The end of commercial broadcast radio as we know it.

[k4kyv]

This issue has been a hot topic of discussion and debate in broadcast rags for some time now, but I have seen very little mention on mainstream media.  I rarely listen to commercial stations, AM or FM, so I don't know if they are alerting their listeners, but if not, they ought to be.

The recording industry wants to impose a performance tax that would financially hurt local radio stations, stifle new artists and harm the listening public who rely on free local radio.

Senators Blanche Lincoln (D-Arkansas) and John Barrasso (R-Wyoming), along with Representatives Gene Green (D-Texas) and Michael Conaway (R-Texas), and many other members of Congress have sponsored legislation and efforts against the performance tax.  Others still need to hear from constituents.

For more than 80 years, radio and the recording industry have enjoyed a mutually beneficial relationship: free play for free promotion. The relationship has sustained businesses on both sides.

But like many businesses, the record labels are struggling in this economy, plus they have failed to adapt to the digital age. So now they want to impose a fee called a performance tax on local radio stations every time a song is played.

This would threaten the local radio stations financially, stifle new artists and harm the listening public who rely on free local radio. The money generated from the performance tax would flow into the pockets of the major record labels, three out of the four of which are foreign-owned. The record labels would like for you to think the fee would go to compensate artists, but in truth the record labels would get at least 50 percent of the proceeds.

This tax would reduce the variety of music radio stations play, and prevent new artists from breaking onto the scene. The tax would particularly affect smaller stations, some of which may end up switching to a talk-only format if they don't shut down entirely.

http://www.noperformancetax.org/Radio%20at%20Risk

[N3DRB The Derb]

The cure: do local programming and a national 100% station boycott on taxable programming. without outlets they have nothing.

[Steve - WB3HUZ]

For more than 80 years, radio and the recording industry have enjoyed a mutually beneficial relationship: free play for free promotion.

 Radio pays ASCAP fees.

[W3SLK]

Steve said:

Radio pays ASCAP fees.

That is what I thought. Our local FM station has tried for the last year and a half to get some response from Rep. Paul Kanjorski with out so much as an acknowledgement. In light of that, they are stumping to have him removed from office during this year's election. What gets me is do the record companies think everyone is going to pay premium prices for just to listen to their offerings? If I were a recording label company, I would think that the radio stations would be my ally by 'showcasing' their products/artists. With all the digital means available, I don't think there is one person out there recording off the air!

[k4kyv]

I recall in the mid 60's when I worked at a small 1 kw daytimer, a local singer-songwriter approached the station. He wanted to record one of his songs and have it played on the radio.  The PD stated that they paid ASCAP a fee and ASCAP maintained a monopoly on recorded music.  The station could have invited the singer-songwriter to do a live performance, but they could not play a recording of his songs because every song on the playlist had to be licensed through ASCAP. This shut the door in the face to independent original composers. If the station had violated the licence agreement, ASCAP could have pulled their permission to play any commercial records.

[N3DRB The Derb]

Don, were you a jock, or strictly engineering talent?

if you did on the air stuff, did u use a DJ name ...... like Disco Don? 

[W3LSN]

The writing has been on the wall for radio as a music delivery system for at least a decade due to file sharing. The fact is that there is an entire generation of kids growing up who see no use for radio, don't own radios, and for whom some of the terms we take for granted like "dial", or "tune" are foreign. Younger people are carrying I-pods, souped-up cell phones, and other mobile devices with music storage capabilities. The death of broadcast radio for music will mean nothing to them since they don't go to radio now to hear new releases. Those kids are the future of traditional radio, and it only means death.

The other game changer that will kill off terrestrial radio, and probably DTV, cable, and remaining traditional telephone service, is Wi-Max Wireless Broadband. This technology is growing rapidly. Last year Verizon announced they were getting out of the local telephone business within the next decade. At the same time they announced plans to deploy a new high speed Wireless Broadband 4G network with 100% coverage in the lower 48 states. The rollout has already begun in select markets. Unlike Wi-Fi with coverage of maybe 100 meters, Wi-Max/4G will cover up to 30-miles fixed and 10-miles mobile, and will be used as a universal backbone into the Internet.

