CC Version of Radio's Future

[TheBigA]

There is a fundamental difference between on-line and OTA radio.

No there isn't.  Obviously you've never tried iheartradio, radio.com , tunein.com, or any of the thousands of online streams of radio stations or services like Live365 or more.  In those cases, they are exactly the same as broadcast radio,  just using the internet instead of towers and transmitters.

OTA radio does a much better job of introducing new content than Internet music services.

Except if you happen to be listening to a radio format built 100% around Gold, Classic, or Oldies.  In those cases, you'll never hear any new music.  Music services like Pandora will take your preferences and offer you choices of new music based on your likes and dislikes.

People value the input of experts. BigA will argue with this, but good radio people ARE experts at selecting and presenting programming content. That's why radio still reaches 93% of the population.
 

Huh?  Having “experts” has nothing to do with reach.  Reach is a technical function.  Yes there are “experts” in radio, but over the past 35-40 years they’ve mostly moved from being on the air to being behind the scenes programmers or consultants, either of stations, groups of stations, or formats.  The on-air presenters, for the most part, don’t tend to be experts, but executors who carry out the formats created by the experts.   There was a time when actual musicians and composers hosted radio shows.  For the most part, that’s moved to public and satellite radio.  OTA radio hosts are chosen by the quality of their voice and convenience of their location, rather than by knowledge of music or subject.

Do people value the input of experts?  Some do, some don’t.  We live in a world where experts simply provide context, while the public makes the decisions.  Consider the role of experts on TV talent shows like American Idol, where experts offer opinions, while the public chooses the winner.  Consider the popularity of user-created content sites like Facebook, Twitter, and even Wikipedia.  Consider the American electoral system, where the role of experts is often ignored in favor of simple ideology.  Do we elect the best people to run our government or just the people we like?  You tell me.

Should there be a difference in rates between on-demand and broadcast services? I believe that there should. On-line interactive services are like the music store that lets you audition that record - and hands you a bunch more records "that you might like".

You’ve obviously never read the Digital Millennium Copyright Act, where the royalty rates for online content was set.  There IS a difference in rates between streaming services that don’t allow downloading, and download services.  There is a difference between streaming and on-demand.  However, they’re all set by the Copyright Royalty Board, and in both cases, they’re still much higher than royalties paid to songwriters, and obviously higher than the royalties OTA radio stations pay to labels and artists, which is zero.  Companies like Clear Channel take their on-air programming and stream it online.  When the content is online, the companies pay digital royalties.  When that exact same content is on air, they don’t.  This inequity was pointed out this past week by Tim Westergrin, founder of Pandora.  He testified in Congress that royalties are more a function of platform than whether or not they’re “curated” or hosted.  As I’ve been saying, what Clear Channel is attempting to do is merchandise it’s on-air reach as a negotiating tool to bring down online royalty rates.  This is NOT about Clear Channel getting an advantage over other on-air broadcasters.  ALL on air broadcasters have the exact same advantage over single-platform services like Pandora.  What Clear Channel is suggesting is that their on-air service should be used as credit in setting their online rate.  Up to now, they’ve paid a huge royalty for online, and only a publishing royalty for on air.  This deal attempts to equalize those royalties a bit.  That’s all.

[SirRoxalot]

First, don't be naive. If I can hear it on my computer, I can record it. I don't have to download it, I can simply capture the audio. Services like Pandora present tracks that are separated, and available on demand, which makes it easy to obtain that music. Streaming radio doesn't.

Secondly, new content doesn't have to be recently created. All it means is that it's new to YOU. Underground Garage by Little Steven features a lot of content that's decades old, but new to many listeners. Oldies or Classic Rock introduces music to a new audience that hasn't heard it before. The strength of Classic Rock among 18-30 males constantly amazes me. Good music stations, no matter what the genre, introduce seldom-heard music from time to time to add a little spice to the mix.

The on-line "radio" most often cited is Pandora - which was the thrust of the previous discussions. Pandora, some of iHeartRadio, Spotify, and others are on-demand music delivery systems. I was simply pointing out that on-demand music services act differently, and should pay royalties differently. They're a music delivery service, not a "radio" service in my estimation.

"Having experts has nothing to do with reach." Really? Creating programming that attracts a LOT of listeners doesn't affect reach? Expertise in programming has nothing to do with that?

According to your perspective, it doesn't matter who - if anybody - is on the radio. Ratings say otherwise. There are too many examples to cite of stations in the same market playing essentially the same music, yet one garners massive ratings, while the other languishes. You constantly  denigrate the skills required to communicate with an audience. In your world, if you can't do it, it's not important. In this case, you live in a very small world.

The biggest reason that Pandora and other on-demand services pay more for music is that they are cutting into the purchase of music from the music industry. Their role in promoting music doesn't have nearly the impact on creating demand that the radio industry does. Whether the numbers are reasonable or not is another discussion.

[TheBigA]

First, don't be naive.

