Monthly Archives: April, 2011

Clear Channel Hearts Big Machine Records

Clear Channel’s iHeartradio has a new channel dedicated entirely to the music of popular record label Big Machine.  Big Machine Radio is a commercial-free, digital station that features exclusive content from Big Machine Label Group’s recording artists, including Taylor Swift, Rascal FlattsMartina McBride, Jewel and Justin Moore. The dedicated channel will play songs by the label’s artists, as well as feature artist interviews, acoustic and live versions of popular songs and other content.

To kick things off this week, Big Machine Radio will offer listeners a preview of Justin Moore’s sophomore album OUTLAWS LIKE ME – available in stores on June 21. Tuesday, April 26 at 10 a.m. ET, Justin will provide insight to Big Machine Radio listeners about his new project and songs included on the album. More special programming will premiere on Thursday, April 28, at 3:00 p.m. ET, spotlighting Jewel’s 2010 album premiere radio special for her acclaimed SWEET AND WILD release.

This innovative programming is an excellent example of the ways that streaming channels can offer added value to listeners, artists and stations. It gives the label a chance to showcase their music and connect with listeners. iHeartradio gets to extend their brand too by offering unique content that listeners can’t get elsewhere.

I’m wondering if there is a deal that waives performance royalties for this channel. It’s possible that Big Machine, in doing a deal with Clear Channel for this new channel, has decided to waive royalties or reduce them in some fashion. According to legal expert David Oxenford, there’s nothing stopping either of them from doing such a deal. Sure, Big Machine Radio would benefit from the promotion of a streaming channel dedicated to its artists. And while Clear Channel benefits as well, I doubt they created this channel for free. Whether the upside is a cash payment from the label to them or a reduction of royalties, my guess is there’s an incentive that acknowledges the promotional value of the streaming channel.

You can check out the stream here.

Hanson: Things Are Moving Fast

Kurt Hanson gave his annual State of the Industry keynote presentation during RAIN Summit West earlier this month in Las Vegas, telling the record attendance that “Things are moving faster than you think!” In his nearly 30 minute presentation, Hanson, Publisher of RAIN: The Radio and Internet Newsletter, cited research and gave excellent examples of the acceleration taking place in the Internet radio industry. Domestic listening to streaming is up, supported by Webcast Metrics monthly data as well as The Infinite Dial Study. Revenue is climbing as well, on track to exceed a billion by 2015 according to SNL Kagan‘s reports.

Internet radio, by offering more variety, personalized listening options and fewer commercials, is driving a major audience shift to online listening. Smartphone use is making streaming more mobile and ubiquitous. Pandora is the industry’s first success story, built on variety, low spot load, ubiquity and personalization.

Hanson showed the audience recent Infinite Dial data demonstrating that Internet radio’s audience is doubling every five years, and that time spent with the medium is expanding exponentially as well. 

Vast opportunity awaits but only if the industry can overcome a few obstacles and learn a few lessons.  More emphasis should be placed on selling music, and the music industry and stations should work together to make this happen. The music industry is suffering, noted Hanson, because the value proposition is out of whack. Music is too expensive.

Broadcasters need to offer more compelling content to their audiences and focus on the formula for successful streaming online (variety, low spot load, ubiquity and personalization).

Peppered with lots of contemporary cultural references, Hanson’s keynote was both entertaining and astute. Things are moving faster than you think – that’s both a cheer for the industry and a word of caution to those that might not be paying close enough attention…

SoundExchange Shuts Down SWCast for Non-Compliance

The Silent Man

SoundExchange, the performance rights organization that collects royalties on the behalf of sound recording copyright owners, has exercised its right under the Digital Media Copyright Act to request that access to a webcasting platform be disabled. SWCast is a platform that has offered a streaming solution to smaller webcasters that may not have the funds to develop their own streaming platform. “DJ your own web radio station.” says the site, offering “clearance to legally broadcast your music” along with technical support, streaming audio software and other tools.

According to SoundExchange, SWCast has failed to make any payments for royalties incurred after 2005 and has not filed reports necessary for compliance, while collecting monthly fees from webcasters for those payments and reporting services.

