Open Stream, Insert Foot?

While China was simply an amazing adventure and an eye-opener, it's great to be back (in Korea now) to a country where I can post to Blogger and Word Press again.

One of the best things about July and August is that radio's streaming fees paid to Sound Exchange go down a bit as listeners vacation and listen a bit less online as a result.

However, the trend line is obvious, as listeners migrate online (from A&O Roadmap 2012):

Pandora, we feel your pain, as more and more folks stream our programming we make less and less money since the numbers generally are too small to increase rates enough to our online advertising efforts to grow revenues sufficiently to cover the costs.

Many A&O clients report now spending the equivalent of two full time salaries on the costs of streaming.  If we're willing to spend that kind of money to do it as a service to listeners who increasingly demand and expect it, we owe it to ourselves to make the quality the best we can make it.

Morris Radio Group Topeka Market Manager Larry Riggins said this week, as he pulled the plug temporarily on ad insertion in the wake of Saga's decision to simply simulcast FM on their streams:  "I just get so frustrated that, as an industry, when something doesn’t work quite the way we need it to, we give up on it instead of investing the time and money in technology to make it work.  Streaming can be a huge boost to radio everywhere if we are willing to use the technology it takes to do it right."

He plans in the long run to hopefully return to ad insertion on his stations' streams.  "We are only going to simulcast until we are comfortable with the performance of the new updates on our current system, or have a new system in place.  We feel our streams are important for listenership and revenue and can enhance what we are doing moving forward."

Meanwhile, of course, there are numerous proven ways other than Ad insertion and/or Ad replacement to enrich the online experience for your listener while still making good online money right now:

1. Podcasts (audio and video)
2. Personality blogs
3. Player takeovers
4. Synchronized banner ads with audio spots
5. Social media
6. Local info and entertainment portals
7. Mobile apps
8. Jobs/Help wanted
9. Portable media
10. Video pre-rolls 
11. Discount daily deals
12. Etc, etc, etc!

Take the time to do some homework yourself by reading and joining in on the many powerful arguments now going on, pro and con

• http://radioink.com/Article.asp?id=2524451&spid=24698
• http://www.fastcompany.com/3000934/quick-write-down-notebook-maker-moleskine-goes-analog-digital
• Radio’s Future requires Innovation
• Ad Messaging Is a Problem for Simulcasted Streams
• http://www.audiographics.com/agd/083112-1.htm

And, if you're lucky, attend the secret meetings.  (smile)

Yes, it would be ideal if radio could offer something much, much better online than what we do on AM and FM.  Yet, as Sean Ross has been pointedly reporting for many years, we simplyhave not been able to accomplish that except in very rare instances.

Country listeners in A&O's 8th annual "Roadmap 2012" perceptual study had some suggestions for you which they said would make them listen longer.

Highlights = far and away the stop 3 answers:

• Better Quality of sound
• Faster Connection
• Eliminate Lag time so I can win contests           

Honorable Mentions for:

• Fewer commercials, better quality commercials
• News and traffic updates
• More Prizes
• Eliminate the “auto turn off”

So, at present (having been out of the country during the "it was not a secret meeting"), I am also encouraging A&O clients to join Saga in simply simulcasting on air 100% online so the listening experience is at least the same as listeners have come to expect unless you and your ad sales/insertion provider can offer a superior product). 

A second benefit is that the listening recorded by ARB is no longer lost, since it can be claimed as a genuine simulcast. 

Third, with no lengthy delay, listeners can enter and win call in contests in real time and not be faced with the disappointment of learning that they constantly seem to miss the opportunity to win as long as they listen online.

Long term, it seems to me that if you hope to do well in mobile streaming, you're going to have to produce something specifically targeted for the needs of smart phone users, with a much lower commercial load that most of us are carrying on our steams now.

If you're going to dip your toe into streaming audio, make sure it's after putting only your best foot forward!

If I Ruled The World

I'd make every radio owner, manager and programmer sign up for Pandora and spend thirty minutes per day with it and then switch over to their stations' online stream.

One of the two will captivate you with its flow and consistency and the other will treat you to clipped songs, the same Ad Council PSA's over and over, a time delay which makes it impossible to win their contests and promotions, technical glitches and snags.

With one, the two quarter hours will will seem to speed by and you might even forget to turn it off.

With the other, you'd likely become so frustrated with the experience that you'll probably switch it off early.

Aren't we supposed to be the "TSL" experts?

Most Steaming Listening Is To Local AM/FM Radio

(Another Katz/Garber goodie Monday...)

Hello? Apple? It's RIM.

You've never seen all of those on one platform before and it's a very welcome sight, indeed!

"BlackBerry Radio is not a traditional radio app, but instead works with multiple radio apps to make the process of finding and listening to radio on a BlackBerry® smartphone quicker, easier and more integrated by presenting a sampling of services from some of our most popular partners."

While listening to music streams from participating radio partners, users in the US will have quick access to the recently launched Amazon MP3 storefront to purchase songs currently playing. Users can also access BlackBerry Radio at any time from within the music menu on their BlackBerry smartphone.

If you haven't noticed, things are getting very interesting in the mobile space and it's only begun.

Once Again, Bonneville Gets It Right

“We are in serious jeopardy. We’ve got to invest….we’ve run historically at such great margins, we’ve been reluctant to knock a point or two off of it to invest. I'm still not sure that streaming by itself is a great business.”