I’m not naïve.  I’m simply responding to the mistakes and misstatements you made in your previous post.  Now you’re backpeddling from what you said.  Recording isn’t unique to online.  People have recorded broadcasts off the air for years. 

I was simply pointing out that on-demand music services act differently, and should pay royalties differently.
 

They do, and if you knew what you were talking about, you’d know that’s the case.

 

Creating programming that attracts a LOT of listeners doesn't affect reach? Expertise in programming has nothing to do with that?
 

Maybe you don’t understand the definition of the word.  I would say the quality of the signal has a lot to do with reach, not the quality of the content.  Reach is calculated in the number of people within the sound of one’s voice.  Not the expertise of the programming.  But none of this has anything to do with this issue.

According to your perspective, it doesn't matter who - if anybody - is on the radio. Ratings say otherwise.

No, according to job listings.  What qualifications are radio stations looking for? Expertise in music?  In the content they’re delivering?  How many on-air people have college degrees or experience in music?  You tell me.  On air people are hired for the quality of their voice and convenience.  That’s their expertise.  In today’s world, the public can go directly to the performers and don’t need intermediaries.  So what does an on-air person bring to the table?  They have no expertise in the content, they don’t actually pick the music, they’re simply human voices who provide context to the presentation.  I’m not saying it’s useless, but it’s not expertise, and they’re not hired for their expertise.  The programmers are the ones who have that, and they’re usually not on the air.  But none of this has anything to do with this issue.

You constantly denigrate the skills required to communicate with an audience. In your world, if you can't do it, it's not important. In this case, you live in a very small world.

Oh come on.  Have you actually listened to the radio?  Do you want me to post transcripts of what these people actually say on the air?  Sure there are a handful who know what they’re doing.  But most were hired for convenience, to have a warm body in a chair to read live commercial copy.  Don’t overvalue their contributions to world peace and intellectual discourse.  It doesn’t exist.  The real decision makers are not on the air.  But none of this has anything to do with this issue.

The biggest reason that Pandora and other on-demand services pay more for music is that they are cutting into the purchase of music from the music industry. Their role in promoting music doesn't have nearly the impact on creating demand that the radio industry does. Whether the numbers are reasonable or not is another discussion.

Says you.  The music industry says otherwise.  The music industry will show you historically how on air radio cut into music sales from the 1930s on.  That’s why they took radio stations to court back then to prevent them from playing music on air.  The only reason recorded music gets played today is because the music industry lost those cases in court. 

But none of this has anything to do with this issue.  Clear Channel isn’t Pandora.  IHeartRadio is not an unhosted music service.  If you just read my posts you’ll understand what this is really about. 

[DavidEduardo]

The on-line "radio" most often cited is Pandora - which was the thrust of the previous discussions. Pandora, some of iHeartRadio, Spotify, and others are on-demand music delivery systems. I was simply pointing out that on-demand music services act differently, and should pay royalties differently. They're a music delivery service, not a "radio" service in my estimation.

You are engaging in distinctions that are similar to when engineers try to "hear" whether you have a Foti or an Orban box in the audio chain. Interesting, from an insider's point of view, but irrelevant among users of the end product.

Listeners perceive, as has already been noted, all kinds of aural broadcasts to be "radio" or, in some cases, just to be "where I go for music."

It really does not matter if the service is customized, live or delayed or local or from someplace else. Using the TV analogy, if I use a DVR, I am still watching TV. If I use my television's web connectivity to access Netflix or Amazon Video on Demand, I am still watching TV. If I use Roku to stream shows stored elsewhere, I am still watching TV.

The same analogies apply to radio.

Just as beauty is in the eye of the beholder, "radio" is a perception or a term defined by the consumer, the listener. While it is nice to think that Pandora and the others are different from radio, and, thus, not really competition, that attitude will put all the nails in radio's coffin.

If it is audio, and it takes time that could be spent listening to terrestrial radio, it is radio. The faster that the industry accepts this, the better prepared we will be to move into new areas of opportunity.

[musiconradio.com]

You are engaging in distinctions that are similar to when engineers try to "hear" whether you have a Foti or an Orban box in the audio chain.

This thread is definitely has a Orban tone to it. (I say 8100) 

As I said, do a search on the Congressional hearings.  The demanded relief this past week.

I understand this. My question is when? A year, two, never. How Long will they continue (P) if you are paying half of revenue, and your investors demand profit.

The deal with CC this week could drag this out for awhile.


We can all have opinions on this topic. Right or wrong, hold on, fasten your seat belt, it is going to be one hell of a ride. I can guarantee that!

[TheBigA]

The deal with CC this week could drag this out for awhile.

The deal with CC only involves one very small indie label.  Pandora said that one label would account for maybe 1% of all the music they stream, so it wouldn't make a huge difference for them.  If you notice, no other labels have jumped on the bandwagon.  I suspect the RIAA and SoundExchange have instructed the majors to stay away.  The RIAA has been successful up to this point in keeping all labels on board.  This deal marks a breach of unanimity, which isn't permitted. 

