Technology360

Internet Radio Equality Act

Tom Spring writes:

On Thursday a bill that could save Internet radio was submitted to Congress. The bill, Internet Radio Equality Act, would stop a new royalty scheme that Internet broadcasters say will shut them down because it will cost them too much money.  ¶  U.S. Reps. Jay Inslee (D-Wash.) and Don Manzullo (R-Ill.) filed the legislation Thursday. ...

... The Inslee-Manzullo Internet Radio Equality Act vacates the CRB's March 2 decision and proposes Net radio stations continue paying a percentage (7.5) of revenues through 2010. Alternatively, the bill would allow Net broadcaster to choose to pay 33 cents per hour of sound recordings transmitted to a single user. ...

Link:  PC World.  Thanks to Mari Silbey at ZatzNotFunny! for the tip.

Reclaim the Media says that Inslee has eight co-sponsors. 

Update:
Jeremy Egner has a good article on this in Current.  --Dennis

Bridge Ratings: Sweat the cell phone and don't count on HD

... says Mark Ramsey, who has a good summary (link: Hear2.0) of the latest update of Bridge Ratings' digital media growth projections.  But you should check out the Bridge Ratings report directly since it's full of useful info, including:

... Internet radio continues to show the most significant growth of monthly users of those media we cover in this analysis. At the conclusion of 2006, we estimate that 24% of the U.S. population or 72 million Americans listened to on-line radio in the previous 30 days. In this newest update of the report 25% have listened in the previous 30 days. Weekly listening has also climbed with 19% of the sample listening to some form of Internet radio in the previous 7 days up to 57 million per week. ...

Link: Bridge Ratings.  Must reading.

Update:
Also see comments by Sue Schardt, We're not dead.  Link:  Schardt Media.  --Dennis

Public broadcasting and statin drugs

I attended a meeting of National Public Radio station execs this week to which Alan Deutschman, author of Change or Die, spoke.  I'll let Andy Carvin take over from here:

Someone in the audience suggested to Alan Deutschman that maybe public radio is doing just fine, and that change could actually be a bad thing. Alan replied by asking a question and telling another story.  ¶  First, the question: if you could take a pill that would solve all of public radio's problems, would you take it? Even if it had zero side effects? Alan said you probably wouldn't, and he explained this by talking about statin drugs, which are taken by millions of people to prevent heart attacks. ...

Link:  Andy Carvin's Waste of Bandwidth.  --Dennis

Digital Subscribers Like Free Radio, Too

Alex Mindlin writes:

As a group, fans of digital radio do not listen to traditional radio less than everyone else. In fact, they listen to slightly more, according to a study recently released by Arbitron and Edison Media Research. ...

Link:  New York Times.

Edison's 25-pp summary report and press release can be found at, The Infinite Dial 2007: Radio's Digital Platforms - Online, Satellite, HD Radio and Podcasting.  Important reading.  Link:  Edison Media Research.  --Dennis

Attacking and Defending the VJ Model

Steve Safran has interesting coverage of an NAB panel on the VJ news production phenomenon at Lost Remote.

Following the Frogs in the Pot

Terry Heaton has some good comments on whether broadcasters will repeat trends in the newspaper industry.  He writes:

... local media companies will never — repeat NEVER — recoup losses to their legacy platforms’ business model by shifting that model online. This is because traditional ad methods follow the path of scarcity, but abundance is the rule-of-thumb online.  ¶  Mass marketing requires scarcity in order to create demand. Reduce the supply, increase the demand; it’s as old as the modern culture. But online, the demand side now plays a major role in creating its own supply — and this is especially true of businesses supported by advertising, a.k.a. the media. Fragmentation, disintermediation, the ability to unbundle content from form, and the personal media revolution have all created an abundant, customer-in-charge world for media, one in which pure reach-frequency ad models won’t work....

Link:  The PoMo Blog.

Slacker.com: The radio revolution arrives this summer

... says Mark Ramsey.  Mark has an audio interview (MP3) with Slacker.com's head of marketing, Jonathan Sasse, who describes upcoming developments.  Slacker is a music service that learns user preferences and effectively delivers customized "radio stations" for the listener.  It's not the only such service. 

But the new developments are particularly interesting.  Coming this summer is a portable playback device that operates in WiFi hotspots and enables the user feedback on songs played.   This is a caching device, so music it downloads while you're in a hotspot it will be played back based on your preferences when you're out of the hotspot.

But wait ... there's more.  The really radical thing in the works is a satellite fed kit for automobiles.  This device will catch and cache a bunch of music from the sky and create for you on the fly program streams that reflect your preferences.  Seems to me (and to Mark) that this may deflate (technology, yes, but ultimately competitive balance also goes to how successful the competition is in attracting subscribers) the monopoly arguments that us broadcasters are using to oppose the proposed Sirius/XM merger.

