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November 24, 2009
A new report from Washington Research Group Concept Capital says that is it becoming less likely that the Performance Rights Act, which would force radio stations to pay royalties for playing music, will become law. In recent months, the House and Senate Judiciary Committees have approved the legislation, and a meeting was held between broadcasters and record labels to engage in mediated discussions over a possible compromise. However, Concept Capital says the odds are dropping for the legislation to pass in the 2009-10 Congress. The research group reduced its estimate from 60 percent to 40 percent odds of the bill passing in the next 12 months.

The report outlines four reasons why the possibility is less likely, first saying that broadcasters are doing an effective job of building opposition to the legislation. The NAB has gotten 27 Senators and 253 House members to sign a resolution opposing the Performance Rights Act. Secondly, broadcasters have gotten traction with arguments that a new fee could have damaging consequences for a large number a radio stations – particularly in a difficult advertising environment – and that a disproportionate share of endangered stations are minority-owned.

The report also notes that we are entering an election year, and individual members are typically more sensitive to broadcasters’ policy agenda as voting season nears. And lastly, broadcasters have new leadership in Washington.  Former Republican Senator Gordon Smith recently took the helm of NAB, and his stature, bipartisan reputation and skill set are a positive factor for broadcasters in the radio royalty battle.

The report from Concept Capital concludes, “We do not rule out the possibility of some kind of breakthrough or legislative maneuver that would allow the bill to move forward. The bills’ chief supporters (the Senate and House Judiciary Committee leaders) remain very committed to moving a bill. And the royalty bill has now progressed farther than it has in any prior congress, so risk clearly remains for broadcasters. But our sense is the momentum has shifted away from passage.”

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Understanding College Radio

NACA and the College Gig
How to Navigate The Educational Market

By Will Morgan

The college gig, in one respect, can be thought of as the generic store brand in the music industry supermarket – only a few people seem to be aware of it, despite its relative value. As a culture of advertising-inundated consumers, we instead reach for the big names on the shelf, or for the purposes of this example, the principal venues with established reputations. And more often than not, especially if you’re a musician, these items are beyond our means, financially and otherwise. Like any business, a musical career requires growing before we can expect to reap the rewards, and a college gig can often be the answer as to where to begin.

For many artists, the college booking process seems to be one shrouded in mystery, and understandably so. Schools do not share the same business mentality as standard venues, and hosting concerts is only a small part of their ongoing effort to keep students content. Not knowing how to approach this unique niche of the touring market can be discouraging for artists. Yes, landing a college performance requires a methodology unfamiliar to many, but it is certainly a revenue source worth tapping into. And thankfully, there is a set of fairly well-established guidelines and channels that will enable you to make the most of eager students and deep pockets.

In effect, there are two standard avenues for getting a college gig. The first is the do-it-yourself method: direct solicitation with press, flyers, music and the like. The second is through cooperative agencies, the most predominant of which is easily the National Association for Campus Activities, or NACA. The Association for Campus Activities (APCA) has also emerged as another helpful organization. So which plan of attack should you choose? The artists who have negotiated the process and the booking agents who understand the collegiate business mindset will quickly point to four important influencers in making the decision – money, reputation, attitude, and entertainment value.

NACA, as its website notes, “links the higher education and entertainment communities in a business and learning partnership.” In other words, the organization serves as a meeting ground for artists and colleges, thereby facilitating the booking process. Among NACA’s offerings are the Artist Matching Service, Block Book It Now (an online service that allows neighboring colleges to view each others’ schedules and book the same artists), and, perhaps most importantly, the Regional and National Conferences. Clearly, performance opportunities abound. Syd, a Boston-based singer/songwriter who estimates he has booked “a couple hundred” shows through NACA’s service, refers to the organization half-jokingly as “musician’s crack.”

