revenue

Ernst & Young say digital rev's already approaching halfway point for media & entertainment

Thursday, June 13, 2013 - 12:55pm

By 2015, 57% of revenue for the media and entertainment industries will come from digital, says Ernst & Young.

Based on their data, digital revenue already accounts for 47% of income for companies in these industry sectors.

Ernst & Young surveyed 550 companies in technology, gaming, publishing, film, broadcasting and cable, and social networking.

Read more in The Wrap here.

 

 

In overall flat Q1, radio digital revenue grew 9%

Friday, May 17, 2013 - 12:20pm

While broadcast radio's first quarter revenue was flat, digital performed well throughout the quarter, up 9% ($179 million), according to today's RAB report.

"Radio’s digital sector revenue continues to grow as radio stations invest in and promote their digital offerings to listeners, driving increased attention by the ad buying community," commented RAB CEO Erica Farber.

Spot spending by Communication/Cellular advertisers was up 36% for the quarter, making it the top category for the period.

Broadcasters' overall revenue in the first quarter was $3.5 billion, held back by automotive spending's 20% slide.

The RAB's Q1 revenue press release is here.

Summit panelists look at accelerating revenue from ads, subscriptions, and donations

Tuesday, May 7, 2013 - 12:50pm

Triton Digital president of publisher development Dominick Milano acknowledged that there's a "disconnect" between the unprecedented amount of audio consumption made possible by Internet and mobile technology, and the fact that advertising dollars haven't moved to those platforms in levels reflective of the audience. That "disconnect" served as the premise for the Triton Digital-sponsored "Accelerating Your Revenue" panel, which Milano (at right) moderated, at last month's RAIN Summit West event in Las Vegas.

The panel covered the three principal revenue models for online radio: advertising, premium (or subscription), and listener-supported (i.e. donations).

Katz360 VP of broadcast services and online audio and video sales Dean Mandel suggested one key is the right combination of broadcast radio and online radio -- not only for ad campaigns, but in creating worthwhile listening experiences. He encouraged radio programmers to "take better advantage" of what technology has to offer to improve their online product.

"The programmers are brilliant and if they can come up with interesting content to fill instead of a lot of PSAs and ads, it will help grow the audience," Mandel (left) said.

He said he sees lots of value in what sets local broadcasting apart from national/global database-driven music webcasters: a local brand, personalities, and local content.

Mandel is also a big supporter of targeting advertising, and suggested effective listener-registration helps a lot. His "pro-tip" was for stations to look for online listening happening in markets outside your own that may command higher CPMs (his example was a Charlotte station that might have significant listening in New York City).

He also suggested that media buyers have indeed become sophisticated, and being able to provide them with targeting and third-party tagging on audio will raise CPMs.

Andrew Polsky, as VP of digital media for SBS Interactive, also deals in the advertising world. He says what his company needs is "advocacy" at the agency and buyer level, especially for the Hispanic market.

His company, aside from Hispanic-focused broadcast and online radio, owns MegaTV (video content and network) and SBS Entertainment (which is concert production). Key for him is being able to leverage all the properties as a unified platform, "offering a 360 approach to advertisers," and using content from one property on the others (see his company's LaMusica mobile app as an example).

Polsky (right) seconded Mandel's notion that there needs to be a better solution than "PSAs" to fill long stopsets when streaming broadcast content.

Michael Jackel, who is Spotify VP of West Coast advertising sales, also agreed about the power of being able to target listener groups for advertising (he addressed the perception of his company as a "subscription service," but insisted Spotify is a "dual-model" business with the large majority of its users accessing via free, ad-supported streaming).

Moderator Milano asked Jackel (left) if there were a model for subscription alone to work -- or if services need a free version to remain viable.

"If the value proposition is really there, pure subscription can work," Jackel answered. "Spotify has a great product that's free, but the premium is a great value proposition." He said, in the U.S. especially, people are used to "free," so Spotify's free streaming makes sense. "Pandora isn't winning on the subscription model because there's not that much value to their premium service," Jackel went on. "Few people will pay just to 'not have ads'. You have to offer something that's really compelling in order for people to pay for it."

Compelling content is also key to driving donation revenue for listener-supported stations, like Joe Gallagher's MVYRadio.com. After some background on WMVY-FM and its early foray into streaming (Net Radio Sales, now Katz360 and AndoMedia/Webcast Metrics, now owned by Triton Digital, were both born of these efforts), Gallagher said successful donation support relys on offering content that "serves a niche, serves a vertical" and allows for "a passionate connection" with listeners.

