Electronically Filed Docket: 19-CRB-0005-WR (2021-2025) PUBLIC VERSION Filing Date: 09/26/2019 07:53:58 PM EDT
Before the UNITED STATES COPYRIGHT ROYALTY BOARD LIBRARY OF CONGRESS Washington, D.C.
In the Matter of:
Determination of Rates and Terms for Docket No. 19-CRB-0005-WR Digital Performance of Sound Recordings (2021-2025) and Making of Ephemeral Copies to Facilitate those Performances (Web V)
WRITTEN DIRECT STATEMENT OF THE NATIONAL ASSOCIATION OF BROADCASTERS Witness Testimony
Volume 2 of 3
Sarang Vijay Damle (D.C. Bar No. 1619619) [email protected] 555 Eleventh Street, NW, Suite 1000 Washington, D.C. 20004-1304 T: (202) 637-2200 F: (202) 637-2201 Joseph R. Wetzel (CA Bar No. 238008) [email protected] Andrew M. Gass (CA Bar No. 259694) [email protected] 505 Montgomery Street, Suite 2000 San Francisco, CA 94111-6538 T: (415) 391-0600 F: (415) 395-8095
Counsel for the National Association of Broadcasters
September 23, 2019 TAB A Before the COPYRIGHT ROYALTY BOARD LIBRARY OF CONGRESS Washington, D.C.
In the Matter of:
Determination of Rates and Terms for Docket No. 19-CRB-0005-WR Digital Performance of Sound Recordings (2021-2025) and Making of Ephemeral Copies to Facilitate those Performances (Web V)
WRITTEN DIRECT TESTIMONY OF DR. GREGORY K. LEONARD
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) TABLE OF CONTENTS
I. QUALIFICATIONS ...... 1
II. ASSIGNMENT AND SUMMARY OF OPINIONS ...... 2
III. BACKGROUND ...... 5
A. Key Players in the Music Licensing Landscape ...... 5
B. The Section 114 License ...... 9
1. Compulsory License for Public Performance Rights for Sound Recordings for Digital, Non-Interactive Streaming Services (i.e., Webcasting) ...... 9
2. The Willing Buyer-Willing Seller Standard ...... 13
3. Royalty Rates Established Under the Webcasting Proceedings ...... 15
C. Digital, Non-Interactive Streaming Services Subject to the Section 114 License ...... 18
1. Simulcast ...... 18
2. Custom Radio...... 19
3. Internet Radio...... 19
IV. SIMULCAST DIFFERS ECONOMICALLY FROM CUSTOM RADIO IN WAYS THAT SUGGEST THAT THE STATUTORY RATE SHOULD BE LOWER FOR SIMULCAST THAN CUSTOM RADIO ...... 20
A. Terrestrial Radio Stations Use Non-Music Content to Drive Audience and Revenues More Than Custom Radio ...... 20
B. Simulcast Listeners Have Weaker Preferences for Music Than Listeners of Custom Radio...... 25
C. Advertisers Have Lesser Ability to Target Ads on Simulcasts Than on Custom Radio, Which Should Result in Lower WTP for Simulcast Ads ...... 27
D. Some Radio Stations Have Difficulty Generating Ad Revenue from Simulcast ...... 28
i NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) E. Taking Account of a Service’s Business Model Does Not Amount to Public Utility Style Rate of Return Setting and, In Fact, Is Necessary for a WBWS Analysis ...... 29
F. Summary ...... 30
V. THE ROYALTY FOR SIMULCAST BASED ON A BENCHMARKING APPROACH ...... 31
A. iHeart’s License Agreements with Independent Record Labels Involving the Licensing of Public Performance Rights for Sound Recordings ...... 32
B. Other License Agreements That Provide Useful Information ...... 44
1. Spotify’s License Agreements with Record Labels Involving the Licensing of Public Performance Rights for Sound Recordings Indicate that the Current Statutory Rates for the Section 114 License Are Too High ...... 44
2. Licenses (and Offered Licenses) Involving the Licensing of Public Performances Rights for Musical Compositions Assign a Lower Royalty Rate to Simulcast than to Internet Radio and Custom Radio ...... 47
C. Other License Agreements Are Not Valid Comparables ...... 53
VI. THE ROYALTY FOR SIMULCAST BASED ON AN OPPORTUNITY COST FRAMEWORK ...... 55
A. Potential Direct Royalty Losses on the Label’s Other Royalty Streams ...... 58
B. The Promotional Offset of Simulcast ...... 61
C. Conclusion on Net Opportunity Cost ...... 64
VII. OTHER ECONOMIC FACTORS ...... 66
A. The Decrease in Average Song Length Suggests the Per-Play Royalty Should Be Lowered...... 66
B. The Statutory Rate Should Not Increase at the Rate of General Inflation ...... 66
ii
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) I. QUALIFICATIONS
1. My name is Gregory K. Leonard. I am an economist and partner at Edgeworth
Economics, 333 Bush Street, Suite 1450, San Francisco, CA, 94104.
2. I received a Bachelor of Science in Applied Mathematics-Economics from Brown
University in 1985 and a Ph.D. in Economics from the Massachusetts Institute of Technology in
1989. After receiving my Ph.D., I became an assistant professor at Columbia University. I subsequently moved into economic consulting and worked at several economic consulting firms prior to joining Edgeworth.
3. My specialties within economics are applied microeconomics, the study of the behavior of consumers and firms, and econometrics, the application of statistical methods to economics data. I have published over sixty articles in scholarly and professional publications, which are listed on my curriculum vitae, which is attached as Appendix E. Many of these articles address issues in industrial organization and the economics of intellectual property.
4. I am the Vice Chair for Economics of the Board of Editors of the Antitrust Law Journal and have served as a referee for numerous economics and other professional journals. I have given invited lectures on antitrust and intellectual property issues at the Federal Trade
Commission (FTC), the United States Department of Justice (DOJ), the Directorate General for
Competition of the European Commission, the Fair Trade Commission of Japan, and China’s
Supreme People’s Court and Ministry of Commerce. I have been retained by the DOJ to consult on antitrust matters.
5. In 2009, I was invited to speak at a session of the FTC’s hearings on the “Evolving IP
Marketplace” concerning the calculation of patent damages. In the report that the FTC subsequently issued, my views on damages calculation were cited extensively. In 2007, I served
1 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) as a consultant to and testified before the Antitrust Modernization Commission, which was tasked by Congress and the President of the United States to make recommendations for revising
U.S. antitrust laws. In its Uniloc decision, the U.S. Court of Appeals for the Federal Circuit cited one of my publications in support of its conclusion that a method of calculating reasonable royalty damages in a patent case (the so-called “25% Rule”) is an unreliable and flawed methodology.
6. I have served as an expert witness in a number of litigation matters before U.S. District
Courts, state courts, arbitration panels, and the (U.S.) International Trade Commission. In addition, I provided expert testimony in the Phonorecords III case. A list of cases in which I have testified (in deposition or at trial) in the last five years is provided in Appendix E.
II. ASSIGNMENT AND SUMMARY OF OPINIONS
7. I have been asked by counsel for the National Association of Broadcasters (“NAB”) to analyze the appropriate statutory royalty for public performance rights for sound recordings for digital, non-interactive streaming services (i.e., webcasting) under the Section 114 license for the period 2019-2024 and to evaluate NAB’s proposal regarding that statutory royalty. My opinions are based on the information and data cited herein. I reserve the right to update my analysis and opinions if more information and data become available through discovery. I also reserve the right to respond to the opinions and analysis of other experts in this case.
8. Based on my analysis, as described in greater detail below, I have reached the following opinions:
• Simulcast is differentiated from other non-subscription non-interactive services, such as custom radio, in economically important ways that suggest that a lower per-play royalty for simulcast than for custom radio is appropriate.
2 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) − A simulcast is a by-product of the terrestrial radio broadcast that it mirrors, and the simulcast audience is much smaller than the broadcast audience. A custom radio service, in contrast, is its own standalone product.
− Terrestrial radio stations are focused on the preferences of listeners in their respective local markets. They differentiate themselves from each other and other alternatives to which users could devote their attention by using non-music content, such as on-air personalities, local weather and news, promotions, etc. Custom radio services, in contrast, serve a national audience and choose to offer little or no non-music content.
− Simulcast listeners have revealed through their choices that they have weaker preferences for music versus non-music content than do custom radio listeners. As a result, radio stations likely would lose less audience if they were to substitute for music with (additional) non-music content than would custom radio stations.
− Advertisers have a lesser ability to target their advertisements to interested consumers on simulcast than they do on custom radio.
− Smaller radio stations have found it difficult to generate additional ad revenue from their simulcasts.
− Substitution by listeners between simulcast and custom radio is well below one-to- one, indicating that many simulcast listeners’ next best alternative to simulcast is not custom radio or, for that matter, other royalty-bearing alternatives.
− All of these factors taken together lead to the conclusion that simulcast should be treated as differentiated from custom radio as an economic matter for the purposes of determining the appropriate royalty for sound recording performance rights; that is, the products are far from “perfect substitutes.”
• I have reviewed various license agreements to see whether they are informative as to the appropriate statutory rate or as to other issues relevant to this proceeding.
− iHeart’s licenses with independent record labels provide a useful benchmark for the appropriate statutory per-play royalty rates for simulcast and custom radio, respectively. I focused on the subset of such agreements that were renewed because, by choosing to renew, a licensor demonstrated the acceptability of the effective royalty rate paid under the agreement in the pre-renewal period. The resulting effective royalty rates, [ REDACTED ] (detailed below), are in a range of [REDACTED ] to [REDACTED ] for simulcast and REDACTED] to [REDACTED ] for custom radio, depending on the portion of terrestrial royalties that are allocated to webcasting services. If a single effective royalty rate is calculated for simulcast and custom radio combined, it is in the range of REDACTED] to [REDACTED ]. The resulting effective royalty rates including just the adjustment for skips are in a range of [REDACTED ] to [REDACTED ] for simulcast and [$REDACTED ] to [REDACTED ] for custom radio, depending on the portion of terrestrial royalties that are allocated to webcasting
3 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) services. The range for the single effective royalty rate for simulcast and custom radio combined is REDACTED ] to [REDACTED ].
− Performance Rights Organizations’ licenses with and offers to radio stations, while they are not appropriate benchmarks for the statutory rate in this proceeding, nevertheless provide useful information on two other issues. These agreements/offers treat simulcast the same as terrestrial broadcasts and their royalty rates are lower for simulcast than for custom radio, consistent with the iHeart-independent label agreements.
− The effective royalty rate per play paid by Spotify for sound recording performance rights for its ad-supported interactive service provides a benchmark for a rate above the upper bound of the range of appropriate statutory rates for simulcast and other non-subscription non-interactive services. This is due to the interactivity of the Spotify service and the fact that Spotify’s effective rate likely does not reflect effective competition. The Spotify effective rate per play was [REDACTED ] over the January 2018-March 2019 period.
− Other license agreements are not useful as benchmarks because they were not renewed (implying that at least one party found the effective rates to be unacceptable) or because they simply reflected the existing statutory rate.
• I conducted an opportunity cost analysis to determine the net loss in royalties from other royalty-bearing services that a label would expect from licensing simulcast. The NAB commissioned a survey, conducted by Professor John Hauser, to determine the alternatives simulcast listeners would choose in the absence of simulcast. The royalty, if any, associated with each alternative was identified. Combining across alternatives provides the label’s expected opportunity cost associated with licensing simulcast. I calculate the opportunity cost to be in the range of [$0.00074] to [$0.00108] per play, where the range is based on different assumptions regarding the royalty rates of alternatives and the extent of statistical variation in the survey. This opportunity cost likely would be partially offset by gains in royalties for the label as a result of simulcast being more promotional than other music- related alternatives, although I am unable to quantify the amount of the offset. Moreover, before being used as a benchmark for the statutory rate in this proceeding, the opportunity cost should be further adjusted downward to account for complementary oligopoly power. After making an adjustment to account for effective competition, the royalty rate based on the net opportunity cost framework is [$0.00078] per play with a 95% confidence interval of [$0.00065] to [$0.00095].
• Several other factors are relevant to determining the appropriate statutory rate.
− The average song length among the Billboard Hot 100 has decreased over time. This results in an increase in the royalties paid by a non-subscription non-interactive service for a given number of minutes of music. Yet, there is no evidence that the decrease in song length reflects greater song quality or otherwise causes an increase
4 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) in audience. Therefore, holding everything else equal, the statutory rate should be decreased by the same percentage that average song length has decreased to hold the royalty per minute of music constant.
− The general rate of inflation is not an appropriate basis for determining the increase in the statutory rate over time because the supply and demand factors affecting the appropriate statutory rate are quite different than those affecting the overall economy. Instead, changes in the statutory rate should be tied to price changes in a narrower and more relevant industry segment, such as the music industry. Notably, some prices in the music industry have not been increasing over time.
• The proposal that I understand has been made by the NAB in this proceeding is consistent with and supported by my analysis. Specifically, the rates and terms the NAB is proposing (including the definition of simulcast) are consistent with the rates and terms that a willing buyer and willing seller would agree to in a workably competitive transaction involving the rights in question.
III. BACKGROUND
A. Key Players in the Music Licensing Landscape
9. The current music licensing landscape for webcasters involves multiple exclusive rights
in two universes of copyrighted works: the public performance of a musical composition, the
public performance of a sound recording, and the reproduction/distribution of the sound
recording. The U.S. Copyright Office identifies eight key players in the market for music licensing in the United States: (1) songwriters; (2) music publishers; (3) performance rights organizations; (4) mechanical rights administrators; (5) recording artists and producers; (6) record companies; (7) music providers; and (8) consumers.1
1 “Copyright and the Music Marketplace: A Report of the Register of Copyrights,” U.S. Copyright Office, February 2015, pp. 18-25, https://www.copyright.gov/docs/musiclicensingstudy/copyright-and-the-music- marketplace.pdf.
5 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 10. A songwriter is the author of a musical work, contributing music or lyrics. The
Songwriters Guild of America and Nashville Songwriters Association International are examples
of trade organizations that represent songwriters.2
11. Music publishers are entities that enter into publishing agreements with songwriters,
under which the publishers in part finance songwriters’ efforts in exchange for future royalty
collections. Music publishers usually license songwriters’ musical works and collect royalties
from licensees of the musical works. Publishers in return receive from songwriters an ownership
percentage in the musical work or the royalty streams that they collect from licensees.3 There are three major music publishers: (1) Sony/ATV Music Publishing; (2) Warner Chappell Music; and (3) Universal Music Publishing Group. These firms hold a significant combined position in the publishing marketplace, controlling the majority of U.S. music publishing rights. There are also a number of mid-sized music publishers, including Kobalt and BMG, followed by thousands of smaller music publishers and self-published songwriters.4 National Music Publishers
Association and the Association of Independent Music Publishers are two trade organizations in
the music publishing industry.5
12. Performing rights organizations, or PROs, are collectives that license the public
performance rights in musical works on behalf of songwriters and publishers, which typically
2 “About NSAI,” Nashville Songwriters Association International, https://www.nashvillesongwriters.com/about- nsai; “What We Do & Why We Do It,” Songwriters Guild of America, https://www.songwritersguild.com/site/index.php/home/about-us. 3 Donald S. Passman, “Publishing Companies and Major Income Sources,” (Chapter 16), All You Need to Know about the Music Business, Eighth Edition, Simon and Schuster, 2013, pp. 219-220. 4 “Publishers Quarterly: UMPG, Sony/ATV Post Strong Results as Lil Nas X and Jonas Brothers Dominate,” Billboard, August 9, 2019, https://www.billboard.com/articles/business/publishing/8527014/quarterly-umpg- sonyatv-kobalt-warner-chappell-lil-radio-hot-100. 5 “About,” National Music Publishers Association, http://nmpa.org/about/; “About Us,” Association of Independent Music Publishers, https://www.aimp.org/about.
6 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) align themselves with a particular PRO. The American Society of Composers, Authors and
Publishers (“ASCAP”) and Broadcast Music Inc. (“BMI”) are the two largest PROs and
represent the majority of songs publicly performed in the United States. ASCAP and BMI are
not-for-profit businesses that must operate according to certain antitrust consent decrees that
constrain their membership and licensing practices. SESAC, Inc. (“SESAC”), and Global Music
Rights (“GMR”) are two smaller, for-profit PROs that license public performance rights in musical works outside of antitrust consent decrees overseen by federal courts.6
13. The licensing of mechanical rights for musical works historically has been handled by
mechanical rights administrators, such as Harry Fox—the largest such administrator—and Music
Reports, due to the administrative burdens associated with a Section 115 compulsory license,
which included serving notice on the copyright holder and the regular reporting of royalties on a
song-by-song basis. Recently, the Music Modernization Act established a new regime, to be
phased in in the near future, which will afford licensees a blanket compulsory license, with associated logistics to be administered by a designated Music Licensing Collective. Mechanical rights licensing for musical works is also often handled, and in the future will likely continue to be handled to some degree, directly by music publishers.7
14. A record company (or label) typically finances the production of sound recordings, which
are the result of a contractual relationship between the recording artists and record company.
Record companies also promote the sound recording and recording artists and arrange for the
6 “Music in the Marketplace,” Better Business Bureau, https://www.bbb.org/council/for-businesses/toolkits/bbb- brochure-music-in-the-market-place; “About Us,” Global Music Rights, https://globalmusicrights.com/about. 7 Al Kohn & Bob Kohn, “Licensing Music in Sound Recordings (Mechanical Licenses),” (Chapter 13), Kohn on Music Licensing, Fourth Edition, 2010, pp. 808-809; “Designation of Mechanical Licensing Collective and Digital Licensee Coordinator,” U.S. Copyright Office Website summary of the Music Modernization Act, https://www.copyright.gov/rulemaking/mma-designations/.
7 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) physical and digital distribution of the sound recording and live events featuring the recording artist. Record companies own and generally handle the licensing of the reproduction and public performance rights for their sound recordings. An exception is the licensing of incidental reproductions and public performances of sound recordings for digital, non-interactive streaming services, which are the subject of Section 112 and 114 statutory licenses, respectively. In those cases, the industry collective, SoundExchange, is responsible for collecting and paying out royalties to recording artists, non-featured artists, and record companies.8 There are “major” record labels and independent or “indie” record labels. Universal Music Group (“Universal”),
Sony Music Entertainment (“Sony”), and Warner Music Group (“Warner”) are the major record labels. These major record labels share common corporate ownership with the major music publishers. Independent record labels are those that are not wholly owned by one of these three major record labels.
15. Music service providers are channels for the transmission and distribution of musical works and sound recordings, including radio and television stations, digital music companies, and physical and online record stores. In this matter, the music service providers operating under the Section 114 compulsory license include those entities that provide digital, non-interactive streaming services. Digital, non-interactive streaming, also known as webcasting, enables consumers to listen to streams of songs over the Internet without the ability to select the specific songs that are played. Pandora is an example of a digital, non-interactive streaming service that provides its listeners with the ability to create custom radio stations based on the listener’s initial selection of a song, artist, or music genre that is then further personalized to the listener based on
8 Donald S. Passman, “Broad-Strokes Overview of the Record Business,” (Chapter 7), All You Need to Know about the Music Business, Eighth Edition, 2013, pp. 322-323.
8 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) the listener’s feedback.9 A terrestrial radio station’s stream, or simulcast, of its terrestrial broadcast over the Internet is also classified as a digital, non-interactive streaming service and is covered by the Section 114 statutory license. iHeart is an entity that offers both simulcasts of its terrestrial radio stations and a custom radio service.10 The NAB, Radio Music License
Committee (“RMLC”), and Television Music License Committee (“TVMLC”) are organizations that represent terrestrial radio and television broadcasters in certain music licensing negotiations,11 though the broadcasters can and do negotiate individually with performing rights organizations (such as ASCAP, BMI, and SESAC) and rights owners directly.
B. The Section 114 License
1. Compulsory License for Public Performance Rights for Sound Recordings for Digital, Non-Interactive Streaming Services (i.e., Webcasting)
16. For the purposes of copyright protection, the United States Copyright Act recognizes musical compositions and sound recordings as two separate protected works, with their authors granted separate exclusive rights over them. For both musical compositions and sound recordings, these include an author’s exclusive right to reproduce, distribute copies of, and make derivatives of a work. With respect to the exclusive right to publicly perform the work, the
Copyright Act treats musical compositions and sound recordings differently. Copyright owners enjoy a broad exclusive right to publicly perform musical compositions in any manner or
9 “About Pandora,” Pandora, https://www.pandora.com/about. 10 “Welcome to iHeartRadio,” iHeartRadio, https://www.iheart.com/content/welcome-to-iheartradio/. 11 “About Us,” National Association of Broadcasters, https://www.nab.org/about/; “Our Mission,” Radio Music License Committee, http://www.radiomlc.org/; “About Us,” Television Music License Committee, https://tvmlc.com/about/.
9 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) medium, while the exclusive right to publicly perform sound recordings is limited to
performances carried out by means of a digital audio transmission.12
17. That divergent treatment is the product of a lengthy history. Until the mid-1990s, U.S.
copyright law afforded exclusive rights to public performances only for musical compositions,
not sound recordings. This was, in part, due to the established understanding that playing sound recordings over terrestrial radio mutually benefits radio broadcasters and record labels representing copyright owners—broadcasters would use the sound recordings to generate listenership and advertising revenues, while sound recording owners would gain exposure to promote their record sales.13 In 1995, however, with the rise of the Internet and changing modes
of music-listening, as well as concerns over digital streaming as a potential substitute for
purchasing activity, Congress passed the Digital Performance Right in Sound Recordings Act
(“DPRSRA”). The DPRSA granted a limited public performance right “by means of a digital
audio transmission” by amending Sections 106 and 114 of the Copyright Act.14 The DPRSRA
addressed three separate types of digital transmissions: (i) nonsubscription broadcast
transmissions, which it exempted from the public performance right; (ii) subscription-based
transmissions, which were subject to a statutory license (i.e., a compulsory license); and (iii)
interactive services, for which copyright owners gained public performance rights to be
negotiated directly with interactive service providers.15
12 U.S. Copyright Office, “Copyright Registration of Musical Compositions and Sound Recordings,” Circular 56A, pp. 1-2, https://www.copyright.gov/circs/circ56a.pdf; 17 U.S.C §106 (“Exclusive rights in copyrighted works”). 13 “Copyright and the Music Marketplace: A Report of the Register of Copyrights,” U.S. Copyright Office, February 2015, p. 44, https://www.copyright.gov/docs/musiclicensingstudy/copyright-and-the-music-marketplace.pdf. 14 Dana A. Scherer, “Money for Something: Music Licensing in the 21st Century,” Congressional Research Service, June 7, 2018, p. 17; 17 U.S.C §106. See also Digital Performance Right in Sound Recordings Act of 1995, Public Law 104-39, November 1, 1995, https://www.congress.gov/104/plaws/publ39/PLAW- 104publ39.pdf. 15 “The Digital Millennium Copyright Act of 1998: U.S. Copyright Office Summary,” U.S. Copyright Office, December 1998, pp. 15-16, https://www.copyright.gov/legislation/dmca.pdf.