We are at the dawn of a new age of universal service like the telephone network was in 1920. Verizon sees only declining profits in offering landline and mobile telephone service, so they have begun to cede that business to Skype, Vonage, and myriad other VoIP companies. Verizon is converting itself into a connectivity provider, they know where the future is and it’s in wireless broadband and mobile devices.  What this means for traditional radio, DTV, etc is a long downward death spiral once people discover that they can access to their own multi-media servers at home and watch video and listen to music from anywhere in the world on their mobile handheld. This will create a market for dockable systems connecting into big screen HD displays with multi-channel audio systems. Radio and TV stations that adapt by turning themselves into Internet based content providers have a chance of surviving, but this also means that anybody with streaming software can become a radio and TV station. I’m not sure how the business model we are used to in broadcasting will continue to work in the new environment.

This stuff is not a pipe dream as the 4G deployment is already underway, and much further along in some foreign countries. The days of a big stick transmitter for local radio/TV are pretty much over. Verizon and other broadband carriers will soon be providing transmission facilities for those who are willing to make the transition.

73, Jim
WA2AJM/3

[w3jn]

Whatever they do, I hope they improve the abysmal quality of digital cellphones and other compressed digital audio sources such as MP3s...

[W1RKW]

short wave BC, same thing.

[W1DAN]

Hi all:

Jim made very good points.

With WIMAX, free over the air ("OTA" these days) radio is dead. Same with TV. There are a group of companies that are lobbying Congress to have the broadcast TV frequencies taken away from broadcasters and sold to these internet firms for wireless Internet access. As the Gummint is so strapped for cash, I feel this will be approved.

So your public airwaves will be privatized soon. Pony up the $$$ to view reality TV.......

http://broadcastengineering.com/news/Genachowski-favors-broadcasters-relinquish-spectrum-20100224/

Dan

[W3LSN]

Yes it's true that Commissioner Genachowski is no friend of DTV. He is on record as saying DTV is a waste of spectrum. The nationwide wireless broadband companies have fine lobbyists with much bigger budgets than the National Association of Broadcasters. That's why I see HD Radio, DTV, and even the new Mobile DTV as being transitional technologies that will soon be eclipsed and consigned to the ashheap of history. Of course, the broadcasting industry will be in complete denial while this is happening, and move much too late.

Kind of interesting is that the "pay for access" aspect of this change will be a reversion to the way things worked prior to the invention of radio. Back then you paid for your entertainment and news.

The sleeping giant about to awaken is 4G/Wi-Max. This is exciting stuff as it is not just a new form of Shortwave with pictures, it's the Swiss Army knife of telecom. All the technology you need or want to conduct your life will be in the palm of your hand. Sure, cell phone service stinks now in many places, but they were saying the same thing about electrical power service 80-90 years ago. There have been a few improvements since then.

73, Jim
WA2AJM/3

[ka3zlr]

Well Diana an I are learning very quickly just what I can an Can't have on this fixed Income...

Man I miss my Job...

73
Jack.

[W1DAN]

Jim:

While we cannot stop progress, the FCC has been promoting other services at the expense of free OTA radio and TV for decades. The FCC was originally an engineering group that was replaced with lawyers creating technical regulation, thus the wireless consortium will win over, at the expense of the consumer.

Having spent 25+ years in broadcasting, I have a historical background while working very hard to stay abreast of the latest technology. From a broadcaster's point of view, the re-mapping of TV spectrum was an economically difficult transition that had no economic gain (actually heavy costs on the average of $10m per station) for the broadcaster.  This latest selling of the public's spectrum is obviously the nail in the coffin for us. And yes, I agree that the NAB provides too little too late. Take for instance the Mobile DTV push that is happening right now (I helped implement it at our station)-I feel this is technically flawed technology (i.e. 8vsb in a moving environment) that is arriving a bit too late, while 3g is already in place serving the iPhone crowd.

