They Thought They Had Us By The Antenna

Seriously, squatters…now you want to sell? You bought a bunch of URL’s.  Now you want to sell them.

It was a dark and stormy night sometime in 1995.  My entry into the Internet world was thanks to a terrific VP of Marketing for a major pharmaceutical company.  We had given a presentation to her on pay-per-view and video on demand as we placed them in a test with one of the then baby-Bells.  After the meeting she asked, “Guys, do you think this Internet thing will ever amount to anything commercially?”

On the flight home (no angry passengers, no TSA, no service ponies) the guys I was with decided we needed to get some religion.  We studied a number of areas – designing, distributing, monitoring, including “naming.”  Network Solutions was the only game in town managing URLs…they tied site names (xyz.com) to actual DNSs.  In other words, when someone went looking for a web page using a URL like xyz.com, Network Solutions managed the relationship list that told Mae East and Mae West and all their friends, “Oh, looking for that?  Well, go to 253.254.255.256 (Yes, it’s an intentionally impossible address.  But then, go dial 555 1212).

A few folks got a bright idea – register a bunch of URLs using companies' names then squat on them.  When the companies come knocking, bump that $70 registration fee up to a few – or many – thousand dollars.  You got it, they want it, supply and demand, eh?

Well, the law caught up with these squatters.  In effect, it said that the .com extension really was to be applied to commercial entities and declared that unless you had a reasonable right to use a URL, you had to give it up.  Said another way, McDonald’s Excavating could have registered and kept mcdonalds.com but others, with no connection to the name could not.

Seemed pretty simple.  You can breathe now, the backstory is over.

It got complicated for broadcasters.  Smart squatters registered hundreds of call letters – letters which, by and large, are gibberish and would be available to anyone and, therefore, not totally protected by UPC rules.  And they sat on them while they called or snail mailed stations offering to sell at anywhere from 10 to one thousand times the registration cost.

A few stations paid.  Most balked and went another direction…and it was the best thing they could have done.  The squatters forced stations to look for other names and in doing so, they incorporated (OMG) branding into their URLs.  So we saw wabcradio.com, wlsam.com, wor710.com, 103.5KISSFM.com, or abc7chicago.com   The URLs actually clued prospective visitors in about the site and bolstered the stations’ brands.

So the Internet grew, more stations jumped aboard, started streaming and were able to cross promote between the web and over the air.  And stations succeeded because in their URLs, they had a catch phrase – mnemonic, if you will , in most cases – that would resonate with their audiences.

I think just about everyone I know listens to streams of broadcast stations.  And of them, I’d wager that most, if not all, know the URL of the station.  Some have set bookmarks and don’t remember.  Others rely on recognizing the station logo in the iHeartRadio listings or on tunein.com and its derivatives.

Well the payoff to this rambling story is that about a week ago I got an email from a company acknowledging that I was the website manager (not webmaster…big difference) for a number of stations. 

They went on to say that they had recently acquired the URLs for the stations’ call letters.  It was quite well laid out and correctly listed the stations and their owners.

And after that, they laid out the sales pitch and why these stations needed their call letter URLs – just the plain 3 or 4 letter URLs.  They also said that it would be good marketing for the station as we could promote multiple URLs.  Oh, and that the offer included wouldn’t last long.  That offer, by the way, varied by market size so they did do some homework..

If you know me, you know that I jumped at the chance – No, no!  I was polite.  I simply laid out history and offered my condolences for their having purchased a pig in a poke.  It was fun.

Sadly, someone spent their (or worse, someone else’s) money to buy those URL’s.  Sitting at lunch, a couple of beers and they start talking and realize – falsely – that if they can get their hands on these dormant URLs, they can score big.

There was an episode of Twilight Zone (yes the original) where some guys stole a bunch of gold.  They put themselves into suspended animation for a number of years so that when they emerged, the robbery would be long forgotten and they would be rich beyond belief.  When they did actually awaken, scientists had discovered how to create gold artificially and their haul was worthless.  Not an exact parallel but close enough. 

