Academic's math shows Pandora pays sound recording royalty at 10 times the rate of UK radio

Wednesday, December 12, 2012 - 12:10pm

We've heard (at the recent House Subcommittee hearing on the Internet Radio Fairness Act for one, but elsewhere too, and often) the recording industry:

  • doesn't like the amount of royalties streaming services pay to play copyright recordings, and wants more;
  • really doesn't like that U.S. broadcasters don't pay at all; but should, like the good folks of the non-U.S. broadcast world.

So, how much does, say, a UK radio broadcaster pay to play a copyright sound recording per listener, and how does that compare to other services, like Spotify or Pandora?

Enter David Touve (you may remember him as the Washington and Lee University Assistant Professor of Business Administration who estimated that U.S. broadcasters would owe the recording industry $2.5 billion a year if they were required to pay at the webcasting rate here).

Using data from PPL (which collects royalties from UK radio) and RAJAR (which measures listening), and estimating 12 songs per hour, Touve estimates "the value of a single radio play to a single listener in the UK for only that portion of the royalties that are paid to record labels, featured artists, and performing artists" is £0.000073, or $0.00012.

"For comparison, I believe the value estimated above is 1/36th the rate reported by Zoe Keating ($0.0042) [Touve's referring to this] for her receipts from streaming music services (e.g., Spotify), 1/10th the rate ($0.0011) paid by Pureplay Webcasters in the U.S. (e.g., Pandora), and 1/18th the CRB-established default Webcaster rate ($0.0021) in the U.S."

Put another way: Pandora currently -- under the settlement "discount" rate -- pays at a rate ten times what UK radio pays to perform sound recordings.

(The difference in audience size between Pandora and the broadcast industry of a country like the UK, much less the U.S., naturally means the recording industry's take from broadcasters will be much larger. But what Touve is putting in high relief is the discrepancy between the rates.)

Read Touve's latest Rockonomics blog entry here.

Paper attributes drop in sales of radios to growth of online/mobile radio listening

Thursday, October 18, 2012 - 9:00am

Ofcom -- the UK government's counterpart to the FCC in the U.S. -- has published its third "Digital Radio Report" as it anticipates an eventual nationwide "switchover" of all radio to digital platforms.

Ofcom would like the switchover to happen in 2015 -- but they're waiting for 50% of all radio listening to be via digital platforms, and national DAB coverage to be comparable to that of FM (and local DAB to reach 90% of the population and all major roads). (DAB is the UK's digital radio system, along the same lines as, but significantly different than, HD Radio in the U.S.)

For the 12 months ending in June 2012, data from RAJAR show 29.5% "of all radio listening hours were to services delivered over a digital platform."

Listening on a DAB digital radio set was the most widely-used method, accounting for just under 65% of all digital listening hours. Digital television was almost 16%, and Internet radio accounted for over 13%. The most-listened-to "digital only" stations were BBC Radio 4 Extra, 6 Music, and Five Live Sports Extra (all with over a million average weekly listeners).

Interestingly -- and The Telegraph points this out -- just 6.7 million radio sets were sold in this time period, which is an 18.3% drop from the same period last year. The paper attributes this to "radio listening (that) is now online or via apps, and new apps such as the iPlayer and Radioplayer (that) have encouraged more users to listen via their mobiles."

Read the summary of Ofcom's report here; and coverage from The Telegraph here.

UK RadioPlayer releases mobile app for Apple devices

Monday, October 8, 2012 - 11:25am

RadioPlayer, the online radio platform that aggregates more than 300 UK commercial and BBC stations, has launched its app for the Apple iPhone and iPad.

"Our aim was to create a simple app that showcases the amazing variety of UK radio," said Michael Hill, Managing Director of RadioPlayer. "The fact we’ve built one that’s also beautiful, innovative, and a joy to use, is testament to the power of partnerships." Hill spoke at both our recent RAIN Summit Dallas (here) and at Friday's RAIN Summit Europe in Berlin.

RadioPlayer, which launched in March of last year, reportedly attracts seven million unique listeners a month. The group says an app for Android phones is in the works.

Read more in TheNextWeb here.