Randall Krause, President and CEO of SWCast, in a letter posted on his website, does not deny the claims and says he is “committed to ensuring that we reconcile any and all compliancy concerns of SoundExchange going forward.”

Meanwhile the more than 100 webcasters that were streaming with SWCast are left looking for another streaming partner – not to mention the monies they were paying thinking they were covering their royalties.  Jason Stoddard, Live365’s Director of Broadcasting Sales, says there’s always room for them in their network. “While the disabling of SWCast is an unfortunate event for many webcasters, our ongoing dedication to complying with all royalty regulations means they still have a place to go.”

By everything I have read, the stations that were streaming with SWCast had no idea they were not compliant. While it seems that they were eclectic stations with smallish audiences, the betrayal of the stations and their listeners is not small at all. By all that I can see, SWCast represented that they covered all the licensing obligations for its stations. And SoundExchange hasn’t received payments for any period since 2005? All I can say is, what took SoundExchange so long?

New Study: Car Streaming is Here

KnowDigital presented the results of a new study focused on Internet radio listening in cars at RAIN Summit West which revealed that Internet radio is – despite technological challenges – already in cars, and many of those who listen to Internet radio on a weekly basis have already found a way to listen in their cars.

“Despite these challenges, it appears that in-car streaming radio is far from the “next frontier.” according to the study presented by VP Sam Milkman. While obstacles such as technological ease, smartphone battery use, and data plan expenses were of concern to some, 71% of those who listen regularly to Internet radio are already listening in their cars. 

90% of those listeners are also listening to terrestrial radio in the car, and Milkman points out that broadcast radio continues to be a choice out of habit, ease of use and live and local content such as traffic, news, weather, and personalities. Broadcasters should continue to focus on these services as they brace for the coming wave of Internet radio in cars, he advises.

As new devices emerge to put Internet radio into the dashboard of the car, consumers will be forced to choose which stations they want to lock into presets. KnowDigital found that when offered the chance to program up to ten presets, consumers only chose to program five of those positions. This means that as the in-car audio system opens up to offer on-air and online audio options, terrestrial broadcasters will have to sharpen their skills to hang onto a preset. “There only appears to be interest in one or two FM stations,” cautions the study. 

According to this study, it’s game-on for in car Internet radio. As newer devices make access and listening easier, the stakes will get higher. It’s important that stations develop strategies and relationships that enable them to leverage the car streaming opportunity.

Mason Tells RAIN’s Hanson: Digital Is Critical to CBS Radio’s Future

CBS RADIO President and CEO Dan Mason is excited about broadcasting’s digital future. In a keynote interview at RAIN Summit West last week, Mason shared his thoughts on radio’s future. During the 30 minute “fireside chat” with RAIN Publisher Kurt Hanson, Mason outlined his perspective that digital is now an essential component for success for broadcasters.

Broadcasters should embrace personalization and explore sidechannels, said Mason. He mentioned Phillies Radio as an example of a sidechannel (HD, not streaming) that CBS RADIO is pleased with. Mason touched upon some other investments that CBS RADIO has made and is planning. He encouraged the audience to find him on Last.fm, where he listens to the Yardbirds, among other things.

He also said that plans are in the works to relaunch mp3.com in May. That’s big news – mp3.com was a free music download site that got into legal trouble with the record labels over licensing. Its history includes a huge IPO and eventual sale to record label Vivendi Universal, where it eventually died. CNET picked up the url, but it’s been inactive for several years. Now Mason says CBS RADIO will relaunch the site next month. A look at the site this morning shows the structure of a platform that will offer downloads, interact with Last.fm, and tie in videos, podcasts, entertainment news and more. (In an ironic sidenote, mp3.com’s original founder, Michael Robertson, also appeared at RAIN Summit later in the day on a panel discussion of The Future of Music.)

Later last week, Mason sent a memo to CBSRADIO employees that echoed the digital excitement he expressed at RAIN Summit West, commenting  “never have I been more certain as to what an incredible opportunity we have before us.” and “the digital side of the business is just as important as our over-the-air operations.”

There were many impressive moments at RAIN Summit West, it was an event that in my opinion really exemplified the positive place that Internet radio is occupying. Listening to CBSRADIO President and CEO Dan Mason talk about the digital opportunity for broadcasters as a critical element to future success was one of those.