10 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 18. Around the time the DPRSRA was passed, the growth of internet streaming gave rise to
ambiguity about whether certain online music providers fell under the statutory license, whether
they should be required to negotiate licenses like interactive streaming services, or whether they
were exempted from the new public performance right altogether.16 The U.S. Copyright Office
itself acknowledged that certain online music-streaming services did not fall squarely under any
of the three categories outlined in the DPRSRA.17
19. In 1998, Congress updated the DPRSRA with the Digital Millennium Copyright Act
(“DMCA”), which expanded Section 114 provisions to cover all non-interactive webcasters,
while also amending Section 112 to allow streamers to make “ephemeral” recordings to facilitate
digital transmissions of sound recordings.18 The DMCA’s updates to Section 114—particularly
for Section 114(d)(2)—clarified to a degree which types of webcasters would be entitled to the
statutory public performance license. Most of the provisions restricted eligible webcasters to those that stream music in a non-interactive way—i.e., provide a user experience that “mimics a radio broadcast” in certain respects and thus is unlikely to substitute for sales of recorded music.19 For example, Section 114(d)(2) prohibits a webcaster using the statutory license from
16 Dana A. Scherer, “Money for Something: Music Licensing in the 21st Century,” Congressional Research Service, June 7, 2018, p. 17, https://fas.org/sgp/crs/misc/R43984.pdf; Amy Duvall, “Royalty Rate-Setting for Webcasters: A Royal(ty) Mess,” Michigan Telecommunications and Tech. Law Rev., Vol. 15, Issue 1 (2008), pp. 271-272. 17 “The Digital Millennium Copyright Act of 1998: U.S. Copyright Office Summary,” U.S. Copyright Office, December 1998, p. 16, https://www.copyright.gov/legislation/dmca.pdf. 18 “The Digital Millennium Copyright Act of 1998: U.S. Copyright Office Summary,” U.S. Copyright Office, December 1998, p. 16; “Copyright and the Music Marketplace: A Report of the Register of Copyrights,” U.S. Copyright Office, February 2015, p. 49, https://www.copyright.gov/docs/musiclicensingstudy/copyright-and-the- music-marketplace.pdf. 19 “Licensing 101,” SoundExchange, https://www.soundexchange.com/service-provider/licensing-101/.
11 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) posting a playlist in advance, from playing the same artist too many times within a 3-hour period, and from playing too many tracks from the same album.20
20. Currently, payment and reporting of royalties under Sections 112 and 114 are made to a single non-profit entity, SoundExchange, which is a party in this proceeding.21 In Web I, the
Copyright Arbitration Review Panel (“CARP”) recognized SoundExchange as a “Receiving
Agent” and one of two “Designated Agents” responsible for collection and distribution of royalties under Section 112 and 114 statutory licenses. Since then SoundExchange has evolved into the sole “Collective” for these licenses.22 In 2007, in the Web II decision, the CRB affirmed that using SoundExchange as the sole Collective was “the most economically and administratively efficient system for collecting royalties under the blanket license framework created by the statutory licenses.”23 Section 114 requires that SoundExchange distribute 50% of collected license fees to the copyright owner of a sound recording; 45% to the featured recording artist or artists; and the remaining 5% to agencies that represent non-featured musicians and vocalists in the sound recording.24
20 17 U.S.C §114(d); “Copyright and the Music Marketplace: A Report of the Register of Copyrights,” U.S. Copyright Office, February 2015, pp. 46-47, https://www.copyright.gov/docs/musiclicensingstudy/copyright- and-the-music-marketplace.pdf; Donald S. Passman, “Advanced Copyright Concepts,” (Chapter 20), All You Need to Know about the Music Business, Eighth Edition, Simon and Schuster, 2013, pp. 322-323. 21 “Copyright and the Music Marketplace: A Report of the Register of Copyrights,” U.S. Copyright Office, February 2015, p. 47, https://www.copyright.gov/docs/musiclicensingstudy/copyright-and-the-music- marketplace.pdf. 22 “Procedural Regulations for the Copyright Royalty Board,” Copyright Royalty Board, Library of Congress, 71 Fed. Reg. 59010 at 59013, October 6, 2006 (“As of [today], only SoundExchange is a recognized receiving agent for royalties generated under the section 112 and 114 licenses.”). See also Dana A. Scherer, “Money for Something: Music Licensing in the 21st Century,” Congressional Research Service, June 7, 2018, p. 25. 23 “Digital Performance Right in Sound Recordings and Ephemeral Recordings,” Copyright Royalty Board, Library of Congress, 72 Fed. Reg. 24804 (“Web II”), p. 24104. 24 17 U.S.C §114(g)(2); “Copyright and the Music Marketplace: A Report of the Register of Copyrights,” U.S. Copyright Office, February 2015, p. 47; Donald S. Passman, “Advanced Copyright Concepts,” (Chapter 20), All You Need to Know about the Music Business, Eighth Edition, Simon and Schuster, 2013, p. 323.
12 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 2. The Willing Buyer-Willing Seller Standard
21. In setting the statutory rates for the licensing of public performance rights for sound recordings for digital, non-interactive streaming services under Section 114, the Copyright Act requires that the CRB Judges “establish rates and terms that most clearly represent the rates and terms that would have been negotiated in the marketplace between a willing buyer and willing seller.”25 The economic factors considered by the CRB Judges when determining the rates and
terms that would be agreed upon under the willing buyer/willing seller (“WBWS”) standard
include:
• “[E]conomic, competitive, and programming information presented by the parties, including—(I) whether use of the service may substitute for or may promote the sales of phonorecords or otherwise may interfere with or may enhance the sound recording copyright owner’s other streams of revenue from the copyright owner’s sound recordings; and (II) the relative roles of the copyright owner and the transmitting entity in the copyrighted work and the service made available to the public with respect to relative creative contribution, technological contribution, capital investment, cost and risk.”26
• “[T]he rates and terms for comparable types of audio transmission services and comparable circumstances under voluntary license agreements.”27
22. In Web IV, the CRB Judges ruled that, in applying the WBWS standard, “effective
competition” among the labels should also be assumed to prevail.28 The assumption of effective
competition rules out the exercise of “complementary oligopoly power” by a label against a
service.29 Complementary oligopoly power arises when each of the major labels, and perhaps
some independent labels, is a “must have” from the point of view of the service. A label is a
25 17 U.S.C §114(f)(2)(B). See also “Determination of Royalty Rates and Terms for Ephemeral Recording and Webcasting Digital Performance of Sound Recordings (Web IV),” Library of Congress, Copyright Royalty Board, May 2, 2016, 81 Fed. Reg. 26316 (“Web IV”). 26 17 U.S.C §114(f)(1)(B)(i). 27 17 U.S.C §114(f)(2)(B)(ii). 28 Web IV at 26331. 29 Web IV at 26368.
13 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) “must have” for a service if the service would be substantially negatively impacted, and perhaps
not viable, if it was denied access to the label’s sound recordings. If the majors are “must
haves,” but the resulting complementarity is not internalized by each major, they each would have the incentive to charge a royalty to the service that is too high from the perspective of economic efficiency (or even from the perspective of their joint profit maximization). The CRB
Judges found that royalty rates in interactive service license agreements were influenced by the labels’ complementary oligopoly power in the interactive service setting.30 In contrast, the CRB
Judges found that royalty rates in non-interactive service license agreements with steering provisions better reflected effective competition because the non-interactive service licensee’s ability to steer created competition that mitigated the labels’ exercise of complementary oligopoly power.31
23. An additional dimension of effective competition is whether any labels possess unilateral
market power. The individual songs in a label’s catalog are, to varying degrees, substitutes for each other from the point of view of a service. If a service negotiated separately with the individual copyright owners of each song, it could use the potential for substitution between songs to play one copyright owner against another to obtain lower royalty rates. When negotiating with a label, however, the service does not have the ability to threaten to substitute among songs within the label’s catalog; it can only substitute one label’s songs for another label’s songs. The aggregation of substitute songs within a label’s catalog thus can create market power for the label. However, in Web IV, the CRB Judges did not make any adjustment to account for such market power and maintained that the steering provisions adjusted for
30 Web IV at 26343-44. 31 Web IV at 26366.
14 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) complementary oligopoly power while not “diminish[ing] the firm-specific monopoly value of
each Major’s repertoire taken as a whole.”32 As a matter of economics, however, such market
power can result in outcomes that are not effectively competitive.
3. Royalty Rates Established Under the Webcasting Proceedings
a. Royalty Rates Established in the Prior Webcasting Proceedings
24. In the Web I determination of 2002, the CARP had originally set separate rates for
internet-only webcasting services and for radio retransmissions (i.e., simulcasting), based on
their conclusion that over-the-air broadcasts had a “tremendous promotional impact” on
phonorecord sales, while the promotional effect of standalone webcasting services was
inconclusive.33 Citing “dramatically different RR [radio retransmission] and IO [internet-only] marketplace rates” in a benchmark agreement between Yahoo! and the RIAA, CARP determined that appropriate per-play royalty rates under the WBWS standard would be $0.0014 for webcasters and $0.0007 for radio retransmissions.34
25. The Library of Congress, in its review of the original CARP decision, found insufficient
support for a differential rate structure based on the record in that case, concluding that “the
Yahoo! agreement justified only a single rate applicable to all transmissions, without regard to
the source of the transmission.” The Library of Congress calculated a “unitary” per-performance
rate between $0.00065 and $0.00083, and accepted CARP’s $0.0007 radio retransmission rate as
32 Web IV at 26368. 33 Report of the Copyright Arbitration Royalty Panel to the Librarian of Congress, In the Matter of Rate Setting for Digital Performance Right in Sound Recordings and Ephemeral Recordings, Docket No. 2000-9, February 20, 2002 (“Web I”), pp. 33-34, 74-75. See also Amy Duvall, “Royalty Rate-Setting for Webcasters: A Royal(ty) Mess,” Michigan Telecommunications and Tech. Law Rev., Vol. 15, Issue 1 (2008), pp. 273-274. 34 Web I at 74-75, 88.
15 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) a reasonable per-performance royalty rate for all transmissions, with a $500 minimum fee for
each licensee.35
26. In the Web II determination, the CRB—the successor to CARP—set rates from 2006-
2010 for all commercial webcasters as follows: $0.0008 for 2006, $0.0011 for 2007, $0.0014 for
2008, $0.0018 for 2009, and $0.0019 for 2010, with a $500 fee for each licensee.36
27. After several webcasters raised objections to the rates determined in Web II, Congress
passed the Webcaster Settlement Act of 2008—which gave the industry broader authority to
privately negotiate royalty rates with webcasters—and the Webcaster Settlement Act of 2009,
which extended this negotiation period.37 In July 2009, SoundExchange notified the Copyright
Office that it had reached new royalty terms that would be made available to all commercial
webcasters in turn.38 These agreements set rates retroactively from 2006-2015. The rate for
non-subscription services was set at the greater of either a specified per-performance rate
(starting at $0.0008 in 2006 and increasing to $0.0014 by 2015), or 25% of gross revenues
earned by the webcaster and its affiliates, including revenue from activities other than
webcasting.39 I understand that the latter component of the greater-of rate formulation made this
rate structure economically untenable for diversified businesses, leading to the characterization
35 Library of Congress Copyright Office, Determination of Reasonable Rates and Terms for the Digital Performance of Sound Recordings and Ephemeral Recordings, 67 Fed. Reg. 45240, July 8, 2002, pp. 45255, 45262. 36 Library of Congress Copyright Royalty Board, Digital Performance Right in Sound Recordings and Ephemeral Recordings, Final Rule, 37 C.F.R. 380, May 1, 2007, pp. 24095-96, 24112. 37 Webcaster Settlement Act of 2008, P.L. 110-435, October 15, 2008; Webcaster Settlement Act of 2009, Public Law 111-36, June 30, 2009. See also Passman, “Advanced Copyright Concepts,” (Chapter 20), All You Need to Know about the Music Business, Eighth Edition, Simon and Schuster, 2013, p. 324. 38 Library of Congress Copyright Office, Notification of Agreements Under the Webcaster Settlement Act of 2009, 74 Fed. Reg. 34796, July 17. 2009, p. 34797. 39 Library of Congress Copyright Office, Notification of Agreements Under the Webcaster Settlement Act of 2009, 74 Fed. Reg. 34796, July 17. 2009, pp. 34799.
16 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) of this rate structure as the “pureplay” rate structure—the structure only made sense for services,
like Pandora at the time, that were engaged exclusively in webcasting activity.
28. In February 2009, the NAB and SoundExchange also entered into an agreement, wherein
NAB members would pay a per-performance rate of $0.0008 in 2006, increasing to $0.0025 in
2015.40 This agreement was necessary for NAB members, who operated terrestrial radio and
other businesses in addition to their webcasting activities, because the “pureplay” rate structure
was not economically tenable. At the time, radio broadcasters were suffering significant drops in
revenue during the Great Recession that began in 2008-2009. NAB negotiated a rate structure
that back-loaded the highest rates in the out years. NAB also negotiated additional concessions
with record labels and SoundExchange, including reduced reporting burdens, and waivers of
certain statutory license conditions related to pre-announcement of recordings and performances
of multiple songs from the same artist or album within a certain period of time.41
29. At the commencement of the Web III proceedings, most licensees—including NAB
members—were still covered by prior settlement agreements, and therefore did not participate.
About 95% of royalties paid to SoundExchange in 2008 and 2009 were already part of
settlements as a result of the Webcaster Settlement Acts.42 For all other webcasters who did not
settle, the CRB set rates at $0.0019 per play in 2011, increasing to $0.0023 in 2015 with a minimum fee of $500.43
40 74 Fed. Reg. 9293. See also NAB Website, “Agreement Reached on Online Streaming Rates for Local Radio Broadcasters,” February 16, 2009, https://www.nab.org/documents/newsroom/pressRelease.asp?id=1733. 41 Written Direct Testimony of Steven W. Newberry on Behalf of the National Association of Broadcasters, Determination of Royalty Rates for Digital Performance in Sound Recordings and Ephemeral Recordings (Web IV), 14-CRB-0001-WR (2016-2020), (“Newberry Web IV Witness Statement”), pp. 7-10. 42 Library of Congress Copyright Royalty Board, Determination of Royalty Rates for Digital Performance Right in Sound Recordings and Ephemeral Recordings, 79 Fed. Reg. 23101, April 25, 2014 (“Web III”), n. 5. 43 Web III at 23120.
17 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) b. Current Royalty Rates Established in the Web IV Proceeding
30. The most recent round of rate determinations before the CRB, Web IV, covered non-
interactive Internet transmissions of sound recordings and their associate ephemeral recordings
for the period from January 1, 2016 to December 31, 2020. For commercial subscription
webcasters, the rate was set at $0.0022 per play starting in 2016; for commercial non-
subscription webcasters, the rate was set at $0.0017 per play. Both rates are adjusted for 2017 to
2020 to reflect inflation as measured by the Consumer Price Index applicable to that rate year.44
31. For non-commercial webcasters, a base rate of $500 was set for each station or channel
for all webcast transmissions totaling not more than 159,140 Aggregate Tuning Hours (“ATH”)
in a month, for each year in the rate term. For transmissions in excess of 159,140 ATH, a per-
performance fee of $0.0017 would begin. At 159,140 ATH/month and assuming 11 songs per
hour, the $500 lump sum fee would amount to $0.0003 per play. Just as for commercial
webcasters, the rates for transmissions above 159,140 ATH would be adjusted for 2017 to 2020
to reflect inflation as measured by the Consumer Price Index applicable to that rate year.45
C. Digital, Non-Interactive Streaming Services Subject to the Section 114 License
1. Simulcast
32. A simulcast is the transmission over the Internet of what a terrestrial radio station is broadcasting over the air. I will refer to the transmission to each listener as a “simulcast stream.”
The content of a simulcast stream is in most circumstances identical to the terrestrial radio station’s broadcast, except for example the advertisements, some of which may differ on some simulcast streams from the advertisements played on the broadcast.
44 Web IV at 26316. 45 Web IV at 26316.
18 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 2. Custom Radio
33. Custom radio streams music to listeners over the Internet without any simultaneous
terrestrial broadcast. Unlike simulcasts, custom radio is a “one to one” stream, with a particular
listener receiving an individualized stream reflecting his or her expressed preferences, subject to
the limitations on “interactivity” imposed by the Section 114 license, as interpreted by U.S.
courts.
3. Internet Radio
34. Internet radio, like custom radio, is a “native digital” service, and does not involve the
retransmission of a terrestrial broadcast. An example of an entity providing internet radio
stations is AccuRadio.
35. As a product category, internet radio is more similar to custom radio than to simulcast.
While internet radio stations do not vary the music played based on an individual listener’s
preferences, such services nonetheless often feature greater user functionality than what is possible
with a linear simulcast stream. For example, many internet radio services (including AccuRadio)
allow listeners to pause and skip songs on an internet radio station, which is not available with a
simulcast.46 In addition, internet radio services do not feature much, if any, non-music content.
Nor are they localized services; because they are not broadcasters subject to FCC regulation, internet radio services have no public interest requirement nor any obligation to serve any local community. It is also my understanding that internet radio services are not a significant part of the streaming market. For these reasons, my report does not treat internet radio services as distinct from custom radio services.
46 “FAQ – Five-Star Radio,” AccuRadio, https://www.accuradio.com/.
19 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25)
IV. SIMULCAST DIFFERS ECONOMICALLY FROM CUSTOM RADIO IN WAYS THAT SUGGEST THAT THE STATUTORY RATE SHOULD BE LOWER FOR SIMULCAST THAN CUSTOM RADIO
36. Simulcast involves streaming a terrestrial radio broadcast over the internet. As such, it is
not a standalone service like custom radio. Instead, simulcast is an “add-on” service that would
not exist without the terrestrial radio broadcast. Indeed, the terrestrial broadcast (and the
revenues derived therefrom)—not the simulcast—are the primary driver of the radio station’s
business. For many radio stations, the listenership associated with the simulcast is a small
portion of overall listenership.47 In contrast, for custom radio (as well as for interactive music
streaming services), the internet stream is the primary driver of the service’s business.
37. For these reasons, and others discussed in subsequent sections below, simulcast and
custom radio are differentiated in economically important ways that imply that a lower per-play
royalty rate should apply to simulcast than custom radio. The two types of services offer
different product attributes and thus appeal to different listeners; the two types of services are
viewed differently by advertisers; different business strategies are employed by the companies
offering each type of service; and copyright owners and licensees have negotiated lower royalties
on simulcast than on custom radio for both sound recordings and musical compositions.
A. Terrestrial Radio Stations Use Non-Music Content to Drive Audience and Revenues More Than Custom Radio
38. Because terrestrial broadcasts typically have a limited geographic footprint (roughly the
radio station’s “direct marketing area” or DMA), economic factors in a radio station’s local
broadcast area (e.g., the preferences and interests of the local audience) are a significant driver of
47 “As the Audio Landscape Evolves, Broadcast Radio Remains the King,” Nielsen, https://www.nielsen.com/us/en/insights/article/2018/as-the-audio-landscape-evolves-broadcast-radio-remains- the-comparable-king//. See also Appendix D.
20 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25)
its choices regarding content and, in particular, its attempts to differentiate itself from
alternatives for consumers’ attention. Thus, for example, many radio stations provide “drive
time” programming to target local commuters. Moreover, terrestrial radio broadcasters have
certain public interest obligations that relate to the local market and affect choice of content. In
contrast, custom radio services target the national market and thus do not offer more narrowly
localized content.
39. The localized content offered by terrestrial radio stations is often non-music related. For
example, drive time programming typically includes on-air personalities that have a following in
the local market area. Accordingly, terrestrial broadcasters tend to devote more time to non-
music content than, say, custom radio services. Examples are drive-time shows and public
service content. Appendices C2-C8 show the number of songs played during various portions of the day for several iHeart radio stations. Compared to the 15.5 songs per hour on average that
Pandora plays (see Appendix C18), the iHeart Los Angeles station KIIS-FM plays only about 7 songs per hour on average during the drive time program from Monday through Friday (see
Appendix C2). Even during evening hours, KIIS-FM plays fewer songs per hour on average than Pandora. Other iHeart stations show a similar pattern. Terrestrial radio stations’ greater use of non-music content, particularly during the highest revenue dayparts, demonstrates two points.
First, the two types of services are pursuing different business strategies. While terrestrial broadcasters attempt to appeal to, e.g., drive-time commuters through engaging on-air talent, custom radio services focus much more narrowly on music provision. Second, and relatedly, terrestrial broadcasters would not devote such substantial amounts of airtime to non-music forms of content unless the content was expected to generate additional revenue (by drawing larger
21 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) audiences) sufficient to justify the time devoted to that content and the expense of providing it.
In short, music is not by any means the sole driver of revenue for many terrestrial broadcasters.
40. My interviews with broadcasters confirmed the importance of non-music content to their radio programming. Beasley and Cumulus indicated that [ REDACTED
]. Cumulus also indicated that a music station
with little music content but popular on-air talent will generate more streams than a station with
more music. Salem and Midwest stated that non-music programming including local DJ
personalities can be a radio station’s competitive differentiator. Cromwell stated that community
involvement is a key differentiator for its stations relative to alternatives. They aim to “be
important where we are.” Another example given by Cromwell is that there are three country
music stations in Nashville that play essentially the same music but they still have non-
overlapping audiences—the reason is because their different non-music content attracts different
listeners to each station.
41. Listener preference information obtained from the survey commissioned by the NAB48 also confirmed the importance of non-music content. For example, 53%, 46%, and 34% of respondents identified news, weather, and traffic, talk (e.g., live DJ commentary, politics, personal finance), and sports (e.g., game broadcasts, commentary) as either “Somewhat
Important” or “Very Important”, respectively, when listening to simulcast.49
48 The NAB retained Professor John Hauser to conduct an Internet survey to determine the frequency with which consumers listen to simulcasts, the content they listen to via simulcast, and the importance of that content to them. The survey further asked listeners what they would listen to in place of simulcasts in simulcasts were not available for the next five years. See Written Direct Testimony of John Hauser, September 23, 2019 (“Hauser Testimony”) at 4. I analyzed the Hauser testimony for purposes of my opportunity cost analysis, discussed below. 49 Written Direct Testimony of John Hauser, September 23, 2019 (“Hauser Testimony”), Appendix P. If we exclude respondents to the survey who did not select “Music” as a type of content that they had listened to through simulcast over the last three days, then these percentages are equal to 55%, 43%, and 31% for news, weather, and traffic.
