It’s not too late for radio broadcasters to get a piece of the subscription audio pie. So says streaming audio technology company Clip Interactive, which wants to build a business by helping radio do just that.
“The current combined U.S. subscription revenues of Apple Music, Pandora, SiriusXM and Spotify are worth $11.5 billion annually,” said Bill Freund of Clip Interactive this spring. Had U.S. radio developed its own on-demand subscription streaming audio service a decade or more ago, Freund added, they could have grabbed a big slice of that.
“Such a service could include commercial-free content, plus all of the personalities, local information, sports and all the other entertainment that broadcast radio provides,” he said. “They could have really leveraged this space and made money from it.”
The opportunity to make money from ad-free/on-demand subscription audio is not lost, as far as Clip Interactive is concerned. The Colorado-based company has developed a paid radio streaming app called Magic. What Freund calls a “technology demonstration app” was released to some broadcasters the final week of June.
The company believes at least 10 to 15% of radio listeners are willing to pay $12 each month to hear ad-free local radio. According to Freund, even that is a conservative estimate.
“Actually 32% of 2,000 listeners surveyed in a Harris Poll said they’d be willing to pay $12 a month for commercial-free on-demand broadcast radio streaming,” he said. This breaks down as 45% of SiriusXM, 43% of internet radio listeners and 29% of AM/FM listeners.$12 PER MONTH
It would be expensive for individual broadcasters and even radio groups to develop their own subscription radio services. But using a Magic-style app, Clip says, listeners could replace on-air commercials with favorite songs/talk segments, request local traffic and weather on demand, and yet stay synchronized to a station’s on-air transmission, whether listening directly through their smartphones or smart speakers or in the car.
This is why Clip wants to aggregate all U.S. radio streams onto the Magic platform, a significant difference from iHeartRadio’s offering that only aggregates iHeartMedia streams and podcasts.Bill Freund
Freund explains, “It is really like the radio dial for all existing stations, only without commercials.” Freund also highlighted the simplicity of the Magic user interface, which will utilize voice controls to skip and request content. Finally, Freund says that the commercials will not just be skipped but will be “covered by new content,” such as other radio segments, music discovery created by program directors, podcast clips or perhaps even user-generated audio.[From 2015 — Clip Interactive Launches Independent Broadcaster Program]
The company will handle the heavy lifting involved with ad/song substitution and skipping, on-demand content requests and stream synchronization. The mixing would be handled by Magic’s artificial intelligence, which would act as a curator/DJ to ensure smooth transitions. The Magic AI would also keep tabs on each user’s content choices, to suggest song/genre choices to them.
“Say the user was listening to their local Cumulus CHR station, and that station went into a commercial set,” said Freund. “Our AI could be programmed to switch the user to another Cumulus station in the same genre, seamlessly switching them back to the local station once the commercial set was over.”
The bottom line for Magic subscribers would be ad-free broadcast radio that they could let run uninterrupted or control at will using voice commands. Either way, the commercial sets that many listeners find irritating would be a thing of the past, at a cost of $12/month.BUSINESS CASE
The fact that some of radio’s listeners would now be tuned into Magic rather than over-the-air broadcasts would not substantially affect radio’s OTA advertising revenues, Freund contends, but would give these stations access to subscription revenues that didn’t exist before.
How much money each station could make would depend on how many subscribers on the Magic platform select their audio streams, and for how long. This is due to the business structure of the Magic platform: All of the subscriber revenues are combined into a pool, whose net is split between Clip Interactive and its member stations.
For its portion of the take, the company will handle all aspects of the Magic playout platform, including paying royalties and all other fees on the broadcasters’ behalf. The Magic platform makes it possible for broadcasters to earn revenues from subscription radio without doing anything beyond providing a stream to the company.
Clip Interactive is promoting its Magic platform to U.S. broadcasters and sponsored a session at the recent NAB Show to spread the word. The message Freund wants to get across to broadcasters: “Magic would allow them to get a share of the subscription audio market, without having to do anything on their part.” With $11.5 billion in play annually, is it a business case worth considering? Freund says it’s currently working on a Nasdaq initial public offering slated for September, concurrent with the release of an alpha pilot of Magic, during which the company plans to work with its first partner broadcaster. Later in 2019, Magic’s beta version will be released, and Freund says the company “hope[s] to expand to any broadcaster who is interested.”ABOUT CLIP INTERACTIVE
According to its website, Clip Interactive develops “technologies that identify, unitize and deliver audio content to consumers so they can listen to what they want, when they want.” Among its offerings, Clip coordinates placement of digital ads with on-air ads using machine learning algorithms; and it aims to offer “a comprehensive marketing technology platform that can target and measure like digital.”
The firm was founded by Jeff Thramann. Michael Lawless is CEO. In early 2018, Clip Interactive announced it hoped eventually to become a public company.
Bill Freund is EVP and chief business development officer as well as an equity partner. He is perhaps most familiar to the industry as co-founder of Triton Digital. He has also worked at Podcast One, Westwood One, Katz Media Group and AM/FM-Chancellor, and he founded a capital advisory company.
The frequency and breadth of EAS alert testing on SiriusXM radio will change following an FCC order. The commission decided that Satellite Digital Audio Radio Service (SDARS) and Direct Broadcast Satellite (DBS) services are sufficiently similar in function and technology that their testing requirements should match.
Specifically, the new testing requirements require SiriusXM to log receipt of weekly test of EAS alerts and to transmit a monthly test on 10% of all of its channels, varying which channels are tested month to month so all channels are tested throughout the year.