Understanding NACA

Joining NACA is costly, but it can also yield you an “astonishing amount of money,” notes Syd. Those artists who decide against membership cite expenses as the main factor. An associate national membership (designed for companies doing business in the college market) costs $632/year at press time. Membership provides access to all the organization’s services and enables you to apply to both regional and national NACA conferences. Syd’s college booking agent, George Hornick from Wally’s World of Entertainment, affirms that conferences are the driving force for membership and are definitively the best way to book shows, especially if you land a showcase opportunity. Terri Mazurek of Peppermint Booking, whose roster includes Ellis, a Midwestern singer/songwriter who has had great success with NACA, echoes Hornick’s sentiment: “If you showcase well, it is THE best way to get attention in the college market.” And indeed, a little research will reveal just how lucrative one conference performance can be. Following Syd’s very first showcase, he ended up scheduling 50 college dates that same day, all paying $500 each. These results are not uncommon.

Be advised, though, that getting a showcase requires serious investment. To attend the conferences as an artist, you must first have a booth and pay the Campus Activities Marketplace fee. Then you must also pay the showcase application fee and, if selected to perform, you must pay a showcasing fee as well. Herein lies the financial trade-off that typifies NACA. Also keep in mind that showcasing slots are not reserved solely for musicians. College representatives are looking for acts that can entertain students, meaning comedians, magicians and other performance artists are also vying for coveted performance slots.

How to Succeed

Be personable and active. Even if you do not land a showcase, it can still be worthwhile to pay the booth fee and make an impression with your music if you have a positive demeanor. Not only does a certain amount of flexibility and a good attitude make you more pleasant to work with, but it will also confirm to prospective college buyers that you can interact well and potentially entertain an audience. This personal effort can have very tangible results, i.e. increased bookings. Mazurek notes that “many students have heard of Ellis because … they just met her at a conference and liked her,” and points to the fact that for “about half of her bookings, the schools are calling me directly asking for her; she has a very large number of repeat bookings.” Hornick mimics her comments, remarking “when it comes to somebody like Syd, his personality and his music have proven invaluable in the NACA eyes. To the students on program committees, they find that endearing.” He continues, “Not only is he talented, but he can also keep a set of students entertained for a period of time. NACA is all about entertainment. Students want to be entertained. To some of them, a musical act is right there with the magician, the novelty, etc.” Syd agrees: “Everyone who’s decent, or charismatic I should say, will have success with it.” In this respect, it becomes apparent how college gigs differ from standard venue performances, in that entertainment value and accessibility are paramount.

Consider an agent. The trick with student activities committees, college program boards, and the like is that they are largely student-run, meaning personnel turnover occurs very frequently. Also, because they still have all their academic worries outside of booking entertainment, “it’s not the most prioritizing thing in their life,” as Hornick puts is. If you are a self-represented artist, trying to maintain relationships with one college, let alone hundreds, can be a job unto itself. Certain agents work specifically with colleges, making sure their relationships remain intact through all the transitions. Again, the conferences are prime territory for strengthening these bonds. Additionally, those agents that have clients with proven track records are very appealing to schools because they can then book not just one, but many acts through one contact.

Use NACA as a springboard. While college gigs can certainly pay well, they do not create the same benefits as a real venue performance. Take advantage of the fact that you have generated interest among a seriously buzz-driven community and aim for playing at a local venue next time around to draw paying fans. Mazurek warns, “if you don’t follow up these shows with ticketed concerts at nearby venues, you then have a whole audience of folks who are now used to seeing you for free. They may not pay to see a show down the road.” She continues, “there is a danger of becoming just a ‘college artist’ and the students may not take you as seriously. It is important to have a balance of college shows and ticketed club shows.” Hornick concurs that “[artists] should use it to financially supplement their tour,” but that having success in the college market shouldn’t be the ultimate goal.

