Rusty speaking at SXSW on DMCA issues

I'm speaking at SXSWi on "Rewriting the DMCA: How to Improve Section 114":

``This panel will discuss the ugly bits of the Section 114 compulsory license for digital/internet music usage, and what parts are in it for historic reasons that don't apply in todays world; as well as changes that both users of the licenses (webcasters) and content providers (artists, labels) would agree to.``

Tuesday, March 17th; 11:30 am - 12:30 pm Room Hilton E

Muzak Files Chapter 11 to Refinance Debt - NYTimes.com

Muzak Files Chapter 11 to Refinance Debt - NYTimes.com:

"Many of Muzak’s biggest creditors are music companies that license songs for use on Muzak playlists. While the company is known as the creator of elevator music, its business is now more focused on creating playlists for use in retail stores, installing professional sound systems and providing other services."

So even industry giant Muzak is being crushed by the high cost of licensing music.

Sirius XM Prepares Bankruptcy Filing

Sirius XM Prepares Bankruptcy Filing - NYTimes.com: "Sirius XM Satellite Radio has been working with advisers to prepare for a possible bankruptcy filing in a move that could put pressure on the satellite company EchoStar, which owns a substantial amount of the company’s debt."

I'm sure the service will continue one way or another. The question I have is will they split off the programming side from the transport/distribution side. Much of the heavy debt was brought about by the technology side of the company, not the programming side. (Not to say that they didn't pay a fortune to get some of the programming they carry; they did... but maybe a spun-off programming division can make some more money syndicating that programming other ways- like they're doing with net radio now, and might even do with terrestrial stations.)

I'm also curious how bankruptcy will affect their royalty payments to SoundExchange.

iPhone streams updated for 2.0/3G

Until today, our iPhone/iPod Touch streams were only working on the current iPhones with the 1.x software. Now thanks to some testing by Mark Malone at Apple, we've updated our iPhone streams to work with the 2.0 software and the 3G iPhones coming out on Friday. So now our streams work on both old and new iPhones and iPod touches. While I haven't had a chance to test the 3G data network with a new iPhone, you should be able to use the WiFi streams when you're on the ATT 3G network. I'll be interested to see how it works out!

We rolled out iPhone streaming today!

After a lot of testing, we rolled out iPhone streaming tonight. I'm still not completely happy with the look of our iPhone mini-site so you might see some changes in the near future, but rather than wait until everything was perfect, I decided to release it now.

So now when you go to somafm.com on your iPhone, you get an iPhone-specific site with links for both EDGE (32-56k) and WiFi (128k) streams.

Satellite distribution is expensive

I've been looking in to getting Groove Salad distributed over satellite- we've had a few college / public radio stations ask about using it for their weekend and overnight programming. While we have a deal with NPR for distribution of Groove Salad over the NPR satellite service, it's only for use on HD radio multicast channels, and is not allowed to be used for over-the-air analog use.

So I looked into what it would cost to have PRSS (the public radio satellite system) give us a 24x7 satellite feed - which would make it really easy for any over-the-air station to broadcast us (since they already have the equipment for it in place).

It's expensive. $13,000 a month. A 12 hour a day feed would cost $9625. Add onto that the cost of a T1 back to Washington DC to feed their uplink - that's going to be about $1000 more a month, plus another $3000 or so for the Musicam encoding hardware.

I also talked to the folks from Clear Channel Satellite Services when I was at NAB. They're a bit less expensive; but with everything (the T1, sat time) it was going to be around $9500 a month with a 2 year commitment. The caveat is that most public radio stations don't have the satellite gear to receive the Clear Channel satellite feeds; on the other hand, most commercial stations do.

Alternatively, we could use an internet-based solution, the problem is that many of them now have too much buffer delay (10 seconds or more, vs half a second for satellite). There are low latency "over the internet" systems from Musicam, Comrex and others, but they require expensive hardware at both ends.

We'd love to get our programs out there in more places, but the non-internet distribution costs are still quite high.