22 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25)
42. Moreover, the highest revenue dayparts tend to be those where terrestrial radio stations
devote the most airtime to non-music content. Appendices C2-C8 show the ad spot prices and
number of songs played per hour by daypart for various iHeart stations. The dayparts with the highest ad spot prices generally have the fewest songs played per hour. Appendices C9-C13 and
C14-C17 show the revenues and number of songs played per hour by daypart for various
Wheeler and Hubbard stations. They show the same pattern—that non-music content drives revenue beyond music content. This underscores the relative importance of non-music content, and the corresponding lesser relative importance of musical content, to terrestrial broadcasters.50
43. In Web IV, the CRB Judges recognized that simulcast services provided more non-music
content than other services. However, the CRB Judges declined to conclude that this meant that
the simulcast services were entitled to a lower per-play royalty for music, stating that the value
of music to a simulcast service is proportional to the number of minutes devoted to music:
The NAB presents no evidence, however, that the on-air time consumed by on-air personalities exceeds, on a percentage basis, the value that listeners attribute to them. By including non-music content in their transmissions, simulcasters reduce the number of performances of recorded music, thus reducing their royalty obligation under a per-performance rate structure. The NAB failed to present any evidence that the value of non-music content is not fully accounted for in this reduction of royalties.51
44. However, the proposition that the number of music minutes reflects the value of music to a given service rests on the assumption that the decrease in the service’s profits for a given
talk (e.g., live DJ commentary, politics, personal finance), and sports (e.g., game broadcasts, commentary), respectively. 50 During some dayparts, terrestrial radio stations play relatively more music and thus appear to have strategies that are more similar to custom radio. However, these dayparts are not the highest revenue per minute dayparts. Moreover, listenership in the dayparts with greater music content may be driven in part by building station loyalty among listeners in the dayparts with greater non-music content. 51 Web IV at 26321.
23 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25)
decrease in the number of music minutes is the same regardless of how many non-music minutes
the service has chosen to offer.
45. This assumption is not necessarily valid. When non-music content is an important driver
of a radio station’s listenership, music is less important to the radio station than in the case of a custom radio service that offers only music content. A radio station could substitute the music it played with other music. As long as the non-music content was still offered, listenership would not be as adversely affected as would be the case for a non-subscription non-interactive service offering only music. For example, consider a radio station’s morning drive time program that plays only one song per hour.52 If the station were to play some other song than the one it played
in each hour, listenership is unlikely to change because the audience is drawn by the non-music
content of the drive time show, not the one song played. Even if the station opted not to play
another song in the place of the one it played, listenership is unlikely to change significantly.
Conversely, if a custom radio service replaced songs with non-music content or offered zero
songs per hour in any given hour, it would not be able to operate in its current form. Thus,
minutes devoted to music may well overstate the relative value of music to those services with
significant non-music content. Empirical evidence suggests that this is indeed the case.
46. As discussed in greater detail below, in license agreements involving musical
composition performance rights, copyright owners and webcaster services negotiated percentage
of revenue royalty rates for custom radio that were about twice as high as those for simulcast.
They did so even though, while custom radio plays more music than does simulcast, it does not
play twice the amount of music that simulcast plays. This outcome is consistent with music
52 This is not a hypothetical example. iHeart’s KYSR-FM station in Los Angeles played approximately 1 song per hour during the AM drive on Monday and Friday during the week of September 4-10. See Appendix C5.
24 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) content having less value per play on simulcast than custom radio. Moreover, as noted above, the dayparts with the highest ad spot prices are also those with the least music. All of this suggests that the per-minute value of non-music content for simulcasters is higher than the per- minute value of music content for simulcasters, and that the value of non-music content is not adequately reflected in reduced dollar royalty payments for music under the statutory per-play rate structure.
B. Simulcast Listeners Have Weaker Preferences for Music Than Listeners of Custom Radio
47. Simulcast listeners have different characteristics than listeners of custom radio. The simulcast audience tends to have a connection to the terrestrial station’s local market.53 For example, Zimmer stated that many simulcast listeners are current residents listening at work or at home, or former residents, such as military personnel stationed in some other geography or students away at college. Custom radio services, by contrast, tend to have a national audience.
The simulcast audience, on a weighted average basis over dayparts, has demonstrated a preference for the relatively high amount of non-music content that is offered on the simulcast.
The preferences of the custom radio audience, conversely, is more geared toward music.
48. The results of the simulcast listener survey, described in more detail in my opportunity cost analysis below, are consistent with non-music content being an important attribute from the point of view of simulcast listeners. Specifically, including only survey respondents who indicated that they listened to both types of content (music and non-music), 28% indicated that non-music content was more important, 15% indicated that music content was more important,
53 Written Direct Testimony of Steven W. Newberry on Behalf of the National Association of Broadcasters, September 23, 2019, ¶¶ 10-19.
25 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) and 57% ranked music and non-music content as the same level of importance.54 In addition, as
will be discussed further below, the fact that, in the absence of the simulcast, many simulcast
listeners would switch to alternatives with no music content demonstrates the lesser relative
importance of (and thus weaker preferences for) music content among simulcast listeners.
49. Simulcast offers listeners the least degree of interactivity among non-subscription non-
interactive services. In terms of content, simulcast services typically offer exactly what is played
on the terrestrial radio station. In Web IV, the CRB Judges noted that simulcast services could
substitute content on the simulcast.55 However, most of the stations whose personnel I
interviewed did not substitute content as a practical matter due to the technical difficulties caused
by, for example, songs being of different length, meaning substituting one out for the other could leave dead air in the simulcast or require cutting a song short.56 Moreover, as a definitional
matter, music switched out on the stream would not qualify as a “simulcast” and would be
subject to a different royalty rate under the royalty rate structure I discuss below. Because the musical content on the simulcast (as a definitional matter) is predetermined by the station’s
choice of content for the terrestrial broadcast, a simulcast listener is unable to influence the songs
played. In contrast, on custom radio, although a user cannot choose the exact songs that are
54 Underlying survey data from the Hauser Testimony. I note that two people stated they did not know how important music was to them. 55 Web IV at 26323. 56 An exception of which I am aware arises in the context of an agreement between [ REDACTED
The practical difficulties with steering on simulcast may be one explanation for the relative lack of useful benchmark agreements involving simulcast. Most of the useful benchmarks in the various webcasting proceedings have been negotiated in a context where the licensee had the ability to steer.
26 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) played, the user can influence custom radio’s choice of songs by, e.g., suggesting a genre.
Similarly, custom radio and other non-subscription non-interactive streaming services also allow
users to pause and skip songs. Because listeners’ preferences for a service would be expected to
be at least weakly positively related to the degree of functionality, all else equal listeners’
preferences for simulcast would be expected to be lower than for other non-subscription non-
interactive services.
50. One might ask whether simulcast may become more interactive over the course of the
contemplated license period as technology advances and, thus, whether simulcast should pay
rates similar to those paid by custom radio or even interactive services. However, there has been
no trend toward increasing interactivity of simulcasts—simulcast services generally do not
substitute content from what is played on their terrestrial stations. There is no evidence that this
(lack of) trend will change over the course of the license period. Moreover, any such trend toward increasing interactivity likely would yield a service that would not meet the definition of
“simulcast” and thus would be subject to a different statutory rate.
C. Advertisers Have Lesser Ability to Target Ads on Simulcasts Than on Custom Radio, Which Should Result in Lower WTP for Simulcast Ads
51. An advertiser’s WTP per impression to place an ad on a service will depend in part on its ability to “target” the ad to users of the service that are potentially interested in the advertiser’s product or service. For example, Internet search engines generate revenue by auctioning ad space on search result pages. An advertiser can seek to target its ads by bidding for space on result pages associated with searches for key words that suggest the user is interested in the
27 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) advertiser’s product.57 For example, an athletic shoe manufacturer can bid for space on result
pages for searches that include the phrase “gym shoes.” When it can target, an advertiser will be
willing to pay more per impression because it knows that a higher percentage of the impressions
are “on target.” Simulcast does not offer advertisers the ability to target ads towards particular listeners in this way. Instead, every simulcast listener is played the same ad.58 In contrast,
advertisers on custom radio can target their ads toward particular listeners based on listener-
specific information, such as the listener’s choices regarding genre of music.59 Thus, the
advertiser’s greater ability to target on custom radio is tied to its greater degree of interactivity.
With a greater ability to target, advertisers would have a greater WTP for an ad played to a
listener on custom radio than an ad played to a simulcast listener.
D. Some Radio Stations Have Difficulty Generating Ad Revenue from Simulcast
52. Simulcast audiences are generally small. As a result, Nielsen—a company which
measures and supplies audience metrics that are considered to be the “gold standard” in the
industry—is not able to measure the simulcast audience with a high degree of precision. Other
suppliers of simulcast audience metrics (e.g., the radio station’s streaming provider, which can
generate measures of cumulative number of streams or listening hours) have less credibility with
advertisers than Nielsen. Moreover, these alternative simulcast audience metrics do not line up
57 See, e.g., Catherine Tucker, “The Economics Value of Online Customer Data,” The Economics of Personal Data Privacy, OECD (2010), https://www.oecd.org/sti/ieconomy/46968839.pdf. 58 Limited targeting based on geography may be possible on simulcast. For example, a different ad may be played for out-of-DMA simulcast listeners versus within-DMA simulcast listeners. An advertiser offering a promotion limited to the DMA may request that the radio station not play its ad on out-of-DMA simulcast streams. 59 See, e.g., “Pandora Advertisers Can Now Target Based on Artist Affinity,” Pandora for Brands Website, September 14, 2017, https://www.pandoraforbrands.com/article/pandora-advertisers-can-now-target-based-on- artist-affinity; see also Triton Digital website, “Audio Advertising: Industry-Leading Audio Advertising Solutions,” https://www.tritondigital.com/solutions/audio-advertising/details# (Triton advertises its ability to “[r]each highly targeted and unique listeners through predictive modeling and highly accurate audience targeting based on genre, 1st and 3rd party data, behavioral data, socio-demographics, and consumption propensities”).
28 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) easily with Nielsen’s OTA audience metrics and do not provide the range of demographic information that Nielsen provides. The shortcomings of the simulcast audience metrics hinder some stations’ efforts to generate ad revenue from the simulcast.
53. Subject to the data issues described above, Appendix D provides an indication of the simulcast total listening hours as compared to the OTA total listening hours for iHeart stations.
REDACTED On average, simulcast listening hours amount to only [ ] of OTA listening hours, with the
REDACTED largest percentage among all stations being [ ]. The small simulcast audience size makes it difficult to measure the size with precision and to convince advertisers to pay for it. Indeed, a number of small- to mid-sized broadcasters, such as Beasley, Salem, Midwest, Connoisseur, and
Wheeler indicated that advertisers with OTA ads that play through to the simulcast expect to get the simulcast listeners essentially for free.
E. Taking Account of a Service’s Business Model Does Not Amount to Public Utility Style Rate of Return Setting and, In Fact, Is Necessary for a WBWS Analysis
54. In Web IV, the CRB Judges declined to consider economic differences among services based on, for example, business model, because they believed that doing so would amount to public utility-style rate of return setting.60 However, in general, in a WBWS licensing negotiation, economic differences among licensees can result in different negotiated royalty rates
(holding the economic characteristics of the licensor constant).
55. For example, in Web IV, the CRB Judges based their conclusion that non-subscription non-interactive services were entitled to lower royalties under the WBWS standard than subscription interactive services and subscription non-interactive services in part on the finding
60 Web IV at 26329-30.
29 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25)
that users of these different types of services had different WTP for music.61 Thus, the CRB
Judges recognized that services with different economic characteristics may have different
royalties.
56. As a general matter, economic differences among services—including differences on the
user side, the advertiser side, or the label side (e.g., differences in services’ promotional effects)—can result in different royalty rates for different services even if these services are substitutes. Only if two services are very close substitutes do other economic considerations potentially become irrelevant. In that case, the diversion ratios between the two services would be near 1 and (absent substantial differences in promotional benefits) the net opportunity cost framework (see below) suggests that the royalties on the two services should be approximately the same. In Web IV, the CRB Judges may have reached their conclusion that the same royalty rate should apply to simulcast and custom radio under the belief that the diversion ratio from simulcast to custom radio was high. The CRB Judges wrote that “the mutual competition between simulcasters and other commercial webcasters is a strong indication that simulcasters and other commercial webcasters operate in the same, not separate submarkets.”62 However, as the survey results discussed below demonstrate, the (aggregate) diversion ratio from simulcast to other non-subscription non-interactive services is substantially less than one. This is in part due
to the efforts of radio stations to differentiate themselves, as discussed above.
F. Summary
57. In conclusion, simulcast is economically differentiated from custom radio (and other types of music services) in a number of respects. It is a byproduct of terrestrial radio and
61 Web IV at 26335. 62 Web IV at 26323.
30 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) accordingly carries the terrestrial radio station’s programming and its audience is closely related to the terrestrial radio station’s audience. Terrestrial radio stations focus on their respective local audiences, and differentiate themselves from, among other things, other music services using non-music content. The terrestrial radio, and thus simulcast, audience is drawn by the non-music content. Accordingly, music is less valuable for simulcast than it is for custom radio, both in an absolute sense and on a per-play basis. At the same time, the simulcast audience is small relative to the OTA audience, which has made it difficult for smaller terrestrial stations to generate additional ad revenue from their simulcasts.
58. As discussed in more detail below, survey evidence demonstrates that the user substitution between simulcast and custom radio is substantially less than one-for-one. That is, a substantial portion of simulcast listeners do not find custom radio to be the next best substitute to simulcast.
59. All of these factors taken together lead to the conclusion that simulcast should be treated as differentiated from custom radio as an economic matter for the purposes of determining the appropriate royalty for sound recording performance rights; that is, the products are far from
“perfect substitutes.”
V. THE ROYALTY FOR SIMULCAST BASED ON A BENCHMARKING APPROACH
60. Determining the likely outcome of a hypothetical or potential transaction using the outcomes of actual transactions that are sufficiently “comparable” to the hypothetical transaction is an approach commonly used by economists and financial analysts in many contexts, from intellectual property licensing to enterprise valuation.63 This approach is often referred to as
63 See, e.g., Robert F. Reilly and Robert P. Schweihs, “Research Techniques for an Intellectual Property Economic Analysis,” in The Handbook of Business Valuation and Intellectual Property Analysis, 2004, pp. 615-616 (“The
31 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) “benchmarking.” For an actual transaction to be a valid comparable or benchmark for the
hypothetical transaction being evaluated, the economic conditions surrounding the actual transaction must be sufficiently similar to those surrounding the hypothetical transaction, or adjustments to account for any substantial differences in economic conditions must be possible.
61. In the current proceeding, the hypothetical transaction under consideration is a licensing agreement between a record label and a simulcast service, under which the simulcast service is granted public performance rights for the label’s sound recordings in exchange for royalty payments. As discussed above, the hypothetical transaction is to be evaluated under the WBWS standard, with the record label as the willing seller and the simulcast service as the willing buyer.
In addition, effectively competitive conditions are assumed to prevail so that, for example, the record label is assumed not to exercise any complementary oligopoly power. Thus, any royalty rates based on benchmarks (putting aside other dimensions of comparability) must either reflect the possibility of steering, or be adjusted downward to be consistent with effective competition.
62. I have reviewed various actual license agreements available in the record to determine which are valid comparables for use in a benchmarking exercise.
A. iHeart’s License Agreements with Independent Record Labels Involving the Licensing of Public Performance Rights for Sound Recordings
63. iHeart has entered into direct deals with numerous independent record labels, or “indies”, that cover, among other things, the licensing of public performance rights for sound recordings for iHeart’s simulcast service. The terms and conditions of iHeart’s direct deals with indies are generally consistent across all of these agreements. Furthermore, at least 15 of the indies that
identification of comparable sale/license transactions should reflect the industry and economic environment in which the subject intellectual property operates.”); see also Aswath Damodaran, Damodaran on Valuation, 2006, pp. 233-254.
32 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) originally entered into direct deals with iHeart for a license to public performance rights for
sound recordings have chosen to renew their agreements with iHeart.64 In what follows, I focus
on the original and renewal agreements between iHeart and the indies that chose to renew their
agreements with iHeart (I refer to this group of indies as the “renewal indies”), as these
agreements reflect a situation where both parties deemed the agreements to be beneficial, both ex
post as well as ex ante.
64. I have used iHeart’s original and renewal agreements with Big Machine Records, LLC
(“Big Machine”) as an example of iHeart’s direct deals with renewal indies, and present a
summary of the relevant terms and conditions of these agreements between iHeart and Big
Machine below.
June 2012 Agreement between iHeart and Big Machine REDACTED
REDACTED
64 The 15 indies that renewed their license agreements with iHeart include the following independent record labels: Average Joes Entertainment, Big Machine Records, BMG Records, Black River Entertainment, Broken Bow Records, DashGo, Dualtone, Entertainment One, Glassnote Records, Innovative Leisure, Naxos, RPM Entertainment, S-Curve Records, Suburban Noize Records, and Zojak Worldwide. See NAB Exs. 40-53. 65 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 2. 66 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 3.
33 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED
67 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 1(l). 68 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 1(ee). 69 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 1(r). In many of the agreements, [ REDACTED
. See NAB Ex. 54 (Agreement between iHeartCommunications, Inc. and Tommy Boy Music, LLC, May 1, 2019) at ¶ 1(jj), Ex. C. The rights granted under these agreements are therefore somewhat broader than what the statutory license provides. 70 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 3.
34 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED
71 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 3. 72 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 3. 73 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 3(b). 74 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 4(a)(i). 75 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 4(a)(ii). 76 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 4(a)(ii). 77 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 4(a)(iii).
35 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED
June 2017 First Amendment to the June 2012 Agreement between iHeart and Big Machine80
REDACTED
]
65. iHeart’s direct deals with the renewal indies are relevant benchmarks to consider in this
proceeding for a number of reasons. First, they involve the licensing of the same rights that are
the subject of the Section 114 statutory license—rights for the public performance of sound
recordings. Second, [ REDACTED
].
Third, these agreements are between the same type of licensee and licensor that would be involved in the hypothetical transaction—iHeart (the licensee and a simulcast provider) and independent labels (the licensors and record labels). Fourth, iHeart’s direct deals represent market transactions entered into voluntarily by both parties and, therefore, are consistent with
Section 114’s WBWS standard. Moreover, as described above, I have limited my analysis to
78 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 4(a)(iv). 79 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 4(a)(iv). 80 I understand that this First Amendment between iHeart and Big Machine is the “operative” agreement. See Written Direct Testimony of Tres Williams on Behalf of iHeartMedia, Inc., September 23, 2019, ¶ 20, n.3. 81 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012), First Amendment § 2. 82 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012), First Amendment § 4.
36 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) iHeart’s agreements with the renewal indies and have focused on the calculation of iHeart’s effective per-play royalty rates paid to these renewal indies during the time period prior to the most recent renewal between the two parties. Given that both iHeart and the renewal indies chose to renew their direct deals at the same contractual rates, in the absence of some anticipation that the effective rates would change substantially, the effective per-play royalty rates from this time period must have been acceptable to both parties. Fifth, independent labels likely have less complementary oligopoly power than the major labels, and thus the royalties in the iHeart direct deals with independent labels are relatively free of any such power. Sixth, the independent labels could have refused to agree to renew the agreements and received higher per play royalties under the statutory rates, suggesting an understanding that iHeart could and perhaps was steering toward the labels’ recordings or that licensing iHeart offers other (e.g., promotional) benefits for the labels. Finally, most of the renewal indies have entered into renewal agreements with iHeart that carry into the relevant statutory term (i.e., past December
31, 2020).83
66. As discussed above under my summary of iHeart’s agreements with Big Machine, iHeart’s indie direct deals include a royalty equal to [ REDACTED
83 Appendix A5.
37 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED
]
67. [I REDACTED
]89
84 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 1(i). 85 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 1(i), (r). 86 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 1(s). 87 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 1(dd). [ REDACTED
.] 88 I also calculated iHeart’s effective per-play royalty rate [ REDACTED ] and note that including such royalties does not change my conclusions. 89 Appendix A3. REDACTED
38 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 68. As also discussed above under my summary of iHeart’s agreements with Big Machine, iHeart’s indie direct deals include [ REDACTED
]91 Under the current
REDACTED law, no royalties are due to record labels for sound recordings played on terrestrial broadcasts. [
REDACTED
.] 90 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 1(j). 91 NAB Ex. 40 (Agreement between Clear Channel Communications, Inc. and Big Machine Records, LLC, June 1, 2012) § 1(hh).
39 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED
]
69. As discussed above, I performed these effective royalty rate calculations using royalty payments made by iHeart to the renewal indies during the pre-renewal period, reflecting that the effective per-play royalty rates paid during this time period were acceptable to both parties since they both chose to renew the license agreement at the same contractual rates. [REDACTED
92 REDACTED
]
40 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED
.]
70. I performed two additional adjustments to the calculations of iHeart’s effective per-play royalty rates under its direct deals with the renewal indies. First, [ REDACTED
]94
93 Appendix A3. REDACTED
See Appendix A3. 94 Appendix A2. REDACTED
See Appendix A2.
41 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 71. [ REDACTED
]96
72. The simulcast performances and custom radio performances covered by the agreements that form the basis for the effective per-play royalty rate calculations described above account for
REDACTED REDACTED [ ]% and [ ]% of iHeart’s total simulcast performances and total custom radio performances,
REDACTED respectively, and [ ]% of iHeart’s total webcast performances over the September 2013 to May
2019 time period.97 One question that may be raised is whether these rates are “representative”
95 Written Direct Testimony of Tres Williams on Behalf of iHeartMedia, Inc., September 23, 2019, ¶¶ 25-26. 96 Appendix A1. REDACTED
] See Appendix A1. 97 Appendix A4.
42 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) given what seems to be small “coverage.” First, while I excluded the most recent renewed agreements and all non-renewed agreements from the calculations to focus on agreements where there could be little question that the parties were willing, including these agreements in the
REDACTED REDACTED REDACTED calculations increases the coverage percentage to [ ]%, [ ]%, and [ ]% for simulcast,
custom radio, and webcasting performances, respectively.98 Second, the denominator of the
coverage percentage calculation should exclude any label with complementary oligopoly power
because the rates paid to such labels are likely to reflect such power and thus not be
“representative” of the appropriate standard for determining the royalty in this case.99 Excluding
simulcast performances of the major record labels’ (i.e., Warner, Universal, and Sony) catalogs,
REDACTED for example, increases the coverage percentage to [ ]% for simulcast performances.100 This percentage represents iHeart’s share of total indie performances that are covered by its indie direct deals.
73. Some of the iHeart-indie direct deals contain REDACTED REDACTED
98 Appendix A4. 99 Given that simulcast is a small portion of a radio station’s business and the radio station has decreased ability to steer on the simulcast for the reasons discussed elsewhere in this report, the major labels are “must haves” for simulcasters. This is true, even assuming for the sake of argument, that they are not “must haves” for other non- interactive services. As discussed above, being “must haves” confers complementary oligopoly power on the major labels. 100 Appendix A4. Excluding simulcast performances of the major record labels’ catalogs increases the coverage percentage to [REDACTED ]% for simulcast performances when accounting for just the renewal indies.
