In a stock for stock transaction, Randy Michaels and his partner Marc Chase have exchanged ownership of their “pureplay recommendation system” called Up Your Ratings (UYR) for RadioIO stock. Michaels and Chase also become strategic advisors to the company. It’s an announcement that has been in the works for a while – Michaels and RadioIO CEO Tom Bean are old friends, along with Bubba, who joined RadioIO at the beginning of this year.
UYR, which is owned by Randy Michaels and Marc Chase, is a private company with unique intellectual property that has been developed by Mr. Michaels and his team. UYR’s pure play recommendation system (ScenarIO) is designed to deliver a one-to-one, vs. a one-to-many, consumer preference based custom audio product that is specific to the users tastes, locations, moods or activities thus creating a unique audio experience.
“IOWorld and RadioIO have long been innovators and pioneers in the Internet Radio Space including most recently with the launch of RadioIO Live® and The Bubba the Love Sponge® show,” stated Randy Michaels. “Marc and I look forward to continuing that tradition of innovation and with UYR’s IP and IOWorld’s platform we will implement a plan for internet radio that combines the best practices of traditional media with the most successful interactive characteristics of leading internet businesses.”
Following on the heels of that announcement comes another – Shannon Burke, a former Clear Channel personality who lost his morning show gig when he ran into trouble with the law (involving a gun and a wounded wife and dog) will leave the AM radio job he has had since July and join Radioio’s Bubba Army with an uncensored show. I for one cannot wait to find out who’s next..
IO World Media, the parent company of Radioio, has announced second quarter results that reflect revenue gains over a year ago. The company reports revenue of $473,321 in the second quarter of 2011 as compared to $191,544 for the same period in 2010, and a net loss of $197,774 as compared to $274,323 for the same period in 2010.
The company press release notes that the revenue growth is attributable to the very successful launch of RadioioLive and the Early Enlistment Program for the Bubba Army. This revenue will be recognized pro rata over the thirty-six month life of those subscriptions.
Early this year Bubba The Love Sponge joined Radioio after leaving Sirius XM last year. During an early campaign on his new station, many loyal listeners signed up for long term subscriptions, giving them access to both live and archived content as well as Radioio’s music channels.
The company’s stock, trading as IWDM, has ranged from $.05 to $.68 in the last 52 weeks and is currently at $.11.
Will consumers pay for online content they get now for free? That’s a question that Nielsen recently asked 27,000 consumers in 52 countries – and the answer was a resounding “maybe”. After 85% declared that they prefer getting their content for free, survey participants went on to indicate which content they would – or already have – paid for.
In fact, about a third of those surveyed indicated that they have or would be willing to pay for radio (music), and about a quarter for radio (news). 27 or 28% indicated they would or have already paid for podcasts.
Caveats are that they don’t want to see ads if they’re paying for the content, and they expect the content to be “better” than what they were getting for free. Men were more tolerant than women of the idea of advertising, and residents of North American countries were least tolerant globally of the idea of advertising within paid content.
It’s an interesting study in the ongoing debate of best ways to monetize online content. Applied specifically, this information would encourage online stations to create unique channels of audio content that they can charge for, and cultivate customers for that content from within their larger audience base.
Some online stations have been doing this – for $36 a year you can listen to Pandora’s Pandora One, which gives listeners a special desktop app, ad free listening, higher quality audio, and other special features. Digitally Imported offers a similar premium package for $5.95 a month, and Radioio offers an “audiophile subscription” that includes their 52 basic channels plus 20 channels only available to subscribers, along with ad free and better quality streaming.
Last week, “Pureplay” webcasters and Sound Exchange came to agreement on royalty rates for the use of sound recordings by Internet Radio stations for the period from 2006-2010. The deal, and analysis of it’s benefits, have been well summarized by David Oxenford (the attorney that represented the webcasters) here, and by Kurt Hanson, Publisher of RAIN: The Radio and Internet Newsletter on his blog.
As Hanson explains, the deal benefits “webcasters who … who have aspirations of earning more than $1.25 million in revenues per year — but are not wholly-owned divisions of multi-billion-dollar companies (e.g., AOL & Yahoo and CBS & other terrestrial broadcast groups). Those webcasters, and some of the known parties in the group, are Pandora, AccuRadio, Digitally Imported and Radioio.
Like the deal negotiated by broadcasters with Sound Exchange earlier this year, this agreement saves these webcasters from further costly CRB (Copyright Royalty Board) negotiations, establishes performance royalty rates that are lower than the rates established by the CRB, and gives smaller webcasters fixed percentage of revenue rates until they hit annual revenue marks somewhere over a million per year.
While there are critics, there’s no doubt that this deal benefits the certain group that participated in the negotiations, giving them relief from CRB-established rates. Congrats to David Oxenford, Kurt Hanson, Joe Kennedy, Ari Shohat, Mike Roe, and others who participated in the negotiations – I know from previous experience that it’s a long and frustrating process. More importantly, it’s a very expensive process – other webcasters that benefit from this option owe thanks and perhaps more to the companies that stepped up to get it done.