The message coming from the radio industry is clear: Terrestrial radio is in trouble financially and things will get worse before they get any better. Many of the country’s largest national broadcasters are on the verge of bankruptcy, and the Radio Advertising Bureau (RAB) announced that Q1 2009 was the industry’s worst quarter ever in terms of ad spending.

“Internet Radio Makes Waves,” a new eMarketer report, predicts the radio industry will see double-digit losses in ad spending this year alone, with terrestrial radio bringing in $14.5 billion in ad revenues in 2009, a drop of 18% from 2008 levels.

At least radio isn’t stumbling into the online space as badly as the newspaper industry has. The outlook for online radio ad spending is much brighter although it’s not going to be taking the world by storm by any means. The nice thing that online radio presents advertisers is more segmentation and more niche-oriented opportunities to target ad spend in ways that were not possible in recent years.

The chart below shows that the prediction is that online radio ad spend is poised to at least continue to grow while the jury is out on traditional radio. Early returns though seem to point to the steady decline of radio for the purist. No news on ham radio operators though so maybe there is still hope

What are your habits when it comes to radio? I know mine have changed significantly but it’s still on when I am in the car. The difference is that I listen now for different reasons and will quickly play a CD or whatever once there is nothing to being offered on the air. As for Internet radio? I’m not quite there yet but that may just be me.

Comments

TNS Media Intelligence only looked at the display ad business online in comparing it to several other media segments. Only Free Standing Inserts, i.e. those inserts placed into, but not bound to, print media, outgained online display ads in the first quarter of 2008.

Here’s how they stacked up by percentage:

FSI: 8.8%
Internet: 8.5%
Outdoor: 2.5%
Television: 1.7%
Magazines: 0.8%
Radio: -4.5%
Newspapers: -5.2%

An example of online display spending came from measurement firm comScore, and its discussion of quick-service restaurant display ads served in March 2008. McDonald’s easily topped the list, serving over 295 million ads in the month. Only second-place Quizno’s came close to the 100 million mark, delivering 98 million for March.

Impressive growth, big arrangements – it’s all part of what sounds like a fairly realistic plan.  CBS Radio “will invest in significantly more original online content, possibly including niche sports and music offerings,” according to Steve McClellan.  Furthermore, CBS Radio “expects to partner with a music-focused social network site, London-based Last.fm.”

Granted, the fit and finish of the relationship will be as important as its existence; as an example of a failure in this area, ABC News’s odd partnership with Facebook hasn’t done much for either side.  Still, McClellan reports, “CBS CEO Leslie Moonves told attendees at the UBS media conference last week that he was ‘guardedly optimistic’ that the radio division would show at least some revenue growth next year after several years of declines.”

With the effects of the television writers’ strike being felt more and more every week, that would be an especially welcome development for the big corporation.  Watch for others to follow its lead if things work out.

About the search engine:

"iheard.com makes it easy for people to find their favorite internet radio stations by providing an easy to use search interface and directory with thousands of stations organized by genre, country and language. We do not host or stream radio stations, we capture and store rich meta data about each station and connect listeners with stations around the world. We work closely with station owners, helping them find new listeners through onsite advertisement, paid placement and promotion. If you are interested in featuring your radio station on iheard.com, you can submit your station or advertise online now."

One can search for radio stations based on language, genre, country or most popular from all over the world. The best part about this services is that radio stations are rated.

• Alternative
• Ambient
• Blues
• Classical
• Christian
• Country
• Eclectic
• Dance/Electronic
• Folk
• HipHop/Rap
• International
• Jazz
• Latin

Try it out, there are some real gems from all over the world.

Comments

The Day the Web Goes Silent

Next Tuesday, June 26, thousands of US webcasters will go silent, including big names like Yahoo, Rhapsody, MTVOnline, and Pandora, as well as more local offerings like BluegrassCountry.org/WAMU.org and RadioMilwaukee.

Some webcasters will cut off their streams entirely while others will play static, ocean sounds, or similar fare with periodic public service announcements of what is happening.

"The arbitrary and drastic rate increases set by the Copyright Royalty Board on March 2nd threaten the very livelihood of thousands of webcasters and their millions of listeners throughout the country," said Jake Ward, a spokesperson for the SaveNetRadio Coalition.

"The campaign to save Internet radio – a genuine grassroots movement comprised of hundreds of thousands of webcasters, artists and independent labels, and Net radio listeners – has quickly brought this issue to the national forefront and the halls of Congress, but there is still more to be done before the approaching deadline of July
15th.

"On Tuesday, thousands of webcasters will call on their millions of listeners to join the fight to save Internet radio and contact their Congressional representatives to ask for their support of the Internet Radio Equality Act."

After July 15, the CRB plans to impose its new rates, a policy that is retroactive, requiring Net radio providers pay the new rates for the previous 17 months as well.

