YAHOO Shuts Down Streaming! (June 27, 2002)

Yahoo decided to end its streaming services to radio stations this past week, along with its FinanceVision video channel.

Affiliates have been getting letters over the last week from Yahoo! letting them know about the company's plans to discontinue the service. This is actually good news to some affiliates who have been unwillingly locked into auto-renewing contracts.

The shutdown, effect within the week, cuts about 30 for the still non-profitable company that bought the streaming operations and infrastructure from Broadcast.com for $5 Billion in 1999. That's $5 billion right down the toilet! Hundreds of broadcast radio stations would have to either switch to another provider, or, in response to the unfairly-high CARP rates, just get out of the streaming business altogether.

Didn't the Librarian of Congress base the rate charged to webcasters for playing music on a deal the RIAA made with Yahoo last week? Guess what, kiddies? Yahoo decided to shut down its own streaming service to broadcast outlets, although the company will continue to focus on Internet streaming (hope they don't take over live365.com, I rather have Clear Channel take over 365 than those f--kwits at Yahoo!) More on Clear Channel later this page.

Yahoo paid $5 billion dollars on Mark Cuban's Broadcast.com in 1999 which at the time was the biggest provider of streaming services for radio. Since then, other companies have taken over those services for radio broadcast. Unable to compete with those other companies, Yahoo decided to shut down that part of the business.

Yahoo says they will concentrate on its Launch division. They bought that company for $12 million dollars in 2001. LAUNCHcast offers consumers an Internet radio experience with a variety of genre-based music channels as well as the ability to hear music programmed to their tastes. Yahoo will continue to offer some other broadcast services, including a Webcasting business for corporations.

Yahoo has had mixed results in incorporating broadcast services into its media offerings since it made Web broadcasting a major part of its strategy in 1999 when it purchased Broadcast.com Inc for $5.7 billion in stock.

The Yahoo! Radio service had rebroadcast terrestrial radio stations from around the country. The company will discontinue that and instead focus on its LAUNCHcast service, which makes original music broadcasts designed for the web.

Last week final webcast performance royalties for statutory licensees were set by the Library of Congress, and the former Yahoo Radio stations will now have to qualify for statutory licenses or make their own deals with rights-holders. The surprise announcement is particularly interesting because Mark Cuban - who owned Yahoo Broadcast back when it was Broadcast.com - told the RAIN: Radio And Internet Newsletter on Monday that part of Yahoo's strategy when he was part of its negotiations for an RIAA license was to agree to a per-performance rate so high that local stations would be forced to pay to be streamed under Yahoo's license.

Reader Comments: CARP/Bad Deals - Radio Serf (10505) POST RESPONSE The CARP royalty rates were based on a Yahoo! deal. When are people going to wake up and realize that these guys don't know what they are doing. No profits, just alot of bad deals and frivilous spending while grasping at straws to make money on other people's content. The CARP says Yahoo was a "willing" buyer in a free-market demonstration of what the royalty rates should be. They were really an "unwitting" buyer who didn't know what they were getting into.

Clear Channel Committed to Streaming (June 27, 2002)

With Yahoo ending its radio station streaming service, this frees up all radio stations from any further contractual obligations with that company.

You think that Clear Channel would be pulling their streams in response to the high Yahoo-level royalties that many independent stations could no longer afford to stream? Seems that with this article, the radio monolith isn't going to KO a way to publicize its radio stations and to maintain competetion with top-ranked live365.com

VitalStream announced that Clear Channel Radio has signed an agreement for the company's more than 200 streaming radio stations to use the VitalStream Digital Broadcast Network.

"This is a major milestone for us at VitalStream," said Paul Summers, VitalStream chief executive officer. "Working with a company the caliber of Clear Channel exemplifies our commitment to a business strategy focused on providing the highest level of technology and service to world-class industry leaders."

"VitalStream didn't shy away from our traffic numbers and understood our needs as a broadcasting company," said Brian Parsons, director of technology for Clear Channel Radio Interactive. "The efficiency of the VitalStream network keeps us on track with our financial goals and allows us to keep the radio stations streaming on the Internet for our audience while the economics of the industry continue to develop."

According to figures from MeasureCast and Arbitron, Clear Channel Worldwide streams more hours of online programming than any other radio group in the world. Clear Channel streams audio formats ranging from rock to news/talk through its domestic radio stations in the top 50 markets.

About Clear Channel Communications Inc.

Clear Channel Communications, (NYSE:CCU - News) with headquarters in San Antonio, is a global leader in the out-of-home advertising industry with radio and television stations, outdoor displays and entertainment venues in 63 countries around the world.

Including announced transactions, Clear Channel operates approximately 1,224 radio and 19 television stations in the United States and has equity interests in more than 240 radio stations internationally. Clear Channel also operates approximately 770,000 outdoor advertising displays, including billboards, street furniture and transit panels across the world.

