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Tuesday, November 6, 2012
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Items of Concern for Radio in 2013

European publishers want to be paid by Google for using their listings in search returns.

Artists want to be paid by the radio industry for using their music in programming.

Advertisers want to pay less for an accountable return.

The general public doesn't want to pay anyone for anything.

Four separate issues, and all are active battles around the world. Each has arguments that involve business changing. What to do?

"New radio revenue models are needed because there's too much content available for free online, and not enough 'special' audio content to charge for." I understand that anyone making a living off the status quo finds it difficult to accept concepts that conflict with it. However, there's enough data to support that our whole system for distributing audio news, information, and entertainment has changed. We're talking both ends here - how people produce content to how consumers consume content.

Consumer change is easily witnessed by scanning the interaction various age groups have with each other and media. As we ride the Baby Boomers to retirement, not keeping an eye on Millennials (and younger) is a mistake that continues to be made in the radio industry.

Can you see comparable radio problems in what follows?

The New York Times has a good article on Google's continued problems convincing European publishers that it will "not pay for content that Google does not host." European publishers fail to see the benefit of being where millions of people go to uncover their daily content - "Google News."

Point 1 - Radio's biggest take-away: It's important to be where people are looking for what you have to deliver.

European publishers, unlike American counterparts, are giving Google resistance on being listed in returns. They refuse to admit that it's not being on the internet that matters; it's being found. Google just happened to build the world's most-used "serve me this" machine, and it's beneficial - not restrictive - to be listed on it. (As an asterisk: Google's ad business provides over 65% of the company's revenue, which establishes the value of appearing in the listing.)

Point 2 - Artists
I ride the fence on payment of fees to artists in that I believe the early stage of an artist's radio exposure is not something they should be paid for. When becoming known, an artist carries great liability for any station placing their song in its playlist. After establishing a name, it's a different story. The artist becomes a draw and earns the right to be compensated. At what point this "establishing a name" occurs is negotiable.

The concept of paying artists a performance fee is coming to the front burner again, repositioned as "The Internet Radio Fairness Act." The name rightly explains what action is needed - fairness, in fees paid by all audio-based media.

In May 2007, I wrote: "...SoundExchange already announced its intentions of pursuing broadcast radio for the same performance fees."

In March 2009, I followed with these words: "The radio industry will find no solace in its ability to promote artists because artists can/will/do find promotional opportunity at every turn today. This is now an issue of parity, and this fight will not go away until the radio industry pays."

Point 3 - Advertisers
Radio advertising, as old timers know it, is having trouble breathing. National revenue is replacing local as the lead category throughout the radio industry. Online there are areas where radio hasn't looked because it chose to spend time chasing the coupon craze. For all the bellowing of iHeartRadio, it's barely a blip among its competitors.

If the radio industry continues a reluctance to embrace all that new media offers, it will gradually lose its audience base and advertiser support (as European publishers are learning from their actions). I predict a 5-7 year lag, placing extreme downward pressure between 2015-2017 as the digital dashboard goes mainstream.

Point 4 - Free Content
New radio revenue models are needed because there's too much content available for free online, and not enough "special" audio content to charge for. There are answers here, but they need to be accompanied by action. (Check Google News to see just how little action occurs within the radio industry.)

To help bridge those last two items, just keep repeating the words of Former Army Chief of Staff, General Eric Shinseki: "If you donít like change, youíre going to like irrelevance even less."

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