RAIN 9/14: Some broadcasters consider putting off "radio's online future," for, well, the future

Paul Maloney
September 14, 2012 - 12:55pm

So, you're a local radio broadcaster (or you head a group), and your online efforts over the past 10 years haven't done much of anything postive for your bottom line. Specifically, you feel the process of replacing your advertisers' on-air content in your streams with online-only material simply costs too much, sounds horrible, and doesn't generate the revenue to make it worth the bother.

Think you'll abandon "ad-insertion" and simply stream a pure simulcast of your on-air signal? Or perhaps shut down the stream altogether? Certainly you want to carefully consider such a move, and gather as much information and opinion as feasible to advise your decision, right?

"Traditional radio is not dead, but its future is inextricably tied to digital." That's Mike Agovino (here), who'll speak at RAIN Summit Europe in Berlin October 5. But he's COO and co-founder of Triton Digital, so what might you expect him to say?

But consider the thoughts of Radio Ink publisher Eric Rhoads, who recently called it "foolish" for radio to ignore its online streaming, and wrote, "Streaming will be your primary source of revenue" by 2016, and that "your transmitter will make up only a small percentage of your listening." (See more in RAIN here. )

Rhoads' own publication today offers an interview with SAG/AFTRA National Associate Director Mathis Dunn exploring the realities of compensation for voice talent when streaming ads produced for broadcast radio (that's here). But make sure you also read consultant Mark Ramsey's analysis of the interview, his thoughts on abandoing streaming, the assumption that ad-insertion is necessarily "clunky," and the need for a realistic business model for it (here).

"But is (simply simulcasting the on-air signal's programming and ads online) any way to serve the interests of our clients, let alone our consumers?" he asks. "Is this the way to stage radio for a future where ever-more consumption happens online and radio competes not only against Pandora and its kind, but also potentially against streaming services from Apple, Google, and Amazon? All of whom will squeeze every ounce of value creation out of technology for the benefit of advertisers and listeners alike."

That's what you, the broadcaster, need to decide. We're looking forward to getting lots more input on this very matter during the "Online Strategies for Local Broadcasters" session (more here) at RAIN Summit Dallas. This Tuesday CBS Radio/Dallas' Dan Halyburton will moderate this panel discussion, with panelists Emmis Digital VP Angie May Cook (whose WQHT/New York "Hot 97" is one of the nation's most-innovative when it comes to its new media efforts), Triton Digital's Stephanie Donovan, TargetSpot's Elizabeth Pardieu, and Dave Van Dyke of Radiate Media. 

Paul Maloney
September 14, 2012 - 12:55pm

Michael Damsky has spent most of his 32-year radio career so far at two of Chicago's legendary radio stations. Following a stretch of more than two decades that saw him rise from an account executive at WXRT to that station's general manager, Damsky became WLS-AM/FM director of sales, and then eventually president/market manager.

On Tuesday (when he'll attend RAIN Summit Dallas), Damsky will offcially assume his new role as AccuRadio Executive Vice President of Sales.

"It is our belief that AccuRadio, with its fully built-out platform for personalizable music channels, is well positioned to take a significantly increased share of this fast-growing market," AccuRadio founder/CEO (and RAIN publisher) Kurt Hanson said today. "With his proven ability to build a sales organization, Michael will help provide the increased revenue which we expect to fuel AccuRadio’s growth."

"I am excited to be joining AccuRadio — a pioneering provider of personalizable streaming Internet radio," Damsky said. "I couldn’t pass-up the chance to help grow AccuRadio into a leadership position in what is clearly the most rapidly expanding sector of music listening."

Paul Maloney
September 14, 2012 - 12:55pm

Stock and financial analysis site Seeking Alpha is reporting that, for its upcoming royalty renewal, satellite radio outlet SiriusXM is offering to pay 5%-7% of its gross revenues to use copyright sound recordings, while SoundExchange is asking for 13% -- rising to 20% -- over the 2013-2017 term.

The Copyright Royalty Board set satellite's 2007 royalty rate at 6% of gross revenues, rising each year to 8% this year. 

Note that the CRB's determination (a) concerns SiriusXM's satellite transmissions, not its streams, for which it pays a separate royalty at a dramatically higher rate; and (b) this rate, in stark contrast to online streaming rates, is determined using the 801(b)(1) standard.

"With the survival of (SiriusXM) no longer at stake (as it was during the last determination) and lower capital expenditures required during the next license period, future rates that could be set by the CRB could easily be higher and much closer to, or even above, the 13% rate," predicts Seeking Alpha. Read more here.

While we're on the topic, Internet radio royalty determinations are currently based not on 801(b)(1) standards, but solely on the controversial, DMCA-mandated "willing buyer willing seller standard," which many industry experts agree is the key reason streaming royalties are so much higher than those for satellite and cable radio in the U.S. Congressman Jason Chaffetz in July announced he hopes to introduce to Congress the Internet Radio Fairness Act that would move Internet radio royalty determinations to use the 801(b)(1) standard that's used for most other royalty decisions (see coverage here). Industry legal expert David Oxenford explains the importance of 801(b)(1) here. Oxenford, a D.C.-base partner at Wilkinson, Barker, Knauer will moderate the "Music Licensing Roundtable" panel at RAIN Summit Dallas on Tuesday.