The WiMax idea can be a good thing, but I feel they can do it without taking the broadcaster's spectrum. My guess is the re-farming of broadcaster's spectrum is a move to squash competition for entertainment, and at the same time, yet another free service becomes a paid....err "service". How much local content will these Internet providers create?

So those on a fixed income will not be able to get free entertainment, but more importantly access to emergency information and public service as the rules for license ownership were originally based on (yes also originally it was accepted as a blatantly commercial service). WiMax will widen the gap between the have's and the have not's, and allow for more complete surveillance of the end user.

Also it is my opinion that once spectrum is sold in any way, the FCC really has no leg to stand on regarding regulation.

Will the new users of this valuable spectrum be required to hold to the same rules for emergency alert, profanity and public service as the broadcasters currently do? I think not.

Is this proposed re-farming in the public interest, convenience or necessity?

Dan

 

[Opcom]

I recall in the mid 60's when I worked at a small 1 kw daytimer, a local singer-songwriter approached the station. He wanted to record one of his songs and have it played on the radio.  The PD stated that they paid ASCAP a fee and ASCAP maintained a monopoly on recorded music.  The station could have invited the singer-songwriter to do a live performance, but they could not play a recording of his songs because every song on the playlist had to be licensed through ASCAP. This shut the door in the face to independent original composers. If the station had violated the licence agreement, ASCAP could have pulled their permission to play any commercial records.

that is a very wrong practice. Sets up ASCAP as some kind of pimp that new or would-be artists should have to pay. Ridiculous - An artist should be the one to say if their recordings can be played, not some filing-cabinet mafia.

Maybe it's a moot point. The best outcome might be to end up with the AM BC band intact, with a mix of news, niche, country &western, small market stuff. I'm not holding my breath for any of it. I do not want the AM & FM analog broadcasts to cease, as I enjoy them and I am willing to pay for it by listening to the commercials. But I can't see changing my situation to pay twice (listening to ads and paying a bill) for the same thing.. I'll just stop listening if it costs money, like I quit watching 99% of TV because it's crap. Funny, TV is not interesting, but I still like to listen to AM BC radio stations.

[W3LSN]

Dan,

The “public interest, necessity, and convenience” is a quaint relic from a bygone age. The final nail in its coffin was the updated Communications Act of 1996.

I have also been in radio and television engineering since 1979, so I tend to agree with your observation that the FCC has changed for the worse regarding its policies toward broadcasting. The transition seems to have kicked off slowly in the mid 1970’s when the FCC began to be packed with politicians and lawyers who tend to form a symbiotic relationship with their friends the lobbyists. Now not a single FCC commissioner has an engineer on their staff anymore. Jim Quello was the last actual broadcaster to be picked as a commissioner, and there will probably be no other. A former engineering co-worker of mine came from the FCC, and I understand the morale is quite low among the engineers that remain.

I’m not sure the future is so bleak except for those who plan to do business as usual.  I mentioned universal service.  How many people today can’t afford to keep a telephone or at least one OTA TV?  The pricing of broadband and related hardware will drop as the market saturates which will make access affordable for everyone. I can also foresee some kind of enforced mandate that will make basic telecommunications service affordable to even plain old poor folks who will need it as a lifeline much as they do now with telephones. I think security concerns are legitimate, but the NSA has supposedly been intercepting all our e-mail, satellite traffic, telephone calls, and faxes for the last 20-years under their Project Echelon with only a few token protests raised. Perhaps we just need better encryption, and more people with the testicular fortitude of Phil Zimmerman to give it away for free like he did with PGP.

As for free entertainment, plenty will remain unless you really want to pay for premium services such as new movie releases, or an electronic newspaper subsctiption. Two of my old college friends already run their own music radio stations out of their homes 24/7 as a hobby. I tend to spend a lot of my time online reading bloggers as opposed to regular media outlets. Many free web resources will be available for news and entertainment because those sites will want to remain free. The only danger to this scenario is if the broadband industry converts to a fee charged on bandwidth use as opposed to the flat monthly connection fee we enjoy now. There have been rumors of the industry pushing for this, but I think it would suffer the same fate as per minute charges on old-style dial-up connections. In any case, I think localism will survive and thrive because people will not need to jump through FCC hoops to obtain a license, they will just need a broadband connection and some basic hardware to become a radio or TV station. It could all prove to be quite democratizing if things get that far.

