How you react to adversity often defines you.
This week we heard that the economy dropped an incredible 6.2% in Q4 and that unemployment soared to almost 7% (and almost 9% in not-so-sunny California).
So what did President Obama do?
Did he cower away from his campaign pledges?
Just the opposite.
He proposed a stunning $3.7 trillion budget that is not only a repudiation of the past 30 years of Reagon's "trickle-down" economics, but also a down payment for future growth.
He starts his 134-page budget with a 10-page preamble entitled "Inheriting a Legacy of Misplaced Priorities".
"It is no coincidence that the policy failures of the past eight years have been accompanied by unprecedented Governmental secrecy and unprecedented access by lobbyists and the well-connected to policymakers in Washington. Consequently, the needs of those in the room trump those of their fellow citizens".
Powerful stuff.
But what if Obama was not talking about President Bush's policies over the past 8 years, but rather "Big Radio" and the NAB?
Sadly, Obama's preamble could just as easily apply.
For too long, the folks at Clear Channel and other large radio conglomerates were so busy lobbying Congress for special privileges including ownership rights and killing satellite radio that they totally forgot their most important constituent: the listener.
Thus, it should surprise no one that radio ratings and revenues are falling just as fast (if not faster) than the economy overall.
If only terrestrial radio had its own "Obama".
Any suggestions?
Friday, February 27, 2009
Saturday, February 21, 2009
RIAA Lends Terrestrial Radio a Hand
This was definitely an exciting week for those of us in the wireless space.
The most interesting headlines came from the World Mobile Congress. The mobile space is unquestionably the hottest space in technology right now...in no small part because of Apple's iPhone.
Everyone who is anyone in technology was in Barcelona making announcements.
Microsoft, Nokia, Google, Yahoo...all present.
Terrestrial radio should take note.
Untethered Internet Radio is the future and is approaching even faster than we at RadioSherpa could have predicted.
Had this kind of excitement (and ecosystem) for HD Radio existed back in 2006 (when RadioSherpa entered the space), the medium would have had a chance, but we fear that this window is rapidly closing.
The folks at iBiquity will only succeed if they position their medium as a stepping stone to the eventual reality of ubiquitous Internet Radio.
This is still better than satellite radio.
The announcement that Sirius was rescued from bankruptcy really does not matter. Satellite radio is irrelevant..and everyone knows it.
The Wall Street Journal is even suggesting that the only reason some investors see value in Sirius XM is the $6 billion in tax losses that the company has accumulated over the years.
Pathetic.
Finally, this week saw the NAB strike a deal with SoundExchange/RIAA on Internet Radio streaming fees.
Its actually quite logical that SoundExchange struck a deal first with the NAB. Let's face it, terrestrial radio, for all its faults, remains the only ones capable of paying the higher royalty rates.
Pandora, despite all its listeners, simply does not have the sales force required to sell the necessary advertising required to cover the increased royalty rates. And satellite radio may be on its last legs.
If terrestrial radio has helped the RIAA and the big labels make billions over the last 50 years, these increased rates may just be terrestrial radio's reward.
May seem hard to believe that higher rates could be a reward, but these new rates will effectively kill most of the online radio startups who had hoped to kill Clear Channel and its brethren.
Tuesday, February 17, 2009
Yikes! Radio Revenues to Tumble 13%
Talk about good timing.
Our post yesterday spoke to the importance of online radio for terrestrial broadcasters.
Although we are not big fans of "analysts", we do like to cherry-pick "investor notes" when they support our position.
Think George Bush combing over any potential tie-ins between Iraq and 9-11 back in 2003.
Luckily no one will die over our selective use of facts.
Anyway, Wachovia analyst Marci Ryvicker reconfirmed her belief today that terrestrial radio is looking at a 13% decline in revenues in 2009.
The one bright spot: online radio...which is expected to have a "defining year" in 2009.
We would not go that far, but it may just be the key towards future growth.
BTW, Just so you know we take these investor notes with a grain of salt...we would like to point out that Wachovia has single-handedly brought once proud Wells Fargo to its knees asking for a bailout.
We can only hope that Marci's ability to predict the future is far more lucid than her bosses.
