NAB X-Stream 2001

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The NAB Radio Show in New Orleans, Sept 2001

By Keith Rowland

Just returning from the very humid New Orleans, I'd thought I'd report on some of the activities and discussions going on at The NAB (National Association of Broadcasters) Radio Show and NAB X-Stream conference. While this show is not a big as the full NAB show in Las Vegas, which covers all fields of broadcasting including the television industry, this was the first time that the Radio Show included the new arena of broadcasting on the Internet. The X-Stream conference was the area I attended.

On the lighter side, the interest in broadcasting on the Internet was huge. There were sessions describing what kind of content, both audio and video, was appropriate for web viewers and listeners. Discussion really focused on how to make money with streaming media. It comes as no surprise, companies can only provide rich-media content on the web, if it's profitable for them to do so. Fortunately, the cost of streaming is coming down, and it was shown that sponsors are still interested in advertising on the web, but only where good content is prevalent. Many examples of profitable streaming ventures where presented. It was shown through many statistical reports, that streaming media is on the rise, in both listener demand and sources of diverse content.

On the darker side, many issues are rising that stand to limit the progress of streaming media. There is still the AFTRA (American Federation of Television and Radio Artists) issue, where the union for radio talent was requesting to be paid up to 3 times the going rate for any talent that appeared on Internet streams. This means any terrestrial radio station that was streaming their station audio on the net was asked by the advertising agencies to stop broadcasting as they were not in a position to pay this excessive fee. You may have noticed many stations went off the Internet a few months ago. Only some of them are back, with mechanisms in place to swap out the on-air advertising audio with newer web-only content.

In addition to the AFTRA issue, the RIAA (Recording Industry Association of America) and the NAB are in opposite corners in the "Recording Performance Rights" issue. The RIAA, which represents the record companies, wants to charge an extra fee to all Internet broadcasters for the use of their recorded content. Radio stations have been paying the artists for their work through organizations like ASCAP and BMI, but have been exempt from paying recording companies over the years since the RIAA never established a fee schedule in the early years of radio. But now with a new distribution channel available on the Internet, the RIAA wants to cash in. This is the same RIAA that is going after the illegal file swapping services like Napster and its look-alikes. So the RIAA is certainly making a few enemies lately.

An interesting debate sort of occurred during the show. On different days, the RIAA vs NAB issue was debated. First, Wall Street Journal columnist Walter Mossberg gave a keynote speech to the attendees which he lambasted the RIAA for their tactics. He did whole-heartedly agree that we need to protect artists copyrights, but suggests that Napster showed everyone how consumers want to get their music. Mossberg states that something needs to be developed by the RIAA to allow customers to sample the music they are interested in before purchasing it online and not to treat potential customers as criminals.

Mossberg presented his view on the future in radio broadcasting. He showed a cell-phone that could listen to streaming audio, a CD-ROM based MP3 player with a 600 MEG CD-ROM full of his favorite music and suggested that all these and other alternative forms of getting music would be a threat to traditional broadcasting. He stated his own children don't listen to radio much anymore. He sees the customization of a personal music library to be highly more desirable than listening to pre-programmed radio. He told of his son's parties with his friends and how they just load up their computer with MP3 files and play them all night.

On the next day, Hilary Rosen, President of the RIAA got her chance to rebuff Mossberg. Before addressing the Napster issue, Rosen directed her beginning remarks on the Recording Performance Licensing issue. The NAB and the RIAA are in direct opposition on this issue. The radio broadcaster wants to be able to stream their signals on the net without incurring excessive fees to play music. The broadcasters argue that their radio stations are the primary source for introducing the record company's music to the public. In fact, the Internet streams of such music often include a player which identifies the artist, song title and the album name and even a link to an online store to buy it. Over the air broadcasters are reducing the amount of song identification. Hillary herself sated she has been campaigning to get radio stations to identify their music being played. However, I think the RIAA has got this licensing thing all backwards. The Internet radio stations are more likely to generate CD sales, more so than radio stations since they identify the music and give listeners easy ways to purchase it. Why would the RIAA want to punish internet broadcasters and let terrestrial broadcasters get away with using their music without identification for free?

Rosen very eloquently consoled the gathering of broadcasters, stating her case for continued representation of the recording companies interests, but suggested that the lawyers could be thrown out of the room and a deal could be made with broadcasters. Many presenters in the conference sessions stated the difference between the sides was very extreme.

Rosen then addressed the Napster issues and rebuffed a charge from Mossberg that the RIAA was trying to institute a plan where you'd purchase music on-line, but it would be essentially a rental with time limits set in the downloaded files. Rosen suggested this was not the case, but that they are working to present a fair and workable system. However she also solicited any ideas from the public on how this can be accomplished.

In general, radio broadcasters are scared and they should be. They fear the alternative sources of entertainment such as satellite digital radio, MP3 file swapping, and narrow casting on the net. Their road is even more filled with potholes like AFTRA and RIAA issues. While they are really feeling the pressure of the competition, NAB president Eddie Fritts continues to express the notion that radio has survived many competitive entities over the years and we'll withstand this one too. I'm not so sure. Many session speakers presenting at NAB's own X-Stream conference where optimistic on the future of Internet radio and many were comparing their product to standard terrestrial radio as being superior. Radio broadcasters could only settle for the fact that their service was still king of wireless devices. Portable radios and auto radios have been the basis of the continued success of radio. But people like Walter Mossberg and others pointed out that new wireless devices connected to the Internet will soon be available in the US and will likely compete with traditional radio.

Other sessions concentrated on video programming. Since the cost of bandwidth has been declining over the last year or so the streaming of video is becoming cost effective for the Internet broadcaster. However video programming was plainly directed to the broadband user. A lot of discussion and statistics were given on how much broadband has penetrated American homes. It was also stated that many early Internet broadcasters bailed out too soon and that the corner is being turned to being a viable and profitable venture.

There is one possible savior for all the terrestrial radio station broadcasters. IBOC (In-band On-Channel) digital radio is coming. IBOC is a technology where any radio station can add additional digital channels to their existing station. You can get digital quality audio of the same audio content of the station or the station could program additional side-channels on this digital signal. While this technology can help the traditional radio broadcasters to improve their signal and audio quality, it does not address the programming aspects of a mass-market broadcast station versus a narrow casting Internet music service. It might be too little, too late.

Most of the Radio Show and the X-Stream conference focused on music programming and not very much on talk-radio. It is my opinion that talk-radio will withstand the industry competition better than the music programmers. It's often said, all radio stations play the same small play lists and sound the same in every town. As most readers of this article will agree, talk radio has fresh new content every day.

As for what I got out of the X-Stream conference-- an optimistic outlook on the future of Internet broadcasting. However, I can see the day when stations will be so plentiful, that no one station will be able to gather enough listeners to justify the costs. It will take some clever financial models and revenue generating schemes to pay for the streaming station. Those that figure it out will be sucessful. Those that can't will crash and burn. I also came away from the conference with many ideas for new opportunities for myself in the future. You may see new features on the Art Bell web site in the coming months based on information learned from this conference. You may see myself involved in some sort of an Internet radio station. Afterall, it is easy to do, has low cost of entry as compared to a real radio station, and has great potential.

There is no doubt, that Internet streaming has changed the face of broadcasting. With the addition of interactive television, wireless streaming devices, MP3 players, digital satellite broadcasting and digital terrestrial radio, the radio broadcasting industry is certainly in a state of change.

Keith Rowland, webmaster