The complete list on Internet radio stations participating in the Day of Silence are as follows:

Yahoo!
Live365 stations,
Rhapsody,
MTV Online,
AccuRadio,
KCRW (Santa Monica, CA),
Pandora,
Radioio,
DigitallyImported,
RadioParadise,
3WK,
myMVY,
Wizard Radio,
Born Again Radio,
Pearadio.com,
Ear.fm,
WGLI (Bablylon, NY),
WMUK (Kalamazoo, MI),
Head-On Radio Network,
Zecom/Gemz Radio,
monkeygrip music cafe,
KFCF (Fresno, CA),
LuckySevenRadio.com,
Blue Power/Guitar Speak,
WPNA (Oak Park, IL),
60′s Chicks Radio/Seasons &
Celebrations Radio,
STAR 107.9,
WRPS/WebRadioPugetSound,
Puregold Rock ‘N Roll,
NeverEndingWonder Radio,
RadioMilwaukee,
BAGeL Radio,
Gotradio/100hitz,
KDUN (Reedsport, OR),
GDRadio.net,
KQLZ (Los Angeles, CA),
KXPR/KXJZ (Sacramento, CA),
NiceNoise.Net,
BlackLight Radio,
Pure Pop 24/7,
Smooth Jazz and More,
Reggae Nostalgia,
WCH Radio/The Wave,
WYGS Southern Gospel Radio
Network,
BluegrassCountry.org/WAMU.
 

This legislation would, according to a press release on the matter, “save Internet radio from a recent royalty hike that threatens to bankrupt the industry.”  The threat: “a Copyright Royalty Board (CRB) decision to increase fees webcasters pay to play music online by a devastating 300 to 1200 percent.”

All right, so the language they’ve used is a little overblown, but it’s for a good cause.  If you doubt the importance of this issue, visit SaveNetRadio.org, where there are testimonials from around 400 different artists.

And the Roots Music Organization, “an international organization representing more than 2200 independent artists and labels,” has said, “[W]e are very pleased by the introduction of the Internet Radio Equality Act in the Senate today.”

It looks like the Roots Music Organization has a lot to be pleased about; given the forces amassed by opponents of the CRB decision, vacating it may not be too hard.

In fact, “companion legislation” to the Internet Radio Equality Act has been introduced (again, by one Democrat and one Republican), and it “has already garnered the support of more than 60 cosponsors.”

Given the current political climate, Democrats and Republicans can be expected to disagree on just about every issue.  Since they’ve teamed up to support the Internet Radio Equality Act, well . . . it may deserve your backing, too.

Tag:

Unfortunately for Internet radio providers, and for music lovers around the world, the judges at the CRB denied the appeal headed up by NPR and joined by several online radio stations.

Now, the only music that’s coming from streaming online providers is that of the funeral march.

Olga Kharif at Business Week discusses the implications of the CRB’s ruling:

The stations will have to cough up these royalty payments – 300% to 1,200% higher than the fees they are used to paying — retroactively. Unless Congress gets involved, that will mean the death of many Web radio stations, whose revenues will fall short of these royalty payments.

Previously, streaming audio providers were only responsible for a paying percentage of their gross revenues in royalties to artists and record labels. Now, any station that serves up online music content will have to pay an initial $500 inclusion fee, along with royalties that are calculated on a ‘per song’ basis and are retroactive for all of 2006 as well.

Eric Bangeman of Ars Technica talks more about the drastic change in royalty payment structure:

The ruling is a huge blow to online broadcasters, and the new royalty structure could knock a large number of them off the ‘Net entirely. Under the previous setup, radio stations would have to pay an annual fee plus 12 percent of their profits to the music industry’s royalty collection organization, SoundExchange. It was a good setup for the webcasters, most of whom are either nonprofits or very small organizations.

In a statement, SoundExchange Executive Director John Simson anticipates “working with the Internet Radio Industry” to ensure mutual success. As Bangeman continues in his article, however, he points out that the organization’s comments seem less than sincere given the consequences of their royalty hikes:

[A]fter today’s ruling—which will take effect on May 15 unless the US Court of Appeals for the District of Columbia Circuit agrees to hear an appeal—there probably won’t be much of an Internet radio industry left for SoundExchange to work with.

An online coalition, SaveNetRadio, has launched a last ditch campaign in an attempt to save Internet radio. 

SoundExchange, the royalty collecting division of the Recording Industry Association of America (RIAA), will seek to retroactively charge webcasters for streaming content delivered throughout 2006 to users, a decision that could send the sites packing for good.

The new rates will require webcasters to pay for each song streamed to each user, and will increase yearly according to these figures:

2006: $0.0008 to stream one song to one listener

2007: $.0011

2008: $.0014

2009: $.0018

2010: $.0019

Eliot Van Buskirk and Sean Michaels of Wired lament the financial implications of the U.S. Copyright Royalty Board

The advertisers are uploading 30-second radio ads, in MP3 format, which will air on around 700 radio stations.

Google Audio Ads are sold on a CPM basis through the AdWords platform, and advertisers can target on factors like geographical market and time of day. Reporting functions disclose which stations ran ads and when, and real-time air checks are available, a bit of a novelty for interactive marketers who have grown used to not seeing their non-search executions.

It’s somewhat interesting that the ads will be on a CPM and not CPA (cost per action) model. I thought Google’s plans were to shake-up the advertising industry by bringing their AdWords model to other channels. Instead, a CPM model suggests that Google’s not confident they can make money on a CPA basis on anything other than search.

Tag:

Bookmark WebProNews:

Andy Beal is an internet marketing consultant and considered one of the world’s most respected and interactive search engine marketing experts. Andy has worked with many Fortune 1000 companies such as Motorola, CitiFinancial, Lowes, Alaska Air, DeWALT, NBC and Experian.

You can read his internet marketing blog at Marketing Pilgrim and reach him at andy.beal@gmail.com.