Radio panel at the 2011 Boston Area Definitive Audio Student Summit

BADASS2011-NoidsFLYERI participated in an interesting panel at the Boston Area Definitive Audio Student Summit (BADASS) summit last weekend at the New England Institute of Art (one of our IBS-SRN member stations).

The subject of the panel was “Radio Promotion”. Participants included Tai Irwin from the New England Institute of Art, Steve Theo from Pirate! Promotion, a professor in the Entertainment Management program at Bay State College and myself.  We provided a brief history of the radio industry and music promotion and then launched into a discussion about the future.  Though somewhat tainted by the past we came away with some hope for what lies ahead.

The record and radio businesses have changed quite dramatically over the last 15 to 20 years.  Radio is fighting more and more for the attention of a new audience and the record business is working to transition from selling physical objects and adapt to the new digital world.

Badass-panelWhile many believe that the music industry is down that is not actually the case.  It is the traditional record industry that is down, the broader music industry is doing quite well, even in this down economy.  On the radio side that is true too, the old way of broadcasting a local signal terrestrially is changing due to the internet.  A station’s ability to aggregate a like minded audience outside of its terrestrial footprint is much easier with the internet.

There are still challenges for the industry though. On the radio side it is the change in their business model for digital broadcast.  When broadcasting terrestrially there were no payments for performance royalties because they were viewed as promotional.  Your business wants to reach as large an audience as it can.  When broadcasting digitally you need to report each “play” to Sound Exchange and pay a royalty for that particular play.  Under this model your expenses grow dramatically as you grow your audience.  Further as per stream royalty rates continue to escalate so will a station’s future expenses.

Even with these challenges there is a dramatic shift to digital distribution and the Internet. Creative promotors and broadcasters are finding a way to work together to help their constituents grow.  Overall the future is quite bright.  We just need to find a way to get there together.

PS I’d like to thank the organizer of BADASS, John Krivit at AES for hosting the event and Julie Viscardi-Smalley at Bay State College for inviting me to the panel in our special “industry room”.  It was great fun seeing the interest radio and music still generate!

Public Comment on CRB record keeping rules

Fred Wilhelm started a discussion about the CRB record keeping rules.  The complete article on the CRB record keeping is in the recent P2Pnet.

Well, I wanted to add my piece to this so I responded to Fred from the perpective of our customers, the web-casters.

Backbone Networks, as an internet radio aggregator, has an additional concern regarding web-casters. This concern would be true if the rumored standard ISP charge for music is implemented. Web-casters would still have to pay a performance royalty for streaming music to listeners with the ISPs that had implemented the charge. This is music for which the listener already has a right to hear. In other words, the streaming royalty would constitute a double payment.

For listeners of web-casters on ISP services that pay the license fee Backbone would like to see the streaming royalty rates waived however the reporting requirement remain. This would eliminate the double payment while at the same time providing the information back to SoundExchange to enable appropriate allocation to the artists.

Webcasters provide a service to their listeners, they program their shows to highlight new music and other programming that keeps their audience engaged. As such they are helping listeners find new music, i.e. some of the 7500 artists you reference. Anyone who has listened to Radio Paradise, Soma FM, BaGEL Radio, AccuRadio, Pandora or one of the IBS-SRN college radio stations know that these web-casters add significant value to their listener communities.

While we believe that the current royalty rates are way too high and are slowing the adoption of internet radio, this solution would at least help lower the cost web-casters bear for streaming to listeners on those ISPs. This may even help the web-casters that provide the added value of progamming interesting playlists for their listeners to continue to operate.

Separately we have a few additional broader concerns for web-casters. These are:

– The worldwide nature of the internet enables a worldwide audience. However, the complexity to report in the US is multiplied dramatically as the stream crosses borders. This friction in the system is a drag to the overall health of the music industry and internet radio.

– The royalty rates are tied to a particular transmission medium yet the listeners do not make such a distinction. We would support “broadcast neutrality” for the rates and ask that the rates be normalized between terrestrial, satellite and internet transmission. What we find most strange about the rates is that they are highest for internet transmission yet those streams are the most valuable because of the information and statistics that are associated with them.

I bring up this point because as an internet aggregator we would only support providing additional reporting to SX in exchange for reduced rates. Further, the more information provided the lower the rate should be. This data is extremely valuable and should not come for free. To me I think that the full requested information associated with each play is about equal to the current royalty rate.

We are all for finding workable solutions that promote artists while enabling web-casters to operate in a profitable manner and not all web-casters agree with our position but we believe that it is directionally correct and fair to the artists and web-casters.