Stream On You Crazy Diamonds

The New York Times investigates increased online activity at many of the nation’s mainstream radio stations. These moves to stay relevant and reach listeners where they live come at a tough time for all who would dare to stream audio, as the federal Copyright Royalty Board is intent on levying monolithic fees for such use.

After ceding ground (and potential advertising dollars) for years to an army of autonomous Internet radio stations, some of which are run from basements and spare bedrooms, the nation’s biggest broadcasters are now marching online, determined to corral the next generation of listeners. The result may be a showdown to define the future of the medium.
All of this comes at an inopportune moment for small, Internet-based radio stations, which are facing a sharp increase in the royalties they must pay to record labels (and artists) for playing their music.
Soma FM, a San Francisco-based Web site housing 11 stations specializing in genres like rootsy Americana and spy-movie themes, owed about $20,000 for 2006 under the previous rate structure, said the site’s founder, Rusty Hodge. But Mr. Hodge, who said the stations combined generally attracted a peak audience of 12,000 at any given moment, figures that the rates would translate to a bill of $600,000 for the same year.
The cost of playing music online could become a deterrent for the traditional radio broadcasters too as more of them stream music on the Web. But it’s a price they may not be able to avoid; advertisers are flocking online.



About David Burn

I wrote my first ad for a political candidate when I was 17 years old. She won her race and I felt the seductive power of advertising for the first time. Today—after working for seven agencies in five states—I am head of brand strategy and creative at Bonehook in Portland, Oregon.