No one is listening to over the air radio anymore.

Over the air radio continues to bleed listeners. Is is the technology? Is it the programming? Of course, I think it's the latter. Regardless, it's losing audience share. Why? More choices. And as soon as we have internet in cars, AM/FM listening will plummet even more.

Inside Radio 14-Nov-07 reports:

Summer book Persons Using Radio (PUR) numbers declined to their lowest level since Arbitron began keeping statistics in Fall 1998. Radio usage dropped in every cell except 50-54s. Steepest declines continue to be among teenagers and young adults, as their attention is increasingly diverted to other media. That’s especially true among males, with Men 18-24 and 18-34 cells posting the biggest year-over-year declines. But the crowded media world is also taking a toll on the 25-54 money demo, which fell 15.1-14.9. There’s also a disturbing trend among female demos. In the Summer book not a single female cell saw an increase in listening. All but two (50-54 and 65+) declined. Compare that to male demos. While older women mirror the trend of listening less, the Summer book shows Men 45-64 were listening to the radio more.

via Hear 2.0

The Promotional Value argument

There is a valid argument that todays corporate radio operations (e.g. CBS, Clear Channel) is not providing adequate promotional benefit to record companies to justify their exemption from a performance right royalty (much like internet radio already pays).

But the argument that there is no promotional value for radio is a weak one, and an argument that I wish MusicFirst (the association backed by SoundExchange, RIAA and many independent record labels) would stop using.

In the testimony from Alice Peacock (a singer/songwriter) she said something that bothers me because of the context she uses it in:

Frankly, the promotion argument sounds a little silly. Last week I bought a pair of Nike shoes. I wear them everywhere—well, except to Senate hearings. With the Nike logo on my feet, I am probably promoting their brand wherever I go. Can you imagine if I decided not to pay for the shoes on the grounds that my promoting Nike should excuse me from payment? My refusal to pay would be called "shoplifting." But radio's refusal to pay artists is called "business as usual."

Wearing shoes with a logo around town may not be significant promotional value; but once she brings those logos on stage in front of a large audience, it's a different matter!

You don't think the popular performing artists wearing clothes with the big designer labels are buying all that stuff themselves? No, the designers give them to them to get the promotional publicity for seeing their brand worn by a star.

It's also common for performing musicians to get lots of gear and other goodies in exchange for promotional consideration. Guitars, drums, cymbals, keyboards are commonly given to popular musicians to use, so that aspiring musicians will see them and want to buy that brand as well. Why do you think so many drummers have their drum brand in huge letters on their drums? And it's been going on that way for decades.

Radio has a tremendous amount of promotional value. However, the way many stations do things in this new media-consolidated world detract a lot of value from that promotion. How often do you hear a radio DJ play a new song, and mention the album name or the label it's on?

The other argument against promotional value (the one that no one seems to like to talk about) is that while radio can promote songs, that promotion doesn't always turn into a purchase. This is something that radio needs to help fix: right now, many people hear something on the radio and then go out and download a free copy of it. Promotional value only has value if it brings in money.

What I've done at SomaFM is made sure that we have links to where people can buy CDs and legal downloads when they hear something on our station. It's not a perfect solution yet because we play a lot of stuff that's not available for legal download; or it's out of print or otherwise hard to obtain a copy of.

Another problem that is really a record industry problem and not a radio problem is the fact that there are so many "for promotion only" CDs ending up on Amazon, Half.com and brick and mortar stores like Amoeba Records. If you go to buy a CD and can get a used FPO copy for half the price, you'll buy it - who cares if there is a hole punched in the UPC. This is a case when the value of radio promotion goes to the wrong person - the used CD store and not the sound recording rights holder.

Labels: you need to do some work on this as well. Meet broadcasters halfway. Make sure that when people go to obtain your recordings that they can do it legally and quickly. And broadcasters should be telling people how to buy the music they're playing as well. Then everyone benefits.

USA Today: Internet radio providers "close to settlement"

While I won't publicly comment on any negotiations that may be going on between SomaFM, SoundExchange and the RIAA, I'm happy to say that this article in USA Today sums it up well:

Net radio's future, which looked dismal earlier in the year after new copyright royalties were instituted, is apparently back on track. The proposed fees were so high many stations said they would be forced to go out of business. But Hansen says stations and record labels have been negotiating a settlement and are close to coming to terms.

musicFIRST makes some proposals for over-the-air royalties

Radio Ink: According to the document obtained by Radio Ink, the coalition is proposing changes to the law that would do away with broadcasters' royalties exemption and have small commercial stations -- "small" is not defined -- pay a flat royalty rate of $5,000 per year, while noncoms and college stations pay $1,000 a year.

