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Is Internet Radio Doomed? Sounding Off on the Copyright Royalty Debacle
An editorial note from IWA Executive Director Kevin Shively
It's hard to not have heard about the problems the Internet radio industry seems to have every few years when the copyright royalties for streaming copyrighted material online come up for review. From newspaper articles on the "Day of Silence" to a recent segment on NPR's All Things Considered, the story is getting a lot of press and generating a lot of interest within the industry. A Google search for stories on Internet radio royalties in the past week alone racks up a result of nearly 700 listings!
If you haven't heard, first come out from under your rock, then go to SaveNetRadio.org to learn more.
One thing has changed this time from the last time Internet radio was threatened back in 2002, however. This time, the NAB is getting into the act by recently pledging "unequivical support" for the Internet Radio Equality Act introduced by Senators Ron Wyden (D-OR) and Sam Brownback (R-KS). This bill would allow webcasters to pay a royalty of $0.0033 per listener hour or 7.5% of revenues related to the provider's digital transmissions of sound recordings. This is, of course, in lieu of the currently proposed rate of from $0.0008 to $0.0019 per preformance (or song), which is defined as one listsener listening to one sound recording.
Recently, however, I was at an industry event and heard something from a long-time broadcast radio host that shocked me. He likened the issue to "Napster", and that Internet radio was a threat to broadcast radio. It's amazing that there are still attitudes like that in broadcast radio, especially when the vast number of broadcast radio stations, including ABC, CBS and Clear Channel, have made streaming a part of their standard operations! The two issues could not be farther apart, no matter how much the RIAA wants to bring up "stream ripping" as an example of why they are similar.
The fact is that there is no supported research to show that stream ripping is a common or even minimally prevalent problem, which belies the real problem for the record industry: why would anyone go to the trouble of recording Internet radio when they can listen to it whenever they want to? Consumers (or the bulk of them, anyway) will always follow the path of least resistance, i.e. whatever's easiest for them. If they just want to listen to any non-specific music, they will listen to their favorite broadcast or Internet radio station. If they want to own a piece of music and listen to it whenever they want to, they will buy it online from sites like iTunes or emusic. CD sales are on the decline, and nothing can stop that. Formats come and go - who buys 8-tracks anymore (other than collectors)?
The real problem is that the traditional business model for selling music recordings is broken - not because people aren't willing to buy music, but because record companies have not yet figured out how to adapt their models for the new generation. Those that have are seeing actual sales increases. According to figures released last month by Nielsen SoundScan, CD sales decreased by 15 percent from Jan. 1 to July 1 this year, while sales of digital tracks, though still much smaller, rose 49 percent. Ironically, it seems the tighter the grip record companies try to place on their music, the more they hurt their own sales. On the other hand, when EMI decided to start selling their music on iTunes without digital rights management protection, their sales actually increased to a point where they actually pulled in line for the first time with CD sales!
If consumers are going to continue the trend towards digital purchases online and away from physical media, what's the best medium available today to promote that music to people that otherwise might not be aware of it? Internet Radio! It's the only place where you are guaranteed that the listener is exactly where you want them - at a point of sale terminal! It's the ultimate checkout product placement!
Most Internet radio stations already have ways to purchase the music online that listeners hear on their stations. Some have even gotten record companies (ironically, in some instances the same record companies that are fighting to raise royalty rates) to actually pay to advertise their music on their stations. It's in Internet radio's best interest, of course, to not only continue this practice, but to continue to fine better ways to help distribute the music they play. After all, the more they can become the source for inspiring people to buy music, the closer their connection to their listeners becomes because they become the trusted authority on music for their listeners.
So what's next for Internet radio? The good news is that the deadline was avoided by a new proposal put forward by SoundExchange as a result of public pressure and the actions of some members of Congress that would lower the fees for some webcasters. Major differences remain, however, between the two sides on both the rates themselves and, in particular, the per channel fee (which is NEW this time around!).
It seems that the best possible outcome for webcasters would be for the Internet Radio Equality Act to be passed and enacted. Calls to Congress to make this happen are, perhaps, the best hope of achieving this. Of course, the other option, provided webcasters can survive the back royalties owed since the last rate expired, is to simply work out deals with independent recording labels that are not a part of SoundExchange to play their music at lower rates or offer other benefits to those labels in lieu of royalties. Ironically, both sides say they want to support music and the musicians that create it, and a growing number of them think Internet radio needs to continue to be there to help spread their message to the millions of listeners listening online today. It's a symbiotic relationship, not a parasitic one.
