Local rock radio will survive if it knows "its job to do," Fred Jacobs tells Forbes

Monday, March 18, 2013 - 12:20pm

Forbes asked Jacobs Media president Fred Jacobs how FM rock radio will survive in the new digital world.

Jacbos pointed to "disruptive innovation" authority Clayton Christensen and his concept of knowing the "job to do:"

"The stations that have had the most success – and will likely thrive in the future – are the ones that have a strong grasp on what jobs consumers are hiring them to do." Jacobs said. "Proprietary personalities, a hometown POV, solving local advertiser needs, and serving their communities."

Forbes contributor Michele Catalano points to online-only services' lack of "the human connection" as an Achilles heel, one that broadcasters should focus on to compete. Jacobs agrees.

"We’ve seen research that points to key downsides with Pandora – listeners feel detached from their hometowns and often miss hearing personalities they love."

That said, successful FM stations embrace digital technology for the advantages it affords, "rather than seeing it as a foe," Jacobs says. He cites data showing as much as 15-20% of some FM rock stations' listening coming from online and digital.

Read more at here.

Forbes: Digital music industry innovation and progress "impeded by the current copyright system"

Friday, May 25, 2012 - 11:35am

Editor's note: RAIN will return on Tuesday, May 29. Have a great Memorial Day weekend!

Music royalties"To say that copyright law is complex would be an understatement," writes Forbes contributor John Villasenor. Few RAIN readers likely need to be told that. Nor should they be surprised by Villasenor's comment that the Copyright Royalty Board's "willing buyer/willing seller" model for setting Internet radio royalty rates "has not worked ideally." 

Former SoundExchange general counsel Gary Greenstein, now a copyright attorney with Wilson, Sonsini, Goodrich & Rosati, tells Forbes that "the willing buyer/willing seller standard, as it has been applied by the CRB, has resulted in rates that would likely drive many nonsubscription, Internet-based digital music services out of business."

Congress had to pass two Webcaster Settlement Acts (in 2008 and 2009, RAIN coverage here, here and here) to "temporarily grant SoundExchange, a non-government entity, with the extraordinary power to negotiate lower rates." You can read more about those negotiated rates in RAIN here. And, as Villasenor writes, even "those 'lower' rates can still be very high when measured with respect to revenue."

For example, Pandora paid nearly 70% of revenues to content acquisition costs -- which include royalties -- according to their Q1 2013 fiscal results (RAIN coverage here).

Forbes pullquote"So where does all of this leave things?" ponders Villasenor. "The short answer: in need of repair."

He argues that "some of the policy objectives enshrined in copyright laws of the United States may stifle innovation and impede new business opportunities… America’s status as a global technology leader is due in large part to disruptive advances that upend prevailing industry practices, and in doing so, often interfere with streams of revenue flowing to less innovative incumbents. Yet this is precisely the sort of progress that is impeded by the current copyright system as it applies to certain digital music services."

Rightsholders -- songwriters, recording artists, record labels -- are absolutely entitled to "be fairly paid for their work, and deserve the protections of a well-designed copyright royalty framework," writes Villasenor.

"But it’s also important not to lose sight of the public’s interest in having access, under reasonable terms, to copyrighted material." Villasenor quotes the Supreme Court from a 1975 ruling: "The immediate effect of our copyright law is to secure a fair return for an 'author's' creative labor. But the ultimate aim is, by this incentive, to stimulate artistic creativity for the general public good."

"That [public] interest is no less valid if it happens to be served using non-traditional business models such as Internet radio," concludes Villasenor. You can find his article in Forbes here.

Do you agree with Villasenor's argument? Disagree? Let us know in the comment section!

Forbes sees emotion- and activity-based playlist service Stereomood as Pandora with feelings

Friday, December 2, 2011 - 11:00am

When it comes to passion and emotion, do we just leave it to the Italians?

StereomoodThis week Forbes covers Stereomood, an online radio service based in Rome. As opposed to clinical musical genres, Stereomood is designed to create a listening experience based on your state of emotion. Forbes contributor Daniel Papalia (see?) writes, "Where Pandora is omniscient and calculating, working to crack songs like codes or pretty algorithms, Stereomood is malleable and sensual."

Stereomood (which we covered in February, here) uses song links from blogs and creates playlists based on mood or activity. The user picks a suitable tag on the website, based on what they're doing or how they're feeling. Since it's based on music blogs, unsurprisingly, "playlists skew towards the indie and under the radar. Major label acts are represented, but sparingly," Papalia writes. 

"By carnally and spiritually (Mama mia!) arranging songs, the site erodes all prior notions of genre, desegregating and humanizing music," he continues. "Tracks from different eras and opposite hemispheres peacefully mingle, united by feeling and human activity – the purest and simplest of measures."

Read more on Stereomood in Forbes here.


Not only will listening grow, but Internet radio CPMs will climb as ads are locally-targeted, says analyst

Thursday, October 27, 2011 - 12:55pm

SNL Kagan this week announced its new report, "The Economics of Internet Music and Radio," predicting continued growth for Internet radio ad revenue, outperforming traditional media, over the next decade.SNL Kagan

"We expect radio station digital/online ad revenue to grow... from an estimated $713 million in 2011 to $1.55 billion in 2021," reads the report summary. "Based on our 10-year radio ad spending projections, radio station digital ad revenue is expected to rise from 1.5% of the total in 2007 to 7.0% by the end of 2021."

For "Internet-only" radio, Kagan forecasts a faster growth, from $293 million this year to over $1 billion by the end of 2021.

ForbesCertainly, as Internet radio's audience grows, it'll attract a greater number of advertisers. What's more, as Forbes reports, "SNL analyst Justin Nielson says that with Internet radio services migrating to mobile devices and in-car systems, companies will soon start pushing local and targeted ads." That should raise ad rates from current $5-7 CPMs to the $10-$20 range, Forbes says.

SNL Kagan publishes corporate, financial, and market news and analysis in the media and communications sector. SNL senior consultant Robin Flynn has spoken at the RAIN Summit and was a judge for the 2011 RAIN Internet Radio Awards.

The SNL Kagan report is available here (password required).


Wednesday, September 14, 2011 - 12:00pm

iHeartRadio new player

New articles from USA Today, Forbes and Reuters highlight the newly-updated iHeartRadio from Clear Channel (with custom radio features) and what it means for Pandora.

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