The Infinite Dial

At the risk of piling on here, I should note that I just spent several days listening to the Web streams of a Top 10 market. To broadcasters' credit, I'm hearing more paid content in Web-only stops these days and a little less of McGruff the Crime Dog, which is not to say that the dire sounding PSAs have gone away altogether. But I'm also hearing Web stops that go 30 seconds (or longer) more than their over-the-air counterpart and records joined in progress. I'm hearing Web spots and on-air spots that play at the same time. And while it's certainly possible that agencies are now providing non-AFTRA versions of more of their work, I am hearing a number of spots that make me think that maybe some owners are just running spots with AFTRA talent and hoping to get lucky.

Nothing sounds clunkier and is more maddening to the radio fan than when station liners and a couple minutes of a song are missed because of insertion ads. I recently noticed this was happening during every commercial break of a medium market Clear Channel station stream. I agree this needs to be resolved for the benefit of all parties.

This should have been resolved long ago. If AFTRA looks at their records, they'll see their membership has reaped virtually no benefit from this arrangement. It actually does nothing more than preclude advertisers from having their messages heard on web streams, which for most are nothing more than an easier way to listen to over the air radio.

My guess is that presented with the evidence, AFTRA would relent. I would also guess that that there won't be any serious focus on the issue as long as there are people at radio stations that are actually still being paid. Nothing will come before radio's (apparent) plan to have one person personally syndicate all operational aspects of every commercial radio station in the US.

I guess they'd have to outsource opening and endorsing of advertiser payments, or they could limit payments to electronic transfer. Yeah...that's the ticket!

It's unbelievable. Radio people are the only people in show business who don't want people to use their product.

Larry;
The Aftra issue is resolved, but unfortunately, it continues to confuse people. Let me try to explain it. The 300% fee that you refer to is a flat one-time fee that an advertiser must pay in order to license a commercial for use on an Internet radio station if it has not already been licensed for such in the contract with the performer. That 300% sounds alarming -- it's really 3x the session fee, and usually amounts to about $700. Unlike broadcast AFTRA fees, which require the advertiser to pay a monthly amount, this is a one-time flat fee.

Most of this issue is now resolved at the time of contract between advertiser and performer, as most agencies now incorporate digital audio use into their agreements. If they don't, there are very simple steps to follow.

PLEASE read my post at http://audio4cast.com/?s=aftra and don't try to reignite this issue. It will only cause advertisers to fear spending on Internet radio.

Jen, if it's not an issue, why are 75% of the terrestrial stations on the Web continuing to replace paid spots with unpaid PSAs, fill music or (at best) cheaper Web-only spots? The agencies were pretty adamant about not wanting their spots to run seven years ago? Have the same sponsors merely neglected to tell them that this is not a problem anymore?

Most terrestrial stations view their online streams as an opportunity to generate a separate revenue stream, and therefore do not want to simulcast the ads. Instead, they run separate logs for the online station, and either run ads specifically sold for the stream, or run something in its place. In addition, because of the AFTRA rules, you have to have specific permission to stream professionally produced audio spots, so you cannot simply simulcast whatever you want. If an advertiser places a campaign on the online station, that of course is permission. The reason the agencies were adamant seven years ago is because they were not contracting for online use with the performers. Now, either digital use is covered by the contract (in most cases) or, they can very simply add the license for online use by paying 3x the original session fee, a one time payment that is much easier than the license for broadcast which involves monthly payments. It's all outlined in the post on my site at http://audio4cast.com/2008/10/08/licensing-commercials-for-internet-radio-part-two/ .

No let's bring it up, Ms Lane. I brought this up at last years NAB Radio Show at the group heads panel.
I disagree with Jennifer because terrestrial stations began covering the spots because the ad agencies have told us once not to stream their spots. They have never rescinded those instructions. So the fees for that extra 30% are not being paid. Some broadcasters do believe in the alternate commercial inventory but others believe that the additional audience by 100% simulcasting as defined by Arbitron, would be more beneficial revenue-wise. Since most stations streams ratings are so small, the ROI on specifically selling the stream only spots frequently relegates them to a low priority.
Everyone agrees that the streams would sound better without the 'filler' spots/promos/PSAs.
I think that would increase online listening overall and would be the incentive to for stations to more vigorously move listeners to the stream.PPM is very specific on this and since few terrestrial streams meet minimum reporting standards, we don't know how much online listening exists.
Maybe AFTRA could offer stations a low cost license to stream all spots as a simulcast?

