2012年6月26日星期二

[The Economist] and Jun share the audio stream - digital broadcasting make money?


Clear Channel Communications and radio: and the king share the audio stream
- Digital radio make money?

Frank Sinatra (FRANK SINATRA) know they have been treated unfairly. He sings good, but not very good at writing songs; So, even though most of his more than 300 songs broadcast radio stations in the United States, but he never got a penny. A 1909 copyright royalty fee law requires that radio stations pay songwriters, rather than the artist. He spent several years lobbying Congress to amend the law, but in vain. Broadcasting Corporation's lobbying is more powerful than the artist or record company; they have been opposed to any modification of this law, that the broadcast to help the singer free publicity. But this month, the singer and the record companies have got some good news.

June 5, America's largest radio companies - Clear Channel (Clear Channel Communications) announced an agreement with a country music record company - a large machine (Big Machine), its songs broadcast royalty payments, including terrestrial channels and digital channels. Under the plan, Clear Channel will generate ad revenue to pay to the big machine and it's artists, including Taylor Swift (Taylor Swift) and Tim McGraw (Tim McGraw).
The agreement shows that Clear Channel plans to increase investment in digital broadcasting, which is the broadcasting industry, the rapid growth of some industries. Terrestrial broadcasters, according to a 1998 law, whenever the digital radio play a song, it must be paid to the artists. This distorted the system allows an attempt to cultivate the audience's digital platform difficult; broadcast site of Pandora (Pandora), for example, the company more than half of the income used to pay music royalties. Pandora's founder and chief strategy officer Tim (Tim Westergren), Wister Grand said: "We can not carry out such a high royalty online business." His company has spent $ 50,000 lobbying Congress to change the law.

Only 2% of the listeners of Clear Channel from digital broadcasting, the other 98% of terrestrial broadcasting, this agreement seems expensive. But the machine provides only a small part of the music to the Clear Channel, and to pay part of the advertising revenue have to pay more cost-effective than each song. Clear Channel's idea is that this agreement prior to consultation with the other record companies, take a look at the impact on earnings.
The agreement may also reflect the concerns of Clear Channel. In 2008, before the collapse of the advertising market for leveraged buyouts, owed ​​a huge debt. There are sufficient cash flow within a few years, but in 2016 there will be a sum of $ 12.1 billion of debt maturity. The company or moratorium. Melissa Link (Melissa Link), the Fitch international rating agencies (Fitch), said: "They are certainly not the way to debt, because they need to develop."
Now, all eyes are on whether Clear Channel via digital radio make money. They have been opened in 2008, the online site iHeartRadio, the web site by advertising rather than the audience paid to profit. September 2011, iHeartRadio also like Pandora website for listeners on-demand playlists, the list includes the 11 million songs. In contrast, the Pandora's playlist only 900,000 songs, but the audience is the iHeartRadio of 10 times. The holder of the smart phone is a huge market for network radio audiences, they accounted for 70% of Pandora's website audience. However, Pandora is also heavily dependent on advertising revenue (subscription revenue accounted for only 10%), while the phone has proved difficult to attract advertisers.
Second only to television coverage of the ground radio audience has not been the threat of digital radio, especially considering that digital providers need to pay high royalties. Radio be able to seize the audience, because their program is still free, and easy to listen to, especially people who work for drivers. Although car manufacturers have begun to integrate digital radio platform in the car, but the audio stream can still beat most of the mobile data plan. People think that the audio stream will not soon take away a large audience, but the artist, the Clear Channel agreement to go in the right direction.


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