43 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED
74. Based on my analysis of the effective rates in the iHeart-renewal indies direct deals, I
reach two conclusions. First, these benchmark licenses demonstrate that, in a WBWS context,
the per-play royalty rate for simulcast should be less than the per-play royalty rate for custom
radio.101 Second, the per-play royalty rate for each of these webcasting services should be less
than the current statutory rate.
75. One might ask why the renewal indies agreed to royalty rates for webcasting services that were below the statutory royalty rate that they would have received in the absence of a license.
By agreeing to a lower rate, a label licensor gives iHeart an incentive to play more of its sound
recordings, which in turn can result in both greater promotional effects and an increase in the
label’s basis on which royalties are paid (at the expense of other labels).102 This is the result of
competition, and thus is a factor that should be taken into account when determining the
appropriate royalty under the WBWS standard.
B. Other License Agreements That Provide Useful Information
1. Spotify’s License Agreements with Record Labels Involving the Licensing of Public Performance Rights for Sound Recordings Indicate that the Current Statutory Rates for the Section 114 License Are Too High
76. Spotify is an interactive music streaming provider, with both an ad-supported service and
a subscription service. Spotify has entered into licensing deals with record labels that provide
Spotify the right to publicly perform the labels’ sound recordings. I have used data obtained
101 I note that having different royalty rates for simulcast and non-simulcast services is consistent with the first benchmark adopted by CARP for the Section 114 license in Web I. When subsequent Web proceedings previous to the current one took place, various factors contributed toward there being no useful valid benchmark agreements. Now, as discussed herein, more useful benchmarks have emerged. 102 Written Direct Testimony of Tres Williams on Behalf of iHeartMedia, Inc., September 23, 2019, ¶¶ 14-21.
44 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) from SoundExchange that includes royalty payments Spotify made to the majors, plus Merlin,
and INgrooves to analyze the effective per-play rates paid under the agreements with these labels. In addition, under each agreement Spotify [ REDACTED
]. Thus, I added in this value to the royalty payments in calculating the effective
per play royalty Spotify paid for sound recording performance rights.
77. The Spotify-label license agreements are comparable to the hypothetical simulcast-label
license agreements in the following respects. First, these agreements involve the licensing of
similar rights that are the subject of the Section 114 statutory license—rights for the public
performance of sound recordings. Second, the licensors in these agreements (i.e., the labels) are
the same as in the hypothetical license. Third, these licenses represent transactions agreed upon
in a WBWS context (although not an effectively competitive context), as I understand that the
licensing of sound recording public performance rights in the interactive streaming context is not
subject to a statutory license. The Spotify-label license agreements differ somewhat from the
hypothetical simulcast-label license agreement in terms of the nature of the licensee and,
relatedly, the licensee’s service. For example, although both simulcast and Spotify provide
music content to users, simulcast is a non-interactive service, while Spotify offers interactive
services. To increase comparability, I focus on the Spotify ad-supported service, given that
simulcast is also ad-supported and Spotify’s ad-supported service is the least interactive service
Spotify offers.103 Moreover, in my calculation of the effective per-play royalty rates for
103 Spotify is the largest interactive music streaming company in terms of number of users and has the largest ad- supported interactive service. Of its overall users, about 54% are on the ad-supported service. See Anne Steele and Tripp Mickle, “Apple Music Overtakes Spotify in Paid U.S. Subscribers,” The Wall Street Journal, April 5, 2019, https://www.wsj.com/articles/apple-music-overtakes-spotify-in-u-s-subscribers-11554475924.
45 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) Spotify’s ad-supported interactive service it may be necessary to make a downward adjustment
to account for the non-interactive nature of simulcast as compared to the interactive nature of
Spotify. The Spotify-label license agreements also differ from the hypothetical simulcast-label
license agreement in that the Spotify-label agreements are subject to the exercise of label
complementary oligopoly power. In this sense, the royalty rates in the Spotify-label license
agreements should be considered at or above the upper bound on the appropriate royalty for
webcasting services under the WBWS standard and effective competition. In Web IV, the CRB
Judges applied a steering discount of 12% to make interactive service royalty rates closer to the
level that would prevail with effective competition.104
78. Using the SoundExchange data and information from the agreements [REDACTED
REDACTED ], I have calculated the effective per-play royalty rate that Spotify pays for its ad- supported interactive service to be [REDACTED ] for 2018 and [REDACTED ] for January 2019 through
March 2019.105
79. The Spotify effective rate suggests that the current statutory rate for non-subscription
non-interactive services is too high. To improve comparability to what the appropriate rate
should be for non-subscription non-interactive services, the Spotify rate should be adjusted
downward to (1) remove the effects of complementary oligopoly power of the labels that the
CRB Judges in Web IV found was present in the interactive context, and (2) reflect the reduced
interactivity offered on non-subscription non-interactive services as compared to Spotify. With
regard to the latter, as discussed above, advertisers are better able to target their advertisements
within a more interactive service.
104 Web IV at 26404. 105 Appendix B6. I understand that these effective per-play royalty rates do not account for skips.
46 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 2. Licenses (and Offered Licenses) Involving the Licensing of Public Performances Rights for Musical Compositions Assign a Lower Royalty Rate to Simulcast than to Internet Radio and Custom Radio
80. In addition to and separately from the licenses for public performances of sound recordings, terrestrial radio stations also obtain public performance licenses for musical compositions from PROs like ASCAP, BMI, and SESAC. Those licenses authorize a station’s
OTA performances of musical compositions, as well as simulcast and other digital performances by the same radio station.
81. Recent PRO licenses have drawn a distinction between royalty rates paid for simulcast and royalty rates paid for other digital transmissions by the same radio station. Indeed, in each of these deals, simulcasting has been licensed at the same royalty rate as the station’s terrestrial broadcasts, while digital non-simulcast transmissions, excluding custom radio and subscription on-demand services, are licensed at higher royalty rates.
82. The PRO licenses for custom radio services feature a significantly higher royalty rate.
For instance, Pandora pays 20% of its sound recording royalties to the PROs collectively as royalties for performances of musical compositions on its ad-supported custom radio service.106
Given that Pandora’s payments to labels constitute 40%-50% of its revenues,107 the musical
composition royalties amount to 20% of this 40%-50% amount, or 8%-10% of revenue.
106 Pandora Media, Inc. Form 10-K For the fiscal year ended December 31, 2017, p. 6 (“Content acquisition costs for the streaming of musical works on our ad-supported service are calculated such that each copyright holder receives its usage-based and ownership-based share of a royalty pool equal to 20% of the content acquisition costs paid by us for sound recordings on our ad-supported service.”). 107 This is based on my current understanding, but I will update this figure if later discovery becomes available. I note that this range is generally consistent with my calculation based on REDACTED
]. See Appendix B10.
47 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) iHeartRadio, which operates a similar custom radio service, [ REDACTED
]108
83. These PRO agreements are not benchmarks for the purposes of determining the appropriate royalty rate under the Section 114 statutory license at issue here. However, they do provide a useful benchmark for answering the question of whether simulcast should receive a lower royalty rate than custom radio in a WBWS setting. These PRO agreements are transactions in a closely analogous market for the licensing of music copyrights. In these agreements, willing buyers and willing sellers treat simulcast as equivalent to terrestrial radio, and apply a lower royalty rate to simulcast than to non-simulcast and custom radio streaming. In particular, these agreements demonstrate that distinguishing between simulcast and other non- subscription non-interactive services is not limited to the iHeart-indie agreements. These PRO deals are industry-wide agreements that cover approximately 90% of musical composition performances and nearly the entire commercial radio industry.109
84. The PRO agreements thus reinforce the conclusion, based on the evidence in this case,
that in a WBWS context for the digital sound recording performance rights at issue here, the
parties would agree to a lower royalty rate for simulcast than for other non-subscription non-
interactive services.
a. ASCAP 2017 Radio Station License Agreement
85. The ASCAP 2017 Radio Station License Agreement came about as a result of
negotiations in 2016 between the RMLC and ASCAP. ASCAP represents copyright owners who
108 Written Direct Testimony of Tres Williams on Behalf of iHeartMedia, Inc., September 23, 2019 at ¶ 36. 109 See Brent Kendall and Anne Steele, “Washington Considers Overhaul of Music-Licensing Rules,” The Wall Street Journal, February 26, 2019, https://www.wsj.com/articles/washington-considers-overhaul-of-music- licensing-rules-11551182401.
48 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) account for about half of the nation’s musical compositions. The ASCAP 2017 Radio Station
License Agreement covers, among other things, the licensing of ASCAP’s public performance rights for musical compositions for simulcasts. Below I present a summary of the relevant terms and conditions of the ASCAP 2017 Radio Station License Agreement.
2017 Radio Station License Agreement between ASCAP and iHeart
REDACTED
110 NAB Ex. 56 (ASCAP 2017 Radio Station License Agreement between the American Society of Composers, Authors and Publishers and iHeartMedia, Inc., May 8, 2017) § 6.1. See also Written Direct Testimony of Tres Williams on Behalf of iHeartMedia, Inc., September 23, 2019, ¶¶ 34-39. 111 NAB Ex. 56 (ASCAP 2017 Radio Station License Agreement between the American Society of Composers, Authors and Publishers and iHeartMedia, Inc., May 8, 2017), p. 5 (§ 2.1). 112 NAB Ex. 56 (ASCAP 2017 Radio Station License Agreement between the American Society of Composers, Authors and Publishers and iHeartMedia, Inc., May 8, 2017), p. 4 (§ 1.50). 113 NAB Ex. 56 (ASCAP 2017 Radio Station License Agreement between the American Society of Composers, Authors and Publishers and iHeartMedia, Inc., May 8, 2017), p. 3 (§1.24).
49 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED
114 NAB Ex. 56 (ASCAP 2017 Radio Station License Agreement between the American Society of Composers, Authors and Publishers and iHeartMedia, Inc., May 8, 2017), p. 2 (§ 1.21). 115 NAB Ex. 56 (ASCAP 2017 Radio Station License Agreement between the American Society of Composers, Authors and Publishers and iHeartMedia, Inc., May 8, 2017), pp. 5-6 (§§ 4.1, 4.2). See also Written Direct Testimony of Tres Williams on Behalf of iHeartMedia, Inc., September 23, 2019, ¶ 37. 116 NAB Ex. 56 (ASCAP 2017 Radio Station License Agreement between the American Society of Composers, Authors and Publishers and iHeartMedia, Inc., May 8, 2017), p. 6 (§ 4.3). See also Written Direct Testimony of Tres Williams on Behalf of iHeartMedia, Inc., September 23, 2019, ¶ 37.
50 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED
87. The ASCAP 2017 Radio Station License Agreement is comparable to the hypothetical simulcast-label license agreement in this proceeding in the following respects. First, the licensees include radio stations that offer simulcast services, which are the same licensees as in the hypothetical simulcast-label license. Second, the license covers analogous rights— performance rights for musical compositions (as compared to performance rights for sound
REDACTED recordings of musical compositions in the hypothetical simulcast-label license). Third, [
] Fourth, this agreement represents a market transaction negotiated under
the competitive protections of the ASCAP antitrust consent decree and, therefore, is consistent
with the WBWS standard and effective competition. Fifth, the ASCAP 2017 Radio Station
License Agreement is effectively an industry-wide rate given the coverage level.
88. The simulcast royalty (as a percentage of revenue) for musical composition performance
rights from the ASCAP agreement can be compared to the effective Pandora royalty (as a
percentage of revenue) for the same rights. [ REDACTED
117 NAB Ex. 56 (Letter Agreement between ASCAP and RMLC, December 7, 2016) ¶ 6. See also Written Direct Testimony of Tres Williams on Behalf of iHeartMedia, Inc., September 23, 2019, ¶ 35.
51 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED ]118 As previously discussed, I understand that Pandora pays
approximately 40%-50% of its revenues to labels, of which amount 20% is paid to musical
composition rights holders. Thus, Pandora pays 20% of 40%-50%, or 8%-10% of revenue for
musical composition performance rights. Assuming that ASCAP’s share of the relevant musical
composition performance rights market is approximately 45%119, Pandora pays ASCAP 3.6% to
4.5% of its revenues. Thus, the ratio of the ASCAP royalty rate (as a percentage of revenue) for
simulcast to the ASCAP royalty rate (as a percentage of revenue) for Pandora ranges from 38%
to 48%. Yet, the ratio of songs played per hour on simulcast as compared to Pandora is much
higher (11 to 15120). This suggests that the per-play royalty rate should be lower for simulcast
than for Pandora and other custom radio, consistent with the rates in the iHeart-indie license
agreements.
b. BMI 2017 Radio Station License Offer
89. The RMLC and the other major PRO, BMI, are currently litigating the royalty rate to be
paid by commercial radio stations for the public performance of musical compositions. BMI has
offered a rate of 2.0% of defined radio station revenues to cover terrestrial broadcasts, simulcast,
and certain limited non-simulcast, non-custom streaming. In other words, like ASCAP, BMI
treats simulcasting as equivalent to radio stations’ terrestrial broadcasts.121
90. At the same time, the RMLC did not request, and BMI did not offer, a royalty rate for custom radio. But, as noted above, Pandora is licensed for musical composition performance
118 Written Direct Testimony of Tres Williams on Behalf of iHeartMedia, Inc., September 23, 2019, ¶ 36. 119 Mossoff et al., “De-Regulating the Songwriting Business,” Regulatory Transparency Project, February 21, 2019, p. 5, https://regproject.org/wp-content/uploads/RTP-Intellectual-Property-Working-Group-Paper-Antitrust- Songwriting.pdf. 120 Broadcast Music, Inc. v. Pandora Media, Inc., 140 F. Supp. 3d 267, 289 (S.D.N.Y. 2015). 121 NAB Ex. 59 (Radio Music License Committee – BMI REDACTED ). See also Written Direct Testimony of Tres Williams on Behalf of iHeartMedia, Inc., September 23, 2019, ¶ 39.
52 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) rights at a higher royalty rate, even after adjusting for differences in the number of songs per hour.
c. SESAC-RMLC License
91. A group of radio stations represented by the RMLC entered into licenses with a third
PRO, SESAC, covering the period from January 1, 2016 to December 31, 2018. That license, like other PRO licenses, provided a single rate for a stations’ terrestrial broadcasts and simulcasts—0.2557% of a radio station’s defined revenues.122 [ REDACTED
].
C. Other License Agreements Are Not Valid Comparables
92. Other license agreements between broadcasters and record labels have been produced in this case, specifically an iHeart-Warner agreement, an Entercom-Big Machine agreement, an
Entercom-Glassnote agreement, and a Beasley-Big Machine agreement. I have concluded that these agreements are not useful comparables for the rates that would result from a hypothetical
WBWS simulcast-label license agreement under effective competition. In the case of the
Entercom and Beasley agreements with indies, these agreements have expired and have not been renewed.123 In the case of the iHeart-Warner direct deal, [ REDACTED
122 See SESAC Radio Broadcasting Performance License, March 21, 2018, p. 7, http://dehayf5mhw1h7.cloudfront.net/wp-content/uploads/sites/893/2017/09/22194517/SESAC-2016-Blanket- License-002.pdf. 123 As noted above, I similarly excluded iHeart-independent label license agreements that were not renewed or have not yet been subject to renewal.
53 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED ].124 This demonstrates that the licensees in these agreements (i.e.,
Entercom, Beasley, and iHeart) were not willing buyers on an ongoing basis at the specified terms. While the licensees had agreed to those terms at an earlier point in time, the licensees subsequently deemed the terms unacceptable, either because [ REDACTED
] or because market conditions had otherwise changed.
93. In contrast, the agreements I use as benchmarks are ones for which both parties were willing. In particular, the labels involved willingly renewed these agreements despite lower effective rates than the statutory rate.
94. Although the non-comparable agreements are not useful as benchmarks for the appropriate statutory rate, it is nevertheless notable that they distinguish between simulcast and custom radio. This provides additional support for the conclusion that industry participants view the two types of services as being differentiated in economically important ways.
95. I am also aware of Pandora-label license agreements that have been produced in this proceeding. In some of these agreements [( REDACTED
]. As such, these agreements are not informative as their outcomes
[ REDACTED ] are not true WBWS transactions.125 Other Pandora agreements REDACTED
124 Written Direct Testimony of Tres Williams on Behalf of iHeartMedia, Inc., September 23, 2019, ¶¶ 27-29. 125 There is a distinction between the shadow of the (existing) statutory rate and the shadow of an upcoming rate setting proceeding. The existing statutory rate provides a known alternative to each party, whereas the outcome of an upcoming rate setting proceeding is unknown. The latter may encourage the parties to reach a mutually agreeable outcome that would approximate a workably competitive outcome. The former, on the other hand, can affect the outcome by serving as a ceiling, floor, or focal point.
54 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED
]. Such rights must have had expected value to Pandora [ REDACTED
] or Pandora would not have agreed to the license terms. These agreements could be useful [ REDACTED ], but that does not appear to have been the case. Finally, some Pandora agreements with indies [(REDACTED
]. These agreements would be consistent with the proposition that the current statutory rate is too high.
96. Licenses for services or rights that are not the same or sufficiently analogous to simulcast and performance rights for sound recordings are not useful as benchmarks. For example, license agreements for subscription services are not useful here because the users of subscription services are substantially different economically than the users of ad-supported services, particularly from a WTP perspective.126
97. Licenses negotiated in a setting that does not reflect effective competition are not useful benchmarks without an appropriate adjustment to bring the rate down to the effectively competitive level. This issue was discussed above in the context of the Spotify licenses.
98. Finally, licenses that relate to markets outside of the United States are not useful as benchmarks given differences in regulatory regimes and economic conditions.
VI. THE ROYALTY FOR SIMULCAST BASED ON AN OPPORTUNITY COST FRAMEWORK
99. The “opportunity cost” framework provides both a second approach to determining the appropriate royalty and a check on the results of the benchmarking analysis. This framework
126 The CRB Judges in Web IV agreed with this point. Web IV at 26345-46.
55 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25)
determines a level of royalty that would compensate the licensor for any expected net royalty
losses (net opportunity cost) associated with granting the specified rights to the licensee. If
accurately measured, in theory the opportunity cost is the lowest royalty that the licensor would
find acceptable.
100. If a label were to license simulcast (the “with-license world”), it would face two potential
and offsetting effects on its existing royalty streams (versus a baseline where it did not license
simulcast, the “no-license world”): (1) a loss in royalties associated with any users who choose
to listen to a simulcast instead of another service that would have generated incrementally higher
royalties for the label in the no-license world (“direct royalty losses”), and (2) a gain in royalties
from any incremental promotional effects the simulcast has that result in greater usage of another
service that would generate incremental royalties for the label in the no-license world
(“promotional offset”).
101. The label’s opportunity cost from licensing is largest in the scenario where simulcast
services would cease to be offered in the no-license world.127 This is the scenario that I analyze.128 However, by definition, this scenario is one in which the label is a “must have” and accordingly the label has complementary oligopoly power. Therefore, the opportunity cost calculated under this scenario reflects that power. Below, I discuss an adjustment to account for this power.
127 Consider, for example, an alternative scenario where, even though unable to play the label’s sound recordings, simulcast services would remain available to listeners in the no-license world, playing only the sound recordings of other labels. In that case, some listeners of simulcast in the with-license world would remain with simulcast in the no-license world and the label would receive no royalties or promotional benefits on such listeners. In comparison, in the scenario I analyze, all listeners of simulcast from commercial radio stations in the with- license world would flow to a non-simulcast alternative (or possibly a simulcast from a non-commercial radio station) in the no-license world. 128 This scenario also assumes that the label would simultaneously license all simulcast services (rather only than a single simulcast service). This is the appropriate scenario given the nature of the compulsory license.
56 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25)
102. The following figure depicts what would happen in moving from the with-license world
to the no-license world (simplified in terms of the alternatives presented).
In the with-license world, simulcast listeners generate promotional benefits B and royalty RS for
the label. In the no-license world, θ % of simulcast listeners would migrate to OTA broadcasts,
φ % would migrate to custom radio, and the remainder would migrate to non-music alternatives.
Those listeners migrating to OTA broadcasts would generate promotional benefits of B for the
label (this assumes the promotional benefit is the same on OTA broadcasts and simulcast).
Listeners migrating to custom radio would generate promotional benefits of BCR and a royalty of
RCR for the label. Finally, listeners migrating to non-music alternatives would generate no royalties and no promotional benefits for the label. The net opportunity cost of licensing for the label is the level of royalty for simulcast RS that would balance the B + RS received by the label
in the with-license world and the θB + φ(BCR + RCR) received by the label in the no-license
world. Accordingly, the net opportunity cost royalty is RS = (θ-1)B + φBCR + φRCR. As noted
57 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) above, the net opportunity cost can be broken down into the direct royalty loss (φRCR in this
example) and the promotional offset ((θ-1)B + φBCR in this example).
A. Potential Direct Royalty Losses on the Label’s Other Royalty Streams
103. As shown in the example above, the label’s expected direct royalty losses caused by licensing simulcast can be calculated by (1) identifying each of the potential alternatives that simulcast listeners might switch to in the no-license world, (2) determining the percentage of simulcast listeners that would switch to each such alternative in the no-license world (the
“diversion ratio” from simulcast to each alternative), (3) multiplying each alternative’s diversion ratio by the royalty the label would earn on the alternative, and (4) summing across alternatives to obtain the total direct royalty loss due to licensing simulcast.
104. Several factors suggest that the diversion ratios from simulcast to other royalty-bearing services are relatively low. First, as discussed above, simulcast tends to have more non-music content than other royalty-bearing services such as custom radio and interactive music streaming services. Simulcast listeners, who have revealed a preference for such content, are more likely to choose an alternative with non-music content than would a user of a highly music-focused service. For example, simulcast listeners tend to have a connection to the local market and some listen because of that connection and the local content that the simulcast provides. According to
Beasley, simulcast listeners choose a particular station due to a connection with on-air personalities, local events such as concerts and charity events, and the brand in general. Zimmer stated that people listen to streams of their stations because they want to listen to their home- town station, e.g., college students and military personnel. Services providing strictly music content do not provide a particularly good substitute for simulcast listeners who have revealed a preference for localized and non-music content available on simulcast.
58 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 105. To determine the diversion ratios from simulcast to the various potential alternatives, the
NAB commissioned a survey of consumers.129 Respondents to the survey were presented with a
list of alternatives and asked which alternative they would choose in the absence of simulcast.
The specific question asked to respondents to the survey was the following:
Q5. Continue to suppose that live AM/FM radio broadcasts from commercial radio stations over the Internet were not available for the next five years. Assume that everything else would be available for the next five years as it is now.
