RAIN 8/24: Commentators weigh in on Saga's decision to stop replacing ads in web streams

Michael Schmitt
August 24, 2012 - 12:35pm

SagaEarlier this week, Saga Communications announced it would no longer substitute "online only" content for the on-air ads on its station's Internet streams (RAIN coverage here). Saga EVP Warren Lada said he's not worried about losing streaming inventory because it's really not that profitable compared to other areas.

Radio Ink editor Ed Ryan reports other broadcasters may be leaning in the same direction. He writes (here), "While broadcasters know they need to be everywhere consumers want them to be, losing gobs of money to be there is not something they signed up for... When you tack on the cost of the technology paid out to make ad-insertion a part of a radio station stream, it adds to the financial headache."

And besides the costs, there's the subpar experience for the listener to consider. "Nothing sounds worse than 7 minutes of Public Service Announcements in a row."

Nothing, perhaps, except 7 minutes of ads, argues Angel Street Capital's Bob Maccini. Especially when compared with the offerings from pureplay competitors.

"This movement if successful will sound the death knell for terrestrial stations that are streaming," Maccini writes on the Angel Street Capital blog. "Given the other Internet radio listening options consumers will not choose to listen to a stream that is running 10-14 ad units an hour complete with some 60 second spots... Stopping ad insertion may save a few shekels in the short run but long term it will have more significant costs."

Instead, Maccini suggests (here) "rather than inserting PSAs and other filler content that music stations insert songs."

Audio Graphics' Ken Dardis agrees that just "regurgitating" over-the-air signals online won't work. "Radio's place online is to use what the Internet offers to expand limitations of over-the-air content. NPR does this in a remarkably successful way. So why do we not hear it being done by commercial radio industry groups?"

Online radioHe continues (here), "The radio industry belongs online, just not in the way it presents itself over-the-air."

Jacobs Media's Fred Jacobs appreciates Saga's move in that it should help improve the overall quality of its streams. "Radio streams uniformly sound like crap," he writes. "PSAs, bad music, comedy cuts, crickets, and other interstitial material has made the customer experience on radio streams a nightmare."

But he also argues, like Dardis and Maccini, that radio's digital product shouldn't just be a clone of its over-the-air signal. Web efforts required a dedicated team. "Treat digital revenue as a separate business and hire reps with digital sales experience."

Jacobs continues, "it’s time to realistically assess what’s working and what’s not. Radio needs to come to grips with the fact that in many situations, traditional radio salespeople cannot take on this effort, and that digital selling doesn’t cannibalize the traditional spot sales effort."

You can find more of Jacobs' thoughts on Jacobs Media's jacoBLOG here and here.

Paul Maloney
August 24, 2012 - 12:35pm

Townsquare Media Group, owner of 244 radio stations in 51 markets, plus music web sites like PopCrush, Ultimate Classic Rock and Taste of Country, has acquired MOG Music Network, an ad network that reps music blogs.

In July, Beats bought the other half of the MOG company, the on-demand music streaming service (see RAIN here). Townsquare reportedly paid $10 million for the ad network, which it will rename Townsquare Media.

Read more in the New York Times here and AllThingsDigital here.

Paul Maloney
August 24, 2012 - 12:35pm

SoundExchange announced this week that it's distributed to sound recording copyright owners and performers $204.4 million for Q1 and Q2 of 2012. That money comes from royalties paid by webcasters, SiriusXM, and cable radio operations like Music Choice.

In its second quarter, SoundExchange distributed $95.8 million, the second-highest quarterly distribution in the organization's history, according to its press release. To date, SX has distributed more than $1 billion of royalties paid by non-interactive digital radio services.

SoundExchange General Counsel Colin Rushing will join SESAC's Greg Riggle on our "Music Licensing Roundtable" panel, moderated by Wilkinson, Barker, Knauer partner David Oxenford, at RAIN Summit Dallas September 18th.

"This quarter's distribution adds to what is shaping up to be a record breaking year for SoundExchange and reflects the continued growth of digital radio listenership and services," said Michael Huppe, president, SoundExchange.

Read the SoundExchange press release here.

Paul Maloney
August 24, 2012 - 12:35pm

Inside Radio leads today with a collections of testimonials from program directors revealing how they use social media to track the popularity of new music.

Facebook and YouTube now offer PDs a window into how popular -- or burned -- a song is becoming (see, for instance this article from The New York Times). Lincoln Financial Media CHR KQKS/Denver music director Michael Buhrman says, "Social media has gone to the next level in the past few years as a tool for discovering new music, and helping determine whether a song is compatible with our audience."

Inside Radio adds, "But he and other programmers say it’s just one of many utensils in their toolkit, along with callout, music sales, online testing, requests and other traditional means."

"There is no telling who, what age, or what country (a new song's Facebook) likes and (YouTube) views are coming from," cautions KQMV and KLCK, Seattle PD Maynard. "I feel very confident in our systems of picking music and using the internet or social media as more of a tie breaker or an additional information source." Wilks Broadcasting EVP of programming Jeff Sanders adds, "If I see multiple success stories — You Tube views, iTunes sales, Facebook likes, Twitter followers — then we’ll pay attention."