Guys, enjoy your URLs.  You own ‘em.

Change it, Rebuild it, Move it, Take it off the Air. Broadcasters and PCS Spectrum

The headline says, “The FCC Is Promising Big Payouts for Local TV Stations That Go Off the Air.”¹ Well, with respect to Dana Carvey, “Isn’t that special.”

 

Let me get this straight:  In the mid-nineties, when the government and administration were running record deficits (don’t let that “peace dividend” fool you) they went looking for new revenue.  

 

Well, alrighty, then…digital television.

 

Now, to be sure, we had been investigating DTV as a replacement for the weary NTSC for some time.  But it bumped into itself at every turn.  SPMTE, NAB, PBS, NTIA and others conducted numerous tests, all designed to fit 50 pounds of, uh, stuff in a 5 pound bag.  Yeah, 50 – actually more when you look at the bandwidth demands of a digital signal.  Then, once they got all that in a bag, they had to find a way to deliver it without the bag breaking.  You’d think we’d be smart enough to pick the most robust system consistent with the compression we needed (that necessary for the 6 MHz “five-pound bag” we wanted to keep.) 

 

And, true to form, ATSC chose 8VSB.  Brings back memories of the Magnavox AM stereo system.  In this case, at least, some people liked it.  

 

Everyone swallowed hard and implemented it.  It brought with it a lot of promises, not the least of which was multiple channels within the 6 MHz bandwidth.  That was a sacred value, the width of an analog channel.  

 

And everyone changed.  They really embraced it.  OK, June 12, 2009² was declared the final, final, really final, We’re not kidding final date for turning off the analog signal and no one had a choice.  

 

The transition meant billions of dollars of plant upgrades – from camera to transmitter and news van to file storage.  Everything had to be upgraded.  And we did that, too.

 

Some stations immediately launched second channels, the so-called “dot-two” channels offering additional programming.  A few even added dot-three and more, choosing to keep their main channel at 480 lines.

 

Networks began feeding in HD – a huge additional cost to them.  Do the quick math on a golf tournament or NFL game with 20 or more cameras, multiple replay devices and recorders, backhaul then studio and control room changes and, finally, HD distribution.  You’ll get to a number somewhere around the yearly GDP of a South American country. 

 

But it was worth it.  Worth all the expense to deliver great digital television to the masses.  (sarcasm)

 

Should I quit here?  Not without mentioning that the real reason for the move to digital was the government’s recognition that they could move most stations to the UHF band, freeing up, a great deal of spectrum in the VHF band to auction off to personal communications services (PCS).  That was responsible for the cutoff date, the development of digital and all of the money spent by broadcasters to convert.  The extra channels within the 6 MHz bandwidth became carrots, as did a number of regulatory concessions the commission offered to broadcasters when they moved.  Don't kid yourself; it was about the money.

 

Now, the commission is asking stations to take a bribe – fall to the canvas, if you will – in order for the PCS guys like Verizon, AT&T and the rest to have additional bandwidth to distribute their streaming fare on a 1:1 basis.

 

I wrote about the inefficiency of 1:1 awhile back.  To date, the ratio of bandwidth costs for 1:1 to bandwidth costs for 1:many hasn’t changed.  It’s still abysmal.  

 

But we’re going to move forward with that.  In fact, the government is proposing to pay the broadcasters for the spectrum so that they can auction it off to the PCS guys.  From their point of view, it’s “better.”

 

It could be a windfall – a station in LA could receive over a half billion dollars to turn off the transmitter.  That's a “B” you see there.

 

Once again, the Libra feels very strongly both ways: 

·         It’s a free market

·         PCS can be important

·        Stations could easily exist by serving their relayed customers (cable, satellite, copper) with the direct feed most of them now use

Then again,

·        If you’re that willing to give up the frequencies, where’s that public “interest, convenience and necessity” you’re supposed to be operating under

·        What about that [small] percentage of people who rely on OTA signals (I’d add away-from-home but given the 8VSB standard, away from home or portable viewing isn’t possible in many locations.)