Now think about the most recent time you listened to live AM/FM radio broadcasts from commercial radio stations over the Internet. Please consider situations similar to that time and the content you listened to at that time.
Which one of the following would you do in place of listening to such broadcasts over the Internet in similar situations during the next five years?
The prices below are examples and do not include promotional discounts, taxes, or fees. If you are unable to say which particular activity you would do, please indicate this by choosing the “Don’t know/Unsure” option. It is important that you do not guess. (Select one only)
You may click here to review the definitions you read earlier in the survey.130
The alternatives to simulcast presented to the respondents included subscription and ad-
supported interactive music streaming services, subscription and ad-supported non-interactive
music streaming services, satellite radio, other ways of listening to live AM/FM radio broadcasts
other than simulcasts, owned or purchased audio, television and video options, and print
options.131 Appendix R to the Hauser Testimony presents the diversion ratio results generated from this survey question.
129 See Hauser Testimony. 130 Hauser Testimony, Appendix D, p. 15. 131 Hauser Testimony, Appendix D, pp. 15-17.
59 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 106. The largest percentage of survey respondents, 32.1%, would have chosen alternatives
classified as other ways of listening to live AM/FM radio broadcasts if simulcast were not available. Furthermore, the specific alternative that was selected by the largest percentage of respondents, 25.3%, was listening to live AM/FM radio broadcasts from commercial radio stations through a radio. This alternative notably would not trigger a royalty to the record label in the no-license world. Other categories of alternatives that were selected by respondents that would also not trigger a royalty to the record label in the no-license world included television and video options (11.8% across all alternatives presented in this category), owned or purchased
audio (9.4% across all alternatives presented in this category, excluding purchasing digital music
files or CDs that the respondent does not currently own, which as discussed below would trigger
a royalty in the no-license world) and print options (3.0% for all alternatives presented in this
category). Respondents also selected alternatives that involved listening to music streaming
services through a subscription that they already had including 7.4% for subscription interactive
services, 5.2% for subscription satellite services, and 1.6% for subscription non-interactive services.132 These alternatives would also not trigger a royalty to the record label in the no-
license world.
107. In contrast, some respondents did choose alternatives that would trigger a royalty to the
record label in the no-license world including: (1) 1.4% would purchase a new subscription to
an interactive music streaming service; (2) 5.0% would listen to an ad-supported interactive
music streaming service; (3) 4.6% would listen to music on an ad-supported video site; (4) 2.8%
would purchase a new subscription to a non-interactive music streaming service; (5) 6.8% would
132 Hauser Testimony, Appendix R, pp. 1-3.
60 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) listen to an ad-supported non-interactive music streaming services; (6) 3.2% would purchase a new subscription to a satellite radio service; and (7) 1.8% would purchase digital music files or
CDs that they do not currently own.133 For each of these seven alternatives, I have determined the royalty that would be earned on the alternative and converted to an equivalent per-play royalty rate for simulcast.134 Multiplying each alternative’s per-play royalty rate by the diversion ratio from the survey results gives the expected direct royalty loss per play for that alternative as a result of the simulcast. Summing over alternatives yields the total expected direct royalty loss per play due to the simulcast, which is equal to [REDACTED ].135
B. The Promotional Offset of Simulcast
108. In the formula for the net opportunity cost in the example above, the promotional offset is
(θ-1)B + φBCR. Note that this term is negative (meaning it lowers the label’s net opportunity cost) under the assumptions that (1) simulcast and OTA broadcasts have the same positive promotional benefit, and (2) custom radio has a lower promotional benefit than simulcast and
OTA broadcasts.
133 Hauser Testimony, Appendix R, pp. 1-3. 134 In performing these calculations, for some of the alternatives it was necessary to have an average number of plays per month for simulcast users. In SDARS III, Sirius XM’s expert concluded that satellite radio subscribers had 601 plays per month. Given the 11 to 15 songs per hour ratio for terrestrial radio versus Pandora, which likely also approximately holds for terrestrial radio versus satellite radio, a person who spent the same time on simulcast as satellite radio would have approximately 450 plays per month on simulcast. I confirmed this figure by analyzing usage data from the survey. The survey respondents were asked to provide their number of hours of simulcast listening in the last three days. I used these responses to estimate hours per month, taking into account that the survey respondents (who had, by definition, listened to simulcast in the last three days) likely are heavier users of simulcast than the average user who listens to simulcast within a month. Finally, I converted from hours of simulcast listening per month to plays per month using the 11 plays per hour. 135 Appendix B1. I also calculated the total expected direct royalty loss per play due to simulcast based on two additional scenarios. The first scenario uses diversion ratios for the alternatives that are calculated by excluding respondents to the survey who did not select “Music” as a type of content that they had listened to through simulcast over the last three days. The second scenario uses diversion rations for the alternatives that are calculated by including only those respondents to the survey who only selected “Music” as a type of content that they had listened to through simulcast over the last three days. The results for these two additional scenarios are presented in Appendices B4-B5 and are consistent with the result based on all of the survey respondents.
61 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 109. There is little dispute that record labels perceive OTA broadcasts to be highly
promotional. In Web IV the CRB Judges stated that the record was “replete with statements
concerning the promotional value of terrestrial radio for introducing new artists and new songs to
the public and stimulating sales of sound recordings,” with “consensus, or near-consensus, on this point.”136 Evidence from the current proceeding further supports this conclusion.137
110. Given that, in most cases, there is significant overlap in characteristics between the simulcast audience and OTA audience of a radio station, there is a reasonable basis to conclude that simulcast has similar promotional benefits with respect to its audience as the OTA broadcast has with respect to its audience. I understand that stations do not see any evidence that record labels treat the over-the-air signal and the simulcast stream as anything other than an identical outlet for their music. Indeed, the PRO agreements discussed above treat simulcast the same as terrestrial radio. In fact, simulcast may provide an additional promotional benefit because, for example, some simulcast services provide links to an online music store for the purchase of digital download of songs on the playlist.138 Pandora, on the other hand, does not have an option
to purchase songs on its website.139
111. In considering whether the statutory royalty rate should be less for simulcast than for
other non-subscription non-interactive services in Web IV, the CRB Judges focused on the question of whether simulcast was more promotional than other non-subscription non-interactive
136 Web IV at 26322. 137 Written Direct Testimony of Tom Poleman on Behalf of iHeartMedia, Inc., September 19, 2019, ¶¶ 6-22; Written Direct Testimony of Leonard Wheeler, Mel Wheeler Inc., September 23, 2019, ¶¶ 36-42; Written Direct Testimony of Andrew Gille, Midwest Communications, Inc., September 23, 2019, ¶¶ 17-20. 138 For example, WXLK’s online streaming player includes a “Buy” button that redirects a listener to purchase music on Amazon. See WXLK streaming player, http://v6player.wostreaming.net/1297; WFHM’s online streaming player also includes a “Buy” option for most previously played songs that redirects to Apple Music. See WFHM streaming player, http://player.listenlive.co/56621/en/songhistory. 139 See Pandora, www.pandora.com.
62 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) services (e.g., custom radio).140 However, it is not necessary that simulcast be more promotional
than other non-subscription non-interactive services for there to be a promotional offset that
decreases the label’s net opportunity cost. As the equation for the promotional offset ((θ-1)B +
φBCR) shows, the offset is negative and reduces the label’s net opportunity cost even if simulcast
and custom radio are equally promotional (i.e., if BCR=B, in which case the promotional offset is
(θ+φ-1)B), as long as some of the simulcast listeners would switch to non-music alternatives (or
other zero promotional benefit alternatives) in the no-license world (i.e., θ+φ-1<0). In short, as
long as some simulcast users would divert to non-music activities, the absolute promotional
effect of the simulcast is relevant. In the no-license world, listeners switching to non-music
activities would not be exposed to the promotional simulcast plays. With respect to those
simulcast users who would switch to other royalty-bearing services in the no-license world, to
the extent that simulcast has a greater promotional benefit than those other services, the promotional offset to the opportunity cost would be even larger.
112. In any event, the evidence suggests that terrestrial radio (and thus simulcast) is, in fact,
more promotional than custom radio. First, custom radio provides listeners with greater
interactivity than terrestrial radio/simulcast. With some control over which songs are played, a
listener has less incentive to, e.g., purchase digital downloads or listen to an on-demand stream.
Second, terrestrial radio has particular features that make it a distinct promotional tool: it has
wider reach among American consumers than digital streaming or other audio platforms;
consumers also spend more time listening to radio than to internet-only audio; and radio stations
feature DJs and on-air hosts that can personally promote the artist or song.141 Third, as discussed
140 Web IV at 26322-23. 141 Written Direct Testimony of Tom Poleman on Behalf of iHeartMedia, Inc., September 19, 2019, ¶¶ 6-10.
63 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) above, the iHeart-independent label agreements support lower effective royalty rates for
simulcast than for custom radio, consistent with the proposition that terrestrial radio/simulcast is
at least viewed by licensors as more promotional than custom radio.
C. Conclusion on Net Opportunity Cost
113. I estimate the label’s direct loss in royalty revenue from users being diverted from other
royalty-bearing services to simulcast to be $0.00091 per play. The promotional offset is likely to be non-negligible given that (1) OTA broadcasts are widely acknowledged to be promotional, (2) the simulcast audience shares characteristics with the OTA audience, (3) some simulcast listeners would switch to alternatives that provide no promotional benefit in the no-license world, and (4) other non-subscription non-interactive services provide less promotional benefit than
OTA and simulcast. However, the amount of the promotional offset is difficult to quantify. I conservatively conclude that the label’s net opportunity cost of licensing simulcast is $0.00091 per play. A confidence interval for this figure can be calculated that reflects the statistical variation inherent in the survey. The 95% confidence interval for the per-play rate is $0.00074 to
$0.00108.
114. To ensure that the royalty rates for non-subscription non-interactive services (including
simulcast) reflected effective competition, in Web IV, the CRB Judges used as benchmarks
royalties from actual license agreements between labels and services that contained steering
provisions.142 Steering, in which a service pledges to play more of a label’s sound recordings
than would occur in the absence of steering, is a means by which a service can create
142 Web IV at 26365-69.
64 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) competition among labels, mitigating the complementary oligopoly problem and thereby
obtaining a lower royalty rate.
115. As discussed in the net opportunity cost analysis, I applied a no-license scenario where it was not possible to offer a simulcast without the sound recordings of the label in question. I noted that this meant that the resulting rate is not free of the complementary oligopoly power problem. An adjustment can be made by applying the steering discount negotiated in licensing agreements. Such an adjustment pushes the rate toward the rate that would prevail under effective competition.143 In Web IV, the steering discount was found to be 12%.144 I apply this
discount to the royalty rate based on the net opportunity cost framework to obtain a steering-
adjusted rate of $0.0008 per play with a 95% confidence interval of $0.00065 to $0.00095.
116. Finally, I have conducted a sensitivity analysis of the $.00091 rate calculated using the
opportunity cost framework, where different royalty rates for some of the alternatives are used.
In the first scenario I used an alternative per-play royalty rate for ad-supported interactive equal
to the effective per-play royalty rate for custom radio calculated from the direct deals between
iHeart and the renewal indies [ REDACTED
]. The result is $0.00090.145 In the second scenario I
used an alternative per-play royalty rate for ad-supported video equal to the effective per-play
rate for only Premium/Produced Content. The result is $0.00096.146
143 Web IV at 26369. 144 Web IV at 26404-05. 145 Appendix B2. 146 Appendix B3.
65 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) VII. OTHER ECONOMIC FACTORS
A. The Decrease in Average Song Length Suggests the Per-Play Royalty Should Be Lowered
117. The average length of songs in the Billboard Hot 100 has decreased over time.147 This suggests that the average length of songs played on Hot 100 radio stations has decreased over time and this trend may have affected stations with other formats as well (e.g., given that other stations play Hot 100 songs and that the shortening length may be occurring in other genres).
Shorter song length implies an increase in the number of songs played for a given number of minutes devoted to music. Under a per-play rate structure, a station with decreasing song length is therefore paying an increasing amount in royalty fees for the same number of minutes of music. There is no evidence that the shorter song length has increased the simulcast audience or otherwise allowed a simulcast service to increase its revenues (or decrease its costs). Thus, the royalty paid per minute of music should be constant, not increase, over time (holding other factors constant). To achieve this outcome, in principle, the royalty per play would have to be decreased by the same percentage that the average song length has decreased. While I do not have the information necessary to calculate the appropriate adjustment, the existence of the decreasing song length is a further factor supporting a reduction in the statutory rate from the current level (all else equal).
B. The Statutory Rate Should Not Increase at the Rate of General Inflation
118. In Web IV, the CRB Judges specified that the statutory rate should increase each year at the same rate as general inflation as represented by the CPI. However, as an economic matter,
147 Aisha Hassan and Dan Kopf, “The reason why your favorite pop songs are getting shorter,” Quartzy, Oct. 27, 2018, https://qz.com/quartzy/1438412/the-reason-why-your-favorite-pop-songs-are-getting-shorter/.
66 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) any yearly increase in the statutory rate should be tied to the increase in prices in a narrower industry—e.g., music services and the royalties paid by such services. Prices in other industries reflected in the CPI may be driven by economic factors that play no role in the music industry.
Conversely, music prices may be driven by economic factors that play no role in other industries.
For either reason, the general CPI may have low correlation with prices in the music industry.
119. A review of such prices suggests little, if any, change in recent years. For example, subscription prices for interactive music services have stayed constant or declined over the last few years.148 This implies that sound recording royalties per subscriber for these services (which are generally calculated as a percentage of the subscription price) have similarly stayed constant or declined. Similarly, the per-play royalty for sound recording rights for ad-supported Spotify was lower in the first quarter of 2019 as compared to 2018.
120. In light of there being little evidence of increasing prices in the music industry, the statutory rate should be held constant over the five-year term of the hypothetical license.
148 For example, Spotify has charged the same $9.99 monthly fee for premium subscriptions for more than ten years. Moreover, Spotify’s average revenue per paid subscriber has declined over time. See Glenn Peoples, “The Growing Cost of Music’s $9.99 Monthly Price Tag,” Billboard, September 20, 2019, https://www.billboard.com/articles/business/8530616/music-streaming-prices-competition-subscribers; Tim Ingham, “The Average Spotify Subscriber Pays $5.50 a Month—and Record Labels Hate It,” Rolling Stone, January 11, 2019, https://www.rollingstone.com/music/music-features/the-average-spotify-subscriber-is-paying- 5-50-a-month-and-record-labels-hate-it-776925/.
67 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX A1 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) APPENDIX A2 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25)
APPENDIX A3 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) APPENDIX A4 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) APPENDIX A5 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) APPENDIX B1 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) APPENDIX B2 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) APPENDIX B3 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) APPENDIX B4 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) APPENDIX B5 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) APPENDIX B6 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) APPENDIX B7 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) APPENDIX B8 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) APPENDIX B9 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) APPENDIX B10 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25)
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APPENDIX C15 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) APPENDIX C16 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) APPENDIX C17 RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) APPENDIX C18 Appendix C18 Pandora Songs Per Hour
Average Average Ad Songs per Average Time per Format Hour Song Length Hour (a) (b) (c) (d) Top Hits 16.75 0:03:20 0:04:32 Country 17.00 0:03:28 0:01:45 Rock 14.50 0:03:59 0:03:01 Adult Contemporary 14.50 0:03:53 0:03:54 Pop Latino 14.75 0:03:48 0:05:53 All Formats 15.50 0:03:41 0:03:49
Average Songs in Ad Time 1.0
Notes: Data was compiled from listening to Pandora stations. Measurements for ads and songs include buffering time. Songs were considered as part of a particular hour if they began within that hour. Calculations derived by averaging four hours of Pandora runtime per station. Average Songs in Ad Time is derived by dividing Average Ad Time per Hour by Average Song Length.
Sources: "Adult Contemporary," Pandora Internet Radio. "Alternative Rock," Pandora Internet Radio. "Pop Latino," Pandora Internet Radio. "Today's Country Radio," Pandora Internet Radio. "Today's Top Hits," Pandora Internet Radio.
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX D RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) APPENDIX E GREGORY K. LEONARD
Gregory K. Leonard is a Partner at Edgeworth Economics specializing in applied microeconomics and econometrics.
Dr. Leonard has written widely in the areas of antitrust, industrial organization, econometrics, intellectual property, class certification, and labor economics. His publications have appeared in the RAND Journal of Economics, the Journal of Industrial Economics, the Journal of Econometrics, the International Journal of Industrial Organization, the Journal of Public Economics, Annales Economie et de Statistique, the Journal of Labor Economics, the International Journal of the Economics of Business, Antitrust Law Journal, Antitrust, Antitrust Source, the Journal of Economic Analysis & Policy, Journal of Competition Law and Economics, the Journal of Economic Surveys, 法学家 (Jurists’ Review), Antitrust Chronicle, the Berkeley Technology Law Journal, the Columbia Science and Technology Law Review, the European Competition Law Review, les Nouvelles, Landslide, Managing Intellectual Property, Legal Issues of Economic Integration, Kokusai Shoji Houmu (International Business Law and Practice), and the George Mason Law Review. Dr. Leonard authored two chapters and co-authored another chapter in the American Bar Association Section of Antitrust Law (ABA) volume Econometrics (2nd Ed., 2014), co-authored two chapters in the ABA volume Issues in Competition Law and Policy, and co-authored the “Econometrics and Regression Analysis” chapter of the ABA volume Proving Antitrust Damages (2nd Ed., 2010). He co-edited Economic Approaches to Intellectual Property: Policy, Litigation, and Management and authored or co-authored three of its chapters. One of these chapters (co-authored with Lauren J. Stiroh) was cited by the Court of Appeals for the Federal Circuit in its Uniloc decision. Dr. Leonard is a Senior Editor of the Antitrust Law Journal and has served as a referee for numerous economics journals.
Dr. Leonard was invited to speak on merger simulation at the 2004 US Department of Justice and Federal Trade Commission (FTC) Merger Workshop, the econometrics of evaluating competition in local retail markets at the 2008 FTC Retail Mergers Workshop, and the calculation of patent damages at the 2009 FTC Hearings on the Evolving IP Marketplace. The 2011 FTC report resulting from the latter hearings cited Dr. Leonard extensively. In 2005, Dr. Leonard served as a consultant on the issue of immunities and exemptions to the Antitrust Modernization Commission (AMC), which was tasked by Congress and the President with developing recommendations for changes to the US antitrust laws. He testified before the AMC in December 2005. Dr. Leonard gave an invited presentation on the use of natural experiments in antitrust at the European Commission’s Directorate General for Competition (DG Comp) in 2014.
Dr. Leonard has extensive experience with international antitrust and intellectual property issues, particularly in Asia. He has been retained by the Anti-Monopoly Bureau of China’s Ministry of Commerce (MOFCOM) as an outside economics expert to assist in merger reviews. Dr. Leonard has given invited presentations at MOFCOM, the Supreme People’s Court of China, Renmin University, the Chinese Academy of Social Sciences, and the University of Political Science and Law. He was a member of ABA and US Chamber of Commerce delegations to joint workshops with the Chinese antitrust agencies, MOFCOM, NDRC, and SAIC, and served on the working groups of the ABA’s Sections of Antitrust Law and International Law that prepared comments on MOFCOM’s and SAIC’s draft regulations. Dr. Leonard has also given presentations to the Japan Fair Trade Commission and the India Competition Commission. Dr. Leonard has experience in a broad range of industries, including pharmaceuticals, telecommunications, airlines, semiconductors, hedge funds, securities, commercial and recreational fishing, medical devices, professional sports, credit card networks, payment systems, information services, computer software, computer hardware, chemicals, plastics, flat glass, retailing, advertising, beef processing, fertilizers, printing, petroleum, steel, beer, cereals, cosmetics, athletic apparel, film, milk, canned fish, vitamins, animal feed supplements, tissue, paperboard, industrial gas, concrete, automobiles, contact lens cleaners, sports beverages, soft drinks, diapers, tobacco products, graphite and carbon products, and modems, among others.
Dr. Leonard has provided written and oral testimony and presentations before federal and state courts, government agencies, and arbitration panels on issues involving antitrust, damages estimation, statistics and econometrics, surveys, valuation, and labor market discrimination.
Prior to joining Edgeworth, Dr. Leonard was a Senior Vice President at NERA and Lexecon Inc., a founding member and Director of Cambridge Economics, Inc., and an Assistant Professor at Columbia University, where he taught statistics, econometrics, and labor economics.
Dr. Leonard received an Sc.B. in Applied Mathematics-Economics from Brown University and a Ph.D. in Economics from the Massachusetts Institute of Technology, where he was a National Science Foundation Graduate Fellow and an Alfred P. Sloan Foundation Fellow.
EDUCATION
Massachusetts Institute of Technology
PhD, Economics, 1989 Alfred P. Sloan Foundation Fellowship, 1988-1989 National Science Foundation Graduate Fellowship, 1985-1988
Brown University
ScB, Applied Mathematics-Economics, 1985 Rohn Truell Memorial Premium in Applied Mathematics, 1985
PROFESSIONAL EXPERIENCE
2012- Partner, Edgeworth Economics
2008-2012 Senior Vice President, NERA Economic Consulting
2004-2008 Vice President, NERA Economic Consulting
2000-2004 Senior Vice President, Lexecon, Inc.
1991-2000 Director, Cambridge Economics, Inc.
2 1990-1991 Senior Analyst, NERA Economic Consulting
1989-1990 Assistant Professor, Columbia University (Teaching Areas: Econometrics, Statistics, Labor Economics)
PAPERS AND PUBLICATIONS
“A Proposed Method for Measuring Competition Among Imperfect Substitutes,” Antitrust Law Journal 60, 1992, pp. 889-900 (with J. Hausman and D. Zona).
“Issues in the Contingent Valuation of Environmental Goods: Methodologies for Data Collection and Analysis,” in Contingent Valuation: A Critical Assessment, Ed. by J. A. Hausman, North Holland Press, 1993 (with D. McFadden).
“Assessing Use Value Losses Due to Natural Resource Injury,” in Contingent Valuation: A Critical Assessment, ed. by J. A. Hausman, North Holland Press, 1993 (with J. Hausman and D. McFadden).
“Does Contingent Valuation Measure Preferences? Experimental Evidence,” in Contingent Valuation: A Critical Assessment, ed. by J. A. Hausman, North Holland Press, 1993 (with P. Diamond, J. Hausman, and M. Denning).
“Competitive Analysis with Differentiated Products,” Annales d'Economie et de Statistique 34, 1994, pp. 159-180 (with J. Hausman and D. Zona).
“A Utility Consistent, Combined Discrete Choice and Count Data Model: Assessing Recreational Use Losses Due to Natural Resource Damage,” Journal of Public Economics 56, 1995, pp. 1-30 (with J. Hausman and D. McFadden).