This change has its roots in an EAS First Report and Order filed in 2005 that extended EAS alert testing requirements for satellite radio. SiriusXM filed a petition that same year, arguing that proposed requirements for weekly and monthly EAS tests on all of its channels would “mislead subscribers to believe that satellite radio operators transmit state and local EAS alerts on all channels,” rather than just on previously identified XM Instant Traffic, Weather & Alert channels. Sirius instead asked that those monthly and weekly tests only occur on the traffic, weather and alert channels.
Sirius later made an ex parte filing in 2014 arguing that circumstances had changed since its petition, and that the EAS testing rules for SDARS providers should be similar to that of DBS. It said the weekly and monthly tests had “imposed an excessive, disproportionate and unnecessary burden on SiriusXM and its subscribers.” It also cited that its breaks are not uniform across all of its channels, making it difficult to naturally insert a time for a wide-ranging test.
Following additional filings and public notices in 2017 and 2018, the FCC has concluded that it is appropriate to make SDARS rules for EAS testing comparable to those for DBS and in the public interest.
Read the full FCC order here.
Group owner Sheridan Broadcasting Corp. has announced a content deal with Radio Disney.
Radio Disney will provide video content to Sheridan’s Atlanta-based WIGO(AM). The audio for that content will be “telestreamed,” as SBC says, on WIGO(AM), while there will be a video feed on the station’s website, www.wigoam.com.
The programming will be a one-hour weekday show called “The Radio Disney Hour.”
Ron Davenport Jr., chief operating officer of SBC, said, “We are honored and extremely flattered to be the first radio broadcaster licensed by Disney to use Radio Disney video content. The Radio Disney team has been incredible to work with, and we are very excited about the possibilities going forward.”
HAMILTON, New Zealand — Free FM, a community access radio station, is part of the Community Access Media Alliance, a network of 12 stations around New Zealand. We have been operating for 28 years, for many as AM-only, but on FM for seven years and are making strong inroads in transmedia delivery.
Free FM is a not-for-profit entity, governed by a charitable trust and we operate as a non-commercial broadcaster. We have a small staff and content is created by approximately 80 volunteers, representing a very diverse range of communities, individuals and interest groups in our broadcast area (the greater Waikato region of the North Island — population almost 470,000).
Free FM is partly funded by New Zealand On Air (a government agency) to provide access to broadcasting facilities for individuals or groups with ideas, opinions or cultural needs which may not have the opportunity for expression through the mainstream commercial broadcast industry. The purpose of stations like ours is specifically described in the New Zealand Broadcasting Act.
Access radio is, in essence, radio “by the people, for the people,” where the freedom of expression of ideas, values and beliefs is valued and protected. Many of those who come to make content with us have English as their second (or even third or fourth) language and we frequently have people involved who have physical or intellectual challenges. Much of the content created at our studios nowadays is in the form of prerecorded 30-minute or one-hour programs.[AoIP Applies to Small Stations, Too]
Our philosophy at Free FM is also to stay ahead of the game, by adopting emerging technology where it is clear there are new opportunities to enhance what we do. While radio broadcasting is still our major activity, we have over the last 10 years become our sector’s leader when it comes to digital content delivery and embracing new developments (such as smart speakers). We are always keen to see and evaluate what is coming over the horizon in terms of how listeners are accessing content and what they want to do with it.
It had become painfully obvious that our analog studios were barely fit-for-purpose. There’s a limit to how far you can push things and much of what we had was well used before it came to us back in the 1990s. It became obvious that a complete refit was necessary, replacing decades of add-ons, patches and mis-matched equipment.
Naturally, we wanted to find a technically advanced solution, but budget was also a major consideration. In doing our homework, we looked at all the available digital consoles and audio delivery systems available and considered how they might work for us. One of the big factors to consider was robustness and ease of use for nonprofessional people. And because of language considerations, we were also keen to find products that were intuitive and easy to understand.
In our search, Wheatstone kept coming up as a front runner. Marcus Bekker from Southern Broadcast was already known to us as someone who completely understands our sector. He became an invaluable advisor when talking about our specific needs and wants.[From 2018 — Digital Radio Developments in New Zealand and Australia]
We did comparisons at every level, and everything we saw reinforced the view that adopting Wheatstone’s WheatNet-IP Blade technology would provide us with not only what we need right now, but also form the foundation to support whatever future direction we may take.
We locked onto Wheatstone’s IP-12 console as an affordable way to get us into the IP audio world. It had the ideal number of channels (12), and it was easy to navigate. We liked that each input module has an LED source display that we could name and that the meter bridge has easy-to-read bargraph meters and a prominent onboard timer. Because the IP-12 is a WheatNet-IP audio networked console, it gives us an in to an entire ecosystem for controlling, automating, processing and routing audio. It’s a very powerful system, and we now we have the capacity to develop other options if we wish, such as video, real-time social media content, or other input sources, with relative ease.
What is important to the future of Free FM, and stations like ours, is that we remain relevant and responsive to our changing environment. Digital delivery options are perfect for what we do, and it makes great sense to be at the sharp end of that platform as it grows and changes.
We are very pleased with the bang-for-buck we get from our new infrastructure as it is, and we look forward to the coming years with confidence that we have made the right choice.
For information, contact Jay Tyler at Wheatstone in North Carolina at 1-252-638-7000 or visit www.wheatstone.com.