One thing you're forgetting is that this is not a license between the station and AFTRA, it is a license between the advertiser or agency and AFTRA. AFTRA will not be offering the stations anything.

My other comment is that there are I believe over 300 stations now simulcasting and being measured by ppm in the ten markets ppm is measuring and 11 stations meet the minimum intab requirement. It's going to be a long time before streaming station's audiences amount to enough to make a difference as a simulcast,the highest is a .5 share.

Best,

Jennifer

Well, there's no station that wouldn't want a 0.5 added on to its terrestrial share. In the markets large enough to have PPM, half a share or even two-tenths can still significantly impact revenue.

And if more listening isn't yet going to the Internet streams, you can blame it at least in part on the bad on-line experience that stations currently offer because of this issue.

Arbitron does not consider it simulcasting unless it is 100% which includes commercials so the 300 number Jennifer quotes may be misleading. It may include non commercial NPR stations.

I agree with Jennifer that most terrestrial stations view their online streams as an opportunity to generate a separate revenue stream.

But I believe that this was a move made neccessary by the AFTRA issue.

All that said, there's no reason in this day and age of sophisticated station automation that ad insertion shouldn't be done soon.

Of course, cable TV still doesn't have it right too often either.

I do agree that the AFTRA issue needs to be solved, particularly in light of Arbitron's rules.

But sloppy is sloppy...and unfortunately fixing it ranks low on the priority list these days with so many multi-tasking...

FWIW, I continued to receive "DO NOT AIR IN ONLINE BROADCAST" instructions in production/traffic orders from almost every agency I recieved spots from until about 8 months ago. The only reason it stopped was because I'm no longer responsible for spots on my radio station.

So, to me, it seems that everyone's right. It's not an AFTRA vs stations issue, everyone's streams are messed up (I mostly blame that on user/engineer error btw), 100% simulcasts would be ideal, and we'd all love the extra half-point.

That said, we're also probably losing a lot more than a half-point to Pandora, Last.fm, and the like. Even they aren't doing it right, but they're doing it right enough.

This is an issue that I have been pushing for action from radio management for years. The industry views this is an addition revenue stream (someday)and is embracing not giving anything away. This is hurting the brands. The multi-platform distribution is here and radio better wake up to this fact and resolve the AFTRA issue now.

Arbitron does not consider it simulcasting unless it is 100% which includes commercials so the 300 number Jennifer quotes may be inaccurate. It may include non commercial NPR stations. But I doubt any commercial station in PPM markets is considered simulcasting in Arbitron.
And why can't stations get a license? if ity is true that most spost are already licensed (soemthing agencies do not acknowledge) then it would be kind of found money.

The 300 stations is a number of properly simulcasted and encoded stations according to Arbitron, it is not misleading.

thanks,

Jennifer

As a former AFTRA member and owner of an AFTRA signatory with a contract to hire AFTRA talent, my understanding of the current situation is that AFTRA's current (expiring) contract set NO scale for digital or online. The contract requires a signatory to negotiate freely with talent, establish a case by case rate ....BUT then report that hiring and rate to AFTRA so that future negotiations can attempt to set a scale based on this new marketplace.

A few months back AFTRA sent me and all signatories a reminder of this and a note that to that date NO ONE had reported even one such contract after a couple of years.

That means, to me, that what was intended as a resonable offer by AFTRA was rightly interpreted by agencies, signatories as "Are you kidding? Give you ammunition to use on us the next negotiaton?"

This isn't going away but I think it's in the Never Mind column. Our company has very slick spot insertion that never sounds clunky and even allows an extra song or feature for online only listeners almost daily.

Whether online revenue, the only bright spot in radio forecastng right now, can ever make up for lost broadcast revenue is beyond our estimation.
Radio operators are not about to give up this talking point to Wall Street right now.

Larry,

Internet radio streams do not have to sound bad. Here at Ando we have a patent pending buffer system that allow breaks to be flexible and seamless. In my view the AFTRA issue helped the U.S. get a head start over other countries in forcing stations to sell different inventory than what was on their terrestrial station and thus not giving it away. Internet radio advertising is taking off as audience continues to grow and represents the future of audio.

Robert Maccini
COO
Ando Media, LLC