“Market Definition Under Price Discrimination,” Antitrust Law Journal 64, 1996, pp. 367-386 (with J. Hausman and C. Vellturo).
“Achieving Competition: Antitrust Policy and Consumer Welfare,” World Economic Affairs 1, 1997, pp. 34-38 (with J. Hausman).
“Economic Analysis of Differentiated Products Mergers Using Real World Data,” George Mason Law Review 5, 1997, pp. 321-346 (with J. Hausman).
“Superstars in the NBA: Economic Value and Policy,” Journal of Labor Economics 15, 1997, pp. 586-624 (with J. Hausman).
“Efficiencies From the Consumer Viewpoint,” George Mason Law Review 7, 1999, pp. 707-727 (with J. Hausman).
“Documents Versus Econometrics in Staples,” contributed to www.antitrust.org, also available at www.nera.com (with J. Hausman).
3
“The Competitive Effects of a New Product Introduction: A Case Study,” Journal of Industrial Economics 30, 2002, pp. 237-263 (with J. Hausman).
“Does Bell Company Entry into Long-Distance Telecommunications Benefit Consumers?” Antitrust Law Journal 70, 2002, pp. 463-484 (with J. Hausman and J. G. Sidak).
“On Nonexclusive Membership in Competing Joint Ventures,” RAND Journal of Economics 34, 2003 (with J. Hausman and J. Tirole).
“Correcting the Bias When Damage Periods are Chosen to Coincide With Price Declines,” Columbia Business Law Review, 2004, pp. 304-306 (with D. Carlton).
“Competitive Analysis Using a Flexible Demand Specification,” Journal of Competition Law and Economics 1, 2005, pp. 279-301 (with J. Hausman).
“Using Merger Simulation Models: Testing the Underlying Assumptions,” International Journal of Industrial Organization 23, 2005, pp. 693-698 (with J. Hausman).
“Application of Empirical Methods in Merger Analysis,” report to the Fair Trade Commission of Japan, June 27, 2005 (with C. Dippon and L. Wu).
“A Practical Guide to Damages,” in Economic Approaches to Intellectual Property, Policy, Litigation and Management, ed. by G. Leonard and L. Stiroh, 2005 (with L. Stiroh).
“Applying Merger Simulation Techniques to Estimate Lost Profits Damages in Intellectual Property Litigation,” in Economic Approaches to Intellectual Property, Policy, Litigation and Management, ed. by G. Leonard and L. Stiroh, 2005.
“Antitrust Implications of Pharmaceutical Patent Litigation Settlements,” in Economic Approaches to Intellectual Property, Policy, Litigation and Management, ed. by G. Leonard and L. Stiroh, 2005 (with R. Mortimer).
“Framework for Policymakers to Analyze Proposed and Existing Antitrust Immunities and Exemptions,” report to the Antitrust Modernization Commission, October 24, 2005 (with D. Bush and S. Ross).
“Real Options and Patent Damages: The Legal Treatment of Non-Infringing Alternatives and Incentives to Innovate,” Journal of Economic Surveys 20, 2006, pp. 493-512 (reprinted in Economic and Legal Issues in Intellectual Property, M. McAleer and L. Oxley, eds., Blackwell Publishing, 2007) (with J. Hausman).
“The Competitive Effects of Bundled Discounts,” in Economics of Antitrust: Complex Issues in a Dynamic Economy, ed. by L. Wu, 2007.
“Estimation of Patent Licensing Value Using a Flexible Demand Specification,” Journal of Econometrics 139, 2007, pp. 242-258 (with J. Hausman).
4 “Patent Damages and Real Options: How Judicial Characterization of Non-Infringing Alternatives Reduces Incentives to Innovate,” Berkeley Technology Law Journal 22, Spring 2007, pp. 825-853 (with J. Hausman and J. G. Sidak).
“Don’t Feed the Trolls,” les Nouvelles, Vol. 42, September 2007, pp. 487-495 (reprinted in Patent Trolls: Legal Implications, C.S. Krishna, ed., The Icfai University Press, 2008) (with J. Johnson, C. Meyer, and K. Serwin).
“Are Three to Two Mergers in Markets with Entry Barriers Necessarily Problematic?” European Competition Law Review 28, October 2007, pp. 539-552 (with N. Attenborough and F. Jimenez).
“Economics and the Rigorous Analysis of Class Certification in Antitrust Cases,” Journal of Competition Law and Economics 3, 2007, pp. 341-356 (with J. Johnson).
“Assessing the Competitive Effects of a Merger: Empirical Analysis of Price Differences Across Markets and Natural Experiments,” Antitrust, Fall 2007, pp. 96-101 (with L. Wu).
“Incentives and China’s New Antimonopoly Law,” Antitrust, Spring 2008, pp. 73-77 (with F. Deng).
“Use of Simulation in Competitive Analysis,” in Issues in Competition Law and Policy, ed. by W. Dale Collins, 2008 (with J.D. Zona).
“Allocative and Productive Efficiency,” in Issues in Competition Law and Policy, ed. by W. Dale Collins, 2008 (with F. Deng).
“In the Eye of the Beholder: Price Structure as Junk Science in Antitrust Class Certification Proceedings,” Antitrust, Summer 2008, pp. 108-112 (with J. Johnson).
“Merger Retrospective Studies: A Review,” Antitrust, Fall 2008, pp. 34-41 (with G. Hunter and G. S. Olley).
“Roundtable Discussion: Developments—and Divergence—In Merger Enforcement,” Antitrust, Fall 2008, pp. 9-27.
“Dispatch From China,” Antitrust, Spring 2009, pp. 88-89.
“A Hard Landing in the Soft Drink Market – MOFCOM’s Veto of the Coca-Cola/Huiyuan Deal,” Antitrust Chronicle, April 2009(2) (with F. Deng and A. Emch).
“Predatory Pricing after linkline and Wanadoo,” Antitrust Chronicle, May 2009(2) (with A. Emch).
“Farrell and Shapiro: The Sequel,” Antitrust, Summer 2009, pp. 14-18 (with M. Lopez).
“掠夺性定价—美国与欧盟的法律及经济学分析” (“Predatory Pricing - Economics and Law in the United States and the European Union”), 法学家 (Jurists’ Review), 2009, pp. 100-110 (with A. Emch).
5 “Revising the Merger Guidelines: Second Request Screens and the Agencies’ Empirical Approach to Competitive Effects,” Antitrust Chronicle, December 2009(1) (with L. Wu).
“How Private Antitrust Litigation May Be Conducted in China,” Competition Law360, January 6, 2010 (with F. Deng and W. Tang).
“Merger Screens: Market-Share Based Approaches and ‘Upward Pricing Pressure,’” Antitrust Source, February 2010 (with E. Bailey, G. S. Olley, and L. Wu).
“Minimum Resale Price Maintenance: Some Empirical Evidence From Maryland,” BE Journal of Economic Analysis & Policy 10, 2010 (with E. Bailey).
“Three Cases Reshaping Patent Licensing Practice,” Managing Intellectual Property, March 2010 (with E. Bailey and A. Cox).
“Econometrics and Regression Analysis,” in Proving Antitrust Damages: Legal and Economic Issues, ABA Section of Antitrust (2nd Edition), 2010 (with J. Langenfeld, W. Li, and J. Morris).
“Patent Damages: What Reforms Are Still Needed?,” Landslide 2, May/June 2010 (with M. Lopez).
“The Google Books Settlement: Copyright, Rule 23, and DOJ Section 2 Enforcement,” Antitrust, Summer 2010, pp. 26-31.
“The 2010 Merger Guidelines: Do We Need Them? Are They All We Need?,” Antitrust Chronicle, October 2010(2).
“Evaluating the Unilateral Competitive Effects of Mergers Among Firms with High Profit Margins,” Antitrust, Fall 2010, pp. 28-32 (with E. Bailey and L. Wu).
“Predatory Pricing in China—In Line With International Practice?,” Legal Issues of Economic Integration 37, 2010, pp. 305-316 (with A. Emch).
“What Can Be Learned About the Competitive Effects of Mergers From ‘Natural Experiments’?,” International Journal of the Economics of Business 18, 2011, pp. 103-107 (with G. S. Olley).
“District Court Rejects the Google Books Settlement: A Missed Opportunity?,” Antitrust Source, April 2011.
“Making Sense of ‘Apportionment’ in Patent Damages,” Columbia Science and Technology Law Review 12, pp. 255- 271, 2011 (with E. Bailey and M. Lopez).
“Rigorous Analysis of Class Certification Comes of Age,” Antitrust Law Journal 77, 2011, pp. 569-586 (with J. Johnson).
“Economic Analysis in Indirect Purchaser Class Actions,” Antitrust, Fall 2011, pp. 51-57 (with F. Deng and J. Johnson).
6 “Merger Assessment and Frontier of Economic Analyses (4): Empirical Methods in Antitrust Merger Review,“ Kokusai Shoji Houmu (International Business Law and Practice), Vol. 40, No. 3, 2012, pp. 391-401 (with L. Wu)
“Merger Assessment and Frontier of Economic Analyses (5): Empirical Methods in Antitrust Merger Review,“ Kokusai Shoji Houmu (International Business Law and Practice), Vol. 40, No. 4, 2012, pp. 557-564 (with L. Wu).
“Merger Assessment and Frontier of Economic Analyses (6): Empirical Methods in Antitrust Merger Review,“ Kokusai Shoji Houmu (International Business Law and Practice), Vol. 40, No. 5, 2012, pp. 731-739 (with L. Wu).
“Economists’ Roundtable on Hot Patent-Related Antitrust Issues”, Antitrust, Summer 2013, pp. 10-21 (with D. Carlton, C. Meyer, C. Shapiro).
“Not So Natural Experiments,” Competition Policy International, July 2013 (2).
“The Role of China’s Unique Economic Characteristics in Antitrust Enforcement,” in China’s Anti-Monopoly Law: The First Five Years, ed. by Adrian Emch and David Stallibrass, 2013 (with F. Deng).
“Reflections on Bazaarvoice,” CPI Antitrust Chronicle, March 2014 (1) (with P. Normann).
“An Introduction to Econometric Analysis,” in Econometrics: Legal, Practical and Technical Issues, ABA Section of Antitrust (2nd Edition), 2014.
“The Econometric Framework,” in Econometrics: Legal, Practical and Technical Issues, ABA Section of Antitrust (2nd Edition), 2014.
“Applying Econometrics to Estimate Damages,” in Econometrics: Legal, Practical and Technical Issues, ABA Section of Antitrust (2nd Edition), 2014 (with J. Langenfeld, W. Li, and J. Morris).
“Determining RAND Royalties for Standard-Essential Patents,” Antitrust, Fall 2014, pp. 86-94 (with M. Lopez).
“Reflections on the Debates Surrounding Standard-Essential Patents,” The Antitrust Source, August 2015.
“Turning Daubert on Its Head: Efforts to Banish Hypothesis Testing in Antitrust Class Actions,” Antitrust, Spring 2016, pp. 53-59.
“Roundtable with Economists: Discussing Practice and Theory with the Experts,” Antitrust, Spring 2018, pp. 11-23 (with D. Carlton, P. Johnson, M. Maher, and C. Shapiro).
“Comparative Analysis of Court-Determined FRAND Royalty Rates,” Antitrust, Summer 2018, pp. 47-51 (with F. Deng and M. Lopez).
“A Comparison of the Almost Ideal Demand System and Random Coefficients Logit Models For Use with Retail Scanner Data,” NERA Working Paper, 2007 (with F. Deng).
7 PRESENTATIONS
“Merger Analysis with Differentiated Products,” paper presented to the Economic Analysis Group of the US Department of Justice, April 1991 (with J. Hausman and D. Zona).
“Assessing Use Value Losses Due to Natural Resource Injury,” paper presented at “Contingent Valuation: A Critical Assessment,” Cambridge Economics Symposium, April 3, 1992 (with J. Hausman and D. McFadden).
“Contingent Valuation and the Value of Marketed Commodities,” paper submitted to the Contingent Valuation Panel of the National Oceanic and Atmospheric Administration, U.S. Department of Commerce, August 12, 1992 (with J. Hausman).
“Economic Analysis of Differentiated Products Mergers Using Real World Data,” paper presented to the George Mason University Law Review Antitrust Symposium, October 11, 1996 (with J. Hausman).
“Documents Versus Econometrics in Staples,” paper presented to a program of the Economics Committee of the ABA Antitrust Section, September 5, 1997 (with J. Hausman).
Discussant, “New Developments in Antitrust” session, AEA meetings, January 7, 2000.
“In Defense of Merger Simulation,” Department of Justice and Federal Trade Commission Merger Workshop, Unilateral Effects Session, February 18, 2004.
Discussant, “Proving Damages in Difficult Cases: Mock Trial & Discussion,” NERA Antitrust & Trade Regulation Seminar, July 10, 2004.
“Network Effects, First Mover Advantage, and Merger Simulation in Damages Estimation,” LSI Workshop on Calculating and Proving Patent Damages, July 16, 2004.
“Early Exchange of Documents,” LSI Workshop on Pre- and Early Stage Patent Litigation, July 23, 2004.
“Lessons Learned From Problems With Expert Testimony: Antitrust Suits,” LSI Workshop on Effective Financial Expert Testimony, November 4, 2004.
“Price Erosion and Convoyed Sales,” LSI Workshop on Calculating & Proving Patent Damages, January 19, 2005.
“Economic Analysis of Rule 23(b)(3),” LSI Litigating Class Action Suits Conference, June 6, 2005.
“Early Exchange of Documents,” LSI Workshop on Pre- & Early-Stage Patent Litigation, July 22, 2005.
“Issues to Consider in a Lost Profits Damages Analysis,” Patent Litigation 2005, Practicing Law Institute, September 30, 2005.
8 “Antitrust Issues in Standard Setting and Patent Pools,” Advanced Software Law and Practice Conference, November 3, 2005.
“New Technologies for Calculating Lost Profits,” LSI Workshop on Calculating & Proving Patent Damages, February 27, 2006.
“Estimating Antitrust Damages,” Fair Trade Commission of Japan, April 21, 2006.
“Economic Analysis of Rule 23(b)(3),” LSI Litigating Class Action Suits Conference, May 11, 2006.
“Permanent Injunction or Damages: What is the Right Remedy for Non-Producing Entities?,” San Francisco Intellectual Property Law Association/Los Angeles Intellectual Property Law Association Spring Seminar, May 20, 2006.
“Antitrust Enforcement in the United States” and “Economic Analysis of Mergers,” Sino-American Symposium on the Legislation and Practice of Anti-Trust Law, Beijing Bar Association, Beijing, People’s Republic of China, July 17, 2006.
“Economic Analysis in Antitrust,” Chinese Academy of Social Sciences, Beijing, People’s Republic of China, July 20, 2006.
“Issues to Consider in a Lost Profits Damages Analysis,” Patent Litigation 2006, Practicing Law Institute, September 26, 2006.
“Comparison of the Almost Ideal Demand System and Random Coefficient Models for Use With Retail Scanner Data,” Pacific Rim Conference, Western Economic Association, Beijing, People’s Republic of China, January 12, 2007 (with F. Deng).
Discussant, “Applied Economics” Session, Pacific Rim Conference, Western Economic Association, Beijing, People’s Republic of China, January 12, 2007.
“Balancing IPR Protection and Economic Growth in China,” International Conference on Globalization and the Protection of Intellectual Property Rights, Chinese University of Political Science and Law, Beijing, People’s Republic of China, January 20, 2007.
“The Use and Abuse of Daubert Motions on Damages Experts: Lessons from Recent Cases,” LSI Workshop on Calculating & Proving Patent Damages, February 27, 2007.
“Will Your Licenses Ever be the Same? Biotechnology IP Strategies,” BayBio 2007 Conference, April 26, 2007.
“Tension Between Antitrust Law and IP Rights,” Seminar on WTO Rules and China’s Antimonopoly Legislation, Beijing, People’s Republic of China, September 1, 2007.
“Issues to Consider in a Lost Profits Damages Analysis,” Patent Litigation 2007, Practicing Law Institute, September 25, 2007.
9
Discussant, “Dominance and Abuse of Monopoly Power” Session, China’s Competition Policy and Anti-Monopoly Law, J. Mirrlees Institute of Economic Policy Research, Beijing University, and the Research Center for Regulation and Competition, Chinese Academy of Social Sciences, Beijing, People’s Republic of China, October 14, 2007.
“Opening Remarks,” Seminar on China’s Anti-monopoly Law and Regulation on Abuse of Intellectual Property Rights, Beijing, People’s Republic of China, April 26, 2008.
“Issues to Consider in a Reasonable Royalty Damages Analysis,” Patent Litigation 2008, Practicing Law Institute, October 7, 2008.
“Econometric Evaluation of Competition in Local Retail Markets,” Federal Trade Commission and National Association of Attorneys General Retail Mergers Workshop, December 2, 2008
“Merger Review Best Practices: Competitive Effects Analysis,” International Seminar on Anti-Monopoly Law: Procedure and Substantive Assessment in Merger Control, Beijing, People’s Republic of China, December 15-17, 2008.
“The Use of Natural Experiments in Antitrust,” Renmin University, Beijing, People’s Republic of China, December 18, 2008.
“China’s Antimonopoly Law: An Economist’s Perspective,” Bloomberg Anti-Monopoly Law of China Seminar, January 29, 2009.
Panelist, “Standards for Assessing Patent Damages and Their Implementation by Courts,” FTC Hearings on the Evolving IP Marketplace, February 11, 2009.
“Economic Analysis of Agreements Between Competitors” and “Case Study: FTC Investigates Staples’ Proposed Acquisition of Office Depot,” Presentation to Delegation of Antitrust Officials from the People’s Republic of China, Washington, DC, March 23, 2009.
“Reasonable Royalties in the Presence of Standards and Patent Pools,” LSI Workshop, April 20, 2009.
Presentations on Unilateral Effects, Buyer Power, and the Intellectual Property-Antitrust Interface to Delegation from the Anti-Monopoly Bureau of MOFCOM of the People’s Republic of China, Washington, DC, May 10-11, 2009.
Panelist, “The Use of Economic and Statistical Models in Civil and Criminal Litigation,” Federal Bar Association, San Francisco, May 13, 2009.
“Trends in IP Rights Litigation and Economic Damages in China,” Pursuing IP in the Pacific Rim, May 14, 2009.
Presentation on the Economics of Antitrust, National Judicial College of the People’s Republic of China, Xi’an, People’s Republic of China, May 25-26, 2009.
10 “Case Study: The Use of Economic Analysis in Merger Review,” Presentation to the Anti-Monopoly Bureau of MOFCOM, Beijing, People’s Republic of China, May 27, 2009.
“Economics and Antitrust Law,” China University of Political Science and Law, Beijing, People’s Republic of China, September 21, 2009.
“Case Study: Economic Analysis of Coordinated Interaction,” Presentation to the Anti-Monopoly Bureau of MOFCOM, Beijing, People’s Republic of China, September 22, 2009.
“Relevant Market Definition,” 4th Duxes Antitrust Law Seminar, Beijing, People’s Republic of China, September 26, 2009.
“Expert Economic Testimony in Antitrust Litigation,” Supreme People’s Court, Beijing, People’s Republic of China, February 2, 2010.
“New Case Law for Patent Damages,” Law Seminars International Telebriefing, April 28, 2010.
“China/India: Sailing in Unchartered Waters: Regulating Competition in the Emerging Economies – New Laws, New Enforcement Regimes and No Precedents,” The Chicago Forum on International Antitrust Issues, Northwestern University School of Law Searle Center, May 20, 2010.
“Antitrust and Intellectual Property,” Supreme People’s Court, Beijing, People’s Republic of China, May 26, 2010.
“Cartel Enforcement Trends in the United States,” 2nd Ethical Beacon Anti-Monopoly Summit, Beijing, People’s Republic of China, May 27, 2010.
Panelist, “The Future of Books and Digital Publishing: the Google Book Settlement and Beyond,” 2010 American Bar Association Annual Meeting, August 7, 2010.
“Coordinated Effects” and “Non-Horizontal Mergers,” Presentations to Delegation from India Competition Commission, US Chamber of Commerce, Washington, DC, October 26, 2010.
“UPP and Merger Simulation,” Annual Conference of the Association of Competition Economics, Norwich, UK, November 11, 2010.
“Uniloc v. Microsoft: A Key Ruling For Patent Damages,” Law Seminars International Telebriefing, January 21, 2011.
“Correlation, Regression, and Common Proof of Impact,” New York City Bar Association, January 19, 2011.
“Private Litigation Under China’s New Antimonopoly Law,” Bar Association of San Francisco, February 17, 2011.
11
“Competition Law and State Regulation: Setting the Stage and Focus on State-Owned Enterprises,” Competition Law and the State: International and Comparative Perspectives, Hong Kong, People’s Republic of China, March 18, 2011.
Panelist, “Booking it in Cyberspace: The Google Book Settlement and the Aftermath,” American Intellectual Property Law Association, San Francisco, May 13, 2011.
“Econometric Estimation of Cartel Overcharges,” ZEW Conference on Economic Methods and Tools in Competition Law Enforcement, Mannheim, Germany, June 25, 2011.
Panelist, “Antitrust and IP in China,” Antitrust and IP in Silicon Valley and Beyond, American Bar Association and Stanford University, Palo Alto, October 6, 2011.
Panelist, University of San Diego School of Law Patent Law Conference: The Future of Patent Law Remedies, January 18, 2013.
“Economics Framework,” US-China Workshop on Competition Law and Policy for Internet Activities, China’s State Administration for Industry and Commerce (SAIC) and the U.S. Trade and Development Agency (USTDA), Shenzhen, People’s Republic of China, June 4-5, 2013.
Panelist, “China Inside and Out,” American Bar Association, Beijing, People’s Republic of China, September 16-17, 2013.
Panelist, “Remedies in Patent Cases,” Fifth Annual Conference on The Role of the Courts in Patent Law & Policy, Berkeley and Georgetown Law Schools, November 1, 2013.
“Royalty Base,” LeadershIP Conference, Qualcomm Incorporated, March 21, 2014.
“Reflections on Natural Experiments,” DG Comp, April 8, 2014.
Panelist, “Antitrust in Asia: China,” American Bar Association Section of Antitrust Law, Beijing, People’s Republic of China, May 21-23, 2014.
Panelist, “Patent Damages Roundtable,” 2015 Intellectual Property Institute, University of Southern California Gould School of Law, Los Angeles, March 23, 2015.
Panelist, “IP and Antitrust - The Current State of Economic Analysis,” Global Competition Review Live 2nd Annual IP & Antitrust USA, Washington, DC, April 14, 2015.
Panelist, “FRAND Royalty Rates After Ericsson v. D-Link,” American Bar Association, May 15, 2015.
Participant, Patent Damages Workshop, University of California-Berkeley, March 3, 2016.