UK's Classic FM director leverages Internet for brand's global reach

Thursday, September 6, 2012 - 12:05pm

Darren Henley is managing director of (and "the mastermind behind") Classic FM, "the most successful commercial classical music station in the world," writes The Independent in its profile. He's "the radio boss with a plan to drag classical music into the digital era." Classic FM, now celebrating its 20th anniversary, has a weekly audience of 5.5 million listeners. Henly has "reinvented classical music's reputation with the British public," writes the paper.

Henley has clearly set his goals on a global scale, explaining he wants Classic FM's website and stream to be the world's go-to destination for classical music, "responding to a surge in interest in classical downloads." He told The Independent, "We are at a tipping point now in digital consumption versus physical product. In the next 12 months, we will see digital really ramp up." He later admitted, "It's been years since I bought anything on CD. I've been 100 per cent digital downloads for quite a long time now."

He's brought on a team of journalists who upload classical music news, album reviews and video footage to the Classic FM website. And they've recently launched a free iPad app.

His efforts at bringing a new generation of listeners to the genre aren't limited to Internet and mobile content, however. The station shares studios with rock Xfm and urban Choice FM (and Capital Radio and Heart FM are upstairs). The proximity can lead to inspiration. "It's really good because we hear what they are doing in the lift and the canteen and you think, 'There are ways we can do that' ... I want to make sure we understand all the techniques people are using in pop music radio." And there's no sleepy octagenarian on-air personalities either. He's hired well-known TV personalities Alan Titchmarsh and John Suchet, whom he describes as "both people with big personal brand values from outside the classical music world but people our audiences very much relate to."

Read more in The Independent here.  

We'll present our first-ever RAIN Summit Europe, October 5 in Berlin. More information and registration here.

Cridland details benefits, drawbacks, and rough costs of UK's radio platforms

Monday, August 20, 2012 - 1:10pm

To tie in to our RAIN Summit Europe event coming up October 5th in Berlin, we'd like to point out this very handy guide to radio listening in the UK prepared by Media UK Managing Director and "radio futurologist" James Cridland.

Radio listeners in the United Kingdom have local AM and FM stations just as in the United States. But even their Internet radio options can be different (as services like Pandora don't have the necessary licenses to stream there, and sources like the BBC often wall off their content to U.S. listeners).

Instead of satellite services dedicated to radio (like SiriusXM), radio delivered via television platforms seems to be the UK solution. There are the Sky and Freesat channels on digital satellite TV, Freeview radio channels on digital terrestrial TV, and digital radio delivered via cable television (such as on Virgin Media). Of course, U.S. cable- and satellite-television customers in the often get radio sources like Music Choice and SiriusXM along with their video channels.

You likely know that broadcast digital radio -- HD Radio here in the U.S. -- is on a different platform there. There's DAB Digital Radio (which actually began in 1990), but also a newer technology that's available in Europe outside the UK: DAB+ (which uses improved audio compression and error correction technology).

Cridland runs down each of these platforms in detail, and includes links to lists of stations on each. Read more here. We hope you'll be able to join us for RAIN Summit Europe on October 5th in Berlin. All you need to know is here.

UK grocery giant Tesco acquires "Pandora of Europe" Net radio service we7

Monday, June 18, 2012 - 11:15am

we7British grocery giant Tesco has acquired streaming music service we7 for £10.8m.

Billed as the "Pandora of Europe," we7 decided in September 2011 to discontinue its on-demand offerings in favor a customizable Internet radio service. Its original backers include Peter Gabriel (RAIN coverage here and here).

The question you may be asking at this point, as TechCrunch asks in its headline, is: "What the heck is a grocery store doing buying a music streaming service?" 

The Guardian reports Tesco is one of the UK's largest CD retailers, so the company may be trying to stay one step ahead of consumers who are increasingly abandoning CDs, as TechCrunch writes. Tesco's digital director said, "This move will help us offer a greater choice for the growing number of customers who want to access music instantly on any device." 

"It’s reminiscent of Amazon’s digital strategy, of which Tesco is now surely a competitor," argues TechCrunch, "and ties in nicely with the retailer’s purchase last year of another UK startup, Blinkbox, which lets users stream Hollywood movies on-demand on the same day as their DVD release."

We7 gains potential exposure to a huge audience. "Not only is Tesco the UK’s largest retailer, it has around 5,000 stores worldwide, and operates in 14 countries, with a decent online presence too," writes TechCrunch.

You can find more coverage from the Guardian here and TechCrunch here.

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