Radio Goes Off The Web

June 13, 2002
| By Katy Rent |
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GRAND RAPIDS — What was once thought to be the next big step in communication has suddenly ceased to exist. Radio broadcasts of local stations — and of stations across the country — have been temporarily taken off the Internet because of ongoing negotiations with several agencies.

Broadcasting radio programs over the Internet began three to four years ago as a way to reach the masses, and accomplished just that. People in New Zealand could type in the Web address of a station in Grand Rapids and get the local scoop and listen to music. Now however, due to complications with both music rights fees and talent fees, audio streaming has been temporarily suspended.

Streaming is the data transfer technique that allows Internet users to hear audio files, for instance, without lengthy download times, enabling Web surfers to hear radio broadcasts as they occur.

At issue at this time are the music rights fees owed to the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music Inc., the SESAC, a performing rights organization designed to represent songwriters and publishers and their right to be compensated for having their music performed in public, and the Recording Industry Association of America (RIAA).

“We pay them (music rights organizations) huge amounts of money to play the songs that we play on the radio but the fees that we pay to play them on the radio do not cover streaming, so there is an uncertainty there for how much we may or may not owe them for what we put on the air and the Internet,” said Phil Catlett, general manager of Regent Communications.

That issue, combined with an uncertainty over talent fees owed to union talent for commercials, has been enough to shake up the Internet situation. Presently talent fees are being enforced at three times the rate the agencies paid the talent in the first place. “What is happening is that the unions are asking for more money,” Catlett added.

Catlett said the American Federation of Television and Radio Artists (AFTRA) just signed a new contract with its talent that adds some rather substantial fees for the voice talent heard in a commercial each time the commercial airs on the Internet.

Phil Tower, program director and operations manager for WOOD and WTKG radio stations in Grand Rapids, said the new contract would cost three times as much to run an ad on the Internet. As a result, advertising agencies contacted the radio stations saying the commercials would not be available to air on Internet streaming.

Those two issues combined were enough to force all major broadcast companies to take a hard look at what they were doing and whether they wanted to continue — and in the case of Grand Rapids, the three major radio companies here all pulled out of the Internet scene.

However, Catlett added there is new technology whereby stations can pull all of its local ads and just run the broadcasters and the music. It will be up to the stations what they want to do with that time: perhaps play station promotions, more music or Internet-only ads. There might also be an opportunity for national advertisers to run promotional pieces on the Internet. 

“With this technology it is likely that a number of us will be back up and streaming very soon,” Catlett added.

The blow to local radio stations is hard to measure, Catlett said. It is difficult to calculate if the temporary suspension of Internet broadcasts has or will hurt local rating numbers. “The streaming was so new that we really didn’t have a sense of how much listening was going on, so when it was pulled it was just a sense of where we were losing an opportunity to reach people who listen with their computers on the Internet, but it wasn’t a measurable constituency that we really had a handle on,” Catlett said.

Tower added that perhaps the biggest hit has been felt with local sportscasts and popular talk shows on WOOD. “There are many Griffins and Whitecaps fans out there who would like to listen on their computer and can’t. If there is a Whitecap player parent who lives in Alabama, it is nice to be able to hear the game at home,” he said.

Catlett, however, is confident that any effect the suspension does have on the stations, at least those under Regent Communications, which includes WLHT, WTRV and WGRD, will be over in less than a month, when he expects to have the sites up and running.

WOOD and WTKG have no set date for when streaming will return, but Tower said the stations look forward to being up and streaming again soon.

That will only happen with some alterations and an agreement about music rights fees. Catlett said negotiations are ongoing but what it looks like is that stations will pay more money up front but it will be worth the potential that the Internet service offers listeners and surfers.

For now listeners and surfers alike will have to be patient while local stations work out the kinks and put new software programs in place.

“It has been a big issue in our business,” said Catlett. “We have had hundreds of responses from the outside and the public is supportive of what we want to accomplish, and (they) understand we are doing whatever we can to get the streaming back up and running.”

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