SanFran MusicTech Summit

I'll be moderating a panel on new developments in streaming at the SanFran MusicTech Summit this Thursday, May 8th at the Hotel Kabuki. Our panel will start at 1:50pm in the Osaka Room (the downstairs room behind the Spring Room). With me will be:

John Richey - Wireless Music Delivery Expert, Apple
Greg Ogonowski - VP of New Product Development, Orban
Chris Grigg - Head of Standards, Beatnick
Tim Pozar - VP of Engineering, UnitedLayer

We're going to be talking about delivery methods. New codecs. Streaming to mobile devices. Internet radio hardware devices. How to determine if you really need a content delivery network. It should be real fun.

Here's a blurb about the summit:

The SanFran MusicTech Summit will bring together digital thought leaders from the San Francisco Bay Area, as well as from all around the country to the region which currently leads the way in innovating (both socially, and technologically) new ways of interacting with both music, and musicians. We will be working long term to help enable a sustainable, ongoing, Northern California based music and related technology market.

Register for the Summit here

Clear Channel and HD radio leverage iTunes for brand awareness

Clear Channel adds HD radio tagging for iTunes: "Clear Channel Radio, the largest radio broadcaster in the United States, is now tagging tracks played on its digital radio stations to help listeners buy music through iTunes. The company is leveraging HD radio technology to provide the new service."

What does that mean? In reality, it means if you have a compatible HD Radio with an iPod dock (which there is apparently only one model at the moment), if you are listening to HD radio (not analog FM, but only HD radio), and you hear a track you like, you press a button. Then the next time you dock your iPod, that list of "tagged" songs is transferred to your iPod in a special playlist. Then when you sync to your computer, you'll have a new playlist in iTunes that doesn't have the actual songs, but the names of songs you tagged. At that point, you can buy the songs on iTunes, and then add them to a new playlist, and then load them onto your iPod.

To use internet radio people, this sounds silly. After all, we have a list that shows everything we've played recently, and that list links to where you can buy the tracks or CDs.

What is the real reason for this "breakthrough technology"? Twofold: 1. It brings up the awareness of HD radio to people who are googling for "ipod". 2. It is an attempt to show the music industry that radio does indeed promote records and that's why terrestrial radio should continue to get an exemption from sound recording royalties.

Note to radio manufactures: a feature in a radio that would be really useful? TiVo-like features. The ability to record the end of a show after you've turned off your car; or a timed recording of a show so you always get the full program you want to listen to. Or a button that you press that saves the last 5 minutes of what you've just heard.

Or how about this lower tech solution: press a button and it stores the name of the song you're playing. You could then recall a list of the songs you liked, right there on the display of the radio. No need to dock, sync, undock, sync again, etc.

But by the time you've gone through all the steps it takes to use the "iTunes Tagging" from HD radio, it would probably be faster to just to write down the song name!

Top (terrestrial) Radio Execs start sounding desperate

Emmis Broadcasting CEO Jeff Smulyan, quoted in Radio Ink, confirms that he just doesn't get it:

'We're not hiding from new technology, we're driving it. One of the hottest-selling features for the iPod is an FM tuner.'

Or maybe it isn't? Here's the top 10 selling iPod accessories from the Apple Store as of 3-April-08, and I don't see the FM tuner anywhere on it. But the more important thing he's missing is that the FM radio is an iPod remote as well. In fact, it's the only remote control for the iPod that Apple sells now (aside from the one that requires a dock).

'...But one of the biggest reasons for MP3 sales over iPods is that tuners are built in.' The iPod is nearly the only digital audio player available that doesn't come with an FM tuner, but Smulyan said said he believes Apple will soon commit to radio tuners in its market-dominating device.

And I believe Google will give me billions of dollars. That doesn't mean it's going to happen, but it's a nice fantasy world to live in.

Terrestrial radio has to keep repeating this, hoping someone will believe that people do listen to commercial terrestrial radio to discover new music. I think they're just saying that to try and stop the tide of the approaching music royalties being pushed by MusicFirst and the RIAA.

Terrestrial radio across the country adds in total less than 30 tracks a week. That's across all commercial formats, all across America. A typical FM station might add a few tracks each week. Look in the music trades- most stations list less than 5 adds a week. I can discover more music than that just by browsing the recommendations on the iTunes store.

