Internet Radio Silence Day and Web Video Summit - A Tale of Two Types of Webcasters

This week two contrasting events both of significant meaning to the webcasting industry happened.

On one hand, today thousands of other U.S. webcasters, turned off their music streams and go silent for 24 hours June 26th to demonstrate the "silence" that Internet radio may be reduced to permanently after July 15th, the day on which 17 months' (Jan 1, 2006) worth of retroactive royalty payments set by the Copyright Royalty Board are due. If these new royalties are implemented, it threatens the survival of US Internet radio industry. The new fee structure would change the basis of the payments to a flat fee for each song streamed on a per-user basis. Thus, in 2007, every song sent to every listener would net SoundExchange, a royalty collection organization with ties to the RIAA, $0.0011, regardless of whether the broadcaster made any money by doing so. The fees are scheduled to more than double over the next five years. The Internet Radio Equality Act has recently been introduced in both the House and Senate to save the Internet radio industry.

On the other hand, Jupiter Media, The media research consulting company, will hold its web video summit June 27-28 in San Jose, California to showcase the bright prospect of creating and distributing web video with topics such as video search engines, mobile videos, etc. Interestingly, the copyright issue is not touched in the conference sessions.

While it's not unusual to see the battle between established media and new media, the new rule of the game is copyright and how government's attitudes and media suppliers toward copyright will affect the content available on the Web. There is also the difference bewteen video and radio webcasters, the latter are usually smaller and not backed up by deep pockets. The Webcasting Worldwide book has discussed the implication of copyright on the future industry and researchers and practitioners alike must create a paradigm of the real meaning of copyright and how it should be pursued in the digital age.

IAB's User Generated Content Conference video coverage in Ad Age

IAB posted an interesting question in its User-Generated Content Conference: How should advertisers use user-generated content? Use it as an ad medium or use it to generate advertising messages? Ad Age has a video report on it with coverage from speakers of the conference. As advertising will play a significant role to fuel the development of Webcasting and user-generated content is a main feature of many webcasters, webcasting researcher and business practitioners should learn more about a good use of user-generated content.

Disney-ABC online success expels the myth about cannibalization of online videos on offline viewing and feasibility of direct payment of TV shows

The June 2007 issue of Fast Company reported Disney's success with its online offering of TV shows. Disney was the first media company to sell TV episodes on iTunes in October 2005 at US$1.99 per episode. In summer 2006, ABC is the broadcast network that stream full episodes for free on its web site with advertising. Since offering downloads on iTunes, Disney-ABC earned US41,790,000 with 21 million downloads. Grey's Anatomy, the top-rated TV show of ABC, increased 4.4 million audience after the episodes became available on iTunes and abc.com even though it's the most streamed ABC TV show online. Such numbers show that the myth of digital platforms cannibalizing TV platforms is unsupported. People who watched the show online usually were to catch the show they missed and they were the young consumers, average age is 28, that advertisers treasured most. The article's author attributed this to the presence of Steve Jobs on the board of directors at Disney. The new windows/platforms for an ABC Family Cable Channel show, Kyle XY, premiered last year, began with 1) free promotional video download on iTunes a week prior to the airing, 2) airing of the show on cable, 3) a cameo of the show at ABC broadcast network, 4) full episodes sold online at US$1.99 on iTunes, 5) episodes of the show onVerizon FioTV as ABC Family on demand at $39.99 a month, 6) free streaming on ABC.com with three 30-second commercials, 7) DVD release at US$40 for the entire season just before the start of season 2. This strategy is maximizing the access of the content to the audience. Ownership of products costs the most to the consumer. Direct payment is possible when value of ownership of the shows is established. The ACR business model here is high access, high cost content, and multiple revenue sources with a combination of a branded content model (in ABC.com) and a content aggregator model (in iTunes.com).