·        If the commission’s actions are, in and of themselves, in the public interest, why should stations get any compensation?  How about another auction at the end of a station’s current license term.  Verizon and AT&T, Scripps and Linn, get out your checkbooks

Broadcasters have gotten the short end of the stick on this so far.  The minute the conversions to HD finished, the industry began nipping at their heels.  Channel repacking, channel movement³ and now channel vacation.  Upgrade an entire facility just to turn it off.  Ditch your dot-twos and combine with another broadcaster to save that precious spectrum.

 

As I showed in one of my earlier writings, there isn’t enough spectrum – DC to white light – to accommodate streaming to everyone all the time.  Do we really want to try?  Is you sending me a funny video of the squirrel in your back yard treed by a cat more important than news coverage of a major chemical spill?  No?  Well how about more important than The People’s Court or ET.

 

The commission is forming a task force to go on the road to sell in the idea to broadcasters.  Doesn’t that tell you all you need to know?

 

¹http://www.nationaljournal.com/tech/the-fcc-is-promising-big-payouts-for-local-tv-stations-that-go-off-the-air-20141001

 

²September 12, 2015 for LPTV stations

 

³NB:  A number of stations lobbied hard to keep their VHF assignments in the conversion to digital.  They found out the hard way that the digital envelope behaves differently compared to analog and that it penetrates building far less reliably.  That prompted a number of filings to move to the very UHF channels they reviled.

