I don’t like what I’m reading today about new fee structures for internet radio.
Orbitcast and Arts Technica warn of the format’s demise. While Kurt Hanson of Radio and Internet Newsletter (RAIN) breaks down the mathematical implications:
Because a typical Internet radio station plays about 16 songs an hour, that’s a royalty obligation in 2006 of about 1.28 cents per listener-hour.
In 2006, a well-run Internet radio station might have been able to sell two radio spots an hour at a $3 net CPM (cost-per-thousand), which would add up to .6 cents per listener-hour.
Even adding in ancillary revenues from occasional video gateway ads, banner ads on the website, and so forth, total revenues per listener-hour would only be in the 1.0 to 1.2 cents per listener-hour range.
That math suggests that the royalty rate decision — for the performance alone, not even including composers’ royalties! — is in the in the ballpark of 100% or more of total revenues.
Given that I listen to WNCW’s internet stream pretty much all day at work, anything that threatens them, threatens me. If you come here often, you already know I have an enormous appetite for media consumption. Now you know which type of media I cherish most.
About David Burn
