June 20, 2011
The article, picked up by the business section of the Post first appeared at TechCrunch.com. Agovino discusses streaming and proposes a streaming rate fee structure for radio and music labels to consider. He also took a shot at anyone in radio that does not see Pandora as a threat. "Some in the radio business don?t see these ?pure? players as competition because they are based upon computer algorithms rather than professional curators. However, seeing these companies as anything other than competition is short sighted. Over time these companies will add more sports and talk programming and probably use some of these same technologies to build recommendations and playlists of spoken word content."
Many disagree with Agovino's lat statement and claim all radio (and music) listening is up due to the increased number of devices and programs the consumer can now listen. In fact, Arbitron claims in its most recent studies that listenership on traditional radio is growing. So who's right on that remains to be seen. On Streaming, Agovino says broadcasters are not making a profit, however he believe's radio?s future must include an aggressive online play. His suggestion is the following royalty agreement with music labels.
"Institute an over the air royalty that starts at one percent of revenue and escalates to five percent of revenue over the next 10 years, then remains at that number in perpetuity. At the same time, institute a new set of streaming fees that start at twenty five percent of revenue and decline to five percent over the next 10 years and remain there. An all-in, five percent revenue share across the board in 2021 would allow broadcasters to anticipate and structure accordingly while also allowing the labels to bring in hundreds of millions of dollars today and billions in revenue over time. On the flip side it would let the labels participate in a meaningful way while not preventing broadcasters from building a profitable online business."
Read the entire article HERE
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