If you have ideas on what, if anything, you think the IWA should do on this issue, feel free to share it with us at info@webcasters.org
Regards,
Kevin Shively
IWA Executive Director
By the way, I do know a little about this issue after having the good fortune to spend several years in the Internet radio industry and working with a lot of good friends and fellow webcasters to help get the Small Webcaster. I should also add that this editorial reflects some of my personal opinions and does not necessarily represent any official stance by the IWA. |
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Podcasters Unite to Figure Out a Role for Ads
by Bob Tedeschi, July 23, 2007, New York Times|
The term “podcasting” has perplexed consumers ever since it was introduced. Confusion has reigned on the business side of podcasts, too. Few consumers will pay to receive podcasts — audio files that exist on the Web, and can be automatically sent to a person’s computer. Advertising, the other potential revenue source for producers and publishers, does not work when marketers have no way of tracking how many times their advertisements are being heard or swapping out old advertisements once they have run their course.
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Seeing the Bigger Picture: It's About Marketing...Not Advertising
by Alan Schulman, Jul 23, 2007, Online Video Insider
THERE WAS A TIME NOT too long ago when, for most agencies, developing advertising campaigns was about as deep inside a marketer's business as they needed to go... or frequently as far as they were asked to go. READ MORE
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Microsoft's LiveStation Looming In Web TV Wars
by Gavin O'Malley, July 9, 2007, Online Media Daily
NEW DETAILS HAVE EMERGED CONCERNING LiveStation, the peer-to-peer Web TV service being readied by Microsoft and Skinkers, a British software developer. Presently in controlled beta testing, the service is an extension of Microsoft's recently launched Silverlight plug-in media player, and is seen as a latent threat to recent Web TV entrants such as Joost and Veoh. "Live TV, this isn't recorded TV being re-broadcast...it is live, without delay," Don Dodge, a search manager and director of business development for Microsoft's emerging business team, wrote on his blog late last week. "Of course the technology could be modified to stream recorded shows or other types of content." READ MORE
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Execs Heart Web 2.0
Almost half of corporate chieftains see unexpected returns on web spending, survey says.
By Ken Schachter, July 6, 2007, Red Herring
The MySpace generation isn’t the only one that gets web 2.0. Top corporate executives are ramping up their investments in web 2.0, according to a new study from consultancy McKinsey & Co.A survey of 2,847 executives around the world found that if they had the chance to do it over again, 42 percent of respondents said they would have invested more in web 2.0 services over the past five years and 24 percent would have invested sooner.
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D-Day for Webcasters
Will Congress pass a bill that prohibits higher royalty fees?
By Alexandra Berzon, July 5, 2007, Red Herring
In Internet radio land, D-Day is July 15. That’s when new royalty rules that web radio broadcasters say could kill them are set to kick in. But a coalition of thousands of large and small webcasters, including Pandora, AOL, and Yahoo, helped craft a bill that would offer an alternative to the new rules and keep them in business. Those rules are set to raise the fees webcasters pay record labels by as much as 1,200 percent on July 15.
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Top 10 geek vacations, Part II
How to get away from it all without getting all that far away
BY Pete Babb, Andrew Brandt, Steve Fox, Melissa Riofrio, July 3, InfoWorld
What makes a great geek vacation? Well, high-speed access from even the most obscure locale is a given. Then throw in some activities to stimulate the brain cells, maybe a dose of electronic entertainment, possibly a bit of techie history, and you're most of the way there.
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Just An Online Minute... Broadband Continues High-Speed Growth |
by Wendy Davis, Tuesday, Jul 3, 2007 4:00 PM ET
WITH MORE AND MORE CONTENT migrating online, broadband penetration is continuing to surge. Seven in 10 Americans who go online from home now connect via high-speed lines, according to a new report by the Pew Internet & American Life Project. What's more, almost half, 47%, of all Americans now have broadband at home, up from just 30% just two years ago.
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Just An Online Minute... FTC Warns Against Net Neutrality Laws
by Wendy Davis, June 28, 2007, Media Post Publications
THE FEDERAL TRADE COMMISSION HAS dealt a blow to net neutrality advocates, who have been clamoring for new laws that would prohibit Internet access providers from discriminating against publishers by blocking access to particular Web sites or degrading service.
In a 170-page report issued yesterday, the agency argued that legislators should tread carefully before passing any new legislation.
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TV Guide To Hand Out Online Video Awards
by Les Luchter, June 28, 2007, Online Media Daily
THE FIRST TV GUIDE ONLINE Video Awards, announced on Wednesday and planned as an annual event, will not only honor the best Web videos, but will also harness online and mobile media for promotion, fan voting, and coverage of the awards process.
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Online Video Ad Sales Soar, Compared To Themselves
by Joe Mandese, June 28, 2007, Online Media Daily
ONLINE VIDEO AD SALES WILL grow 55.5% to $365.5 million during 2007, and another 53.2% to reach $560 million in 2008, according to a forecast this week from Magna Global's Brian Wieser, senior vice president-director of industry analysis.