Panelist, “FRANDtopia - In a Perfect World,” LAIPLA Spring Conference, May 5, 2018.
12 Panelist, “Chicago Forum on International Antitrust Issues,” Northwestern Pritzker School of Law, June 15, 2018.
PROFESSIONAL ACTIVITIES
Member, American Economic Association
Member, Econometric Society
Member, American Bar Association
Contributor, www.antitrust.org
Contributor, ABA Section of Antitrust Law, Econometrics, 2005
Associate Editor, Antitrust, 2007-2010
Senior Editor, Antitrust Law Journal, 2012-; Associate Editor, 2010-2012
Co-Editor, ABA Section of Antitrust Law Economics Committee Newsletter, 2009-2012
Member, Economics Task Force, ABA Section of Antitrust Law, 2011-2012
Member, ABA Delegation to International Seminar on Anti-Monopoly Law: Procedure and Substantive Assessment in Merger Control, Beijing, People’s Republic of China, December 15-17, 2008
Member, Working Group for drafting the “Joint Comments of the American Bar Association Section of Antitrust Law and Section of International Law on the MOFCOM Draft Guidelines for Definition of Relevant Markets,” 2009
Member, Working Group for drafting the “Joint Comments of the American Bar Association Section of Antitrust Law and Section of International Law on the SAIC Draft Regulations on the Prohibition of Acts of Monopoly Agreements and of Abuse of Dominant Market Position,” 2009.
Member, Working Group for drafting the “Joint Comments of the American Bar Association Section of Antitrust Law and Section of International Law on the SAIC Draft Regulations on the Prohibition of Acts of Monopoly Agreements and of Abuse of Dominant Market Position,” 2010.
Referee: Econometrica, Review of Economics and Statistics, International Journal of Industrial Organization, Review of Industrial Organization, Journal of Sports Economics, Journal of Environmental Economics and Management, Research in Law and Economics, Labour Economics, Eastern Economic Journal, Journal of Forensic Economics, Antitrust, Antitrust Law Journal, Journal of Competition Law and Economics, Advances in Econometrics.
13
TESTIMONY IN THE LAST FIVE YEARS
Open Text SA v. Box Inc., United States District Court for the Eastern District of Virginia, Norfolk Division, Civil Action No. 2:13-CV-00319-MSD-DEM, 2013-2015 (Deposition, Trial Testimony).
Affinity Labs of Texas, LLC v. General Motors LLC, United States District Court for the District of Eastern District of Texas, Beaumont Division, C.A. No. 1:12-CV-00582-RC, 2014 (Deposition).
W.L. Gore & Associates, Inc. v. C.R. Bard, Inc. and Bard Peripheral Vascular, Inc., United States District Court for the District of Delaware, C.A. No. 11-515-LPS-CJB, 2014 (Deposition).
Richard Noll and Rhythm Motor Sports, LLC v. eBay Inc., eBay Europe S.A.R.L., and eBay International AG, Inc., United States District Court for the Northern District of California, San Jose Division, Case No. 5:11-CV-04585-EJD, 2014 (Deposition).
Bristol-Myers Squibb Company v. Genentech Inc. and City of Hope, United States District Court for the Northern District of California, Western Division, Case No. 2:13-CV-05400-MRP (JEMx), 2014 (Deposition).
Eli Lilly and Imclone v. Genentech Inc. and City of Hope, United States District Court for the Northern District of California, Western Division, Case No. 2:13-CV-07248-MRP, 2014 (Deposition).
Graftech International Ltd. and Graftech International Holdings Inc. F/K/A UCAR Carbon Company Inc. v. Carbone Savoie, Alcan France and Rio Tinto Alcan, International Chamber of Commerce, International Court of Arbitration, Case Ref.: 19798/AGF, 2014 (Hearing Testimony).
Samsung Electronics Co., Ltd. (Korea) v. Nokia Corporation (Finland), International Chamber of Commerce, International Court of Arbitration, Case Ref.: 19602/AGF/RD (c.19638/AGF), 2015 (Hearing Testimony).
In the Matter of CERTAIN NETWORK DEVICES, RELATED SOFTWARE, AND COMPONENTS THEREOF (I), before the United States International Trade Commission, Investigation No. 337-TA-944, 2015 (Deposition).
Broadband iTV, Inc. v. Hawaiian Telecom, Inc., Oceanic Time Warner Cable, LLC, and Time Warner Cable, Inc., United States District Court for the District of Hawaii, Case No. 14-00169 ACK-RLP, 2015 (Deposition).
In the Matter of CERTAIN NETWORK DEVICES, RELATED SOFTWARE, AND COMPONENTS THEREOF (II), before the United States International Trade Commission, Investigation No. 337-TA-945, 2015 (Deposition, Hearing Testimony).
Largan Precision Co., Ltd. v. Samsung Electronics Co., Ltd., et al., United States District Court, Southern District of California, Case No. 13-CV-2740 DMS (NLS), 2015 (Deposition).
Oracle America, Inc. v. Google, Inc., United States District Court, Northern District for California, Case No. 3:10-CV- 03561-WHA, 2011 (Deposition), 2016 (Deposition, Trial Testimony).
SRI International, Inc. v. Cisco Systems, Inc., United States District Court for the District of Delaware, Case No. 13- 1534 (SLR), 2016 (Deposition, Trial Testimony).
14 ChriMar Systems, Inc., et al. v. Cisco Systems, Inc., et al., United States District Court for the District of Northern California, Oakland Division, Case No. 4:13-CV-01300-JSW, 2016 (Deposition).
TCL Communication Technology Holdings, LTD., et al., v. Telefonaktiebolaget LM Ericsson, et al., United States District Court for the Central District of California, Southern Division, Case No. SACV14−00341 JVS (DFMx), 2016- 2017 (Deposition, Trial Testimony).
Chevron North America, Inc., Positec Tool Corporation, Positec USA, Inc. and Hilti, Inc. v. Milwaukee Electric Tool Corporation, United States Patent and Trademark Office Before the Patent Trial and Appeal Board, Case IPR2015- 00595, Case IPR2015-00596, and Case IPR2015-00597, 2016 (Deposition).
Sanofi-Aventis U.S. LLC and Regeneron Pharmaceuticals, Inc. v. Genentech, Inc. and City of Hope, United States District Court, Central District of California, Western Division, Case No. 2:15-CV-05685, 2016 (Deposition).
Irori Technologies, Inc. v. Procopio, Cory, Hargreaves & Savitc, LLP, and Eleanor Musick, JAMS Arbitration Reference No. 1240022033, 2016-2017 (Deposition, Hearing Testimony).
SD3, LLC and SawStop LLC v. Black and Decker (U.S.), Inc., et al., United States District Court for the Eastern District of Virginia, Civil Action No.: 1:14-CV-00191, 2016 (Deposition).
Intellectual Ventures II LLC v. Nextel Operations, Inc., Sprint Spectrum L.P., Boost Mobile LLC, and Virgin Mobile USA, L.P., United States District Court for the District of Delaware, Civil Action No. 13-CV-1635-LPS, 2016 (Deposition).
In Re Lidoderm Antitrust Litigation, United States District Court for the District of Northern California, Case No. 14- MD-02521-WHO, 2016 (Deposition).
The Dow Chemical Company, Dow Global Technologies Inc. and Dow Chemical Canada ULC v. Nova Chemicals Corporation, Federal Court of Canada, Federal Court File No.: T-2051-10, 2016 (Trial Testimony).
In the Matter of: Determination of Rates and Terms for Making and Distributing Phonorecords (Phonorecords III), before the Copyright Royalty Board Library of Congress, Docket No. 16-CRB-0003-PR (2018-2022), 2017 (Deposition, Hearing Testimony).
Intel Corporation v. Future Link Systems, LLC, United States District Court for the District of Delaware, Civil Action No.: 14-377-LPS, 2017 (Deposition).
Joel Simkhai, et al. v. KL Grindr Holdings Inc. et al., American Arbitration Association, Case No. 01-16-0003-7637, 2017 (Deposition).
In Re Capacitors Antitrust Litigation (Indirect), United States District Court for the District of Northern California, San Francisco Division, Case No. 3:14-CV-03264, 2017 (Deposition).
Evolved Wireless, LLC v. HTC Corporation and HTC America, Inc., United States District Court for the District of Delaware, Civil Action No. 15-543-SLR-SLF, 2017 (Deposition).
15 In Re Solodyn (Minocycline Hydrochloride) Antitrust Litigation, United States District Court for the District of Massachusetts, Case No. 1:14-md-02503, 2017 (Deposition).
Boston Scientific Corporation and Boston Scientific Scimed, Inc. v. Edwards Lifesciences Corporation; Edwards Lifesciences Corporation, Edwards Lifesciences PVT, Inc. and Edwards Lifesciences LLC v. Boston Scientific Corporation, Boston Scientific Scimed, Inc., and Sadra Medical, Inc., United States District Court for the District of Delaware, Case No. 16-CV-275 (SLR), 2017 (Deposition), 2018 (Trial Testimony).
Depomed, Inc. v. Purdue Pharma L.P., The P.F. Laboratories, Inc., and Purdue Pharmaceuticals L.P., United States District Court for the District of New Jersey, Civil Action No. 3:13-00571 (BRM/TJB), 2018 (Deposition).
Rembrandt Diagnostics, LP, v. Innovacon, Inc., United States District Court for the Southern District of California, Case No. 16-CV-00698 CAB (NLS), 2018 (Deposition).
Janssen Biotech, Inc. v. Celltrion Healthcare Co., Ltd., Celltrion, Inc., and Hospira, Inc., United States District Court for the District of Massachusetts, Civil Action No. 1:17-CV-11008, 2018 (Deposition).
SPEX Technologies, Inc. v. Apricorn, United States District Court for the Central District of California Southern Division, Case No. 2:16-CV-07349-JVS-AGR, 2018 (Deposition).
Huawei Technologies, Co., Ltd. et al. v. Samsung Electronics Co. Ltd., et al., United States District Court for the Northern District of California, San Francisco Division, Case No. 16-CV-02787-WHO, 2018 (Deposition).
Asustek Computer Incorporated, et al. v. InterDigital, Inc., et al., United States District Court for the Northern District of California, San Jose Division, Case No. 15-CV-1716 BLF, 2018 (Deposition).
Amgen Inc. v. Coherus Biosciences Inc., Superior Court of the State of California, County of Ventura, Case No. 56-2017-00493553-CU-VT-VTA, 2018 (Deposition).
Plexxikon Inc. v. Novartis Pharmaceuticals Corporation, United States District Court for the Northern District of California, Case No. 4:17-CV-04405-HSG (EDL), 2019 (Deposition).
SELECTED MERGER EXPERIENCE
R.R. Donnelley/Meredith Burda (1990-1993): Merger of printing companies. Reviewed by the FTC. Preliminary Injunction Hearing. Part III Hearing.
Kimberly-Clark/Scott (1995): Merger of manufacturers of tissue products. Reviewed by the DOJ and the European Commission.
Staples/Office Depot (1996-1997): Proposed merger of office supply retailers. Reviewed by the FTC. Preliminary injunction hearing.
IMC/Western Ag (1997): Merger of mining companies. Reviewed by the DOJ.
Dow/Union Carbide (1999-2001): Merger of chemical manufacturers. Reviewed by the FTC.
16 Volvo/Scania (2000): Merger of truck manufacturers. Reviewed by the European Commission.
First Data/Concord (2003-2004): Merger of companies involved in merchant acquiring and payment networks. Reviewed by the DOJ.
Bumble Bee/Connors (2004): Merger of canned seafood manufacturers. Reviewed by the DOJ.
Sonaecom/Portugal Telecom (2006): Merger of telecommunications companies. Reviewed by the Portuguese Competition Authority.
Graphic Packaging/Altivity (2007-2008): Merger of paperboard manufacturers. Reviewed by the DOJ.
Inbev/Anheuser-Busch (2008): Merger of beer manufacturers. Reviewed by the DOJ, the UK Competition Commission, and MOFCOM.
Serta/Simmons (2009): Merger of mattress manufacturers. Reviewed by the FTC.
Coty/OPI (2010): Merger of nail polish manufacturers. Reviewed by the DOJ.
Knowles/NXP (2011): Knowles acquired the speaker/receiver business of NXP. Reviewed by MOFCOM.
AT&T/T-Mobile (2011): Consulted for the DOJ regarding the proposed deal between the two wireless service providers.
Confidential engagement for consumer product manufacturer (2012): Consulted for a consumer product manufacturer considering an acquisition with potential overlap in various jurisdictions around the world.
Confidential engagement for consumer product manufacturer (2012): Consulted for a consumer product manufacturer considering an acquisition with potential overlap in numerous product lines in the US.
UPS/TNT (2013): Consulted for the Ministry of Commerce of the People’s Republic of China regarding the proposed deal between two package delivery services.
Thermo Fisher/Life Technologies (2014): Consulted for the Ministry of Commerce of the People’s Republic of China regarding the proposed deal.
Seagate/Samsung (2014-2015): Consulted for Ministry of Commerce of the People’s Republic of China regarding whether “hold separate” conditions should be lifted.
Western Digital/Hitachi (2014-2015): Consulted for Ministry of Commerce of the People’s Republic of China regarding whether “hold separate” conditions should be lifted.
Confidential engagement for consumer product manufacturer (2016): Consulted for a consumer product manufacturer concerning possible acquisition in the US.
17 APPENDIX F Appendix F
Documents Relied Upon
Company-Specific Nonpublic Documents REDACTED
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Court Documents "Determination of Royalty Rates and Terms for Ephemeral Recording and Webcasting Digital Performance of Sound Recordings (Web IV)," Docket No. 14-CRB-0001-WR (2016-2020) ("Web IV"). "Digital Performance Right in Sound Recordings and Ephemeral Recordings," Copyright Royalty Board, Library of Congress, 72 Fed. Reg. 24804 ("Web II"). "Procedural Regulations for the Copyright Royalty Board," Copyright Royalty Board, Library of Congress, 71 Fed. Reg. 59010, October 6, 2006. Broadcast Music, Inc. v. Pandora Media, Inc., 140 F. Supp. 3d 267 (S.D.N.Y. 2015). Determination of Royalty Rates and Terms for Making and Distributing Phonorecords (Phonorecords III), Docket No. 16-CRB-0003-PR (2018-2022). Determination of Royalty Rates and Terms for Transmission of Sound Recordings by Satellite Radio and "Preexisting" Subscription Services" (SDARS III), Docket No. 16-CRB-0001 SR/PSSR (2018-2022). Library of Congress Copyright Office, Determination of Reasonable Rates and Terms for the Digital Performance of Sound Recordings and Ephemeral Recordings, 67 F.R. 45240, July 8, 2002. Library of Congress Copyright Royalty Board, Determination of Royalty Rates for Digital Performance Right in Sound Recordings and Ephemeral Recordings, 79 Fed. Reg. 23102, April 25, 2014.
Page 16 of 18 Library of Congress Copyright Office, Notification of Agreements Under the Webcaster Settlement Act of 2008, 74 Fed. Reg. 9293, March 3, 2009. Library of Congress Copyright Office, Notification of Agreements Under the Webcaster Settlement Act of 2009, 74 Fed. Reg. 34796, July 17. 2009 Library of Congress Copyright Royalty Board, Digital Performance Right in Sound Recordings and Ephemeral Recordings, Final Rule, 37 C.F.R. 380, May 1, 2007. Report of the Copyright Arbitration Royalty Panel to the Librarian of Congress, In the Matter of Rate Setting for Digital Performance Right in Sound Recordings and Ephemeral Recordings Docket No. 2000-9, February 20, 2002 ("Web I ").
Witness Statements Expert Report of John Hauser, September 23, 2019. Written Direct Testimony of Leonard Wheeler, Mel Wheeler, Inc., September 23, 2019. Written Direct Testimony of Robert Willig (SDARS III ). Written Direct Testimony of Steven W. Newberry on Behalf of the National Association of Broadcasters, Determination of Royalty Rates for Digital Performance in Sound Recordings and Ephemeral Recordings (Web IV), 14-CRB-0001-WR (2016-2020). Written Direct Testimony of Steven W. Newberry on Behalf of the National Association of Broadcasters, September 23, 2019, Written Direct Testimony of Tom Poleman on Behalf of iHeartMedia, Inc., September 19, 2019. Written Direct Testimony of Tres Williams on Behalf of iHeartMedia, Inc., September 23, 2019.
Public Documents and Websites "About NSAI," Nashville Songwriters Association International, https://www.nashvillesongwriters.com/about-nsai. "About Us," Association of Independent Music Publishers, https://www.aimp.org/about. "About Us," Global Music Rights, https://globalmusicrights.com/about. "About Us," National Association of Broadcasters, https://www.nab.org/about/. "About Us," Television Music License Committee, https://tvmlc.com/about/. "About," National Music Publishers Association, http://nmpa.org/about/. "As the Audio Landscape Evolves, Broadcasat Radio Remains the King," Nielsen, February 14, 2018, https://www.nielsen.com/us/en/insights/article/2018/as-the-audio-landscape-evolves-broadcast-radio-remains-the-comparable-king/. "Designation of Mechanical Licensing Collective and Digital Licensee Coordinator" U.S. Copyright Office Website summary of the Music Modernization Act, https://www.copyright.gov/rulemaking/mma-designations/ . "KNUC 98.9," Hubbard Radio, https://corporate.hubbardradio.com/markets/seattle/country-989/. "KQMV 92.5 FM," Hubbard Radio, https://corporate.hubbardradio.com/markets/seattle/movin-92-5/. "KSLX 100.7 FM," Hubbard Radio, https://corporate.hubbardradio.com/markets/phoenix/kslx-100-7-fm/. "KUPD 97.9 FM," Hubbard Radio, https://corporate.hubbardradio.com/markets/phoenix/535-2/. "Music in the Marketplace," Better Business Bureau, https://www.bbb.org/council/for-businesses/toolkits/bbb-brochure-music-in-the-market-place. "Our Brands," Hubbard Cincinnati, https://hubbardcincinnati.com/our-brands/. "Our Mission," Radio Music License Committee, http://www.radiomlc.org/. "Publishers Quarterly: UMPG, Sony/ATV Post Strong Results as Lil Nas X and Jonas Brothers Dominate," Billboard, August 9, 2019 "Radio Stations," https://www.melwheelerinc.com/about. "The Digital Millennium Copyright Act of 1998: U.S. Copyright Office Summary," U.S. Copyright Office, December 1998, https://www.copyright.gov/legislation/dmca.pdf "What We Do & Why We Do It," Songwriters Guild of America, https://www.songwritersguild.com/site/index.php/home/about-us. “Agreement Reached on Online Streaming Rates for Local Radio Broadcasters,” NAB Website, February 16, 2009, https://www.nab.org/documents/newsroom/pressRelease.asp?id=1733 17 U.S.C. § 106. 17 U.S.C. § 114. 2018 Sirius XM 10-K. Accuradio website, www.accuradio.com. Aisha Hassan and Dan Kopf, "The reason why your favorite pop songs are getting shorter," October 27, 2018, https://qz.com/quartzy/1438412/the-reason-why-your-favorite-pop-songs-are-getting-shorter/. Al Kohn & Bob Kohn, "Licensing Music in Sound Recordings (Mechanical Licenses)," (Chapter 13), Kohn on Music Licensing, Fourth Edition, 2010 Amy Duvall, "Royalty Rate-Setting for Webcasters: A Royal(ty) Mess," Michigan Telecommunications and Technology Law Review, Vol. 15, Issue 1 (2008) Anne Steele and Tripp Mickle, "Apple Music Overtakes Spotify in Paid U.S. Subscribers," The Wall Street Journal, April 5, 2019, https://www.wsj.com/articles/apple-music-overtakes-spotify-in-u-s-subscribers-11554475924 Aswath Damodaran, Damodaran on Valuation , 2nd Edition, 2006. Brent Kendall and Anne Steele, "Washington Considers Overhaul of Music-Licensing Rules," The Wall Street Journal, February 26, 2019, https://www.wsj.com/articles/washington-considers-overhaul-of-music-licensing-rules-11551182401. Catherine Tucker, "The Economics Value of Online Customer Data," The Economics of Personal Data Privacy, OECD (2010) Copyright and the Music Marketplace: A Report of the Register of Copyrights," U.S. Copyright Office, February 2015. Dana A. Scherer, "Money for Something: Music Licensing in the 21st Century," Congressional Research Service, June 7, 2017. Digital Performance Right in Sound Recordings Act of 1995, Public Law 104-39, November 1, 1995, https://www.congress.gov/104/plaws/publ39/PLAW-104publ39.pdf. Donald S. Passman, All You Need to Know about the Music Business , Eighth Edition, Simon and Schuster, 2013. Glenn Peoples, "The Growing Cost of Music's $9.99 Monthly Price Tag," Billboard, September 20, 2019, https://www.billboard.com/articles/business/8530616/music-streaming-prices-competition-subscribers. iHeart Website, www.iheart.com. Mossoff et al., "De-Regulating the Songwriting Business," Regulatory Transparency Project, February 21, 2019, https://regproject.org/wp-content/uploads/RTP-Intellectual-Property-Working-Group-Paper-Antitrust-Songwriting.pdf. NAB Website, "Agreement Reached on Online Streaming Rates for Local Radio Broadcasters," February 16, 2009, "Pandora Advertisers Can Now Target Based on Artist Affinity," Pandora for Brands Website, September 14, 2017, https://www.pandoraforbrands.com/article/pandora-advertisers-can-now-target-based-on-artist-affinity Pandora Media, Inc. Form 10-K For the fiscal year ended December 31, 2017 Pandora Radio Service, www.pandora.com. RIAA 2018 Year-End Music Industry Revenue Report. RIAA Certification Criteria, http://www.riaa.com/wp-content/uploads/2017/06/ALBUM-AWARD-RIAA-AND-GRF-CERTIFICATION-AUDIT-REQUIREMENTS.pdf. Robert F. Reilly and Robert P. Schweihs, "Research Techniques for an Intellectual Property Economi Analysis," in The Handbook of Business Valuation and Intellectual Property Analysis, 2004. Royalty Exchange, "Mechanical Royalties Guide, 2019," published January 17, 2019, https://www.royaltyexchange.com/blog/mechanical-royalties#sthash.ffbMLqU6.dpbs. SoundExchange Website, "2019 Rates," https://www.soundexchange.com/service-provider/rates/ SoundExchange website, "Licensing 101," online at: https://www.soundexchange.com/service-provider/licensing-101/. Spotify Annual Report, February 12, 2019. Steve Knopper, "YouTube's Billion-Dollar Payout Provides New Revenue for Musicians," Rolling Stone, February 5, 2014. Terry Hart, “A Brief History of Webcaster Royalties,” Copyhype, November 28, 2012, online at: http://www.copyhype.com/2012/11/a-brief-history-of-webcaster-royalties/. Tim Ingham, "The Average Spotify Subscriber Pays $5.50 a Month-and Record Labels Hate It," Rolling Stone, January 11, 2019, https://www.rollingstone.com/music/music-features/the-average-spotify-subscriber-is-paying-5-50-a-month-and-record-labels-hate-it-776925/ Triton Digital website, “Audio Advertising: Industry-Leading Audio Advertising Solutions,” https://www.tritondigital.com/solutions/audio-advertising/details#. U.S. Copyright Office, "Copyright Registration of Musical Compositions and Sound Recordings," Circular 56A, https://www.copyright.gov/circs/circ56a.pdf. Webcaster Settlement Act of 2008, Public Law 110-435, October 15, 2008.
