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News From Audio Graphics:
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AOL Radio, Yahoo! Launchcast, and Caya Radio |
Now what?
With the revelation that AOL and Yahoo! may shutter their internet radio divisions due to high royalty rates, what do you think is going to happen?
1) A white knight will come riding through the halls of Congress to save the day.
2) Those record label execs will think, "Oops, we've gone too far.
Let's roll back that royalty rate,
and not go after broadcasters."
3) More internet radio stations will follow AOL and Yahoo! and threaten
to close because the math doesn't work.
4) Independent artists will get tired of this mess and start cutting deals
directly with radio stations and networks.
5) It'll be business as usual.
By process of elimination, let's discard numbers 1, 2, and 5. None are possbile. This leaves us with numbers 3 and 4, very possible scenes because this whole online royalty rate story is becoming a nightmare for nearly everyone; stations, musicians, advertisers, and audience.
But we're looking at an even bigger issue here. The radio industry - whether you sit on the broadcast or internet side of the fence - is resting close to the edge of chaos. Yet nothing is being done to fight back. (Unless you consider the NAB's PR lobbying campaign in Washington a success; it's not.) A new system is needed that doesn't include the record labels or SoundExchange.
Way in the back of the room. Yeah, you, the one yelling "heresy." What's wrong with running a music business without the music business' involvement?
Exactly how long do you think the public is going to remember Pink, Black Eyed Peas, Rakim, or Taylor Swift if these artists stop getting exposure on all forms of radio? Then, as a followup question, how long will it be for another few dozen independent artists to rise to the top if they sign an airplay for exposure agreement with a couple of large - online or off - radio networks?
2008 isn't going to be like 2007, not even close. Radio is going to find it too expensive to operate with rules handed down by the Copyright Royalty Board. The economics of the industry are changing. The quality of the product has changed. The audiences that advertisers desire are also now found online, and they are trackable, accountable. They, the audience, can be delivered, and verifiable statistics can be shown for how many did whatever; click, listen, buy.
Radio is either going to move to a format like Caya Radio has, or it's going to be a vast canyon of poor quality programming stuffed with very expensive songs (at today's royalty rate).
Caya Radio is an online station from Canon City, Colorado. Read what's front and center on its home page: "We are a station dedicated to promoting Independent Rock and Metal Bands from all over the world." The owner of Caya, "Robin," also owns "Come As You Are Entertainment and Publishing." Caya Radio doesn't play just independent artists, but its playlist is predominately made up of them.
Here's another question: How difficult would it be for Caya Radio to shift to all independent acts? It already has a list of indie artists whose names are unknown over broadcast airwaves but well-known to Caya Radio listeners. Thus, they are the first wave of "top artists" coming in from the unknown.
It's just an educated guess, but the music industry and the radio industry cannot continue with this exchange of animosity and remain in business.
Knowing that it's unlikely we'll see a drop in the royalty rate to where its cost is absorbed by advertising revenue, the only option left is to play music from artists who realize that getting played on the radio is far more important than the few percentages-of-a-cent they will receive through royalty payments. There are thousands of these bands out there producing quality music. You're a radio station manager; find them. Or, just put up a link on your station web site. Believe me, they will find you!
Begin, today, to solicit independent artists. Or, just download them from web sites where the artist have already signed waivers - like RRadioMusic.com. (Disclaimer: RRadioMusic.com is an Audio Graphics property, though there are dozens of web sites like it. There are also dozens of "independent artist" based online stations, already.)
Internet radio is not bound by the same rules of engagement that govern broadcasters. It's time to start using that as an advantage. It's time to create real internet radio born music stars, and stop playing whichever stars the music industry wants to charge you for today.
As for the broadcast radio stations: If they have as much local clout as claimed, it would be simple to start charging the record labels for those minutes of advertising - at rate card prices. Then they could announce after each song that it's a pay-for-play with a clever little line like, "That was (band name), who paid to have you hear their music. It's a commercial-free hour on...."
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