HD Radio Killer App

Well, if that happened then I would never buy a CD or go to another concert, just like I don't buy DVD's or go to the movies much.

I admit it, I will download a movie or two on the internet. If I like it enough I will buy the DVD when it comes out. If I REALLY like it I will then go to the movie. I don't have a problem supporting a movie or a record that deserves it, but I refuse to pay any amount of money before I am permitted to make that judgement prior to purchase.

I think unfortunatley I am in the minority and that since most people don't believe as I do that I make little impact, but I stand on my prinicples.

Talk about short sighted greed. It wouldn't be surprised if these rumors are being spread by internet webcasters who are in their own way trying to compete with terrestrial broadcasters. The major difference is audience size. There's a reason record companies provide service to most radio stations for exposure and that's audience size. Charging broadcasters these outragous fees would be like cutting off their nose to spite their face. Broadcasters have always paid Ascap, BMI & Sesac fees. Trust me, if they try to institute this change on broadcasters the record industry would suffer a fate worse then broadcasters who have alternatives to playing recorded music. This reminds me of the Petrillo bans and what became of them? BMI was formed and Ascap lost its monopoly. No matter what some would have you believe broadcasting is where the vast majority of record sales come from.

I don't honestly see these fees as a detriment to broadcasters. Personal opinion here so don't shoot me but allow me to explain.

We've always paid royalties for play. The amount of those royalties are based on listener numbers. A small classic rock station in western Kansas pays a small fraction to play Led Zeppelin compared to a New York station playing the same song. All based on the number of listeners.

When I started working in broadcast engineering (2000) we were streaming with two different stream providers (yahoo radio as a part of broadcast.net and another vendor I've already forgotten the name of.) I pulled 8 streams down within a 24 hour period after the first internet royalty fiasco. Someone decided that royalty rates would be based on "potential" audience size. Between music royalties and AFTRA (American Federation of Television and Radio Announcers) no one could afford to stream and nearly all the broadcasters pulled down their streams.

Those issues were both solved. Royalties are paid on a more sane basis. AFTRA voiced commercials are simply "overlayed" with promos or local spots that the station owns the rights to.

Now onto my personal opinion portion. It costs a lot of money to start a radio station. High power FM transmitters (10kw +) start at around 50k and go up. Our HD transmitters cost almost $150k and use an existing antenna/tower. Still haven't talked about STL paths, site leases, studio side gear, support personnel, etc.

A webcaster can by a decent music library for $1/track from iTunes. $2k for music. A few $k for basic PC/editing hardware. You could easily have a "station" streaming on the net for total startup costs of less than $10k.

As a listener, a virtually unlimited number of streams to choose from is great. As a broadcaster, having a barrier to entry keeps everyone from running their own stream.

Broadcasters can no longer afford to argue about music royalties for streaming. If royalties are set to high, no one will stream. We've been there before. If royalties are set too low, everyone will stream. While that may sound like a good thing for the listener, In my opinion, it kills the music business model. As a listener we want something for nothing. We want as many choices as the "market" will provide. As a broadcaster, moderate cost streaming gives us an opportunity to battle our new competitors, satellite and iPods. Cheap streaming changes that from an opportunity to a third competitor. We can't afford to be reduced to the same level as me personally streaming a $2k music library from my basement.

As long as the rates are similar for everyone, I think it's fair. As long as the rates are directly tied to the number of people using the service, I think it's fair. The royalty companies can either deal with collecting fees from 12k radio stations (probably from less than 1000 independent owners) or they can try to collect from a million(?) independents.

Clearly just my opinion,

Mike

I went so far off-topic that I forgot to tie that rant back into the main subject, subchannels. Bottom line is I feel HD-2,3,etc. royalties should be treated exactly like streams assuming the streams are based on some common sense logic. Royalties paid based on listener numbers will have no impact on rollouts. When you turn on an HD-2 and you have an average of 500 listeners your rate will be low. As the rollout progresses and more listeners get HD tuners that will grow. Your royalty rates should grow at the same rate.

Mike

And stations would, and should do exactly what they did a half-century ago...form their own licensing agency, and say "screw-you" to the biggies. To musicians they said "want to be on the radio? Come see us". Licensing fees wouldn't last long!

