R-KS, at left), expressed concern with a lack of negotiating progress between the parties, citing an offer extended by the NAB in June that has gone unanswered by SoundExchange, as well as webcasters' difficulty in scheduling meetings with the record industry group.

"As Congress heads into its August recess, we are troubled by the lack of negotiating progress being reported." reads yesterday afternoon's news release.

Wyden and Brownback also chastised the recording industry for using the "unfounded" per-channel minimum fee as leverage to compel webcasters to adopt Digital Rights Management, portrayed as a measure to combat "stream-ripping."

"Now we are hearing that the recording industry is attempting to use this aspect of the CRB decision to force webcasters to adopt recording restrictions far in excess of the controls that have governed broadcast content for decades," they said. "While we strongly support a negotiated solution, we will not allow the minimum fee issue to be used to force an agreement that mandates DRM technology and fails to respect the established principles of fair use and consumer rights."

Congress enters a recess August 6 and will reconvene on September 4, the deadline the Senators have given for progress in negotiations.

"The fact is online radio services do not have enough revenue to support what will amount to unprecedented royalties. The $500 per channel minimum fee alone will deliver an over $1 billion annual windfall to record companies, a windfall that is not justified by any business or equity considerations," the senators commented. "We feel the Senate must take action, and we will make every effort move the Internet Radio Equality Act to the floor."

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From media consultant John Gorman's blog: "Billboard announced yesterday that the playlists of both Yahoo and AOL Internet radio stations will now bear influence on the trade magazine's national single chart -- the Hot 100...

"AOL also simulcasts eleven XM Satellite music channels on line but it wasn't clear if those stations would be included in the Billboard chart tally.

"What this means is that AOL and Yahoo Internet radio stations are heading in a direction where they will eventually be considered by labels as being relatively on par with terrestrial radio stations in their influence on the national charts...

"In February, 2005, Billboard added digitally downloaded songs to its Hot 100 modus operandi -- and rightfully so...

"Billboard deserves kudos for recognizing the increasing influence of Internet radio to the mass audience."

Read the whole post at John Gorman's Media Blog.

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Here's more feedback on Kurt's suggested "Shambala Experiment" (here)...

"Why were the major labels... pay(ing) radio to play their new releases?.."

Kurt's proposed "Three Dog Night" experiment is elegantly simple and scientifically
valid, which is only one of the reasons why it'll never happen.

The reason the broadcasters weren't prepared with evidence to counter the claim of
airplay having no promotional value is that it's so ridiculous. If it were true, then why, until just a couple weeks prior to the CRB decision, were the major labels working through intermediaries to pay radio stations to play their new releases?

Art Marriott

"'The first big goal of any artist is to make it on the radio..."

An established band's sales might have a measurable impact from being dropped from airplay, but what about new artists and new releases? The first big goal of any
artist is to make it on the radio -- without it, history already shows very limited audience growth, even for people with amazing talent.

Tim Shay

"'Great artists don't need radio, of any kind... ask Alison Krauss..."

Fans aren't listening to AM/FM. They could care less about a track being added and overplayed. They could care less than

less about the mix off adverts and mindless DJ patter Nearly every savvy concert promoter is buying less Radio. Fans are listening to iPods, Internet Radio and satellite.

If you had to sell an AM/FM station's product as a subscription service, you'd be in business only long enough to spend your investment capital. Nobody would pay. It's that bad.

As for Three Dog Night.....they could have easily done the same business without Radio.

Don't believe me?..... ask Dave Matthews..........Alison Krauss (pictured).......Diana Krall.........and many more.

Great Artists don't need Radio, of any kind.

Radio Terra Firma is a Fool's Game. Anyone can play it, with a modicum of talent, a
lack of brains and a sack of cash.

Randy Geider
rockymountent.com

"'Intimidation is a tactic (labels) understand and use every day..."

The music industry will respond with reason to only one tactic... INTIMIDATION. It's
a tactic they understand and use every day as

they exploit their artists and sue children for downloading on the Internet.

There is a quick and simple solution to the bogus and disingenuous claim that radio has no value in promoting sales of their products. The NAB needs to immediately

announce its plans to discontinue use of all music controlled by the RIAA and all other opposing parties as of January 1st, 2008.

Simultaneously, the NAB should announce its plans to establish a new agency representing all terrestrial, Internet, and satellite radio operators. Before any artists' music can or will be played on any station, or music channel, permission must be granted in writing to this agency, a simple process executed on-line. The new agency will pay a 1% royalty fee DIRECTLY to performers for use of their creative properties.

This is REAL intimidation. I suspect the threat of such a plan would quickly bring this foolishness to an end.

'frankieagogo'

"'It's never a good sign when you have to defend the absolutely obvious..."

If you don't mind, I'd share a personal opinion from overseas. I think the Shambala
Experience would definitely make sense. It is quite disappointing though that such
tests have to be considered at all. It is rather frustrating when an industry or certain sub-segments thereof start questioning the obvious and challenge common sense.

In my opinion, the whole thing is very, very simple: Airplay for any artist means publicity -- in the positive sense. And just try to pass an exam at ANY business school anywhere around the globe stating that good publicity has an adverse effect on sales.

Again, it is never a good sign when you have to defend the absolutely obvious. But let's do it if we have to!

'Zoltan'

"'The record industry won't play ball... they know airplay helps sales..."

Some quick thoughts:

(1) The record industry won't play ball, because they know that airplay helps sales. If it didn't there would be no payola laws.

(2) Instead of using a catalog song (which probably doesn't sell much and could be
skewed easily), do it with a new title from a big artist. The results will be hard to mess with, but more importantly, the real impact on sales will be known with a real world example. Further, it will be a warning shot to the record industry of just how much more trouble they'd be in if radio just decided to boycott their high priority titles.

Bob Bellin

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Kurt and Paul, this is deep background -- don't quote me!

Thanks!


August 17 & 18	BandWidth 2007: San Francisco
September 17 & 18	Future of Music Policy Summit: Washington D.C.
September 26-28	R&R Convention: Charlotte, NC
September 26-27	NAB Radio Show: Charlotte, NC
September 26-29	PRPD Public Radio Programming Conference: Minneapolis, MN
October 13	IBS Webcast Conference: Seattle, WA
October 20	IBS Webcast Conference: Boston, MA
October 25-28	College Broadcasters Inc. Natl. Conf.: Washington, D.C.
October 27	IBS Webcast Conference: Chicago
November 4-6	NAB European Radio Conference: Barcelona, Spain
December 1	IBS Webcast Conference: Fort Lauderdale, FL
December 8	IBS Webcast Conference: Los Angeles
February 19-23	iMa Public Media 2008 Conference: Los Angeles

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