The problem at Pandora is there is an inherent conflict between the founder, Tim Westergrin, and the investors in the company.  Tim is proud of the royalties his company pays, and feels it is the obligation of his company to pay for the music it uses.  At the same time, it's obvious they are overpaying, compared to other digital users.  Tim has said that he would not bypass SoundExchange and negotiate directly with labels.  But clearly that is the only solution given the total lack of action by Congress.  Such action would put the company at odds with its founder.

The lack of action by Congress really means that legal action is the only recourse. 

[Casey]

The problem at Pandora is there is an inherent conflict between the founder, Tim Westergrin, and the investors in the company.  Tim is proud of the royalties his company pays, and feels it is the obligation of his company to pay for the music it uses.  At the same time, it's obvious they are overpaying, compared to other digital users.  Tim has said that he would not bypass SoundExchange and negotiate directly with labels.  But clearly that is the only solution given the total lack of action by Congress.  Such action would put the company at odds with its founder.

The lack of action by Congress really means that legal action is the only recourse. 

The Major labels hate free services. This is one major problem Pandora has and Tim knows it. Warner Music especially hates free services ever since Imeem went under and lost them millions. So for Pandora to cut a deal will be very difficult since Tim insists they remain free and especially difficult to remain free on mobile devices. None of the on-demand services offer a free service that is meant to remain free. Even Spotify plans to restrict their free service and operate the limited free service solely to drive paid subscriptions. Pandora doesn't operate that way and therefore more than one major label exec has come out and said they hated Pandora because Pandora operated for free. The only real music service I know of that operates a free service while having deals with the Majors is Slacker and that is because the free service uses Sound Exchange licensing. Without Sound Exchange licensing, operating a free service that is not meant to drive paid subscriptions will be very difficult. Although I think Pandora needs to license directly with labels, I honestly doubt that they would get a deal and still have Tim.

[TheBigA]

I honestly doubt that they would get a deal and still have Tim.

I agree.

[SirRoxalot]

I was simply pointing out that on-demand music services act differently, and should pay royalties differently.
 

They do, and if you knew what you were talking about, you’d know that’s the case.

If you read MY post, you'd understand that I'm aware that on-demand services pay different royalties. I'm simply confirming that, in my opinion, that should continue to be the case.

 

Creating programming that attracts a LOT of listeners doesn't affect reach? Expertise in programming has nothing to do with that?
 

Maybe you don’t understand the definition of the word.  I would say the quality of the signal has a lot to do with reach, not the quality of the content.  Reach is calculated in the number of people within the sound of one’s voice.  Not the expertise of the programming.  But none of this has anything to do with this issue.

Perhap YOU don't understand the definition of the word as it relates to radio. "Reach" in radio is the same as cume - the number of people who tune in for at least five minutes during a broadcast period. At least, that's according to Arbitron. It's NOT the number of people "within the sound of one's voice". It's the number of people who LISTEN at some point - the number of people you reach, not the potential audience. That's certainly affected by programming.

http://www.arbitron.com/radio_stations/tradeterms.htm

I won't dignify your diatribe about what talent does for a radio station with a response. Suffice to say that I'm glad I don't work for you, or any company you're associated with. You have no concept of the value of talent, how they work, or what they do. I don't know what market you're in, but it sure ain't the market that I'm in - despite the efforts of some of the broadcasting companies here.

The music industry says otherwise.  The music industry will show you historically how on air radio cut into music sales from the 1930s on.  That’s why they took radio stations to court back then to prevent them from playing music on air.  The only reason recorded music gets played today is because the music industry lost those cases in court. 

You refuted your own point. The music industry lost those cases in court. In other words, they didn't prove their contention. History has shown that the music industry grew exponentially and new artists were created because of exposure on the radio. The number of musicians paid by radio stations decreased when recording were allowed on the air, but the overall number of musicians grew because more artists were exposed to more people.

But none of this has anything to do with this issue.  Clear Channel isn’t Pandora.  IHeartRadio is not an unhosted music service.  If you just read my posts you’ll understand what this is really about. 

I've read your posts. It would be nice if you would reciprocate. Then again, you either don't understand many other posts, or choose to take statements out of context. iHeartRadio has unhosted custom channels which operate similarly to Pandora. They also stream radio stations. Should they pay different rates for the different services? In my estimation, yes. Perhaps YOU need to catch up with what this is really all about.

[TheBigA]

Should they pay different rates for the different services? In my estimation, yes. Perhaps YOU need to catch up with what this is really all about.

Royalties are not based on programming, but platform.  OTA radio doesn't pay artist or label performance royalties, and digital does.  As far as CC is concerned, that's not the issue.  The issue for them, and the reason they made this deal, is because royalty rates for digital are prohibitively expensive, regardless of whether or not the content is hosted or unhosted.  There has been no progress on legislation fixing the royalty situation, so they've taken matters into their own hands.