The Grassroots Option

Colleges are not bound in any way to book exclusively through NACA once they become members, and if you can present them with a compelling package, you can have just as much luck as NACA-associated artists. Granted, this method requires significantly more grunt work. Choosing this process is where having an already established reputation can help, as name recognition will often move you to the top of the pile. You may also want to choose this path if you or your group might have trouble competing with the various novelty acts that go through NACA. In this case, you save on membership and showcasing fees by directly soliciting schools. When asked how she approaches colleges outside of NACA, Mazurek replies simply “lots and lots of calls to schools, keeping in touch, and letting them know about open dates of our acts.” Sending flyers and one-sheets is effective when followed-up on. Developing and maintaining an up-to-date list of college contacts will allow you to conduct mass mailings easily; there are various resources for gathering all this information (see the directory that follows). Allegedly, Dispatch, certainly one of the most ingenious groups when it came to grassroots work, made their now well-chronicled entrance into the school market by making a huge list of private schools and contacting each one.

Food for Thought

Both methods take a lot of work and a certain amount of money. Do not spring for either until you are sure you are ready and need to do so. Syd advises curious musicians to bide their time and establish a following prior to joining NACA. Also, in this digital age, industry insiders are beginning to notice changes to the standard formats of booking college shows. Mazurek highlights this shift: “[Conferences] seem to be somewhat less effective recently, with more student reps finding their artists via the internet [MySpace, artist sites, etc.]. It used to be that a successful showcase would result in 40 to 50 bookings, but now it seems like ’success’ is 20 bookings.” Hornick agrees: “There’s not as much co-op buying going on at conferences. Now, you’re lucky to get a couple blocks.” He concludes with an observation indicative, perhaps, of the whole college booking process, stating, “It is a long-term investment; you have to put in three years of sticking with it in order to get turn-around.”

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The future of Internet Radio

The Future of Internet Radio

Will the success of Web radio spell the end of traditional broadcast radio?

By John C. Dvorak

Over the past month or so, there has been a heated battle between the music industry and Internet radio about rights and fees. Actually, over the past decade, there has been nothing but trouble surrounding Internet radio. I think it’s one of the reasons that podcasting emerged as an alternative to Internet radio. Look closely at podcasting, however; with the exception of the advanced auto-download via RSS aspect, it’s actually just more Internet radio.

(An aside: It’s interesting to me that many of the people who have pioneered podcasting are trying to ditch the term because it only serves to confuse the market. I suspect the term “podcasting” will be dropped in favor of variations on the Internet radio moniker. The classic “deliverable via RSS model” (developed by Adam Curry and Dave Winer)—on which podcasting was based—will need a new name, such as subscription radio or auto-load radio or who knows what.)

Let’s define Internet radio. Simply put, it’s the delivery of voice and music over the Internet. This has to be done in a format resembling that of a conventional radio show as opposed to mere file-swapping of music, which is also delivered over the Net. That’s it as far as I’m concerned.

The fly in the ointment is that there are no standards for Internet radio—not in the way it’s done, how we listen to it, etc. One would hope, however, that both the PC and Mac worlds would have systems on their machines that would take care of anything thrown at them. Not so from my experience. There is always something that works fine on one of my machines but fails on another, presenting me with odd error messages about missing codecs or unknown formats.

This mess began in the very early days of what could be described as Internet radio, when RealNetworks promoted its streaming, buffering player. You’d click on something and it would play, and then you’d click on something else and the player would tell you that you needed to upgrade. You’d upgrade and then it wouldn’t play the thing it played before unless you did a paid upgrade, which completely confused the machine half the time.

Luckily, more versatile free and public domain players emerged, and people began to stream MP3s and other formats. The bad news was that there were too many of these players, and each would fight for control of the computer and make a mess. Some sounded better than others. Some could save streams. Nobody in the mainstream media could get a handle on the scene, so reviews were scant, and you had to rely on your kids for the inside poop. That dialogue usually came in the form of “What’s this? Why aren’t you using such and such? That’s what everyone uses.” “Oh, okay.” What would I know? I only write about this for a living.

The key to understanding Internet radio is the fact that it can exactly mimic transmitter-based terrestrial and satellite broadcast radio in terms of content and style. Internet radio has three huge advantages over transmitter-based distribution, which will absolutely spell the eventual doom of traditional radio-REACH By its nature, the Internet can distribute the “signal” or show around the world to every nook and cranny. And it can do it while providing high quality at each locale.

