Ineffective Online Radio

Various news sources are reporting that the radio industry, under pressure to pay performance royalties for over the air song plays, has come up with a proposal to pay – along with a list of demands. It’s a very telling list that exposes the radio broadcasting industry’s desperate desire to turn back the dial and ignore the growing popularity of online streaming and other digital platforms with listeners.

Realizing that they’re going to have to pay performance royalties, the radio broadcasters have  come up with a proposal that offers a (1) tiered rate of 1% or less. In exchange for that they want the (2) Copyright Royalty Board’s jurisdiction forever removed from their rates, (3) lower streaming royalty rates, (4) inclusion of FM chips in cellphones, and (5) “AFTRA issues” resolved for streaming broadcast ads.

I get the relationship between #1, #2, and #3. They’re negotiating with the same folks, and they want to use their negotiations to improve and simplify their overall deal, including streaming. The CRB has been unfriendly in this regard, so they would like to take them out of the equation.

But what does all of this have to do with FM chips in cellphones? Nothing. Or AFTRA issues? Not much – performance royalties are paid to musicians, AFTRA monies are owed to actors and voice talent employed by advertisers and agencies to record commercials. These are pretty arbitrary demands.

So what’s so telling about this? It’s a list that is all about going backwards. Cellphones are already radio enabled – for streaming that is. Smartphones have proven to be enormously popular mobile streaming devices. Why fight a battle that’s already won?

As far as the whole AFTRA thing….I’ve gone on and on about this one, you can read some of my opinions here. Simulcasting over-the-air radio commercials on a streaming station is a BAD IDEA. It discourages advertisers and broadcasters from developing ads that have an online/interactive call to action. It encourages broadcasters to view their streams as simulcasts of their broadcasts. WHICH THEY ARE NOT. It’s the fast lazy train to ineffective online radio…

5 responses

  1. >(4) inclusion of FM chips in cellphones

    Now that is really funny, reads almost like The Onion. Why stop there, we should be able to get AM signals as well… on digital cellphones.

    While we’re on the subject of such improvements, I like listening with a cool drink. If my cellphone could double up as a can opener as well, it’d go a long way for me to keep listening, which would mean more royalties. Makes sense to me.

  2. I found a great article on the terrestrial radio royalties struggle on this
    Music Blog at

  3. Ari-What is your expertise of broadcast radio? You stream music on the internet, period.

  4. Bill,

    But I have as much expertise when it comes to digital cellphones as any broadcast veteran might. And the Internet is digital. I’d say there’s a good connection.

    This idea of FM chips on cellphones just won’t fly with the mainstream. Lobbying may help pass this thing through, we’ve all seen crazier deals be made into law. But it doesn’t mean the idea itself is a good one. Also why stop there, why not require FM chips to come with TVs as well?

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