The model for payment has been in effect a long, LONG tme. Recording artists receive their money from record (cd/download) sales and from concerts. Songwriters get theirs from radio airplay. It works, and it's fair. EVERYBODY benefits. But record company execs should remember the lesson(s) of the past...radio stations DO have another option...and with mega-companies like Clear Channel and CBS owning so many stations, it's far more doable than it used to be...simply bypass the commercial product, and record their own!

The record labels need the radio stations far more than radio needs the labels. You can bet that the NAB is going to put up a big fight if the RIAA proceeds with this. This may benefit consumers though. Instead of the RIAA deciding on the next hit, this puts to power with broadcasters. Also, broadcasters could decide not to play music from a certain label if it tries to negotiate higher rates. Look at what happened to the careers of the Dixie Chicks when broadcasters placed the embargo on them. That is clear proof of what power broadcasters have over the labels.

With webcasters, the RIAA can easily overcharge them and force them out of business. This is because the record labels could easily create their own DRMed web streams featuring and promoting their music (such as Pressplay, Rhapsody, etc). They can't easily do that with radio stations. And also, even though Pandora and Last.fm have done very well recently, many consumers still discover their new music via local radio stations.

Modest proposal: Radio stations could employ their own orchestras (remember those days?) and play music long out of copyright. I remember spending many a happy Monday evening in my youth listening to the WQXR String Quartet playing live over FM from a studio high over Times Square. They even had a live studio audience to supply the applause track. Now that was hi-fi.

Music out of copyright used to be a viable alternative. That's when copyrights lasted what, 14 or 17 years? Now they exist for something like life plus 80 years. Nothing we've heard in the past 20 years will out of copyright during our lifetime. Too bad copyrights went this way. Good lobbying, I guess, and worldwide to boot. Good thing patents haven't taken the same road. We'd never have generic medicines.

Ain't that the truth, Milehighmike! If I produce a copyrighted work that sells, I SHOULD reap the financial benefits. But should my great-grandchildren? I'm sorry, but they ought to get a freakin' job!

The extention of the copyright laws were more to benefit corporations that own music, not regular Joes like us or our grandchildren.

My suggestion betrayed my taste for music composed at least 100 years ago. It was also a shameless shill for my daughter, who is a classical musician.

The RIAA and all the big music people are just shooting them selves in the foot. Greed finally killed the institution!!! This could be the greatest thing that happened to inde. music (since Myspace and mp3).

This could be the big break all inde. musicians dream of. Seriously, think about it. What's preventing stations from playing inde and Creative Commons music if they RIAA want to charge them for plays?

btw... you all should read this.
http://www.theonion.com/content/node/27696

Very true. Around the water cooler at the station, I'm hearing quite a few theories.

1) Charge record companies to add music to the rotation. It's not payola if it's disclosed. Radio stations don't want to pay performance royalties for records that may not chart. We'll play Kenny Chesney. But Sara Johns? Nahh. Not worth the money. So, the rich get richer.

2) Only play music from artists who have waived performance royalty fees. May be the only way a new artist can get airplay, depending on how performance royalties are billed.

3) Employ corporate house bands to re-record the songs. I can't tell you the number of really great songs we get that just aren't performed all that well. And there are more than a few name artists who would gladly sign deals to become house musicians. Far easier to get the audience to listen to a new song as sung by Joe Diffie than by Trent Wilmon.

To be honest, I'd kind of enjoy it if the local oldies station had all those 60s and 70s songs re-recorded with "today" talent and technology.

IMHO, even if stations agree to pay performance royalties, the whole what-we-play-and-how-often-we-play-it model will change to the record companies' detriment.

Steam my brains in a pressure cooker, will ya! Man, if that doesn't sound like "The War on Terror" taken down to the terms that HD Radio broadcasters can relate to. I'm sure that the NAB will formulate a decent strategy to thwart this outrageous arm twisting that RIAA (as in Dia----)proposes under the guise of protecting the music artist. Hey you want to supplement your shrinking royalty check? Do what most artists do these days: either get into fame-seeking trouble, or start your own reality TV show on cable! You've certainly got enough channels to choose from. LEAVE BROADCAST RADIO ALONE. IT HAS ENOUGH ISSUES TO DEAL WITH, and that's with HD radio trying to play B Ball at the end of the first quarter!