73, Jim
WA2AJM/3

[W3LSN]

Oh yes. About stopping the refarming of TV channels for broadband. It's pointless because the kids aren't watching much TV either. They are already upstairs on their parent's broadband connections or listening to their I-Pods. Local TV will survive, but it will have to stream to survive the coming shakeout. I think there will be a 20 year overlap of old and new technologies, but even that might be a generous estimate. Meet me back here in 2030 and we'll compare notes!
73, Jm
WA2AJM/3  

[w3jn]

Guys, let's keep this outstanding discussion going by avoiding political commentary IAW the forum rulez...

6. No political or religious posts will be tolerated on this site, unless directly related to our hobby.  There are thousands of sites one can go for that subject matter including the TV or newspaper.  People do not come to AMfone for that.

[W1DAN]

Jim:

(JN: Sorry if I am stepping over the line here. This is a technically based discussion, that has political underpinnings. This may come to ham radio some day)

Thanks for the interesting discussion!

I think we'll see the end of OTA broadcast TV within ten years.

PICON was an old idea, but it helped to provide some public service to the consumer. A main point is that the rules unequally limited broadcasters (in my research since the 1960's) for many decades. And yes, the Comms act of '96...ask Clear Channel and the local daytimer radio station how much local programming can be economically done. Are you happier with the radio programming today as compared to before '96?

As far as the market lowering pricing on Internet delivery, I have not seen a dropping of subscription pricing for CATV, Internet or cell phones for decades. I do not feel that WiMax will be any different as it probably will be some form of single supplier market that the above services enjoy.

As far as local programming is concerned, you are forgetting that in order to view such Internet based content, one needs to pay for an Internet connection and provider-this is not free as OTA is now. While most people can afford Internet service, OTA radio and TV is one area that was, and to my mind should continue to be free. RF is a public asset just as our state parks are.

I feel that the quality of any Internet based local programming will be quite limited by the lower revenue gained as compared to OTA TV say 20 years ago. This is just the splintering of the audience by more avenues as well as suppliers of content. Could one Internet blogger hire a team of news or investigative reporters and journalists? Will that blogger be a trained journalist or could it be someone with an alterior motive? Could the Internet media effectively provide an effective form of checks and balances to the government if needed (via essentially government controlled Internet gateways)? While the blogger can easily be more dynamic than local TV stations or newspapers, I am concerned that the money will not be there to support even the most basic efforts at true journalism.

The broadband alliance taking TV frequencies is a strong point for me personally as it promises to end my career, or make it as valuable as working at McDonalds. They could do this with the available frequencies that are not in use. Once TV stations go off the air through their own attrition, then GET A LICENSE and serve the public with WiMax. Here nobody get stepped on and there is a regulatory mechanism built in. The marketplace gets to decide.

Publicly, I resent having to pay for my media as I, like you and your parents, have had the option to receive it for free (I choose to have an Internet connection-I could live without it if I had to). This, along with CATV and cell phones are yet another bill we pay if we want the services. Our parents did not have to pay these bills. To have all this media costs between $100-$200.00/month. Can someone working part time afford to pay for this, as they will not have OTA TV and radio available?

Yeah, I know I cannot stop progress, but this technical progress is not necessarily progress for the consumer.

Your friends running Internet radio stations-do they pay the RIAA fees? As you know, on another thread here, there is discussion of new pay-for play legislation. I'd like to run an Internet station (originally it was LPFM, until NPR and the NAB killed it due to "third adjacent interference" concerns), but cannot afford to pay the RIAA the fees for a hobby effort.

Hope ya do not mind my ranting...

Thanks,
Dan

[DMOD]

Guys, let's keep this outstanding discussion going by avoiding political commentary IAW the forum rulez...