Our post yesterday spoke to the importance of online radio for terrestrial broadcasters.
Although we are not big fans of "analysts", we do like to cherry-pick "investor notes" when they support our position.
Think George Bush combing over any potential tie-ins between Iraq and 9-11 back in 2003.
Luckily no one will die over our selective use of facts.
Anyway, Wachovia analyst Marci Ryvicker reconfirmed her belief today that terrestrial radio is looking at a 13% decline in revenues in 2009.
The one bright spot: online radio...which is expected to have a "defining year" in 2009.
We would not go that far, but it may just be the key towards future growth.
BTW, Just so you know we take these investor notes with a grain of salt...we would like to point out that Wachovia has single-handedly brought once proud Wells Fargo to its knees asking for a bailout.
We can only hope that Marci's ability to predict the future is far more lucid than her bosses.
Monday, February 16, 2009
Hidden Key?
"Within each storm of life is hidden a key that will unlock another door that you were meant to walk through."
-- Steve Brunkhorst
Sirius XM is facing bankruptcy.
Automotive companies and their suppliers are already bankrupt.
Advertisers are pulling back and that includes spend on terrestrial radio.
But a hidden key may just be emerging.
MediaWeek ran an article on Sunday that indicated that advertisers are increasingly looking at online radio as a viable advertising channel.
TargetSpot, a key player in the online radio advertising space, indicated that that upfront billings grew 72% so far this year.
Granted, such growth is relatively easy when you are talking about small dollars.
In fact, one media buyer indicated in the article that advertising on streaming radio now accounts for 5 to 7 percent of their network radio budgets. These percentages are still admittedly small...but for radio, any growth at this point should be considered a win.
Let's hope that broadcasters have enough faith to hold onto this key that could provide new significant revenue streams in the future.
-- Steve Brunkhorst
Sirius XM is facing bankruptcy.
Automotive companies and their suppliers are already bankrupt.
Advertisers are pulling back and that includes spend on terrestrial radio.
But a hidden key may just be emerging.
MediaWeek ran an article on Sunday that indicated that advertisers are increasingly looking at online radio as a viable advertising channel.
TargetSpot, a key player in the online radio advertising space, indicated that that upfront billings grew 72% so far this year.
Granted, such growth is relatively easy when you are talking about small dollars.
In fact, one media buyer indicated in the article that advertising on streaming radio now accounts for 5 to 7 percent of their network radio budgets. These percentages are still admittedly small...but for radio, any growth at this point should be considered a win.
Let's hope that broadcasters have enough faith to hold onto this key that could provide new significant revenue streams in the future.
Friday, February 13, 2009
Radio Gets Google To Throw $102 Million Down The Toilet
The Internet this week has been littered with stories about the pending bankruptcy of Sirius XM. The satellite radio monopoly has $175 million due on Tuesday and another $350 million due in May. In this economic environment, its chances of averting bankruptcy is slim. Can you say fire sale?
Of course, one company that must be enjoying this is iBiquity. Never blessed with the billions in cash that satellite radio received, the pending bankruptcy of their biggest competitor must be fun for them to watch.
If you add this news with the fact that Jaguar recently announced that it was going to make HD Radio a standard option across all their cars, our friends over at iBiquity are having a very good week.
Too bad iBiquity wasted all that money on petitioning the FCC to mandate the inclusion of HD Radio into satellite radio receivers.
But not all was great for terrestrial radio this week. In probably the most interesting news of the week, Google announced that it was exiting the radio business.
So how is this a bad thing?
Doesn't Google devalue ad inventory with its efficient algorithms?
Sure.
But Google is not dumb. It does not pull out of markets where it still sees potential...even if the venture is still just a cost item on their income statement.
Has Google Maps broke even yet?
We doubt it, but don't expect Google to be pulling out of this space anytime soon.
More likely, Google sees that OTA radio advertising is not a growth business. In fact it is a business on the decline.
Not even their $102 million investment (at a minimum) in dMarc made it worth continuing.
This should extremely worrying for terrestrial radio.
