Clear Channel

Cox latest broadcaster to support Internet Radio Fairness Act

Tuesday, November 13, 2012 - 12:45pm

The Cox Media Group has officially announced its support of the Internet Radio Fairness Act (details of the bill are here) that would move Internet radio royalty determinations away from the controversial "willing buyer willing seller" standard to the more widely-accepted 801(b) standard.

"We believe the current royalty system for Internet radio actually hinders its future and growth," CMG Director of Communications Andy McDill said. "Cox Media Group strongly believes in a vibrant Internet radio marketplace, where artists, broadcasters and our listeners benefit from a sustainable rate setting process."

Other broadcast groups supporting the bill include Clear Channel and Salem Communications. Other supporters include webcasters like Pandora, Radio Paradise, and AccuRadio; plus groups like the Consumer Electronics Association and the Computer and Commmunications Industry Association.

While the NAB hasn't explicitly signed on as a supporter of the IRFA, when the bill was introduced the group said it "strongly supports legislative efforts to establish fair webcast streaming rates. NAB will work with the bill's sponsors and all interested parties to create broadcast radio streaming rates that promote new distribution platforms and new revenue streams that foster the future growth of music" (here).

Read more in Radio Online here.

Like presidential opponents, royalty bill foes rail against "burdensome regulation" and "cheating the middle class"

Monday, November 5, 2012 - 12:05pm

An article in yesterday's New York Times likens the conflict over Internet radio royalties to the presidential race: business suffering under government-inflicted costs vs. wealthy industrialists cheating the middle class.

What the different players are saying sure makes the comparison apt.

Pandora founder Tim Westergren told journalist Ben Sisario, "This adversarial reaction toward Internet radio is counterproductive. It’s causing other businesses to sit on the sidelines, and that is hurting musicians. Ultimately, you want to have many boats in the harbor."

But MusicFirst Coalition, the record industry group that's the main face in the fight against proposed royalty reform, "says it believes that if Pandora gets everything it wants, it could cut its royalty bill by up to 85%," writes Sisario.

The Internet Radio Fairness Act, co-sponsored in the House of Representatives by Republican Congressman Jason Chaffetz of Utah (more here), would require Copyright Judges who determine Internet radio's royalty rates to make their decisions using the "801(b)" standard of Copyright Law, instead of the controversial "willing buyer willing seller." Webcasters like Pandora support the bill, as all other forms of digital radio have their royalties set using 801(b). The music industry is firmly against the bill.

Westergren said, "No one has yet explained to us why Internet radio is under a different standard. No one responds to that fundamental premise."

Naturally, for RIAA CEO Cary Sherman, it's really a matter of companies like Pandora trying to cheat the "entire music community" out of "a fair return on the creative works that are the reason companies like Pandora exist."

Clear Channel CEO Bob Pittman is largely credited with making his company a major online radio force with its launch of the iHeartRadio platform. He says the record industry is wrong to focus on rates. With lower rates, more companies will stream more music, and lead to more income. "If the rate suppresses the volume, there’s less money. If it encourages volume, there’s more money."

Of everyone siding with Internet radio services, it was Rep. Chaffetz himself who stood out with a shot at the music industry establishment: "The old-school dinosaurs are trying to help, but they’re stuck in the tar. They can go talk to the pterodactyls."

Read the New York Times article here.

CC forges digital deal with third record label to secure more affordable online royalties

Tuesday, October 30, 2012 - 10:00am

Clear Channel Media and Entertainment has announced a deal with classical record label Naxos which, in all likelihood, involves the broadcaster paying royalties to the label for on-air play in exchange for a discount or waiver on online plays.

Clear Channel compared the agreement with its "groundbreaking agreements with Big Machine Label Group and Glassnote Records." While this new announcement contained no mention of royalties, both of those agreements involved the on-air/online royalty pact.

Sound recording copyright owners (in this case, the record label) is owed royalties when its music is streamed online, as by Internet radio. However, they can claim no such royalty when the same recordings are used on air by broadcasters.

Deals like this demonstrate that Clear Channel recognizes the growing importance of its both its online listening and the financial viability of streaming copyright music.

As mentioned, earlier this year Clear Channel forged similar arrangements with Big Machine Records (read more here) and Glassnote Entertainment (here). Broadcast group Entercom also agreed with Big Machine on such a deal (here).

Industry legal expert David Oxenford wrote that deals like this may have an effect favorable to webcasters in upcoming royalty rate determinations. He said:

"In setting (webcast royalty) rates, the (Copyright Royalty Board) looks to establish rates that reflect what a willing buyer and a willing seller pay in the marketplace. In past royalty proceedings, that willing-buyer, willing-seller price had to be estimated, as there were no real deals to use as a benchmark. And the estimates all went against webcasters. With a deal like that with Big Machine... the pro-record company outcome of the CRB proceedings may well be changed if these deals can be shown to be representative of the real value of the public performance of the sound recording." Read more here.

Several webcasters, broadcasters, and consumer electronics groups have joined the Internet Radio Fairness Coalition (see coverage here) with the intent to support new legislation (more here) that would remove the "willing buyer/willing seller" standard from rate determinations.