Music and Radio - Friends at War

The music business continues in the doldrums as broadcast radio repeats its slide in listenership and revenue. One would think that two businesses whose relationship has been symbiotic for over 70 years would be all over one another to boost collective growth. Well, think again. First, the labels are becoming irrelevant. They’ve become terrific at marketing while totally looking past the content. In fact, today, most successes out there are due to great marketing rather than great – or even good – music…and there’s a public out there that’s tired of it. It cuts across all demos as listeners change their listening patterns to include more classics and fewer currents. A quick scan of most of today’s releases demonstrates the lack of writing and performing talent making their respective ways to the listener. So while the labels are busy marketing, they’re also busy screaming, “Pirate! Pirate!” instead of finding real talent. Younger demos are more sophisticated – or less easily fooled. Either way, most won’t pay for a CD with one good cut. And in the last few years, there haven’t even been many of those! Sure, go ahead and cite a couple of albums or tracks but, by and large, the music creative world is a mess. That mess “sticks” radio with short playlists and uninspiring music and the medium suffers greatly. Not even the synergies that the CBS’s and Warners of the world can bring will turn it around. You can use tracks from company labels in TV shows (subliminally or with the blatant display that CBS includes in shows like Numbers); you can offer teases or select free tracks, or parade artists in a never-ending column onto the sets of TV talk shows; you can license tracks for commercial use, hoping they’ll stoke sales. Fact is, if the content isn’t there, well, there’s not a lot of hope. At the same time, radio broadcasters, seeing revenue fall came up with the ideal solution: crank up the commercial load. That’s worked really well! Some, Clearchannel, the nation’s largest radio group owner, included, have returned to less nonprogram time. It hasn’t helped much though since the chase for listeners has shortened every station’s playlist. Instead of getting tired of commercials, listeners just become fatigued from listening to the same music over and over and over and… The combination of label and broadcaster errors is a recipe for disaster. As this problem spirals upward, another wrench was tossed into the works: the performers have stepped in, looking for more money, themselves. Again, what was a symbiotic relationship for the same 70 years is now becoming adversarial as the US House considers HR4789,1 the “Performance Rights Act.” The bill, now voted out of committee with a recommendation for passage by the full House, seeks pay for play – with performers on the receiving end. These payments would be above and beyond the ASCAP, BMI and SESAC payments. It disregards the fact that radio is the main outlet for release of new material and new artists. It forgets that radio is a nearly piracy-free medium where airplay is of full cuts rather than Amazon.com-type samples. The "Local Radio Freedom Act" recently introduced offers to defuse the issue but it won't keep a vote on the Performance Rights Act from coming to a vote. There are numerous arguments for the Performance Rights Act, “Other countries do it.” “We do all the work.” “We’re getting killed by online piracy” are among the top reasons. Nevermind that many of the other countries are, let’s say, less than capitalistic, that the broadcaster is still the main outlet for sampling of new music, and that it isn’t the broadcast music but digital originals that are copied and offered for download. The broadcasters have countered, arguing their position as a major force in music sales and ignoring the longer-term use of music on the air which may contribute little to additional disc sales. The disagreement – and the proposed bill – come at an interesting time. It’s not music tastes that make it so. It’s the technology. Forget peer-to-peer or other file sharing, neither are part of the scenario. The technology is “tagging” and Clearchannel is its biggest proponent…and it may well set the entire licensing structure on its ear. This technique is more than a new wind in technology. It may well become a tornado. Simplified, tagging allows radio listeners to mark or “tag” a particular song as they listen then receive it directly to an iPod – for a fee. Imagine – direct accountability and traceability. Broadcasters, performers and the public will know immediately and exactly what music works and what doesn’t. Wellllll. The proof of the pudding will be in the tasting. And the tasting will be measured in converted tags. Think about what the concept will expose: - How good’s the content? Simple enough. The more they like the cut, the more likely they are to pay to download it. It’s a pretty even playing field. Not flat but not bad - Who’re the hot (and cold) performers - Between the performers and the broadcasters, which is the dog and which is the tail That is what will be the taste of the pudding…and for some performers it may be bitter. After all, track and performer popularity will become very clear through directly traceable sales. If you don’t measure up in sales you don’t get any more play! Now imagine the impact. Imagine how long Clearchannel – and others adopting tagging – will keep playing performers whose music doesn’t generate tagging revenue. Imagine the shortened playlists, further reduction in formats, and boring repetitiveness that could occur. Then again, think about the control that Clearchannel could seize, playing what they see fit and, therefore, guaranteeing tags and sales only for those selections. That feeds right back to the labels – those guys ostensibly responsible for finding, developing and promoting talent. With tagging, who needs the label? In fact, you can look to Clearchannel to be a label. So if it all plays out, where’s the recovery to come from? It’s