Arbitron Tells Broadcasters Digital Opportunity is Big

Radio is not in decline, it’s expanding, and that represents an enormous opportunity, according to Arbitron‘s SVP Paul Krasinski. Krasinski and SVP Bill Rose presented results of their recently updated Infinite Dial Study at RAIN Summit West last week and encouraged broadcasters to recognize the opportunity that digital distribution offers.

With 86% of the 12+ population connected to broadband and one-third of consumers owning a smartphone, it’s a different world. Embracing the fact that radio’s audience is distributed beyond the broadcast is key to future success. Access to audio has changed, has radio changed? asked Krasinski.

Online radio’s audience is expanding, with 89 million listening last month. And 89% of those listeners listen to both broadcast and online radio. Krasinski urged the crowd to alter their view of “audience” and see it across all of radio’s channels. In that regard, the audience is growing. With that growth comes a responsibility to offer great content to listeners.

A key component for radio will be developing innovative solutions for advertisers that enable them to use and measure the effectiveness across these distributed channels. Over the past few months we’ve heard hints that Arbitron is planning to step back into streaming measurement and while they have not announced anything yet, it sounds like it will be a product that enables stations to aggregate audiences from distributed channels. While their PPM product does measure streaming now, it only measures such for stations that simulcast 100% of the time, meaning that stations that sell streaming ads separately from over the air ads don’t qualify. Whether this will change is unclear.

The streaming audience measurement game is stepping up its pace – with the recent accreditation of Webcast Metrics and Arbitron beginning to talk about new plans for the space, more and better options are available to stations, which is bound to be good for the industry.

Webcast Metrics Accreditation is Great News

Triton Digital recently announced that its audience measurement ratings product, Webcast Metrics, has been awarded accreditation by the Media Ratings Council. This is certainly great news for Triton, but cause for celebration by the Internet radio industry as well.

“Triton Digital Media is to be congratulated for the accreditation of Webcast Metrics,” said George Ivie, Executive Director and CEO of the MRC. He added, “Its commitment to quality, as evidenced by its commitment to the MRC accreditation process, demonstrates the seriousness with which it takes its leadership role in the streaming audio measurement space.”

Webcast Metrics’ data collection methodology, metrics , presentation dashboard and reports were audited by an independent CPA firm and reviewed by an MRC audit committee, which led to the accreditation of Webcast Metrics by the MRC. It’s a process that has been in the works for a couple of years, begun prior to the sale of Webcast Metrics parent company AndoMedia to Triton. (Triton has recently retired the name AndoMedia.) During those two years, we’ve seen some changes in the way the numbers are reported and the introduction of some new measurement terms that are more relevant to streaming media, such as AAS (Average Active Sessions) and Session Starts which replaced more traditional radio metric terms AQH and Cume.

Webcast Metrics is the brainchild of AndoMedia’s original Founder Jordan Mendell. Back in 2004, when the company that I founded, Net Radio Sales (now Katz360), was just getting started, we were looking for a server based audience measurement solution for our network of stations. Arbitron had recently purchased and then dropped Measurecast’s server based audience measurement platform in favor of panel based measurement with comScore, and we were looking for a new solution. We had been talking with Jordan about uniform ad insertion solutions for our network and brought the idea of audience measurement to him. Eventually, Aritaur Communications, which owned Net Radio Sales, also invested in AndoMedia, and Webcast Metrics was born.

Today the service is licensed by hundreds of broadcasters and online stations, including Pandora, Clear Channel, CBSRadio, Slacker, and many others. It provides real time audience measurement that stations can use to monitor their streams and advertisers can use to plan effective use of streaming audio.

I’m delighted that the service has achieved this accreditation. It’s a meaningful step for the industry that should enable ad dollars to be spent more easily and confidently. I’m also proud of the part I played in its history, and of the fact that – one day when we were all brainstorming for a name, I came up with Webcast Metrics. May it thrive…

Targetspot’s Study: Excellent Data on Impact of Internet Radio Ads

Adding Internet radio to the media mix increases the overall effectiveness of an advertising campaign, according to new research presented during the RAIN Summit in Las Vegas last week by Targetspot CEO Eyal Goldwerger. TargetSpot research found a 3.5X higher ad response rate when adding Internet Radio to a Broadcast Radio campaign, and a 2X higher ad response rate when adding Internet Radio to an online campaign.