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Just An Online Minute... Study: Increased Internet Usage Raises Teen Risks
by Wendy Davis, June 27, 2007 , Media Post Publications
TEENS WHO PARTICIPATE IN WEB 2.0 activities like social networking, authoring blogs or helping others build Web sites face a higher likelihood of online harassment than their less Internet-involved peers. That's according to a new report by the Pew Internet & American Life Project.
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Study: Internet 2nd Most Essential Medium, But #1 in Coolness
by Les Luchter, June 27, 2007, Online Media Daily
THE INTERNET HAS PASSED RADIO to become Americans' second "most essential" medium and swapped places with TV as the "most cool and exciting medium" since the subjects were last studied five years ago, reported Edison Media Research.
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Google’s breakneck changes stoke privacy fears
By Eric Auchard, June 18, 2007, Reuters
SAN FRANCISCO (Reuters) - Most people missed the announcement about how Google Inc. wants to burrow inside your brain and capture your most intimate thoughts. That's because it never happened. But Google, the world leader in Web search services, is the focus of mounting paranoia over the scope of its powers as it expands into new advertising formats from online video to radio and TV, while creating dozens of new Internet services. READ MORE |
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What Would Jakob Nielsen Think?
by Alan Schulman, Monday, June 18, 2007, Media Post’s Video Insider
AS BROADBAND VIDEO CONTENT CONTINUES stretching its legs from information to entertainment to advertising to education and beyond, one of the key questions that’s being debated is how to best integrate video into the conventions and best practices of the online user experience.
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Warnings of 'internet overload'
By Spencer Kelly, June 15, 2007, BBC
As the flood of data across the internet continues to increase, there are those that say sometime soon it is going to collapse under its own weight. But that is what they said last year.
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Just An Online Minute... YouTube To Test System That Spots Copyrighted Clips
by Wendy Davis, Tuesday, Jun 12, 2007 3:00 PM ET
YOUTUBE IS READY TO START testing a new "video fingerprinting" technology that theoretically identifies copyrighted clips and prevents them from appearing on the site. The test is slated to begin in a month with Time Warner, Walt Disney and other companies, according to press reports. If the technology works, it potentially ends some of the feuding between YouTube and media companies like Viacom, which has a lawsuit pending against the site for copyright infringement.
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Limelight Roars Out of Gate
Money-losing rival of Akamai leaps 46% in trading debut.
By Ken Schachter, June 8, 2007, Red Herring
The IPO market got a little hotter Friday as money-losing Internet content-delivery firm Limelight Networks climbed 46 percent in early afternoon trading. The Nasdaq debut of Tempe, Arizona-based Limelight came a day after shares of Infinera Corp. vaulted 52 percent in its Nasdaq trading debut, the strongest move of any technology IPO this year. The popularity of bandwidth-heavy content like videos, music and computer games on the web have increased demand for content-delivery services like Limelight Networks and its rival, Akamai Technologies.
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Internet Ad Spending Up 16.7%; Financial Services Leads
by Laurie Petersen, Online Media Daily, June 6, 2007
FIRST-QUARTER U.S. INTERNET DISPLAY AD spending hit $2.7 billion for the first quarter--a 16.7% increase over the same period last year, TNS Media Intelligence reported yesterday. The growth was a direct contrast to total media spending, which declined by 0.3% to $34.92 billion for the quarter, as measured by TNS.
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Just An Online Minute... Study: Users Bullish On Video Clips
by Wendy Davis, Wednesday, Jun 6, 2007 , Media Post Publications
ONLINE VIDEO USERS TEND TO watch clips fairly frequently, with the vast majority viewing Web videos at least once a month, according to a new report by the Online Publishers Association.
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Interested in helping our IWA organization as part of our leadership structure?
WE’D LOVE TO HAVE YOU! We have chairman and member vacancies in all of the committees, below. Please contact us via e-mail.
- Membership Committee
- Technology and Standards Committe
- Industry Policy and Best Practices Committee
- Legislative Committee
- A whole bunch of other committees we haven’t figured out yet…got any suggestions?
September 6 - 10, 2007 Exhibition / September 7 - 11, 2007
International Broadcasting Convention, IBC
Amsterdam
Annual broadcast technology event that show covers key areas of the electronic media business including audio, cable, film, grip, Internet, and more. IBC is committed to providing the world's best event for everyone involved in the creation, management and delivery of content for the entertainment industry. Run by the industry for the industry, IBC is owned by six Partners who represent both visitors and exhibitors. The Exhibits will showcase the latest technology and foremost business ideas in broadcasting and new media.
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Sept 28 - 30, 2007
The 3rd Annual Podcast & New Media Expo
Ontario, CA
Capture. Edit. Create. Distribute. Monetize. Repeat. This is the place to learn! The 3rd Annual Podcast & New Media Expo is a "prosumer" and corporate event that brings together influential audio and video podcasters, digital media creators, and bloggers to cover the complete range of creation techniques, business objectives and future trends.