My apologies for making a political comment. 

Phil - AC0OB

[N3DRB The Derb]

every time there is new tech thats better, the complete doom of the old tech it replaced is predicted. It almost never happens. The old tech scales back and retrenches and adopts as best it can, and if it can adopts part of the new tech to supplant itself.

The main reason is that people are stubborn bastards who like things the way they are used to it. When radio came along, the demise of newspapers was imminent - and there was a scaleback. Same thing with the internet - no more news papers, right? they are hurting bad, but a awful lot of people still just have to have that morning paper. When TV came along, radio was obsolete. but you cant watch TV when driving, so radio became a mobile medium.

Unless dictated by government fiat, we'll still have OTA radio for many years, for no other reason than that some people simply want it that way.

I'd say the demise of amateur radio is coming far faster than any other form. There's no built in industry or monetary base to keep it going, and the OT's are dying off in droves with no one to replace them. We are lucky that the HF bands are so useless and filled with noise and unpredictable and prone to sunspot cycles and magnetic disturbances. otherwise we would have been gone quite a while ago.

[W3LSN]

You raise some very interesting questions, but I'm basically addressing Derb's points here. There will be a retrenchment of sorts for radio and TV which will take place during the transition period I described.  I think the economics of the situation will be such that we’ll see a large number of weak and marginal radio stations simply sign-off because they will never again be profitable in their present form with a bunch moving to streaming. I think this will happen as a simple matter of Darwinism. How long it will take is anybody’s guess, but there are too many stations OTA right now for all of them to make money thanks to Docket 80-90 which flooded the FM band with several thousand new stations beginning in the mid 80’s. Part of a broadcast license’s value was always in its scarcity and limited entry into the business. That value has now been diluted in a number of different ways.

Outside of some top markets like NYC, Chicago, or LA, AM radio is basically a rich man’s hobby with 3X the expenses at 1/3 the revenue of FM. Daytime only AM stations are a hopeless case with the real estate value of the tower site often exceeding the stick value of the license and broadcast assets several times over. Many FM stations are economic basket cases too simply because the local advertising pie has been sliced too many ways. The big radio groups have circled the wagons by creating clusters of stations in most markets in an attempt to even the odds of capturing what media revenue there still is. The result has generally been that one or two stronger stations carry three or four weak sisters on their backs. What will kill off most terrestrial radio will be when 4G reaches about 75% penetration, and the station owners wake up realizing they don’t need to worry about defending their licenses from the FCC and the expense of maintaining a transmitter plant and tower anymore. Verizon and T-Mobile will give them all the coverage they want for free, and the transmitter comes with nationwide reach. The station only needs an Internet connection. Some residual terrestrial radio may survive for decades or longer in the form of micro-broadcasters, or community based public radio, but it will all be local and probably listener supported.

I think OTA DTV will retrench mainly to local news and public affairs, streamed via Internet. Local TV is already facing the same problem as radio with its audience disappearing to other media.  The nightly network newscasts are watched by fewer people every year, and the audience is aging. TV and radio will be part of a convergence that ends with them using the same delivery platform for fixed and mobile reception, namely 4G/Wi-Max. I can see the staffs of local TV stations shrinking considerably, but I think local news will keep some viability in what remains. TV station owners will also wonder why they need to worry about huge power bills, replacing expensive IOTs, and limiting themselves to their present coverage areas. Once the 4G networks are up, and the consumers have hardware in their hands, TV will begin to switch off and stream. TV is also in a pickle with regard to advertising just like radio. 

Derb pointed out that people are stubborn, and they want what they want. This is true, and also part of the reason why younger people are deserting radio and TV. Those people are never coming back if they were ever there in the first place. Dinosaurs will not inherit the future. Mobile DTV is already a reality, and car radios with Internet are about to be marketed next year. Terrestrial radio became king of the mobile listener, but it is about to be dethroned. Much the same goes for Mobile DTV which will be only transitional until 4G saturates, then it will be gone. Why should people worry about owning an HD Radio, a DTV receiver, a Moble DTV, an I-Pod, and a cell phone when they can get it all on the same device?   

