summit

The annual spring RAIN Summit West gathering in Las Vegas last month closed with a discussion of the evergreen topic of music licensing costs and the effects on services. Somewhat encouragingly, the on-stage participants -- representing webcasters, the music industry, rights organizations, and performers -- seemed to agree on more than disagree. The panel, "The Song Plays On," was moderated by attorney and webcasting legal expert David Oxenford.

Attendees heard from artist Patrick Laird, a cellist in the classical/rock outfit Break of Reality. A strong advocate for webcasting, he says his band's experience has led him to believe play (that is, exposure) on Internet radio is far more valuable than the royalties his band earns from that play.

"I'd much rather be played," Laird said. "We've had over 16 million plays in a year on Pandora... we wouldn't get radio play otherwise... but our record sales tripled." He told a story of a promoter finding Break of Reality on line and booking them for a show which paid them more than all their royalties for an entire year.

When the discussion swung to the promotional value of Internet radio versus that of on-demand streaming, Laird (left) said, "Internet radio is what radio has always been, a discovery tool, a way to sell tickets, to fill concerts, to sell music, to get more fans. Internet radio is a better version of radio, it does all those things better. What's important is the growth of the medium. We need to support Internet radio, it's the future of the way people discover music... especially independent artists."

Consultant Ted Cohen, of TAG Strategic, while maintaining that "radio should pay," respects the benefit to artists of being played on services that can now reach "a hundred, two hundred million people." He said, "We're somewhere in the sweet spot -- I don't think the artists and labels are entitled to more... I'm not sure how much less they're entitled to."

This led to panelists considering how services could be even more beneficial to artists. Laird really liked the idea of linking directly to artists' presences on Facebook or YouTube ("that's money right there"), and suggested giving tghe artists themselves an interface to maintain those links.

But SomaFM GM/Program Director Rusty Hodge (right) feels the statutory license is a barrier to some of these methods of promoting new music. He suggested the need for a wider range of licenses, that could, for example, allow for use of music that's currently prohibited by the "performance complement" of the law (such as a rule forbidding play of more than three songs by a single artist in two hours, among others). It "keeps you from doing a lot of creative things," Hodge explained.

Cohen agreed that constraints on webcasters' use of content, even when promoting artists, held back creativity.

Moderator Oxenford then brought up the fact that some services like iHeartRadio and Apple's upcoming service are negotiating directly with copyright owners (and going around the statutory license) to, among other things, avoid the constraints of which Hodge complained. And while services going this route would lose the convenience of a "one-stop" for all their licensing, Cohen said the process of direct licensing has become much easier in recent years: "The goalposts have gotten wider."

Getting back to the statutory license, Oxenford asked if a "percentage-of-revenue" royalty model, such as those employed by publishing performance rights organizations, makes more sense for a young industry like Internet radio (The statutory rate is based on a "per performance" rate, a performance being one song/one listener.).

SoundExchange Senior Counsel, Licensing & Enforcement Brad Prendergast explained "the beauty of a per-performance" royalty is that "every transmission of a track is valued the same -- it's 'delivery mechanism neutral.'" It helps protect the value of the music from an operator that would use a high volume of music but make very little money from the service. (He also reminded the panel that there are indeed some statutory agreements to which SoundExchange is a party that use a percentage of revenue, such as the small webcasters' license).

One recent development the panel brought up was the announced withdrawal of digital rights by some publishers from performance rights organizations (PROs) like BMI and ASCAP. BMI VP/New Media & Strategic Development David Levin (left) explained that publishers are seeing record labels making much more licensing music to services than they are, because the PROs operate under federal regulations that they feel supress the rates they can charge. The publishers tell BMI, Levin said, "Because of the government structure you operate under, we can get a better rate outside of this monopoly, by going direct."

Cohen empathized with the sentiment. "The labels are getting 90% of the revenue, the publishers are getting 10%. That pendulum has to swing a little bit."

We have audio for all of our RAIN Summit West content (including this panel) available via SoundCloud. Look for the links in the right-hand side of kurthanson.com.

[This piece ran earlier today. Look for coverage from RAIN Summit Europe soon!]

Today is the second-annual (and first full-day) RAIN Summit Europe, at the Hotel BLOOM! in Brussels.

As something of a departure from the typical RAIN Summit format, today's agenda features five discussion panels interspersed with an equal number of "feature presentations" by a single speaker (and that doesn't even include RAIN publisher Kurt Hanson's address on the global Internet radio industry).

Follow along (or catch up later, if you're not in Europe!) on Twitter via the hashtag #RAINSummit.

The day begins at 9am (that's 2am here at RAIN's Chicago office in the Central time zone) with the "Identifying Online Audio's Sales Proposition" panel, following a quick greeting and introduction. At 10am, the day's first presentation, from SBS Discovery Media's Simon Gooch on his company's Radio Play initiative. As per tradition, we'll close the event with the RAIN Reader Cocktail party at 5pm.

[See the day's full agenda of panels, presentations, and speakers on the RAIN Summit Europe webpage here.]

The event's "presenting sponsors" are a2x by Triton Digital and adswizz.