Of course, one company that must be enjoying this is iBiquity. Never blessed with the billions in cash that satellite radio received, the pending bankruptcy of their biggest competitor must be fun for them to watch.
If you add this news with the fact that Jaguar recently announced that it was going to make HD Radio a standard option across all their cars, our friends over at iBiquity are having a very good week.
Too bad iBiquity wasted all that money on petitioning the FCC to mandate the inclusion of HD Radio into satellite radio receivers.
But not all was great for terrestrial radio this week. In probably the most interesting news of the week, Google announced that it was exiting the radio business.
So how is this a bad thing?
Doesn't Google devalue ad inventory with its efficient algorithms?
Sure.
But Google is not dumb. It does not pull out of markets where it still sees potential...even if the venture is still just a cost item on their income statement.
Has Google Maps broke even yet?
We doubt it, but don't expect Google to be pulling out of this space anytime soon.
More likely, Google sees that OTA radio advertising is not a growth business. In fact it is a business on the decline.
Not even their $102 million investment (at a minimum) in dMarc made it worth continuing.
This should extremely worrying for terrestrial radio.
Friday, February 6, 2009
Alles Klar Herr Kommissar
Running on the treadmill yesterday, we caught the tail end of a song that immediately brought us back 25 years.
It was Falco's timeless hit Der Kommissar.
Like many people in that situation, we came home looking to hear the whole song again.
So what did we do?
Turn on the radio hoping to hear the song?
Dig out our CDs or even our iPod looking for the song?
Nope...went on to YouTube and quickly found several different versions of the song, including this gem of a medley which included the original Falco version, the English version from After the Fire, and our favorite, Laura Branigan's "Deep in the Dark":
Ok, so we were just kidding that we liked Laura Branigan's version the best...but the point is that this medley was available for those crazy 80's buffs.
This experience with YouTube does point to some fundamental weaknesses with the traditional radio programming model. People want things on demand.
And radio is not alone in facing this challenge.
The recent article in the New York Times indicates that people increasingly view traditional movie viewing options as outdated and want to watch movies on demand..even if this means doing something illegal.
“Young people, in particular, conclude that if it’s so easy, it can’t be wrong,” said Richard Cotton, the general counsel for NBC Universal.
The longer traditional media companies put off creating comprehensive digital strategies, the more likely people will look to alternative illegal options.
After seeing what Napster did to the music business, the fact that movie studios have not embraced legal online channels like Hulu and Youtube is inexcusable.
So the radio's slow adoption of digital technologies like HD Radio and online radio is not unique to them. Fear of cannibalizing their analog cash cows is real, but the alternative is worse...losing customers to illegal channels with the chance of losing ALL Revenue.
Alles Klar, Kommissar David Rehr!
It was Falco's timeless hit Der Kommissar.
Like many people in that situation, we came home looking to hear the whole song again.
So what did we do?
Turn on the radio hoping to hear the song?
Dig out our CDs or even our iPod looking for the song?
Nope...went on to YouTube and quickly found several different versions of the song, including this gem of a medley which included the original Falco version, the English version from After the Fire, and our favorite, Laura Branigan's "Deep in the Dark":
Ok, so we were just kidding that we liked Laura Branigan's version the best...but the point is that this medley was available for those crazy 80's buffs.
This experience with YouTube does point to some fundamental weaknesses with the traditional radio programming model. People want things on demand.
And radio is not alone in facing this challenge.
The recent article in the New York Times indicates that people increasingly view traditional movie viewing options as outdated and want to watch movies on demand..even if this means doing something illegal.
“Young people, in particular, conclude that if it’s so easy, it can’t be wrong,” said Richard Cotton, the general counsel for NBC Universal.
The longer traditional media companies put off creating comprehensive digital strategies, the more likely people will look to alternative illegal options.
After seeing what Napster did to the music business, the fact that movie studios have not embraced legal online channels like Hulu and Youtube is inexcusable.
So the radio's slow adoption of digital technologies like HD Radio and online radio is not unique to them. Fear of cannibalizing their analog cash cows is real, but the alternative is worse...losing customers to illegal channels with the chance of losing ALL Revenue.
Alles Klar, Kommissar David Rehr!
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