Comments on: New radio royalty = 78% revshare? http://davidporter.wordpress.com/2008/02/21/new-radio-royalty-78-revshare/ favorites | discovery | ventures | valuation Thu, 26 Nov 2009 16:48:55 +0000 http://wordpress.com/ hourly 1 By: Is advertising-supported the magic potion? at MuSMo - Free Music http://davidporter.wordpress.com/2008/02/21/new-radio-royalty-78-revshare/#comment-3294 Is advertising-supported the magic potion? at MuSMo - Free Music Fri, 07 Nov 2008 10:29:10 +0000 http://davidporter.wordpress.com/?p=84#comment-3294 [...] content providers, do you really care? On the recent blog entry of David Porter who guess-timated the new internet radio royalty to be around 78% – David showed that the math doesn’t add up. Maybe content providers really [...] [...] content providers, do you really care? On the recent blog entry of David Porter who guess-timated the new internet radio royalty to be around 78% – David showed that the math doesn’t add up. Maybe content providers really [...]

]]> By: davidporter http://davidporter.wordpress.com/2008/02/21/new-radio-royalty-78-revshare/#comment-3281 davidporter Mon, 14 Jul 2008 20:33:42 +0000 http://davidporter.wordpress.com/?p=84#comment-3281 Yes, this is definitely why they want a higher royalty rate, and the labels are experimenting with imeem in this area (which they supposedly own ~50% of now). While non-interactive streaming is promotional and arguably not really substitutional (except to same extent any radio is substitutional), the new rates for such streaming are priced at 20% of the rate that's intended to replace CD sales (the $.01 per on-demand play). OTOH, for a large webcaster, this non-interactive internet radio royalty rate works out to as much as 10X what satellite radio has to pay (and an even higher multiple for smaller webcasters). Hence the rate for internet radio is actually closer to the on-demand pricing than to the pricing required for the other forms of radio! Shockingly, this was an intentional choice, as the CRB followed the line of reasoning put forth by the RIAA attorneys. Yes, this is definitely why they want a higher royalty rate, and the labels are experimenting with imeem in this area (which they supposedly own ~50% of now).

While non-interactive streaming is promotional and arguably not really substitutional (except to same extent any radio is substitutional), the new rates for such streaming are priced at 20% of the rate that’s intended to replace CD sales (the $.01 per on-demand play).

OTOH, for a large webcaster, this non-interactive internet radio royalty rate works out to as much as 10X what satellite radio has to pay (and an even higher multiple for smaller webcasters). Hence the rate for internet radio is actually closer to the on-demand pricing than to the pricing required for the other forms of radio! Shockingly, this was an intentional choice, as the CRB followed the line of reasoning put forth by the RIAA attorneys.

]]> By: gobbagobba http://davidporter.wordpress.com/2008/02/21/new-radio-royalty-78-revshare/#comment-3280 gobbagobba Mon, 14 Jul 2008 20:24:25 +0000 http://davidporter.wordpress.com/?p=84#comment-3280 David, I think you are on to something. This why labels are playing hardball with last.fm: Terrestrial or Satellite Radio airplay = free promotion Non-interactive internet radio airplay = free promotion Interactive, on-demand streaming = substitution Allowing people to stream music on-demand brings the risk that a portion of potential customers will simply dial music up on last.fm instead of buying it from iTunes, etc. At the rate offered by last.fm to unsigned artists, it would take about 2000 plays to generate $1 in royalties. If just a tiny fraction of the population decides against buying a track because they can hear it for free on demand, it will result in lower royalties. It is unrealistic to expect the labels to agree to something like this. David, I think you are on to something. This why labels are playing hardball with last.fm:

Terrestrial or Satellite Radio airplay = free promotion

Non-interactive internet radio airplay = free promotion

Interactive, on-demand streaming = substitution

Allowing people to stream music on-demand brings the risk that a portion of potential customers will simply dial music up on last.fm instead of buying it from iTunes, etc. At the rate offered by last.fm to unsigned artists, it would take about 2000 plays to generate $1 in royalties. If just a tiny fraction of the population decides against buying a track because they can hear it for free on demand, it will result in lower royalties. It is unrealistic to expect the labels to agree to something like this.

]]> By: netlabels and webcasting contrasted with on-demand « the Wordpress of Lucas Gonze http://davidporter.wordpress.com/2008/02/21/new-radio-royalty-78-revshare/#comment-3279 netlabels and webcasting contrasted with on-demand « the Wordpress of Lucas Gonze Mon, 14 Jul 2008 17:20:14 +0000 http://davidporter.wordpress.com/?p=84#comment-3279 [...] July 14, 2008 Here are David Porter’s calculations on the health of webcasting as a business: [...] [...] July 14, 2008 Here are David Porter’s calculations on the health of webcasting as a business: [...]

]]> By: davidporter http://davidporter.wordpress.com/2008/02/21/new-radio-royalty-78-revshare/#comment-3253 davidporter Fri, 07 Mar 2008 17:09:39 +0000 http://davidporter.wordpress.com/?p=84#comment-3253 The terms for the on-demand side required by the Majors -- basically $.01/stream -- are far, far in excess of any potential level of ad revenues. I don't think an ad-based on-demand model is economically tenable, at least for Major label content, and at least in the near term. Folks like IODA tend to be much more reasonable, however. The terms for the on-demand side required by the Majors — basically $.01/stream — are far, far in excess of any potential level of ad revenues. I don’t think an ad-based on-demand model is economically tenable, at least for Major label content, and at least in the near term. Folks like IODA tend to be much more reasonable, however.

]]> By: bypassing http://davidporter.wordpress.com/2008/02/21/new-radio-royalty-78-revshare/#comment-3252 bypassing Fri, 07 Mar 2008 16:41:02 +0000 http://davidporter.wordpress.com/?p=84#comment-3252 78% hah that's nothing! I hear that IODA was negotiating for over 100% revshare from imeem.com and when they didn't get it they kicked up a big stink and killed the deal. I see compete.com has new traffic numbers for Feb 2008 and projectplaylist has moved in front of imeem again, but over at quantcast imeem has done the get quantified thing and now shows up with over 100million users a month. http://www.quantcast.com/p-03Kgz0RV6Ztmc 78% hah that’s nothing!

I hear that IODA was negotiating for over 100% revshare from imeem.com and when they didn’t get it they kicked up a big stink and killed the deal.

I see compete.com has new traffic numbers for Feb 2008 and projectplaylist has moved in front of imeem again, but over at quantcast imeem has done the get quantified thing and now shows up with over 100million users a month.
http://www.quantcast.com/p-03Kgz0RV6Ztmc

]]> By: Online radio licensing problems explained… « heute:pop:blog http://davidporter.wordpress.com/2008/02/21/new-radio-royalty-78-revshare/#comment-3250 Online radio licensing problems explained… « heute:pop:blog Tue, 04 Mar 2008 22:44:08 +0000 http://davidporter.wordpress.com/?p=84#comment-3250 [...] David Porter who put the current issues the online radio industry is facing in very simple words in this blog post. In fact, based on this I will explain the problems to the listeners of my radio show in Hamburg [...] [...] David Porter who put the current issues the online radio industry is facing in very simple words in this blog post. In fact, based on this I will explain the problems to the listeners of my radio show in Hamburg [...]

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