Inside Radio has an op/ed piece by John Simson that has a lot of the usual rhetoric we hear from SoundExchange, but this part was very interesting:

Most over-the-air radio is owned by big conglomerates that centralize playlists. They build multi-billion dollar businesses around artists’ music. People who create that music should receive a fair portion of those revenues.

We want to be fair to smaller radio stations, too. For some this payment may be the difference between being profitable and having to struggle. This is why we are in favor of accommodations for smaller radio stations, college stations, talk radio and religious broadcasters. Small radio stations may not be able to pay like the big conglomerates, and we want to accommodate them. We hear them. We hope they hear us.

I'm happy to see SoundExchange is realizing that the diversity of independent radio is valuable. While Simson doesn't say that directly, by making a jab at large conglomerates with centralized playlists he's giving a nod to the independent programmers and station operators out there who are exposing listeners to new and interesting music, not just playing the same old proven hits that everyone knows already.

John goes on to say:

Sometimes Washington, D.C. rhetoric trumps the truth; the musicFIRST Coalition isn’t trying to put radio out of business like the NAB would have you believe. We want us all to march to the same drumbeat, one that won’t be easy to achieve, but that we hope is going to be fair.

One thing John doesn't mention is the international reciprocal rights that this would give US sound recording copyright holders. Currently, US rightsholders don't receive any money for airplay in non-US countries (that do charge broadcasters a royalty for sound recording performances). So while non-US stations are paying these royalties, even if they only play US recordings, all their royalty money goes to the pool of non-US rightsholders.

Once the US establishes a performance right, those collected overseas royalties will be distributed to the appropriate US-based rightsholders.

That's really the big issue here, and I'm convinced that it makes sense.

As long as those performance royalties are reasonable, of course!

Lots of broken parts of the internet today!

Blogger is broken right now; it can't upload to our server. They've at least acknowledged the problem, but who knows when this post will appear.

Paypal, on the other hand, is having some problems that they're not acknowledging - their history download is very broken right now. We use this to populate a Filemaker database we use for sending out the Tshirts and Cds. Not only is it taking a really, really long time (20+ hours to process) when it usually takes 10-15 minutes, but the last download we got was missing all sorts of data. The problem seems to have started yesterday morning; it affected all our shirt orders since 2-Nov.

The data isn't lost, but if we have to go in through the web interface and copy everything into the Filemaker database that will be a real pain.

Yeh, yeh, yeh I know we should be using Instant Payment Notification and not the batch download history - but apparently the Paypal IPN was even broken in the last few days. Paypal has a blog about system status, but it seems to not cover everything.

SaveNetRadio Press Release on SoundExchange's proposed rates for Cable radio services

WASHINGTON, Nov. 5 /PRNewswire-USNewswire/ -- The SaveNetRadio Campaign today expressed surprise and hope upon learning that SoundExchange has formally proposed that cable radio services pay royalties between 7.25% and 7.5% of their revenue to sound recording copyright owners and recording artists. This proposed rate, effective from 2008 to 2012, is virtually identical to rates endorsed by more than 140 cosponsors of the Internet Radio Equality Act, but rejected by SoundExchange and the Recording Industry Association of America.

"Perhaps this agreement means that SoundExchange agrees that 7.5% of revenue is a fair rate; they just prefer that the rate not be legislated," Jake Ward, a spokesperson for the SaveNetRadio campaign said. "The Internet radio industry has never asked for more than royalty parity and an opportunity to grow their businesses to the benefit of artists, consumers, and even record labels. Perhaps SoundExchange's agreement that cable radio should pay 7.5% of revenue is a precursor to an equivalent offer for Internet radio services. It is hard to imagine that recording industry interests would continue to reject Congressional legislation and webcasters' efforts to set fair royalty rates while simultaneously agreeing to the same standard for cable radio services."

The Internet Radio Equality Act -- H.R. 2060 and S. 1353 -- would vacate the March 2nd Copyright Royalty Board's decision and set a 2006-2010 royalty rate at a competitive level with royalties paid by cable and satellite radio services (7.5% of revenue.) The bill would also change the royalty rate-setting standard used in royalty arbitrations, so that the standard applied to webcasters would align with that applied to cable and satellite radio.

For more information on the SaveNetRadio coalition visit http://www.savenetradio.org/