Targetspot’s research was done by third party Parks Associates and represents the first in-depth independent study on the effectiveness of Internet radio advertising. Goldwerger unveiled the whitepaper based on the results, entitled “Internet Radio Advertising Impact”, to record attendance at the RAIN event during NAB Show Week.

It’s a deep meaty piece of research that provides excellent validation of the effectiveness of Internet radio advertising. Highlights:

  • Users who listen to Internet Radio are twice as likely as Internet-only users to respond to an Online ad.
  • The use of Internet radio in an ad campaign can increase ad recall by as much as 2.3%.
  • Broadcast Radio ad recall and response rates significantly increase (3.5%) when combined with Internet Radio use.
  • Consumers are more likely to take action on a broadcast ad if they also listen to Internet radio.
  • In many cases, Internet radio ads combined with broadcast radio ads result in more than twice the ad campaign recall.
I am thrilled with this new piece of research. It’s a much needed and excellent contribution to the Internet radio marketplace that will no doubt benefit their network of stations as well as the overall Internet radio marketplace. Hats off to Targetspot not just for funding it, but also for releasing the data publicly at the RAIN Summit and on their website. It’s an impressive commitment to the space that should be recognized by everyone in the industry.

Internet Radio’s Buzz Factor

If yesterday’s RAIN Summit event at the Renaissance Hotel in Las Vegas is any measure, things are looking good for Internet radio and digital audio. This year’s event was the 9th annual, and I enjoyed reminiscing with some attendees who have been at all or most of them about early events, like the one that was held in a private room at a Mexican restaurant. Things have come a long way..

This year’s event, like last year’s, was held in Ballroom One at the Renaissance which is immediately adjacent to the Las Vegas Convention Center. It’s thanks to the NAB that the event takes place there, since all or most of what happens at the big hotels in town during their show is subject to their approval.

The day’s agenda featured almost 50 speakers, and it was a really impressive bunch, starting with CBSRadio’s Dan Mason who gave the room his perspective on the challenges and opportunities that digital media presents for broadcasters during a keynote chat with RAIN Publisher Kurt Hanson. Arbitron and KnowDigital presented some great new research data on Internet radio’s audience, and Targetspot presented elements of a study they funded on Internet radio’s audience and the effectiveness of ads. Every panel was moderated by an expert in the field, and they had all clearly done their homework, as had their speakers.

The support from the corporate community for this year’s event was greater than ever before – there were more than 20 sponsors of the event, led by Triton Digital’s platinum level endorsement. Triton didn’t just sponsor the event, they contributed to designing one of the panels and sponsoring travel for some of the panelists on the Digital Face-off Panel. As I am sure you know, it’s the sponsor investments that make it possible to build a better event. It was great to have so many companies step up to support this year’s gathering.

Attendance at the event was great too – RAIN Summit West hosted a record number of attendees who asked great questions and – from everything I heard – were thrilled with the show.

Yesterday was an exciting day that embodied the optimistic energy surrounding our industry. If you were there, thanks for contributing to the buzz!

(In addition to writing this blog, I run RAIN Summits which is a sister company to RAIN Publications.)

Digital Dollars For Radio Are Increasing Faster Than Overall Revenue

Online revenues for radio will grow 14% a year over the next five years, according to a report from BIA Kelsey. Overall, radio revenues will rise just 3.7% in 2011 and 4.5% in 2012, meaning that online or digital revenue’s share of total revenue to radio will increase.

“Radio… continues to face a lot of competition in the local and online advertising marketplace. Stations are responding by becoming more aggressive with their digital and online strategies, which are driving measurable revenue.” says Mark Fratrik, vice president, BIA/Kelsey.

According to recent 2010 data from RAB, digital revenue for radio is up 24% over 2009 to 3.5% of overall revenue, up from 3% of overall revenue in 2009.

BIA Kelsey’s reported increase in the portion of radio’s revenue that came as digital dollars last year was 14.1%, versus RAB’s report, using Miller, Kaplan data, that digital dollars for radio were up 24%. This could be due to different assignments of revenue to the “digital” category.

 

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