73, Jim
WA2AJM/3

[W3LSN]

Dan,

No harm ranting. To your point on access costs, the difference with the 4G I think will be universal service.  This does not exist now with present cellular 2G/3G, cable, satellite, etc which are all niche service providers. Your local  phone company is about to abandon phone service as we know it because no local phone company expects to make money providing subscriber loops or local dialtone anymore.  Vonage and Skype have clearly won that war. With local phone service out of the picture, there will be some changes needed for ISPs which will include public service obligations to provide pricing plans for barebones telecom service for telephony, to guarantee access to 911 call centers, and life sustaining issues, whatever.

As far as Wi-Max coming from a single supplier, I do not think it will be true.  That’s why they are now talking about paying DTV stations to voluntarily hand in their licenses so they can grab the spectrum for broadband. They expect and will demand competition which will tend to drive prices lower. Cable and telephone are basically local monopolies  now, but that probably won’t be the case with Wi-Max in the long run.

As for the entertainment aspect of broadband I have some sympathy. However I mentioned that historically people have paid for their news and entertainment. The public has gotten a free ride for 90 years because many radio stations were set up by companies to create a demand for radios, and the practice of free OTA programming carried over to TV for that reason as well as PICON.   While you can rightly argue that airwaves are a public asset, the FCC long ago offered channels for sale to the highest bidder for private and public commercial use. The same argument could be used to eliminate cellular airtime charges, but the precedent has been set.

I think the concerns over quality and professionalism in Internet based offerings will be settled in the marketplace. People will willingly pay for quality content and news from organizations maintaining professional standards as they do now.

I don’t believe my Internet radio friends pay ASCAP or BMI fees because it is a hobby with no advertising or money changing hands.  I will have to ask them though. One mainly has a jukebox running under automation software streaming two stations with one being oldies, and the other classic rock.  The second guy is into jazz.

73, Jim
WA2AJM/3

[W3RSW]

Interesting discusion.
My internet feedback for typing is slow this morning.  tough on editing, 
so;

Considering the high cost of 'big-stick' transmitters, stations and equipment:

Cell towers in there own right are very expensive propositions.  Site leasing fees or outright land purchase are expensive.  The frequencies used predicate much faster weather and corrosion degradation of facilities, cable and equipment.  Talk about tubes being archaic and degradable, VHF, UHF and microwave stuff has its delicate aspects too.

So for a wifi environment for streaming to work we're looking at zillions of smaller relay sites, stuff located on a lightpole near you.

Such sites are very easily sabatoged, with rocks if nothing else.  Keep all the politics you want out of our discussions, the fact is that communications, media, 'broadcasting' in any form is a very human activity subject to all the whims and final judgement of the masses, governmental or commercial control not withstanding.

The future will be interesting.

[ka3zlr]

My whole Life I watched one TV Channel and listened to One Radio Station at a time.

I never needed any of this expanded crap, I don't respect being thought for, and don't care for being told what I need. 4 G 5 G who cares, only folks an business that have set themselves up for all this need it, an the pressure is on, so the rest of us get dragged along handed what we got,... here,.. play with this an be quiet look at the speed you have, Big Deal....

Interesting comments though, an I learned a little....that's what's important I appreciate the Info.


Stay Connected  

73
Jack.

[W3RSW]

Well Jack, yes. If something's really interesting, one devotes all their attention to it, be it video, a book or M13 through a large aperture telescope, whether it be 'virgin' photons through an ocular or via the computer screen....   as you know  

And, quite right; if multi-tasking does one thing it shortens attention span and perhaps reasoned,anaylitical ability.

So we must stay connected to the latest buzz, um hmmm, most derived from HBS post partum lingo.

Absolutely,
Clearly,
Going forward,
Having said that,
..ad absurdium.

I guess language does change; witness "prior to" instead of simply "before" after John Dean's testamony in the Watergate 'trials.'