'Our goal, in the next five years, is to have a radio tuner in every portable phone, in every PDA sold in the United States,' Smulyan said. 'We want to reach 400 million more devices in the next five years.' "

I guess I should be thankful that he's not saying put a HD radio receiver in every iPod. (Among other things, that would be a huge battery killer as well).

Tell my why would Apple want to add an AM/FM tuner in to all their iPhones and iPods? It's a $49 accessory with a cost of goods of well under $5, so why would they want to give up that margin, especially if Smulyan is correct and it is actually one of the biggest selling accessories for the iPod? They probably make more margin on it than they do on the Shuffle itself.

People are caring less and less about AM/FM radio all the time. Look at the demographics: they're not getting any new customers. And they're losing a lot of their old customers.

Oh, and Radio Execs: it's not all about the technology. It's about providing the content that people want. And terrestrial hasn't been doing that for a long, long time.

The biggest stumbling block to the death of terrestrial radio altogether is current copyright law. The fact that we have to jump through hoops to distribute Podcasts, the facts that there are so many limitations to the Section 114 music licensing, the fact that we have to pay such high royalties: these are what is keeping digital radio from completely obliterating terrestrial radio.

I'll leave you with one last comparison: Shortwave Radio. This used to be huge 40-60 years ago. There were stations all around the world broadcasting over Shortwave to reach global audiences. People would buy special radios just to pickup the BBC in the US. But now no one listens to shortwave, and many shortwave stations are shutting down their shortwave transmitters, going online instead, because no one listens to shortwave over the air anymore.

AM/FM: You're next. What you should focus on is creating incredible programming that you can stream and podcast, and stop worrying about your expensive transmitters.

HD Radio isn't going to save you. Cookie-cutter HD2 channels aren't going to help you. Forcing manufacturers to include AM/FM radios in mobile devices isn't going to help you. You've lost the battle. Move on.

EMI scraps about 20 per cent of CDs produced, at an annual cost of £25m

Financial Times has a crazy factoid in this article about revamping EMI:

The record business - in which 85 per cent of artists are lossmaking and EMI pays £25m a year to scrap unsold CDs - "is stuck with a model designed for a world that has changed and gone forever", he says.

Good to know that they're realizing that digital distribution is going reduce waste and expenses like this.

UMG Prez: Indie labels enemies aren't big labels, they're webcasters

Larry Kenswil, President, Universal Music Group/eLabs on why indie labels are missing the future:

Any indie (and I mean a sound recording company, not an artist who chooses to give away music to make money other ways) who thinks webcasting should be used as promotion rather than a revenue source is missing what the future is about. All music use is substitutional for other uses. Everything you do in life substitutes for doing something else. Every bit of evidence we've seen shows that new media reduces sales in old media. Obviously, sales in new media haven't made up for it. On average, heavy satellite radio users spend less money on music (other than their subscription fees) than they did prior to subscribing. Likewise with internet radio. There's just less of a need to own. Promotion is fine, but if you need to get money in from the sound recording, I'll take payment any time. Indie labels are realizing that majors aren't their enemies. Their enemies are corporations who want to make money by performing music and not pay the performers for the privilege.

I understand the big labels' position: they've got all this legacy content they need to monetize. But most indie labels don't have a bunch of legacy content; all their content is newer and they want to get exposure for it.

Where online music discovery is heading?

Widget provider RockYou inks music promotion deals with SNOCAP, Fliptrack, Pump Audio and Nettwerk Records. Here's how it works: Labels / distributors who want to promote music let RockYou use it for free (or for substantially less than the DMCA statutory rates). The "end users" can then use free music from this pool that's being promoted by the labels. But only the music from those labels.

So much for independent radio, where the music choices are made by music directors and DJs based not on economic issues, but based on what is truly the best music available.

But this is definitely the way that people will get music for free and without commercials. Maybe radio as we know it is dead, and these new distribution methods will be the only ones viable in the future?

Jia Shen, CTO and co-founder of RockYou! says in their press release:

“Artists have realized that giving users access to tracks as background music for their sites, slideshows among other widgets, only enhances the user experience, but more importantly, truly offers them an incredible outlet to be discovered and retain new fans. RockYou! currently showcases hundreds of artists music for people to sample and insert into their widget of choice.”

Just what we used to say about radio.