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October 4 - 5, 2007
Streaming Media Europe 2007
London, England
Streaming professionals, content creators and business executives will gather in the autumn of 2006 to learn how to apply streaming and digital media technologies to innovative business solutions and explore the development potential for this expanding industry. Focusing on recent technology advances in the delivery of video over any IP device and the exploding video market, Streaming Media Europe gives you a competitive edge.
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October 10-11, 2007
IP Media Conference & Expo
New York, NY
The Media & Entertainment Industry is literally in the midst of a revolution. Content is being created in numerous formats and distributed across a variety of platforms; from cell phones and mobile devices to computers and on up to HDTV’s and Digital Cinema.
Following right behind the media industry are enterprise and government organizations whose appetite for rich media distribution, along with Telco TV, have caused the telecom industry to return to significant levels of infrastructure expansion and investment for the first time since the dot com meltdown.
The IP Media Conference & Expo is co-located with two well-established events in New York:
HD World – For HDTV, High Definition Video, Audio and Broadcast Applications
SATCON Conference & Expo, for content delivery and satellite applications
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Oct 29 - 31, 2007
Video on the Net Conference
Boston, MA
TV is growing onto the Net.
Print Press is shifting to the Net.
Ad Spending is moving to the Net.
Discover the challenges, the threats, and the opportunities at Fall 2007 Video on the Net.
Meet content producers, innovative technologists, industry leaders and the community forming around the Internet video space.
Network with decision makers and leaders, startups and innovators, and financial thought leaders. Learn about the Future of Internet TV, how to Make Money in the Video Ecosystem, and all about Content
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November 6-8, 2007
Streaming Media West 2007 Conference & Exhibition
San Jose, California
Streaming Media West is the only show that covers both the business of video on the net and the technology of streaming, downloading, IPTV and mobile video delivery. Covering both b2b and b2c business and technology issues in the enterprise, advertising, media and entertainment, broadcast and education markets, Streaming Media East is about more than just streaming!
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Check out www.webcasters.org for the most recent upcoming industry events
STATISTICAL REPORTS
Offering Archived Webcasts Improves Registration Measurably
July 24, 2007, Center for Media Research
According to a new study by ON24 Inc., a media marketing provider, focusing on the B2B publishing industry, webcasting can be a powerful marketing and lead generation tool as webcast type (live vs. on-demand), and interactive features (polling, surveys, Q&A) and streaming formats (audio vs. video) are considered.
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Attractive Demographics at Second Tier Video Sites
July 9, 2007, Center for Media Research
comScore recently released a study from its comScore Video Metrix service of U.S. video streaming activity of up-and-coming video-sharing sites. The study examined six video-sharing sites that did not make the top 10 U.S. video properties for the month, but reveals that French site Dailymotion.com had a particularly strong position in the U.S. video-sharing market in April 2007.
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Global Entertainment and Media Spending Accelerated by Convergent Platforms
July 5, 2007, Center for Media Research
According to PricewaterhouseCoopers Global Entertainment and Media Outlook, the global Entertainment & Media industry is experiencing sustained growth and will increase at a 6.4% compound annual growth rate to $2 trillion by 2011. Digital and mobile spending in each territory during the next five years rising to $153 billion by 2011, says the report. And, spending related to the distribution of entertainment and media on convergent platforms (convergence of the home computer, wireless handset and television) exceed 50% of global spending by 2011.
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Q1 Web Advertising 26% More Than Q1 '06
July 2, 2007 Center for Media Research
According to a recent IAB release, Internet advertising revenues reached a new record of $4.9 billion for the first quarter of 2007. The 2007 first quarter revenues represent a 26 percent increase over Q1 2006 at $3.8 billion and a 2 percent increase over Q4 2006 at $4.8 billion. For your convenience, annual Internet revenues are included as an historical reference.
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70 Percent of U.S. Web Users Streamed Video in March
June 14, 2007, Center for Media Research
comScore released its comScore Video Metrix rankings for March 2007, showing Google Sites as the top U.S. streaming video property with 57.4 million unique people streaming ("streamers") and 1.2 billion video streams initiated. YouTube.com drove the lion's share of the video streaming activity at the Google Sites property with 53.5 million unique streamers and 1.1 billion streams initiated.
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35 to 54's Index Above Average as Podcast Audience
June 4, 2007, Center for Media Research
According to a comScore study, sponsored Ad Infuse, males represented a significantly larger share (63 percent) of the iTunes podcasting audience than did females (37 percent). In addition, 18-24 year olds represented a substantial share of the audience (29 percent) and were more than twice as likely as the average Internet user to download podcasts.
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International Webcasting Association
4206 F Technology Court
Chantilly, VA 20151 |
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