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RAIN 6/30: Rehr admits radio should have fought harder against webcast royalties

Posted on: 06/30/2008

NAB’S REHR: RADIO INDUSTRYMADE A MISTAKENOT FIGHTING HARD AGAINST WEBCAST ROYALTIES: NAB president and CEO David Rehr (pictured), in a presentation at the Conclave Learning Conference held in Minneapolis this past weekend, admitted that the radio industry “made a mistake” in not fighting hard enough against the high webcast CRB-set royalty rates. Rehr also argued that, “never before has radio faced so many regulatory issues.” For more on Rehr’s address, read R&R’s coverage here. Rehr was involved in a debate — which observers described anywhere from “civil” to a “battle royale” — over the proposed performance royalty fee for terrestrial radio, in which he declared, “I’d rather cut my throat than negotiate on this.” Arguing on behalf of the record labels was Sound Exchange general council Michael Huppe, who stated, “The radio business makes $16 billion a year off the backs of performers and those that invest in them, and those performers don’t see a penny of those revenues. The legislation we’re talking about is an attempt to just have radio pay a fair compensation to those artists and performers for what they give to radio.” Clear Channel’s EVP/Chief Legal Officer Andy Levin also chimed in on the royalty fee over the weekend (though not at Conclave), calling the fee a “one-sided tax” for broadcasters. “[Broadcasters are] exempt from paying royalties to the labels when we play a song, and [record labels are] exempt from paying us for the value of the airtime we provide. Now the record companies want Congress to eliminate our exemption but keep theirs. That is simply indefensible.”

RAIN ANALYSIS: Here at RAIN, we’ve been crying out for years that broadcasters needed to be more engaged in the CARP and CRB processes — both because streaming is going to be an important part of their future and because the royalty battle would eventually expand into broadcast radio.

HD PROMO CAMPAIGN ADDS MOBILE ADS: The $57 million ad campaign launched by the HD Digital Radio Alliance, aimed at increasing public awareness about HD radio, will include a mobile marketing campaign with partner 3Cinteractive. 65% of the mobile ads will encourage consumers to send a text message and receive in reply HD radio information, while 35% of the promotion will send users to HDRadio.com. The site, which features buyer’s guides and station listings, has received over 2 million pages views in 2008 so far, according to COO of Texas Creative Jamie Allen. The HD Digital Radio Alliance, citing Critical Mass Media data, claims 75% of consumers were aware of HD radio in 2007, despite other studies showing lower percentages. For more, read R&R’s coverage here.

FREUND GIVES ADVICE ON LAUNCHING STREAMING AUDIO: Bill Freund, a Triton Media Group partner handling the affiliation of their digital convergence applications, outlines in a guest post at Radio Business Report what he believes are the key points in launching a digital audio stream. He argues that a digital stream should be treated as a separate entity, especially in budget planning. Senior management should also be fully behind the effort, as well as patient—the process will be long, Freud says, and broadcasters should have started the transition 10 years ago. “Many still view streaming their broadcast over the Internet as a threat, an expense or a breakeven proposition. The reality is that streaming is a great opportunity and a necessity for radio!” Read his full article here.

STUDY: RADIO’S HOLD STRONG ON AFRICAN AMERICANS AS DIGITAL DIVIDE FADES: A new study by Radio One reveals that 68% of African Americans are online (and 90% of Black teens), compared to 71% of all Americans—an indication that the digital divide may be diminishing. The study also found that 87% of African Americans listen to terrestrial radio in a typical week, while only 16% listen to satellite radio. For more, read Radio Business Report’s coverage here.

INTERNET USAGE GROWING, WHILE OTHER MEDIA DIPS: In reviewing a recent report, The Media Audit found that the Internet represents 29% of the typical day for an American adult. This represents a 64% growth from last year, while other media usage stayed stagnant or declined. Comparatively, American adults spend 23.5% of their day listening to radio, 32.7% watching television, and 7% reading the newspaper. 14% visited an Internet radio site in a 30-day period. Read more on the story at Radio World here.

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