Link:  Hear2.0.

More thoughts on the CRB rate decision

The recent Copyright Royalty Board ruling about streaming rates has sure stirred things up among those who are streaming music online, both traditional radio stations and Internet-only radio operations.  I've posted about it here, here and here.  In what one of my colleagues called an "obdurate" (that's for sure) ruling, the CRB has now reaffirmed its ruling (see Copyright Royalty Board Upholds "Disasterous" Royalty Rates).  But also see Stephen Hill's post on this.  Even if you don't want to heed Stephen's call to "get over it," he provides some important information about how we got here, including this:

   

... If you want to understand the rights holder's side of the issue I recommend the interview BRIAN ZISK of the Future of Music Coalition did with JOHN SIMSON of SoundExchange in Royalty Week. (.pdf)   Simson is a very clear, very practical guy as you will see from what he says. One thing he mentions that is sure to be even more controversial is that SoundExchange and the RIAA intend to fight to change the law as it applies to legacy broadcasters so that ultimately...the rates are uniform.  ¶  This means that terrestrial broadcasters would no longer have the 'carve-out' they've enjoyed since the 1920's, where they pay only the music publishers, songwriters and composers for use of recorded music. With the radio industry already under pressure from changing advertising models, you can bet the screams about this will be much louder, and the lobbying from the NAB should be nothing short of tactical nukes. ...

Which prompts the first thing about which I'd like to comment, that the exchange of values in the music business isn't always obvious.

As we navigate these waters, it will be useful to analyze the historical exchanges of value in the music and broadcasting business.  This was brought to mind by the FCC's recent $12.5M in fines against four large radio broadcasters for accepting pay for play payments -- payola, something most of us thought was part of radio's adolescence, not its adulthood.  Yes, broadcasters have a "carve-out" from the rates, yet they're considered to add so much value to record sales that rights holders are willing to pay us to promote their products.  So powerful is that "reverse value" that we have to make rules against it.   Ironic, huh.  Likewise, many -- perhaps most -- artists don't make much money on record company sales, they make it on performance tours and merchandising.  Reform of this complex set of payments needs to recognize where true value is extended and where it is received.

The second thing is a point about this ruling's impact on innovation.

It's tempting to argue that the recording industry's true target is innovation.  Pandora, to name one, and its fellow innovators are the future of music online, not streams that mirror our broadcast services.  For our own survival, broadcasters need innovation that the CRB's ruling manifestly discourages.  I agree with Stephen that we ultimately must focus on business models that work, but innovation by legacy players is already handicapped by the need to continue to treat good legacy customers well and by the broadcasting culture.  The CRB ruling adds even more reasons not to make the innovative investments and related changes in our m.o.  Seems to me that's exactly what its proponents want.  --Dennis

Future Games

Bob Stein sent me (thanks) a link to a fascinating profile by Eliza Strickland of San Francisco game designer Jane McGonigal.  I've long thought that games were a logical expansion of public media.  McGonigal, without calling it that, has probably developed this concept further than anyone else.  Strickland writes:

... McGonigal wants to harness the power of the communal cerebellum her games create, and put it to work solving real-world problems. Maybe young folks in warring countries could play games together, and would be less inclined to shed each other's blood. Maybe players could analyze real scientific data in the course of a game, crunching numbers and looking for patterns just as they always do, but with a payoff that goes beyond advancing to the next stage of a game. ...

Link:  SF Weekly.  --Dennis

Delivering the Digital Goods: iTunes vs. Peer-to-Peer

Sean Silverthorne has an interesting interview with two Harvard researchers, Ramon Casadesus-Masanell and Andres Hervas-Drane, who have been working on questions like:

How does Apple, which sells music titles for 99 cents each, compete with free music downloads on peer-to-peer networks? Do the two approaches to distributing digital content complement each other? What can the music industry, which aggressively fights p2p downloaders, learn from Apple's experience?

One of their finds was:

While the study of business models in isolation is of great interest, we believe that the analysis of interactions between business models can highlight important hidden insights. In this paper, for example, we show that contrary to the popular view, p2p and iTunes can potentially develop into a mutually beneficial symbiotic relationship. The presence of iTunes has a negative impact on the size of p2p networks resulting in reduced congestion and more efficient file sharing. Better functioning p2p networks, in turn, result in more content exchange, affecting positively iPod sales and Apple's bottom line.

Link:  Working Knowledge.  Thanks to Chuck McConnell for the link.  The paper mentioned, Peer-to-Peer File Sharing and the Market for Digital Information Goods, is presented in summary form only on the Harvard site (Paper No. 07-069), but you might check back later for the full version since most other papers listed have pdf links.  --Dennis