The Future of Internet Radio
Using a song’s genetic make-up, Pandora (www.pandora.com) finds the common denominator among your musical tastes. If you like "Pumpkin Soup" by Kate Nash, odds are you’ll like Milli Vanilli’s "More Than You’ll Ever Know." No? Give it the thumbs down and you won’t hear it again. Love it? Then purchase the song in one touch through AmazonMP3.com or the iTunes Store. You can listen to Pandora on your iPhone or iPod Touch or any Slim Devices or SONOS device. In this article, Pandora CEO Joe Kennedy weighs pure plays against over-the-air simulcasters and discusses what each must do to keep from sinking.
Representing over-the-air simulcasters are the CEOs of two major streaming solutions providers that are helping on-air stations transition to online and deal with RIAA reporting—Zackary Lewis of Liquid Compass (www.liquidcompass.net) and Mike King of Abacast (www.abacast.com)—and a handful of their clients. Liquid Compass hosts more than 700 over-the-air broadcasters on its network, including ABC Radio, Clear Channel, Entercom, NBC/Gannett, and others, and provides ad-trafficking solutions for clients through its TrafficMyAds service. Abacast, with an estimated 400 clients, provides stations with revenue-generating features such as its Ad Injection System, Subscription Systems, and AdSync.
Held Up Without a Gun
Bruce Springsteen recently said, "I’m old-school in that I think you should pay for your music." Paying homage to the wisdom of The Boss, in March 2007, the Copyright Royalty Board (CRB) increased the royalty rates webcasters have been ordered to pay SoundExchange, the nonprofit RIAA spinoff charged with distributing the money to artists. Thanks to a legal loophole, the increase did not apply to over-the-air broadcasters. [For a more in-depth history of the royalties issue, see Streaming Media’s previous articles on the topic at www.streamingmedia.com/ research/center.asp?id=30. —Ed.]
Webcasters such as Kennedy are lobbying Congress to nullify the CRB’s order, claiming that the hike will wipe them out.
"Very simply, unless the rates change, internet radio as we know it will end," he says.
The royalty rates, according to Kennedy, hit pure plays harder than simulcasters.
"For those of us who lack the ability to subsidize losses based on other businesses, it remains a life or death threat," he says.
But despite that pending doom, webcasters sound strangely Pollyanna-ish. On the bright side, says Stoddard, the threat has brought out his company’s prudent side.
"Hopefully, in the end, [the rate hikes are] a good thing," he says, adding that Live365 strives to understand "the best way of delivering [programming] and the most cost-conscious way of delivering it."
Though royalty collection in the U.K. is less complicated than in the U.S., a quarter of Last.fm’s listenership accesses the site from the U.S., so the company could commiserate—but it doesn’t.
Related Articles
Mandatory inclusion of FM chip in CE devices may win lower streaming radio royalties
24 Aug 2010