Gallagher is the "#1 volunteer" for Friends of MVYRadio, the non-profit 501(c)3 that runs the (now) Internet-only, listener-supported station (more in RAIN here). He's also president and CEO of Aritaur Communications, former owners of WMVY-FM. He says his listener-supported model has "worked well, really well," and allowed for year-over-year growth for the past four years. The station recently raised the necessary $600k to operate for the rest of the year.

Gallagher (right) explained that listener targeting allows him to (for example) entice donations from L.A.-area listeners by giving away tickets for a concert there.

Milano polled the panel on the likely entrance of Apple into online radio. Katz360's Manel said, "It'll grow the business, it's a good thing. It might make local AM/FM focus more on their local value proposition" -- again, meaning the personalities and local content.

Spotify's Jackel said, "It's good. When (Apple) come(s) in, advertisers and Wall Street will see the value... it lifts the industry, it publicizes other businesses, to consumers AND advertisers."

You can listen to audio coverage of this panel, and all of RAIN Summit West's content, at kurthanson.com (look in the right-hand margin).

Triton Digital CCO and general manager of data and measurement Rob Favre and SVP and general manager of international markets Jay Supovitz will be part of RAIN Summit Europe, May 23 at Brussels' Hotel Bloom. Spotify's Benelux managing director Tom Segers will also be there. Info and registration links are on the RAIN Summit Europe page.

Labels made $1B+ from streaming last year, 45% from sources like Pandora and SiriusXM

Tuesday, April 2, 2013 - 12:40pm

Yesterday (in this article) we alluded to RIAA financial statements that revealed streaming revenue from sources like Pandora, Spotify, and YouTube (known as "access models") amounted to $1.0328 billion in 2012, accounting for 15% of total industry revenue.

$462 million, or about 45% of the digital total, came from non-interactive digital services operating under statutory licenses (Internet, satellite, and cable radio) via SoundExchange.

Physical retail sales (CDs/vinyl) amounted to about $2.584 billion, down 18.5% in a year. Downloads amounted to $3.02 billion.

See the RIAA revenue summary sheet here.

BIA/Kelsey says radio should see online ad revenues grow nearly 11% a year

Wednesday, March 27, 2013 - 3:05pm

BIA/Kelsey projects online ad revenue for radio will grow 10.8% annually over the next five year (while on-air ad revenues will grow only 2.5% a year), hitting $818 million by then. The group's new Investing in Radio Market Report is out today.

Radio earned $491 million online in ad revenues last year, accounting for just over three percent of total revenue (though markets like Boston earned as much as 14.2% online).

The RAB reported radio's Q4 2012 digital revenue at $206 million (up 11%), and overall 2012 digital revenue at $767 million (up 8%) (see RAIN here). BIA/Kelsey recently released its forecasts on local media ad spending (and the digital share thereof) (see RAIN here). The Pew Research center predicted satellite and online-only radio have an even brighter digital ad revenue upside (see RAIN here).

RAIN Summit West will feature two panels, "Profiting from Mobile" and "Jump Start Your Revenue," to examine trends and discuss strategy to maximize digital revenue. More info is here.

Read more about BIA/Kelsey's report today in NetNewsCheck.com here.

Pandora tells investors it expects royalties as a share of revenue to fall over next few years

Wednesday, March 20, 2013 - 12:15pm

Leading webcaster Pandora says it expects the share of its revenue it pays to license copyright music will fall. CFO Mike Herring said the company is counting on royalties to fall from 60% of its revenue to 40% "over the next few years." Pandora's plan is to both increase ad revenues, and decrease royalties.

Herring spoke at a Roth Capital Partners investor conference yesterday. He told investors improved ad-targeting and interactive features will increase the value of the ads Pandora runs, allowing a higher premium. Pandora is also counting on a stronger showing when royalty rates are determined for the next 5-year term (the process begins in January), and perhaps legislative relief in the form of the Internet Radio Fairness Act (more in RAIN here).

Though Pandora claims 8.5% of overall U.S. radio listening, its revenue is only 1% of the radio industry's. Music royalties came to 61% of Pandora's $125.1 million in revenue during the quarter ending January 31 (see RAIN here). That was up from 59% the previous year.

Read Bloomberg.com's coverage of Herring's speech at Roth Capital Partners here.

Syndicate content