Tag Archives: satellite radio

Radio killed the Internet star. Inequitable royalty calculations are hurting artists.

Reading an article in the NY Times recently about a brewing royalties dispute left me stymied.

Apparently, there is a bill circulating that would reduce the amount of money streaming radio stations pay for the right to broadcast music.

The proposal would bring streaming royalty rates in line with those paid by satellite and terrestrial stations, which are about five times less.

The issue has come to a head as Pandora, arguably the most successful model for streaming radio, struggles to stay afloat in light of royalty rates which amount to half of its profits.

Pandora argues that the rates for streaming radio services should be calculated on the same basis as satellite and terrestrial services.

The current calculations render widely disparate results, such that many streaming services are grappling under the oppressive weight of these fees.

Fundamental to the argument being made by streaming services, like Pandora, is the fact that the exorbitant rate charged streaming services is a barrier to entry.

By stifling new entrants, it reduces the overall number of streams and thus, the royalties artists could potentially earn.

Fewer streaming services, fewer streams, fewer royalties.

It’s not rocket science.

But the music industry doesn’t see it that way.

They argue that streaming services are profiting handsomely, and the efforts to reduce the rate is driven by greed and the desire to increase profits at the expense of musicians.

They point to the ad-supported nature of most streaming services, in support of this position.

This argument would have merit if streaming services were paying the same royalties as satellite services and then sought a reduction.

But the issue is that streaming services pay a disproportionately higher share of their revenues for the right to stream than similarly situated non-Internet services.

And there is no rational basis for the disparity.

Currently, streaming services pay a fraction of a cent each time a song is streamed whereas satellite services, like Sirius, pay a fixed percentage of their revenue to artists and labels.

The two different standards exist because at the dawn of the Internet age, no one knew how big streaming over the Internet would get.

A fraction of a cent per stream seemed reasonable when they were few, if any, true streaming models to base a formula upon.

But services like Last.fm, Pandora, Spotify, iHeartRadio and their progeny, have demonstrated that streaming radio is growing and viable.

And where streaming revenues were thought to once be a thing of folly, they are now very much a reality.

An entirely new market has developed around it.

However, this fraction-of-a-cent revenue model has proven to be inequitable in its application.

And it should be abandoned in favor of one that continues to provide revenue for streaming services and consistent royalties to artists and labels.

This issue is far from over, and I’ll definitely keep you posted with any updates.

If you like your streaming services, I’d suggest you contact your elected officials and make a stink.

Because if the music industry has it’s way, streaming radio will go the way of the record labels and be extinct before you know it.

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Filed under digital advocacy, music, technology

The CollegeDJ Music Festival is coming. Artists are you ready?

For those of you who know me, you know that I was one of the founders of Digiwaxx, perhaps the largest digital music promotion service ever.

Alongside Corey Llewellyn and Andrew Edgar (the REAL founders of Digiwaxx), I helped develop a fledgling brand into a household name.

At the time, Digiwaxx’s core was DJs from all walks of life: radio DJs, college DJs, club DJs, satellite DJs, pirate radio DJs, hobbiest – anyone who spun vinyl, digital vinyl or CDs.

And our base was huge.

But as the labels were increasingly focused on mainstream airplay – essentially the stuff they could track – DJs that weren’t on radio became less important.

So as Digiwaxx grew, labels became wholly focused on the mainstream DJs (radio, satellite, mix show), and less on the others.

As technology started to change, so did the appetite for DJs, who became less enamored by Digiwaxx’s methodology of sending daily email blasts (sometimes up to ten in a day).

Where our open rate used to be well over 90%, we’d be lucky to get 50% and by the time I left Digiwaxx, our open percentage was below 10%.

Mind you, by that time, we had well over 25,000 registered DJs, so 10% still represented a fair number of DJs, and our reach was worldwide.

Fast forward six years, and I’m now working with another brand, that’s catering to DJs.

This time, the focus is exclusively college DJs, and the name of this brand is, appropriately enough, CollegeDJ.

Now, you must know, that CollegeDJ was started by my younger brother, Celestine, who never understood the allure of Digiwaxx.

Through my eight years with Digiwaxx, he was constantly pointing out areas where we could improve or risk obsolescence.

As is typical of older brothers, I ignored his entreaties, opting instead to tow the party line, and follow the initiatives we had set, with blind allegiance.

Even as our stats started to decline, labels balked at the price for our service, and the grumblings (about the frequency of blasts or the failure of labels to respond to requests from smaller DJs) from our membership became louder, I stayed the course.

When I finally did leave, it was just as my brother was launching CollegeDJ, at Penn State, as the antidote to Digiwaxx.

CollegeDJ has quietly become the standard bearer for college djs across the nation.

Every day, CDJ publishes articles about label signings, new artists, and the latest music releases, keeping its membership and readers up to speed on the goings-on of the music industry.

Four or five times a year, CDJ puts out a mixtape, CDJ Sound Check (now on it’s 7th volume) featuring the music of underground, up-and-coming, and established artists alike.

And now, in it’s second year, CDJ hosts an annual music festival, which brings together all the brightest talent in music and DJ culture for a full day of panels, music performances, DJ battles and partying.

This year, the CollegeDJ Music Festival takes place Sunday, November 11, 2012, from 7:00 pm to 4:00 am, at the storied Sullivan Hall.

I’ve been working quietly behind the scenes, doing a little here and there to help ensure the success of the event.

Two years ago, CDJ brought out the likes of Najee, Zuzuka Poderosa, DJ Valissa Yoe, The White House Band, and others.

But this year’s line-up is sure to raise the bar.

I can’t talk about it until the confirmations are in, but rest assured, it’s going to be off the chain!

With over 16,000 ‘likes’ on Facebook and over 18,000 followers on Twitter, CollegeDJ has certainly struck a nerve with a significant niche audience.

It probably doesn’t hurt that the founder of CDJ is an SEO/SEM/social media ninja – with a Ph.D. to boot!

Make sure you mark your calendar!

And if you’re an artist, and would like to perform, make sure you reach out to CollegeDJ right away!

You can find CollegeDJ on their site, on Facebook or Twitter.

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Filed under branding, social media