Clear Channel Entertainment is one of the world's largest diversified promoters, producers and presenters of live entertainment events and is a leading fully integrated sports marketing and management company.

About VitalStream Inc.

VitalStream, a wholly owned subsidiary of Sensar Corp. (OTCBB:SCII - News), is a leading provider of products and services that enable the digital broadcast of audio and video content and other communications via the Internet. VitalStream provides audio and video streaming, Web conferencing, advanced media hosting, payment processing and consulting services.

The company's unique mix of services and technology enable businesses to leverage the global reach of the Internet to distribute their media content to targeted audiences worldwide. For more information regarding VitalStream, call 800/254-7554 or visit the company's Web site at www.vitalstream.com.

Feingold to introduce re-regulation bill Thursday (June 27, 2002)

Sen. Russ Feingold (D-WI) has called a press conference for Thursday morning (6/27) to introduce the "Competition in Radio and Concert Industries Act." That's the bill that Feingold has been promising (RBR 5/27. p.1) to curtail consolidation, which he charges has led to higher concert ticket prices and homogenized radio programming.

The measure to clamp down on radio consolidation and radio tie-ins with the concert business is aimed squarely at Clear Channel Communications, the biggest consolidator in both the radio and concert industries.

As reported in that May story, Feingold charges that consolidation has adversely affected music artists, consumers, labor groups, concertgoers and "every person who listens to radio." The anti-CCU lawmaker will be joined at his press conference by representatives of what are described as "representatives of the artist, consumer and labor communities."

An industry whose top owner was limited by law to holding 40 stations prior to 1996 (and just 2 FMs and 2 AMs in a single market) is now led by the 1,200-station, $3.2 billion (in radio revenue) behemoth Clear Channel, followed by Viacom's Infinity Broadcasting (revenue: $2 billion) and two other companies, Cumulus Broadcasting and Citadel Communications, that have more than 200 outlets each. Those kind of numbers are starting to generate some heavy static on Capitol Hill.

In comments this month on the Senate floor, Feingold made very clear his perception that consolidation has brought problems. Using words such as "startling," "seismic" and "mind-boggling" to describe radio industry practices, Feingold said large radio groups have restricted programmers' access to the airwaves, accepted large payments for putting songs on their playlists and have inflated ticket prices for live events at the venues they control.

Feingold was among the few senators to vote against the 1996 Telecom Act, and he recently called the legislation an example of influence by large, unregulated soft-money campaign contributions. Feingold was a co-sponsor of the recently enacted campaign finance reform laws.

Meanwhile, the Justice Department is investigating practices in the radio industry. And the Federal Communications Commission, as it considers whether to further relax rules on radio ownership, is looking into whether national consolidation has reduced programming choices for listeners.

Members of Congress say they are hearing more complaints from constituents about large station owners. In January, Rep. Howard Berman (D-Calif.) asked the FCC and the Justice Department to investigate whether Clear Channel violates regulations by using third-party owners of stations, and whether the company denies airplay to artists not using its venues for live shows.

Outside of Washington, Clear Channel is contesting a number of lawsuits concerning its business practices. In a suit filed on June 12, Spanish Broadcasting System alleges that Clear Channel tried to depress SBS' stock price and engaged in bidding wars for radio stations solely to increase SBS' costs. Clear Channel has described the allegations as false and "frivolous." In a June 14 suit filed in federal court in New York, a Chicago-area woman alleges that Clear Channel has gouged concertgoers with high ticket prices at its venues.

Clear Channel's overall message in the upcoming battles in Washington and elsewhere will be clear: Consolidation is good for listeners and for business. "The Telecommunications Act of 1996 was actually good for radio," said Pam Taylor, a CC representative. The law "strengthened the media," she added, by allowing new corporate synergies and economies of scale.

Of course, Feingold and other critics argue otherwise. Last week, the nonprofit Future of Music Coalition released a survey of consumers in which most respondents said they want a greater variety of music on the radio, with more programming choices left to local disk jockeys rather than the centralized playlists employed by the large groups.

And when the battle heats up, Clear Channel will be ready to defend itself. In recent FCC filings, the company has said that consolidation has brought more program formats to listeners, as individual owners no longer have stations competing for the same demographic (a rebuttal follows this news item).

Radio Stations Overserving Same Demographic (June 27, 2002)

Since the radio ownership limits were relaxed six years ago, the number of program formats has actually increased and duplicated between sister stations run by the same owner.

Sure, they're serving the soft music fans with soft music formats. The truth is, Clear Channel is going about diversifying in the wrong way.

Radio companies seem fixated on matching a music genre with an age bracket. This is the wrong way to program radio. Many older folks over 35 cannot stand to listen to saccarahin soft music, and for those music fans, they're choosing to listen to CDs instead of the radio.

So, instead of diversity meaning to program by demographic, diversity really means to program by musical taste.

