Panel One - Radio Waves
In a panel on broadcasting, the disparity between terrestrial radio, satellite, and web broadcasting was obviously the centerpiece of the discussion. It was one of the more diverse panels during the day – Mike Holden topped the billing with the title of “musician”, while he was flanked by Joe Kennedy of Pandora, Eric Logan from XM, Patricia Polach as the lawyerly presence, Dick Huey from Toolshed digital media marketing, and John Simpson from SoundExchange. With this group, the moderator was ready to rumble.
SoundExchange is an organization that collects royalties on behalf of artists for web distribution, and so it’s not surprising that a higher royalty rate would be attractive to them. “Yes, I’m happy with the CRB rates – I think they recognize the value of music.” Whether or not that’s true, he did make a valid point when comparing the startup and maintenance costs between companies. He talked about the differences in investments that needed to be made (running and operating a terrestrial station as opposed to webcasting from a PC) and the potential for subscription services to turn a profit. The question becomes – should that matter?
Certainly some of the other panelists didn’t think so. Eric Logan who is a VP from XM satellite radio said, “Listen…I wish we were a profitable business, believe me!” Given that XM pays 90 million dollars for their FCC licensing (while terrestrial radio gets theirs for free) and also launched a huge infrastructure of satellites, their costs are already astronomical - with changes in legislation they are only going to get higher.
And while it might be hard to have great pity for a group that provides a service that seems somewhat narrowly luxurious like satellite radio, the future of all broadcasting on the web also hangs in the balance.
Of course, smaller broadcasters like the ones featured on live365 are in big trouble, given that many small broadcasters are often in default of any attention to procedures and royalty payments. But even larger groups like Pandora could be affected. Joe Kennedy, the CEO and President of Pandora said that even a business like theirs, which boasts 6 million listeners, might have troubles paying up. “We’ve gone from being nothing 18 months ago to probably being the 3rd or 4th largest payer of royalties to SoundExchange. With our economics, under the proposed CRV rates, we can’t continue to exist. We will go out of business… so it is an absolute crisis for us.”
Article comments
1 - Eric Olsen
super job Claire, thanks so much!
2 - bliffle
Why struggle to enforce old monopolistic business models? Let them die, and then form new business models.
The whole concept of copyrights has been so abused that it no longer serves a useful purpose.