Radio Ditches Webcasts En Masse By Randy Dotinga
http://www.wired.com/news/digiwood/0,1412,57134,00.html

02:00 AM Jan. 09, 2003 PT

First came the fuss over double compensation for the radio-commercial actors. Then the flap over royalties for recording artists. Now the slap-happy Internet radio business is reeling from another hit, this time from the nation's most popular network of online stations.

Clear Channel last week ordered its stations to take on the cost of simulcasting radio broadcasts over the Internet, prompting about 150 of its 200 stations to switch off their Web feeds. As the number of webcasters continues to dwindle, survivors wonder if listeners will vanish, too.

"Stations dropping Web streams is pretty bad for everybody," said James Spath, webmaster for San Francisco rock station KFOG. "The lower the profile, the less people will use it as an option. That's why we're trying to keep on no matter what."

Maintaining streams won't be easy considering the medium's complications and expense. Traditional radio stations seem to be especially vulnerable.

"Right now, in any given city, less than half the stations will broadcast on the Internet," said Kurt Hanson, a radio consultant and newsletter editor. "Two years ago, it was probably getting to two-thirds or better."

The loss of the Clear Channel stations is especially damaging, Hanson said. "They've been a leader in showing that using the Web is good for their stations. They sold advertisements on their streams, along with banner ads and links on the websites. They were doing nice, creative things."

Creativity doesn't pay the bills, as Clear Channel stations discovered when executives told them they'd have to start paying for webcasting out of their local budgets. Clear Channel spokeswoman Pam Taylor estimated that only about a third of the 150 offline stations will restore Web streams. (Clear Channel owns or manages 1,200 stations in the United States, more than any other company.)

In some cities, Clear Channel's decision left office-building denizens and other Internet radio fans with little or no local programming.

In San Diego, California, for example, about a dozen stations switched off their streams. In a county of nearly 3 million people, only a handful of news and talk stations still offer live streaming.

The online listenership wasn't high enough to woo advertisers to buy Internet-only ads, said Mike Glickenhaus, a Clear Channel executive in San Diego.

According to Hanson, Internet streams usually attract only about 2 percent of a station's total listeners. But even at the largest stations, that may amount to a couple thousand listeners at any one time. Smaller stations may attract just a few dozen.

And even if advertisers want to buy Web ads, they often have to pay additional royalties to the commercials' actors, Glickenhaus said. Some stations have skirted this problem by setting up programs that shut down Internet audio feeds during commercials and play filler music instead.

Music stations, however, can't get around another cost: royalties for the performers of songs played on the Internet. (Thanks to a quirk in the law, performers don't get royalties when their work plays over the airwaves. But thanks to a provision in the Digital Millennium Copyright Act, webcasters have to pay.)

Webcasting itself can cost $1,000 or more per month, and many stations complain that streaming providers are unreliable.

But dead air could be even more costly. In December, the ratings service Arbitron said online listeners -- about 320,000 of them per week -- made Clear Channel's stations the most popular radio network on the Internet. The company is sure to lose that title now.

"If radio listeners can't listen to broadcast stations on the Web, they're going to find alternatives," Hanson said. "Broadcast radio will never get them back, or at least they will have a hard time."