not in more-of-same. It’s not in bigger promotions. It’s in getting more decent music and getting it to market. That means radio, online, films, every outlet possible. Listeners are ready and willing to pay for music they really like. They’re not as willing to pay for poor quality. If the performers can produce quality content, the relationship with broadcasters works. If not, the tug o’ war will continue. This clearly will be a test of radio’s power. If Clearchannel succeeds, you can look for a gigantic swing in control. Labels will come crawling, hoping to talk Clearchannel out of creating its own label. Performers will rethink their demands for payment as stations begin to base their play on tagging sales, reducing or eliminating play from poor performers (pun intended). In fact, the money may start flowing in the other direction. Remember, it’s not payola if you tell people you’re getting paid! (317, Communications Act of 1934). BMI and ASCAP: take note. The final outcome? Will tagging underscore the need for good content? Can tagging shift the balance of music power to radio? Well, if radio had the slightest idea of what it’s doing, it would get on the stick with HD and with the implementation of tagging. Unfortunately, it doesn’t. Clearchannel will give tagging a great run but everyone answers to the “Q” these days so if it doesn’t work in 89 days, performers may well be safe. OK, that’s hyperbole, to be sure, but probably not too far off. In the meantime, we can look forward to plenty of tracks being forced under TV action, bad matches between commercial beds and their video content, and the continuing parade of unsavory music and performers hawking their wares on talk shows. Here’s the originally introduced bill: Performance Rights Act (Introduced in House) HR 4789 IH 110th CONGRESS 1st Session H. R. 4789 To provide parity in radio performance rights under title 17, United States Code, and for other purposes. IN THE HOUSE OF REPRESENTATIVES December 18, 2007 Mr. BERMAN (for himself, Mr. ISSA, Mr. CONYERS, Mr. SHADEGG, Ms. HARMAN, and Mrs. BLACKBURN) introduced the following bill; which was referred to the Committee on the Judiciary A BILL To provide parity in radio performance rights under title 17, United States Code, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the `Performance Rights Act'. SEC. 2. EQUITABLE TREATMENT FOR TERRESTRIAL BROADCASTS. (a) Performance Right Applicable to Radio Transmissions Generally- Section 106(6) of title 17, United States Code, is amended to read as follows: `(6) in the case of sound recordings, to perform the copyrighted work publicly by means of an audio transmission.'. (b) Inclusion of Terrestrial Broadcasts in Existing Performance Right- Section 114(d)(1) of title 17, United States Code, is amended-- (1) in the matter preceding subparagraph (A), by striking `a digital' and inserting `an'; and (2) by striking subparagraph (A). (c) Inclusion of Terrestrial Broadcasts in Existing Statutory License System- Section 114(j)(6) of title 17, United States Code, is amended by striking `digital'. SEC. 3. SPECIAL TREATMENT FOR SMALL, NONCOMMERCIAL, EDUCATIONAL, AND RELIGIOUS STATIONS AND CERTAIN USES. (a) Small, Noncommercial, Educational, and Religious Radio Stations- (1) IN GENERAL- Section 114(f)(2) of title 17, United States Code, is amended by adding at the end the following: `(D) Notwithstanding the provisions of subparagraphs (A) through (C), each individual terrestrial broadcast station that has gross revenues in any calendar year of less than $1,250,000 may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $5,000 per year, in lieu of the amount such station would otherwise be required to pay under this paragraph. Such royalty fee shall not be taken into account in determining royalty rates in a proceeding under chapter 8, or in any other administrative, judicial, or other Federal Government proceeding. `(E) Notwithstanding the provisions of subparagraphs (A) through (C), each individual terrestrial broadcast station that is a public broadcasting entity as defined in section 118(f) may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $1,000 per year, in lieu of the amount such station would otherwise be required to pay under this paragraph. Such royalty fee shall not be taken into account in determining royalty rates in a proceeding under chapter 8, or in any other administrative, judicial, or other Federal Government proceeding.'. (2) PAYMENT DATE- A payment under subparagraph (D) or (E) of section 114(f)(2) of title 17, United States Code, as added by paragraph (1), shall not be due until the due date of the first royalty payments for nonsubscription broadcast transmissions that are determined, after the date of the enactment of this Act, under such section 114(f)(2) by reason of the amendment made by section 2(b)(2) of this Act. (b) Transmission of Religious Services; Incidental Uses of Music- Section 114(d)(1) of title 17, United States Code, as amended by section 2(b), is further amended by inserting the following before subparagraph (B): `(A) an eligible nonsubscription transmission of-- `(i) services at a place of worship or other religious assembly; and `(ii) an incidental use of a musical sound recording;'. SEC. 4. AVAILABILITY OF PER PROGRAM LICENSE. Section 114(f)(2)(B) of title 17, United States Code, is amended by inserting after the second sentence the following new sentence: `Such rates and terms shall include a per program license option for terrestrial broadcast stations that make limited feature uses of sound recordings.' SEC. 5. NO HARMFUL EFFECTS ON SONGWRITERS. (a) Preservation of Royalties on Underlying Works- Section 114(i) of title 17, United States Code, is amended in the second sentence by striking `It is the intent of Congress that royalties' and inserting `Royalties'. (b) Public Performance Rights and Royalties- Nothing in this Act shall adversely affect in any respect the public performance rights of or royalties payable to songwriters or copyright owners of musical works.