I am with Bruce Reese: streaming should be thought of as a promotional expense and we should stop playing low dough (or bonus spot) commercials on our streams, other than maybe sponsoring 20-60 minute blocks of the music we want our portals to be famous for.

If we are going to take on Pandora we need to use our megaphone differently on the web.

Example. Instead of getting a buck. Get 10 and play 10 less commercials. Or hours sponsored by major advertisers (not for value-added, for value!).

Which Is More Important: Content? Or, Distribution?

Yes, I know that the answer 'should' be that you can't succeed without both, but here's a situation we're going to see more and more:

In an era where every dollar counts, two of Journal’s four Boise stations are no longer streaming. GM Bob Rosenthal says savings could go to keep a part-timer. Plus there's not just not much revenue from in-stream ads.

I hate to see it, of course, but if that's the only choice, I'd say Rosenthal is doing the same thing I'd be doing. What's the point of streaming if you can't offer local, immediate content as as result of the costs.

YOU?

"Dead Webcasters Pay No Royalities"

I wrote Nashville's Dick Shuey to say my condolences when I heard that he has decided to take down his TwangtownUSA streams before 7/15, and that was his reply...

Opinion: Are The Majors Killing The Goose That Has Been Laying It's Golden Eggs...???

As Tuesday's Net Silence Iniative nears, I hope the music business is paying attention to these folks:

Dick Shuey: The Major Record companies continue to go after Radio for more money as their Sales dip and their artists bail out and go independent in order to gain control of their own professional lives.The Record Companies have yet to realize with their sewer of greed that they aren't killing Radio....they are killing themselves. Radio will just change formats and not play their music...then what will the Record Companies do...???

Mark Ramsey and Seth Godin: (click to listen to mp3) "How Screwed is the Music Business?"

A major group Director of Programming put it this way on Friday in an email to his stations: "I feel like we need to take a stand on this issue. It’s better to go dark one day and hope we make a point as opposed to shutting it off completely because we can’t afford to stream anymore. If the July 15th decision isn’t reversed, there is real potential that a good chunk of our promotions budgets could go to paying reassessed fees for the past two years at the same time we shut down the stream."

I wish we didn't have to punish the 1-2% of our total audience which is now using us online by taking away the service they are just beginning to depend on in hopes of getting their attention, but these folks make very convincing arguments. I'd say, "it's not a matter of life and death," except that it indeed may be.

Greater Media Stations Will Be Silent Tuesday, Will YOU?

.. and, Jerry DelColliano makes a convincing case for all of radio to do it too. I wonder, however, if depriving the 1-2% of our total audience that ARB says listens to us from streaming audio service for a day will really prove anything to the people who are responsible for these fees.

Go silent, if you want, I'd say. But, whether you do it on not (and I would not), please, please, please REALLY ramp up the announcements on your stream about what will be lost of these ourageous fees are not reversed.

"We already pay and we'll provide this service as long as possible, but we can't do it if the costs are exorbitant," would be my message during every break on Tuesday, but also today, tomorrow and always.

We need to be lobbying hard in Washington, not depriving our audience of the service they value, in my opinion. That's punishing the listener, who won't understand why we're not there when they need us.

Is This The End Of Internet Radio? Not For Terrestial Radio, But Perhaps For Others.

Daniel McSwain reports that the Copyright Royalty Board (CRB) has announced its decision on Internet radio royalty rates, rejecting all of the arguments made by Webcasters and instead adopting the "per play" rate proposal put forth by SoundExchange(a digital music fee collection body created by the RIAA).

The rates that the Board has decided on, effective retroactively through the beginning of 2006 are as follows:

2006 - $.0008 per play

2007 - $.0011 per play

2008 - $.0014 per play

2009 - $.0018 per play

2010 - $.0019 per play

The minimum fee is $500 per channel per year. There is no clear definition of what a 'channel' is for services that make up individualized playlists for listeners.

How does this affect medium-size webcasters?

Radio Paradise's Bill Goldsmith notes, "This royalty structure would wipe out an entire class of business: Small independent webcasters such as myself & my wife, who operate Radio Paradise. Our obligation under this rate structure would be equal to over 125% of our total income. There is no practical way for us to increase our income so dramatically as to render that affordable." And Radio Paradise is perhaps the most-successful webcaster in its class! For most operators, this rate looks as if it would be >150-200% of total revenues.

How does this affect small webcasters?

Webcasters who stream through services like Live365 may be in jeopardy, as such firms' business models probably never envisioned a royalty rate this high. (Live365's royalty obligation for 2006 is running in the range of $350,000 per month, and that's not even addressing the question of the $500 per station mininum!)

How does this affect terrestrial broadcasters who stream?

The principles are the exactly same, but at the individual radio station level, the dollar amounts are of course are smaller. Clear Channel's total corporate obligation for November 2006 based on comScore Arbitron ratings and assuming 13 songs per hour, would be about $500,000... but if that's for streaming, let's say, 500 stations, it would only be a royalty obligation of about $1,000 per station per month in 2006. Are those stations selling enough online spots and website banners and sponsorships to make that affordable? I'm not sure. (The decision has no impact on news and talk stations who stream.)