Also as part of Clear Channel's newly-announced deal, Naxos will program "Classica," the classical music channel on Clear Channel's online radio service iHeartRadio. The label boasts "one of the largest and fastest growing catalogues of unduplicated repertoire available anywhere—currently over 2,500 titles," including classical music CDs and DVDs as well other genres such as jazz, new age, educational and audiobooks.

Most major webcasters flat in September online ratings

Monday, October 29, 2012 - 1:20pm

Triton Digital's September Internet Audio Top 20 ratings reflect some pretty significant growth for the aggregation of NPR Member Stations. The group has taken the #10 spot for Average Active Sessions (AAS) 6a-12M Monday-Sunday in the September Domestic Ranker (see chart below). The 12,236 AAS for NPR Member Stations is 58% higher than its August number. (While Triton's press release gives no indication, we'd guess it likely that at least some of this growth reflects the addition of more stations to this group.)

Religious/conservative broadcaster Salem Communications, #14 for the same ranker, saw its AAS rise 24% since last month.

The largest webcasters saw little to now growth month-to-month. Pandora's AAS was up 3%; CBS's continued to slide, down 11% since August (CBS online listening in this particular ranker is down 54% in the past 12 months. Compare that to Clear Channel, which is up 94% over the same time period).

Finally, something seems to have changed for Digitally Imported some time in August. Traditionally leader among Internet-only webcasters, DI dropped 57% in this ranker in the past month alone. It's likely a change like this reflects a measurement error of some sort. [UPDATE: Digitally Imported has indeed informed us that not all of its streams were counted in these most recent ratings periods. -- PM]

See all of Triton Digital's Internet Audio Top 20 Rankers here.

IRFC's main mission to support passage of Internet Radio Fairness Act

Thursday, October 25, 2012 - 6:45pm

Radio and webcasting organizations like Clear Channel, Pandora, and Salem, along with other industry parties like the Consumer Electronics Association, have today announced the formation of the Internet Radio Fairness Coalition.

The group formed to lobby Congress to pass the IRFA, or Internet Radio Fairness Act of 2012, which (among other measures) would require the same legal standard be used for determining sound recording royalty rates for all non-interactive digital music services.

The IRFA is a bill in both houses of Congress, H.R.6480 and S.3609. The bills were introduced by Reps. Jason Chaffetz (R-UT), Jared Polis (D-CO), Darrell Issa (R-CA), and Zoe Lofgren (D-CA) in the House and Sen. Ron Wyden (D-OR) in the Senate.

"We believe that market-based solutions are the way to go," said Bob Pittman (left), CEO of Clear Channel. "But in the absence of these agreements, the CRB needs to have and consider more relevant information so they are better able to develop a rate structure that will lead to a healthy, sustainable Internet radio marketplace. This will enable artists to earn more and connect more with their fans, consumers to have more choices, and entrepreneurs to invent and invest in new services."

Currently, government arbitrators base royalty rates for satellite and cable radio using a legal standard called 801(b). It requires the judges to consider how their decision would affect the industry and the public's access to copyright, as well as take into account the investment made by both copyright owners and licensees. Internet radio's royalties are based on the controversial "willing buyer / willing seller" standard, which does not take into account the concerns of 801(b). Rather, judges are instructed to set a rate they think a hypothetical "willing buyer" and "willing seller" would agree to in the marketplace.

The existence of different standards for different forms of radio has led to a situation in which satellite radio operator SiriusXM pays about 8% of its revenues for the use of copyright sound recordings, while webcasters are faced with obligations of 50% to more than 100% of their revenues. As an example, leading webcaster Pandora will pay nearly 70% of its revenue (based on Q1 FY 2013) for sound recording royalties.

"Legislation that establishes a fair royalty rate setting-standard for Internet radio will drive investment in webcasting, which ultimately offers greater opportunities and more revenue for working artists," said Pandora Founder and Chief Strategy Officer, Tim Westergren (right). "Internet radio has been shown to help decrease music piracy and increase music sales. When the digital music sector is allowed to grow and innovate, everybody wins."

Other founding members of the Coalition include 977 Music, AccuRadio, the Computer and Communications Industry Association (CCIA), Digital Media Association (DiMA), Digitally Imported, Engine Advocacy, National Religious Broadcasters Music License Committee (NRBMLC), Radio Paradise, and the Small Webcaster Alliance (SWA).

The Internet Radio Fairness Coalition has launched a website at InternetRadioFairness.com.

iHeartRadio custom stations to remain commercial-free "until April"

Monday, October 22, 2012 - 12:55pm

The Pandora-like custom music service of Clear Channel's iHeartRadio will stay ad-free at least until spring.

Inside Radio reports that listeners are hearing promos calling the service "commercial-free until April."

Clear Channel "has enticed more than 18 million users to register for the service by making that a requirement to use the custom feature. Collecting ZIP code, gender and age data from registered users will enable iHeart to serve more targeted advertising," wrote Inside Radio.

"If it was easy to stick ads in between songs on a CD, labels would have done it long ago," president of digital Brian Lakamp commented. "We'll make an announcement when we've struck the right balance between the consumer expectation and the advertising opportunity."

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