If the definition of diversity means for Clear Channel to program a soft AC, a modern AC, a hot AC, and a soul AC in Los Angeles, then all these four stations are doing is going after the music fan that enjoys soft and safe music. In reality, this is a splintering from one genre of music, the soft music genre, instead of creating radio formats that don't really compete for the same soft music fan.

Soft music is an acquired taste. I cannot stand to listen to that genre for long periods of time. If Clear Channel Los Angeles really wanted to have stations that don't compete for the same musical taste, then they would have created new formats that served tastes that are finding no choice in radio for them to listen to.

The dance music genre, which goes back to the days of disco, and continues on at least in Europe with electronica and dance, is underrepresented on broadcast radio. While people are listening to dozens of dance radio stations on the Internet, broadcast radio is missing out on getting this demographic to listen to their stations by way of putting a dance format station on one of their broadcasting sticks.

Clear Channel Los Angeles serves the pop music fan with KIIS-FM and the soft music fan with KOST, KBIG, KYSR, and KHHT. They could serve the dance demographic with a format and also bring in the lucrative gay male listeners which have a lot of money to spend on the advertisers.

The other two genres they could program is a country music format that serves the rural music fan with real country music instead of the fake kind that is driving the listeners away from KZLA, and for the rock and roll fan, they could program a hybrid of San Diego's KIOZ, with the rockier side of KLOS, and some classic rock staples to serve that demographic.

What Clear Channel Los Angeles Should Do:

92.3 - Rock
98.7 - Country
102.7 - Top 40
103.5 - Soft
104.3 - Dance

BRS Media urges Congress to overrule royalty rates (June 27, 2002)

BRS Media has released details of a letter urging Congress to consider legislation that will lower webcasters' fees and overturn the Librarian of Congress's decision on Internet radio royalty rates (RBR.com 6/20).

In the letter (www.brsmedia.fm/congress/ ), BRS Media Chairman/CEO George Bundy says the following: "The Librarian's decision on Internet radio royalty rates has already had a direct impact on a once thriving Internet sector known as Web Radio. We are encouraged that the Librarian of Congress reduced the rates for internet-only webcasters to the same level as that of AM/FM radio Internet broadcasters. But we remain terribly concerned that this rate will lead to the elimination of hundreds of small, independent, internet-only radio stations. In fact, we have already witnessed just that with great, internet-only stations like San Francisco based SomaFM (www.soma.fm) having to discontinue their webcast. This decision on Internet radio royalty rates will effectively create a virtual monopoly, and will have the stamp of approval from the Librarian of Congress, by offering only a limited number of highly powerful companies the chance to survive."

Bundy recommended that congressional leaders consider legislation to modify the defective "willing-buyer/willing-seller" standard established by Congress, and thereby, used by the Librarian of Congress to determine these rates. "We believe a formula such as the traditional fair market formula would facilitate growth in the Internet Radio Industry rather than stifle it. And utilizing a formula such as this would also ensure that artists, writers, and record labels are fairly compensated."

BRS, which has been tracking streaming numbers since '95, added the number of online stations worldwide is now down to 4,557, from 5,700 in Spring 2001.

The Phantom organizes class-action suit against RIAA (June 27, 2002)

Internet based Alternative station XPHT (The Phantom)/Montgomery, AL PD/MD Jason Davenport tells AllAccess.com that due to the copyright royalty rates released last week, The Phantom will shut down 8/1. Currently up on The Phantom's website is a link to sign a petition to file a Class action Lawsuit against the RIAA: ":Would you join a class action lawsuit against the RIAA? Are you a webcaster and would you join an industry wide class action lawsuit by internet webcasters agaist the RIAA and the top 5 major record labels they represent for using the DMCA (digital millennium copyright act) to stifle free enterprise and even bankrupt small to medium sized webcasters thus creating an illegal webcasting monopoly on the internet?

To sign the petition, click: http://www.the-phantom.cjb.net. The list of participants, which you can view, is at 34 and growing.

CBI says streaming rates may kill college radio webcasts (June 27, 2002)

CBI (Collegiate Broadcasters, Inc: www.collegebroadcasters.org), a non profit organization with membership comprised of college broadcasters from around the country has released a statement against the ruling (RBR.com 6/20) of the Librarian of Congress on streaming royalties:

"The CBI board has reviewed the webcasting rate decision made by the Librarian of Congress. While we are not pleased with the determination, we realize that the Librarian was working within the constraints of the law. Unfortunately, the rates set today (6/20/02) announced what could be the beginning of the end for many Educational and student programs at Colleges and Universities around the country.

We are saddened that the process has prevented the Librarian and the Copyright Office from setting rates and record keeping requirements that appropriately reflects our members ability to comply and pay those fees.

In the coming days, we will be communicating with our members concerning the options available to them and then move forward with an agenda. We are hopeful that the members of Congress have been mindful of the process and can see that the outcome is detrimental to students across the country, the general public and will result in a loss of revenue for the copyright holders. A quick legislative solution is needed to help save the student programs."