Radionomy has brought on former TuneIn Director of Content Scott Fleischer (pictured) as Premium Content Director (beginning in June). As he did at TuneIn, Fleisher will create broadcaster- and content provider-partnerships for the service. Belgian-based Radionomy provides a webcasting platform for professional and amateur webcasters. Fleischer's career experience includes a stint with this publication.

(Radionomy CEO Alexandre Saboundjian will speak at RAIN Summit Europe tomorrow in Brussels, on the Growing Your Online Audience panel.)

Meanwhile, music streaming service Slacker announced today it has named John Hayase its new Chief Product Officer. Hayase will oversee the development of Slacker’s digital music service across all platforms. Most recently VP/Client Solutions with ElasticPath, his career path includes time at EA and Boeing.

Streaming music service Rhapsody has committed to providing "liner-note-style credits" for every track in its 17 million-plus library, including the names of producers, engineers, composers, session performers, and more (you can read more about this in The New York Times here).

There are likely several reasons why Rhapsody would commit to such a huge undertaking, but one might just be that enhancements like this help make service the center of (listeners') music experience," to quote the company's Jon Irwin. Irwin, Rhapsody International president, gave the second of two keynote addresses at the recent RAIN Summit West event in Las Vegas.

Liner note-style credits would also help the listener and the artist to "connect in a meaningful way," to again paraphrase Irwin -- fundamentally necessary for creating the experience for which consumers will pay. 

The streaming music/Internet radio space is certainly crowded, yet Irwin maintained that none of these companies are "really killing it" from a customer experience perspective, or from a profitability perspective (and he includes his own company in that assessment). "Nobody has nailed it across all content types and all listening modes," he said, to offer what he termed "the Ultimate Stream." That is, the various types of content (music, news, sports, comedy, live radio) a listener might want at different times, in any listening venue or device (in the car, the mobile phone, at home).

Irwin listed what he thought the necessary qualities of the perfect music service interface. It would (be):

1. deeply personal
2. drop-dead simple
3. connect fans to artists, personalities
4. new yet familiar
5. easier than piracy
6. guided by trusted sources
7. needs to be embraced by artists and personalities.

Yet creating that is just half the challenge. There's the question of creating "a rational business model" he mentioned. That is, balancing the need for momentum and growth, yet "making sure you're following a sustainable business model, in which you're delivering enough value to your listeners so that they'll pay you for the service" (either by accepting ads or paying a subscription fee).

One solution he offered is for streamers to partner with services with which consumers already have "trusted billing relationships" -- like mobile carriers. Rhapsody itself has partnerships with moblie carriers Metro PCS in the U.S., and E-Plus in Germany. The cost to the consumer is decreased (as its subsidized by the carrier), and it's easier to pay because it's rolled into a bill they already pay. Parntering in this way "takes you down off that $10 price point, you can get actual and perceived reductions in well over 50% for consumers and still give them a great experience," Irwin said.

We have audio of Irwin's speech (and all our RAIN Summit West content) available for free via SoundCloud. Look for the links in the right-hand margin of kurthanson.com. Irwin also published an op-ed summarizing his speech in Hybebot here.

Dozens of top radio and online audio executives from across Europe will meet in Brussels this week for the second annual RAIN Summit Europe, at the stylish Hotel BLOOM!

As with other RAIN Summit events such as last month's successful RAIN Summit West in Las Vegas, web radio professionals will gather to discuss all facets of Internet radio and online audio, participating in panel discussions and presentations and advancing the development of the business of online audio across Europe.

Brussels, just a few hours away from almost everyone in Europe (either by plane or train), is an ideal location for the Summit. And even though we're just days out, and the seating that remains is limited (last year's gathering in Berlin sold out), we're not raising prices for last-minute attendees. You can register for the event using either Eventbrite or Amiando.

Topics on the agenda will range from business to technology to programming and include best practices for measurement of online audio, multiplatform content distribution, mobile streaming, sales strategies, and programming for audience growth.

And we're happy to announce a last-minute addition to the day's agenda: Mediatic Conseil’s executive director Michel Colin will make one of the day's "featured presentations." Based in Switzerland, Mediatic Conseils offers training courses on local advertising techniques and on the effective use of local media. 

Other confirmed speakers already include an impressive mix of Internet radio and online audio executives, including:

• Ali Abhary, CEO, Spectrum Medya, Turkey
• Jan-Willem Bruggenwirth, Managing Director, 538.nl, The Netherlands
• Matthew Carver, Radio Coordinator, EGTA, Belgium
• Ben Drury, Founder/CEO, 7Digital, U.K.
• Hakan Kostepen, Executive Director, Product Strategy & Innovation, Panasonic, U.S.
• Jan Poelmann, RMS, Germany
• Robert Proctor, CEO, Audioboo, U.K.
• Alain Reyes, Head Manager, NRJ, France
• Patrick Roger, VP/Global Sales & Marketing, Adswizz, France
• Jöel Ronez, Director of New Media, RadioFrance, France
• Christian Schalt, General Manager, rs2 and KISS FM (Berlin), Germany
• Kjarten Slette, Head of Music, WiMPmusic, Norway
• Holger Weiss, CEO, Aupeo, Germany
• Steve Whilton, Director of Product, Last.fm, U.K

The day's entire agenda is now available on the RAIN Summits Europe web page here. We hope to see you in Brussels!