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Hello, I'm Steve Rowland.
First of all I would like to acknowledge and thank the many AIR members who have spent countless hours putting this meeting together. It is hard to imagine how much work it took to pull this off. We are all indebted to those who contributed their time and expertise, and if I may single out Dolores Brandon and Rogene Eichler West for particular thanks, they certainly deserve it.
It is a pleasure, and an honor, for me to have this opportunity to address you, and to share with you some of the things I have been thinking about the past few months.
My hope is to raise some questions and to stimulate some dialogue.
First of all, I'd like to recall just what it is that we do. We are independent radio producers. We are artists and independent journalists. We create audio art - sometimes about people, sometimes about nature, about ideas, politics, about music. For the most part, we have given up other avenues that are more lucrative because we believe in what we do - we want to share ideas. We mainly try to deal with issues of the human condition, and of the human spirit. This is our greatest asset. It also can become a liability when we sit down to negotiate terms of payment and distribution for our work, because many of us put the opportunity to create art above the need to sell it.
This is an extraordinary time to be alive, and certainly an extraordinary time for radio producers. It is a time full of possibility, and of anticipation. We've seen huge changes in the way we work over the past decade - workstations and email are ubiquitous, and our daily AIR list is a vital line of communication amongst independents that didn't exist just a few years ago. Now the real focus is on the intersection of art and ideas and the business of delivering art and ideas.
I think most of us understand clearly that the world of broadcasting and delivery of media is rapidly changing. Because audio content takes up less bandwidth than video, audio producers and distributors now find themselves at the front lines of these changes. What models are implemented by record companies for distributing music, by radio networks for distributing radio via satellite and over the web, and by producers for how they agree to be compensated for their work, will set precedents for what models are later implemented by movie studios, television broadcasters, and film and internet content creators.
We have high expectations for imminent changes -- and we have the opportunity to influence changes. The degree of our effectiveness though is determined by several factors. These include:
I'd like to address each of these issues in sequence. Take these as the observations of one person -who has been working in music and radio production for nearly 25 years, and one who is keenly interested in understanding this change, and one who hopes to participate, with all of you, in shaping that change.
Where Things Are:
First of all we need to understand that the established structures in broadcasting and media businesses really are changing. Some of these changes are incremental --- For instance we've seen broadcasting change a lot over the past 20 years - Perhaps the biggest agent of change was cable television. The big three networks had settled into a sense of complacency with regard to their own muscle power. Their focus was only on the competition with each other - not much thought was given to the myriad of channels about to be introduced by cable, and then satellite TV services. The idea of niche marketing, and selling specific items or services to narrow groups - like fishing poles or motorboats to viewers of The Outdoor Channel had not been part of the grand development of American television. But all of a sudden it made sense.
The changes in audio delivery now, are even greater. The Sirius satellite channel is slated to launch in only a month or two. And don't be thrown off by the appearance of small numbers of listeners at the start - this is going to be a slow but steady build and satellite radio is going to be a big deal. Wait till you start seeing some of their marketing efforts. There are already several options for getting audio content on the web ---
And even bigger changes are coming - consider the possibilities that will arise when we have everyday wireless web access. Audio will be obtained on small devices, the size of a Palm pilot or an MP3 player - instead of 200 channels available via satellite, there could be 20,000 channels available on the wireless web.
How this all affects us.
This does affect -- us slowly, but surely. But surely, not as slowly as some may think.
The positives are sort of obvious - with all of these channels, there will be greater need for content. And prices for acquisition should rise. But, on the other hand, with so much easy access, and so much fierce competition, revenue for the distributors is going to go down, and with that decrease, so too the prices paid to independents.
This is already being played out. Those distributors who are setting up channels on the Sirius satellite are looking for content. And there are lots of them. One might think that the value of content would go up, because quality programming becomes more scarce. But not so. Many of the acquirers have suggested that independents provide work for free. The arguments are often something like these: "Well, the whole thing is still in an experimental stage", "We're not going to have many listeners at the beginning", "We're not projecting a positive cash flow until year 4", "You've already been paid for your work when it aired previously", "We're opening new doors for you and giving new avenues for exposure". These probably sound pretty familiar.
What kind of responses are they getting?
The responses to these offers fall into two camps. Those who take them, and those who don't.
Why would some of us take the deals and others not.
Well for someone who has put 6 months or a year of work into a program, and just barely broke even on its production costs, the offer of a "free broadcast" isn't really very attractive. But, if a producer has obtained all the clearances, and can sell the program, any additional broadcast can be viewed a little differently. Now the broadcast can be seen as promotion for selling the product, and even if it only sells a few, nothing is really lost - well, at least in the short run.
Let's take a brief aside and take a look at the world of commercial broadcasting. A few days ago I had the opportunity to attend a presentation by Dave Checketts, the President of Madison Square Garden, Inc. Checketts put three circles on the board, as he said, let me show you the basics of our business model. In the first circle, he wrote "live events". In the second, "broadcast" and in the third, the word "properties". Live events are what the Garden is built on -sports the circus, and concerts --- properties is the term Checketts was using for "stuff he can sell" - programs, popcorn, meals in their restaurants, hats and sweatshirts, even tours of the facilities. Now the NY Knicks have sold out every home basketball game for the last several years. And the prices have gone up 300%. And those folks are buying a lot of hot dogs and beer. But of the three, where do they make their money -- overwhelmingly from broadcast licenses.
What does this have to do with us? Well, as my friend Vinnie Curren, general manager of WXPN in Philadelphia put it, "in public radio we haven't figured out how to turn cume into cash" - meaning basically that we haven't been able to convert our listening numbers into any kind of significant underwriting support. And this leaves independents scrambling to do work for hire, or to eek out profits selling copies of their work.
But why then is the actual broadcast so lucrative in the commercial world and of comparatively little value in public radio? As Vinnie suggested, we just haven't figured this out yet.
What then are the implications of this. Well, for one thing, we need to really discuss these rights issues a lot more. We need to be vigilant and we need to keep in mind that we are constantly setting precedents. As each new delivery model emerges, the first deals that are signed become the basis for all future negotiations.
Where does this leave us?
Personally, I think we need to be careful about selling our work too cheaply, but for those of us with ancillary products, the more exposure the better. So we need to share information about new openings, new opportunities and discuss what kind of offers are being made. We need to come up with equitable solutions --- fees that work both for acquirers and for producers. But the fees aren't the only issue - the rights that go along with them are equally important. The length of time, the number of plays, and what limits are placed on an acquirer's resale rights.
Our world has already changed. There should be no doubt of that.
I mentioned earlier that part of our ability to succeed in the near future will depend upon our ability to discuss all of these issues openly and honestly. We need to talk about them with passion, but without anger. Today's on-line meeting is a great place for us to start. I also mentioned that part of our success will be based on our ability not only to embrace change, but to stand together and help create it.
I hope to meet many of you as the meeting progresses and hope also that you will be willing to share your ideas and experiences with us.