ON DEMAND Because the product has to run through servers anyway, there is an on-demand aspect to Internet radio that cannot be duplicated by transmitter-based radio without the use of ancillary TiVo-like equipment. And there are no such devices available. Internet radio can stream in real time or be obtained on demand as needed. You can listen to what you want when you want. This is a big competitive advantage.

LOW COST The death blow, though, always comes down to money. The expense of streaming over the Internet is a fraction of what transmitter-based broadcasting costs. There is no big antenna, no transmitters, no special studios. Nothing within reason can change this metric.

This same argument could be made about TV, with IPTV being the future of TV distribution. Internet radio will pioneer this transition of media to the Net, if for no other reason than it got a head start.

So, you have to wonder: When will the last terrestrial transmitter get turned off? Well, this sort of thing never happens overnight, but certainly by 2020.

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According to major label vet Ted Cohen , “the main problem centers around the minimums [that services pay labels for the use of music],” he wrote. “The economics just don’t work. A ‘mea culpa’, I was a big proponent of per-track minimum rates for both paid subscription and ad-supported services when I was at EMI. I WAS WRONG!”

Those involved in, and observers of, online music industry are coming to the conclusion that free-to-use, ad-supported services simply aren’t working.

According to major label vet Ted Cohen (pictured), “the main problem centers around the minimums [that services pay labels for the use of music],” he wrote. “The economics just don’t work. A ‘mea culpa’, I was a big proponent of per-track minimum rates for both paid subscription and ad-supported services when I was at EMI. I WAS WRONG!”

The idea that current advertising revenue won’t come close to meeting the costs labels demand for licensing music isn’t new at all. And now labels and businesses may soon be reaching a point where something has to give.

MySpace Music is acquiring most of the assets of streaming music service iMeem, reportedly for around $1 million in cash. Both are struggling to meet the premiums they pay for the use of music. And the U.S. launch of European music-streaming darling Spotify is being held up by the major labels, which want the service to convert free-listening to subscription. “As an ad-supported service the economics don’t work at all,” a label spokesperson said. “They’re going to have to convince us they can convert enough people from free to paid subscriptions to make it worth our while.”

(While none of the major stories of the past few weeks directly involves non-interactive webcasting, the revenue/cost issues facing Internet radio likely have similar roots. This only emphasizes the need to address the issue of licensing costs.)

Cohen concludes, “It seems that the only way to achieve success for both the services and the rights holders in our current economic situation is through deals based on revenue-sharing that are structured with complete transparency. We need to break the cycle of mistrust, be bold, share the risk, share the reward.”

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Last week Arbitron Inc. and Edison Research released their latest study “The Infinite Dial 2009.” This study showed that the usage rate of digital audio platforms, suck as online radio, iPods, podcasting, etc., has significantly increased since 2008. Interestingly enough, weekly online radio audience has grown to roughly 42 million Americans, up from 33 million in 2008.

Here are some findings from The Infinite Dial 2009 study:

“The weekly online radio audience increased significantly in the past year to 17 percent of the U.S. population age 12 and older; up from 13 percent in 2008. On a weekly basis, online radio reaches 20 percent of 25-to-54 year-olds; up from 15 percent in 2008.”
“Online radio listeners are more likely to be upscale, well-educated and employed full time; 54 percent of weekly online radio listeners are employed full-time (compared to 43 percent among persons 12 and older); 16 percent of weekly online radio listeners live in homes with an annual income greater than $100,000 (vs. 10 percent among persons 12 and older); 37 percent of weekly online radio listeners have a college degree or higher education level (vs. 29 percent among persons 12 and older).”
“Weekly online video viewing among persons age 12 and older is up significantly in the past year, from 18 percent (approximately 46 million) in 2008 to 27 percent (approximately 69 million) in 2009.”
“iPod/portable MP3 player ownership continues to grow dramatically. More than four in ten (42 percent) persons age 12 and older own an iPod or other brand of portable MP3 player; up from 37 percent in 2008 and three times the number in 2005 (14 percent). Nearly two-thirds (64 percent) of 18-to-24 year-olds own a digital audio player.”
“While only 14 percent of persons age 12 and older say they are spending less time with over-the-air radio specifically due to time spent with iPods and other portable MP3 players, digital audio players have greater impact on radio among 12-to-24 year-olds. Thirty two percent of teens age 12-to-17 and persons 18-to-24 say they are spending less time with over-the-air radio specifically due to time spent with iPod/other portable MP3 players; this is nearly twice as many 18-to-24 year-olds who reported spending less time with over-the-air radio as 2008.”
“Audio podcasting usage also continues to increase. Twenty-two percent of Americans age 12 and older have ever listened to an audio podcast; up from 18 percent in 2008. In 2009, 11 percent (estimated 27 million) reported having listened to an audio podcast in the past month (up from 9 percent, or an estimated 23 million, in 2008.)”
And in an interview with Arbitron’s Senior VP of Marketing, Bill Rose, he stated:

“The sharp growth in weekly usage of online radio in this year’s study provides compelling evidence that radio’s digital platforms may be reaching critical mass,” said Bill Rose, senior vice president of marketing, Arbitron Inc. “The growth of online radio is reinforced with what we are seeing in PPM. We are beginning to see encoded streams of AM/FM broadcasts with significant audience in local markets.”

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Representatives from the National Association of Broadcasters (NAB) met with members of Congress and the Recording Industry Association of America (RIAA) to reiterate the negative impact that local airplay royalties would have on local radio stations that provide free airplay to its 235 million weekly listeners.

NAB Joint Board Chairman Steve Newberry (President/CEO of Kentucky-based Commonwealth Broadcasting), and NAB Radio Board Chairman Charles Warfield, (President/COO of ICBC Broadcast Holdings) along with representatives from the National Association of Black-owned Broadcasters (NABOB) and the Spanish Broadcasters Association attended the meeting. Rep. Mike Conaway (TX-11), an original co-sponsor of a countering resolution known as The Local Radio Freedom Act, also participated in the meeting.

NAB Executive VP Dennis Wharton said in a statement, “Out of deference to key members of Congress, NAB representatives met today with representatives of RIAA and the music industry to discuss pending performance tax legislation. NAB representatives, along with representatives of minority-owned radio stations, reiterated our strong concerns over the negative impact that the bill would have on the ability of free and local radio stations to continue serving our listeners.”

Meanwhile, Utah Democrat Jim Matheson (UT-2) became the 253rd member of House of Representatives to co-sponsor the Local Radio Freedom Act, a bipartisan resolution that opposes “any new performance fee, tax, royalty or other charge” on local radio stations for music aired free to listeners. To date a bipartisan group of 253 House lawmakers and 27 U.S. Senators have publicly expressed opposition to the RIAA-backed legislation. (11-17-09)

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The Senate Committee on Commerce, Science and Transportation voted in favor of the Local Community Radio Act of 2009, a bill that would allow for the expansion of Low Power FM stations by abolishing third-adjacent channel spacing requirements for full power FM outlets. The legislation has already made it through two key House committees and looks to pass out of the full House.

The Act was introduced by Congressional members Mike Doyle and Lee Terry, which would alter a law passed in 2000 limiting Low Power FM to rural parts of the country. These stations are non-commercial 100-watt radio service that reaches a radius of 5 to 7 miles.

The National Federation of Community Broadcasters (NFCB) has been an ongoing supporter of and advocate for LPFM. Approximately 25% of NFCB’s 250 members are LPFM stations. NFCB believes there is a need for more communities to have their own LPFM. NFCB President/CEO Carol Pierson describes NFCB’s involvement in LPFM as “consistent with our values of localism, diversity, and public service.”

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