Page 17 of 18 Webcaster Settlement Act of 2009, Public Law 111-36, June 30, 2009. WFHM streaming app, http://player.listenlive.co/56621/en/songhistory. WXLK streaming app, http://v6player.wostreaming.net/1297.
Page 18 of 18
TAB B Before the UNITED STATES COPYRIGHT ROYALTY BOARD LIBRARY OF CONGRESS Washington, D.C.
In the Matter of:
Determination of Rates and Terms for Digital Performance of Sound Recordings and Making of Ephemeral Copies to Docket No. 19-CRB-0005-WR (2021-2025) Facilitate those Performances (Web V)
WRITTEN DIRECT TESTIMONY OF PROFESSOR JOHN R. HAUSER
NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Table of Contents
I. Introduction ...... 1 A. Qualifications ...... 1 B. Assignment ...... 4 II. Summary of Opinions ...... 5 III. Survey Design ...... 7 A. Qualitative Interviews ...... 7 B. Survey Instrument Overview ...... 10 1. Screening Questions...... 10 2. Main Survey ...... 12 C. Principles of Survey Design...... 18 1. Attention Checks ...... 18 2. Double-Blind Design ...... 20 3. Filters ...... 22 4. Rotation or Randomization of Response Options ...... 25 D. Survey Pretest ...... 26 IV. Survey Administration ...... 31 A. Use of the Internet for the Survey ...... 31 B. Survey Rollout ...... 34 V. Analysis of Survey Results ...... 36 A. Overview of Qualified Survey Responses ...... 36 1. Analysis of Time Taken to Complete the Survey ...... 37 2. Quality Control by the Exclusion Based on Inconsistent or Unlikely Responses ...... 38 3. Consistency of Survey Findings ...... 40 B. Survey Results ...... 43 1. Hours Spent Listening to Internet Simulcasts of Terrestrial Commercial Radio ...... 43 2. Content to Which Respondents Listened on Internet Simulcasts of Terrestrial Commercial Radio ...... 44 3. Alternatives to Internet Simulcasts of Terrestrial Commercial Radio . 48 VI. Summary ...... 5 3
NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) I. Introduction
A. Qualifications
1. I am the Kirin Professor of Marketing at the Massachusetts Institute of
Technology (“MIT”) Sloan School of Management. My research and teaching at MIT Sloan focus on marketing management, new product and service development, consumer satisfaction, marketing research, research methodology, and competitive marketing strategy.
My research includes the evaluation of consumer decision-making, product and service development, customer satisfaction incentives, methods to identify the voice of the customer, methods to obtain customer feedback, customized communications, determination of relative feature preferences and implicit product valuations, and the use of machine learning to improve customer input. I have conducted research on consumer products and services in intellectual property and false advertising in multiple industries, including satellite and online radio and music services as well as online retail, fashion, and luxury goods. I have evaluated the factors that influence consumer purchasing decisions, consumer preferences, and consumer impressions in a variety of matters related to pricing, distribution, and advertising.
I have published about the use of conjoint analysis and other methods to measure consumers’ willingness to pay for and willingness to buy product and service features.
2. I have testified on matters related to my research, which includes retail products, technology products, digital services, and media services. My testimony history includes, but is not limited to, matters on behalf of SiriusXM, Comcast, Dish Network, TiVo,
We: Woman’s Entertainment, Louis Vuitton, Apple Inc., Microsoft, Johnson & Johnson,
Mozilla, Uber, and Procter & Gamble. My testimony in these matters has addressed switching behavior, trademark infringement, patent infringement, price sensitivity, and false
1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) advertising, among other issues. In addition, I have provided strategic, market-research- based consulting to numerous consumer products, technology/software, and durable goods manufacturers, including American Airlines, Johnson & Johnson, IBM, Procter & Gamble,
Fidelity Investments, Pacific Gas & Electric Company, Ford Motor Company, General
Motors, and Chrysler.
3. I have served as Editor-in-Chief of Marketing Science and have held senior editorial positions with Management Science, the Journal of Marketing Research, and the
Journal of Product Innovation Management. I have received numerous awards for excellence in marketing research and teaching. I am the recipient of the Paul D. Converse
Award for “outstanding contributions to marketing scholarship,” awarded by the American
Marketing Association.1 In 2001, I received the Charles Coolidge Parlin Award, a
“preeminent national honor . . . [awarded for] outstanding leadership and sustained impact on advancing the evolving profession of marketing research over an extended period of time,” from the American Marketing Association.2 In 2011, I received the Gil Churchill Lifetime
Achievement Award of the American Marketing Association for contributions to marketing research.3 In 2013, I was awarded the Buck Weaver Award by the Institute for Operations
Research and the Management Sciences (“INFORMS”) Society for Marketing Science
(“ISMS”), for lifetime contributions to the theory and practice of marketing science.4 I am a
1 “18th Paul D. Converse Marketing Symposium,” University of Illinois at Urbana-Champaign, available at http://www.business.illinois.edu/converse/generalinfo.html. 2 “Charles Coolidge Parlin Marketing Research Award,” American Marketing Association, available at https://www.ama.org/AboutAMA/Pages/Parlin-Award.aspx. 3 “Awards: Marketing Research SIG,” American Marketing Association, available at https://www.ama.org/awards-marketing-research-sig/. 4 “Buck Weaver Award,” INFORMS, available at https://www.informs.org/Recognizing- Excellence/Community-Prizes/Marketing-Science-Society/Buck-Weaver-Award.
2 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Fellow of INFORMS and an Inaugural Fellow of the ISMS.5 I have also served as President of ISMS and as a Trustee of the Marketing Science Institute. In 2016, I was awarded an honorary doctorate (Doctor Honoris Causa) from the Erasmus School of Economics,
Erasmus University.
4. I am the co-author of two textbooks, Design and Marketing of New Products and Essentials of New Product Management, as well as more than one hundred articles, papers, and books, including professional articles in which I administered and analyzed surveys about consumer decision-making. In these professional articles, I used marketing research to determine the importance of product (or service) features in consumer decision- making, determine consumer responses to changes in price and positioning of products or services, and to understand how the use of customer satisfaction measures promotes better management. I have developed market research techniques that enable marketing researchers, experts, and managers to predict the value of individual features in both existing and hypothetical products and to predict how consumers will respond in the marketplace.
These methods have been employed numerous times by academic researchers, as well as practitioners from major international corporations. Many of the papers I have co-authored have been recognized with national and international awards.6
5 “INFORMS Fellows: Class of 2006,” INFORMS, available at https://www.informs.org/Recognizing- Excellence/Fellows/INFORMS-Fellows-Class-of-2006; “Leading Market Researchers Honored as Inaugural INFORMS Marketing Fellows,” INFORMS, available at https://www.informs.org/About-INFORMS/News- Room/Press-Releases/Leading-Market-Researchers-Honored-as-Inaugural-INFORMS-Marketing-Fellows. 6 Toubia, Olivier, John R. Hauser, and Duncan I. Simester, “Polyhedral Methods for Adaptive Choice-Based Conjoint Analysis,” Journal of Marketing Research 41, 1, 2004, pp. 116–131; Yee, Michael, Ely Dahan, John R. Hauser, and James Orlin, “Greedoid-Based Noncompensatory Inference,” Marketing Science 26, 4, 2007, pp. 532–549; Toubia, Olivier, Duncan I. Simester, John R. Hauser, and Ely Dahan, “Fast Polyhedral Adaptive Conjoint Estimation,” Marketing Science 22, 3, 2003, pp. 273–303; Dahan, Ely and John R. Hauser, “The Virtual Customer,” Journal of Product Innovation Management 19, 5, 2002, pp. 332–353; Toubia, Olivier, John Hauser, and Rosanna Garcia, “Probabilistic Polyhedral Methods for Adaptive Choice-Based Conjoint Analysis: Theory and Application,” Marketing Science 26, 5, 2007, pp. 596–610.
3 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 5. My curriculum vitae is attached as Appendix A, and my testimony at deposition or trial within the last five years is attached as Appendix B.
B. Assignment
6. I was retained by Latham & Watkins, counsel for the National Association of
Broadcasters (“NAB”), to conduct an Internet survey as part of the Determination of Royalty
Rates and Terms for Ephemeral Recording and Digital Performance of Sound Recordings
(“Web V”) proceedings. It is my understanding that the Web V proceedings will “determine reasonable rates and terms for two statutory licenses permitting the digital performance of sound recordings over the internet and the making of ephemeral recordings to facilitate those performances for the period beginning January 1, 2021, and ending December 31, 2025.”7 In particular, I was asked to design and conduct a survey to determine how much consumers listen to Internet simulcasts of terrestrial commercial radio, as well as to what content they listen, and the importance of that content to consumers. I was also asked to determine what consumers would do in place of listening to Internet simulcasts of terrestrial commercial radio if such simulcasts were not available for the next five years.
7. The “Simulcast Switching Survey” I conducted was based on scientific principles and was executed according to those principles. In undertaking this assignment, I utilized my extensive expertise in developing, testing, and analyzing surveys, as well as my experience in interpreting qualitative and quantitative research about consumer attitudes, intentions, and behavior. I include, as Appendix C to this report, a list of materials I have relied upon to date in connection with this particular assignment. To the extent that I review additional information after this report is filed, I will supplement this list.
7 “Determination of Rates and Terms for Digital Performance of Sound Recordings and Making of Ephemeral Copies to Facilitate Those Performances (Web V),” Federal Register, January 24, 2019, available at https://www.federalregister.gov/d/2019-00102.
4 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 8. I am being compensated at my standard billing rate of $950 per hour. I have been assisted in this matter by staff of Cornerstone Research, who worked at my direction. I receive compensation from Cornerstone Research based on its collected staff billings for its support of me in this matter. Neither my compensation in this matter nor my compensation from Cornerstone Research is in any way contingent or based on the content of my opinion or the outcome of this or any other matter.
9. Part of the survey work for this investigation was performed at my direction by Applied Marketing Science (“AMS”), a market research and consulting firm. I am a
Senior Consultant to and Co-Founder of AMS. I am a minority stockholder in AMS.
AMS’s fees are not contingent or based on the content of my opinion or the outcome of this or any other matter.
II. Summary of Opinions
10. An Internet survey was conducted under my direction between September 4,
2019 and September 13, 2019 to measure what consumers would do in place of listening to
Internet simulcasts of terrestrial commercial radio if such simulcasts were not available for the next five years. The survey also determined consumers’ listening behavior with respect to Internet simulcasts of terrestrial commercial radio including (1) how much they listen, (2) to what content they listen, and (3) the importance of that content to consumers. The survey was designed and executed carefully following scientific guidelines for surveys conducted for academic, commercial, and litigation purposes. The survey was pretested carefully to assure that the questions are understood by respondents and that the survey provides reliable data.
The survey is based on a representative sample of respondents who listen to Internet simulcasts of terrestrial commercial radio. The data were analyzed according to scientific
5 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) principles and reported accurately. I conducted several analyses to verify the quality of the survey responses, resulting in an analysis sample of 501 respondents.
11. The results of the survey demonstrate that respondents listened to an average of 5.3 hours of Internet simulcasts of terrestrial commercial radio over the three days prior to taking the survey (approximately 1¾ hours per day). During these listening hours, respondents listened to a variety of types of content, and varied in the degree to which each type of content was important to them. Of the analysis sample of 501 respondents, 256
(51.1 percent) indicated music was very important, 185 (36.9 percent) indicated news, weather, and traffic was very important, 123 (24.6 percent) indicated talk content was very important, 99 (19.8 percent) indicated sports content was very important, 45 (9.0 percent) indicated comedy was very important, 22 (4.4 percent) indicated religious content was very important, and 18 (3.6 percent) indicated that kids and family content was very important.
12. If Internet simulcasts of terrestrial commercial radio were unavailable for five years, respondents reported that they would consider a variety of alternatives to such simulcasts. On average, respondents indicated that they would consider 12.6 alternatives.
13. When asked to select one alternative to listening to Internet simulcasts of terrestrial commercial radio based on the most recent time they listened to such simulcasts, respondents were most likely to select that they would listen to terrestrial broadcasts of commercial radio.8 Of the analysis sample of 501 respondents, 127 (25.3 percent) selected terrestrial broadcasts of commercial radio. Other alternatives selected included listening to on-demand music streaming services through paid subscriptions respondents already had,
8 By varying the time of day and day of week that the survey was released to respondents and by sampling the last three days, I obtained a random sample in time of consumers’ listening behavior. By then selecting the most recent listening experience, I obtained a random sample in time of listening experiences. In addition, the inbound sample was balanced to the U.S. Census and then screened to obtain a random sample of consumers who listen to Internet simulcasts of terrestrial commercial radio.
6 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) selected by 37 respondents (7.4 percent), and watching video content that respondents already purchased, or to which they subscribed or had access, selected by 37 respondents (7.4 percent). These results are robust to different approaches to analyzing the data, such as reweighting the results based on the amount of time respondents spent listening to Internet simulcasts of terrestrial commercial radio in the past three days, reweighting to reflect an equal number of click-ins per day, and testing for differences in the result based on demographic characteristics of different respondents.
III. Survey Design
14. In designing this survey, I followed standard scientific methods to maximize the reliability of the survey instrument. My survey design adopted the scientific guidelines for surveys conducted for academic, commercial, and litigation purposes.9 Here I describe the steps taken to develop the survey instrument, including conducting qualitative interviews, developing the questions, implementing standard scientific principles of survey design, and evaluating (or “pretesting”) the survey.
A. Qualitative Interviews
15. Surveys should use language that respondents find relevant and easy to understand. If the questions of interest are ambiguous or otherwise unclear, the results of the survey may be distorted due to guessing or misunderstanding on the part of the respondent.
16. To develop an understanding of how individuals listen to Internet simulcasts of terrestrial commercial radio and how they describe their listening, I instructed Cornerstone
Research and AMS to conduct in-depth qualitative interviews. Qualitative interviews are
9 See, e.g., many of the recommendations in Diamond, Shari S., “Reference Guide on Survey Research,” in Reference Manual on Scientific Evidence, Third Edition, Washington, D.C.: Federal Judicial Center and National Research Council of the National Academies, 2011, pp. 359–423, available at https://www.fjc.gov/content/reference-guide-survey-research-2.
7 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) one-on-one discussions between a trained interviewer and a customer, subscriber, or potential subscriber of a product or service. In these qualitative interviews, the interviewer encourages the respondent to talk about the respondent’s experiences in choosing and using the product or service of interest. The interviewer listens carefully to the words and phrases used by the respondent and asks questions to understand the respondent’s thought process.
17. At my direction, AMS and Cornerstone Research conducted fifteen qualitative interviews between July 1, 2019 and July 15, 2019 by telephone.10 Cornerstone Research communicated to me orally the findings of these interviews, including the words and phrases respondents used to describe Internet simulcasts of commercial terrestrial radio. These findings informed the wording of the questions and response options in the survey instrument.
18. I instructed AMS to interview these fifteen listeners of Internet simulcasts of terrestrial commercial radio on four main topics. First, interviewees were asked to describe their Internet simulcast listening including where they access content, the devices they use to access content, the reasons they listen to Internet simulcasts, and how they perceive listening to Internet simulcasts as different from other types of listening. Second, interviewees were asked to what they listen when they listen to Internet simulcasts including whether they listen to specific shows or content, whether they listen with others, and how much they listen.
Third, interviewees were asked if they were aware of other ways of accessing the same content they listen to via Internet simulcast and, if so, why they do or do not listen in those other ways. Fourth, interviewees were asked what they would do if they could not listen to
Internet simulcasts of terrestrial commercial radio.
10 Qualitative interview respondents were recruited from ROIRocket from individuals who indicated in an online form that they listened to Internet simulcasts of terrestrial radio within the past week. See ROIRocket, available at www.roirocket.com.
8 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 19. The findings from the qualitative interviews informed the survey questions, response options, and descriptions. Interviewees described accessing Internet simulcasts from a radio station’s website or through platforms such as iHeartRadio or TuneIn. They described their experiences listening to similar content with reference to several means of listening other than Internet simulcasts, such as streaming services, satellite radio, and
AM/FM broadcasts through radios. These findings were used to inform the definitions provided in the survey, for example, the question labeled “QINTRO.”11 Interviewees also described listening to a variety of types of audio content on Internet simulcasts, including music, talk, and sports. This finding was used when I created the list of response options in
Q2.12 In addition, interviewees described a number of different activities they would do if they could not listen to Internet simulcasts of terrestrial commercial radio, including listening to music through paid and ad-supported streaming services, listening to podcasts, watching television or movies, and reading news on their computers or smartphones. I used these responses to inform the list of alternatives for Q4 of the survey instrument.13
20. When crafting the survey instrument, I used the words and phrases respondents used during these qualitative interviews. Qualitative interviews revealed that respondents were not familiar with the terms “simulcast” or “simulcasting,” nor were many of them familiar with the term “terrestrial radio.” Respondents understood the phrase “live radio broadcasts over the Internet” to describe Internet simulcasts of terrestrial radio. As a result, instead of using the term “simulcast” in the survey instrument, I used “live AM/FM radio broadcasts over the Internet.”14 Another finding from the qualitative interviews is that
11 The survey questionnaire with programming instructions is included as Appendix D. See Appendix D, QINTRO. 12 See Appendix D, Q2. 13 See Appendix D, Q4. 14 See, e.g., Appendix D, QINTRO.
9 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) respondents used the word “content” to describe the audio material that they access via simulcast or other means. This informed the way I framed response options in survey questions QS9, QS10, and Q4 and the way I phrased survey questions such as QS10, Q2, and
Q3.15
B. Survey Instrument Overview
21. In this section, I describe the survey questionnaire. The survey questionnaire with programming instructions is included as Appendix D to this report, and screenshots of the programmed survey questionnaire are included as Appendix E to this report.
1. Screening Questions
22. An important component of survey design is defining the relevant target population of interest for the survey.16 The target population in this matter is United States residents over the age of 18 who listen to Internet simulcasts of terrestrial commercial radio broadcasts. Once the target population has been defined, introductory or “screening” questions identify whether sampled individuals meet the criteria for inclusion.17
23. I used demographic criteria such as geographic region, sex, and age group to balance the incoming sample against the U.S. Census. These variables, along with education level, were also used to validate responses against the demographic information that the
15 See, Appendix D, QS9, QS10, Q2, Q3, Q4. 16 Diamond, Shari S., “Reference Guide on Survey Research,” in Reference Manual on Scientific Evidence, Third Edition, Washington, D.C.: Federal Judicial Center and National Research Council of the National Academies, 2011, pp. 359–423, available at https://www.fjc.gov/content/reference-guide-survey-research-2, at pp. 376–377. 17 Diamond, Shari S., “Reference Guide on Survey Research,” in Reference Manual on Scientific Evidence, Third Edition, Washington, D.C.: Federal Judicial Center and National Research Council of the National Academies, 2011, pp. 359–423, available at https://www.fjc.gov/content/reference-guide-survey-research-2, at pp. 386–387.
10 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) respondents previously reported.18 In addition, participants could not be employed by (or have a member of their household who was employed by) a radio broadcasting company, an
Internet audio streaming company, or a market research company or public relations agency, and could not have taken a survey related to music services or radio broadcasting in the past six months.19 These screens are standard security questions and do not bias the results.
24. To evaluate whether respondents engaged in the behavior of interest in this study, that is, listened to Internet simulcasts of terrestrial commercial radio, I first asked respondents about the types of media-related activities in which they recently engaged. This enabled me to identify respondents who listened to music and/or non-music content.20
25. I then provided respondents with definitions of different ways respondents may listen to content. Because the different ways of listening are closely related, it is important to ensure that respondents understand the different terms used in the survey to describe those activities. The terms and definitions in the survey were developed based on the initial qualitative interviews, and were then refined based on feedback from the pretest interviews, which are discussed below. In particular, I determined that “live AM/FM radio broadcasts over the Internet” was understood by respondents to refer to Internet simulcasts of terrestrial radio.
26. After respondents read the definitions for the different ways of listening to music and non-music content, I asked respondents to select the ways in which they listened to music and non-music content. The purpose of this question was to restrict the sample to
18 See Appendix D, QS1–QS4. 19 See Appendix D, QS7–QS8. 20 See Appendix D, QS9.
11 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) respondents who listened to Internet simulcasts of terrestrial radio.21 Finally, I asked respondents to indicate whether the stations to which they listen via Internet simulcasts of terrestrial radio were non-profit or commercial.22 Respondents’ answers to these questions allowed me to include only qualified respondents in the survey.
27. After responding to the initial screening questions and being identified as a member of the target population, qualified respondents proceeded to the main portion of the survey.23 Respondents’ answers to the questions in the main portion of the survey provided the basis for my analysis and opinions.
2. Main Survey
a) Hours Spent Listening to Internet Simulcasts of Terrestrial
Commercial Radio
28. Respondents who qualified for the main portion of the survey were first asked to approximate the total number of hours they spent listening to Internet simulcasts of terrestrial commercial radio over the prior three days.24 I asked respondents to report their listening over the prior three days because the pretests (discussed below) assured that three days is a reasonable amount of time over which people can remember their behavior. The survey was set up so that respondents were asked to provide a whole number answer to this question using a text box that appeared on the screen.25 AMS probed respondents in both the qualitative interviews discussed earlier, and the pretests discussed later, to determine that
21 See Appendix D, QS10. 22 See Appendix D, QS11. 23 For the screening questions, see Appendix D, QS0–QS11. For the main survey questions, see Appendix D, Q1–Q5. 24 See Appendix D, Q1a. 25 The survey was designed so that respondents who provided an answer larger than 48 hours, which would correspond to 16 hours of listening per day, would be reminded that there are 72 hours in three days and asked to confirm or update their answer. This probe would help ensure that respondents understood the question and provided accurate responses. No respondent provided an answer larger than 48 hours in the survey, so no respondent received this prompt.
12 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) respondents could recall their listening over three days. The interviews helped determine that longer periods—for example, seven days—would likely be too long for respondents to remember listening accurately.
b) Content to Which Respondents Listened on Internet
Simulcasts of Terrestrial Commercial Radio
29. Respondents were next asked to specify the types of content to which they listened via Internet simulcasts of terrestrial commercial radio over the prior three days.26
Respondents made selections from choices including music and non-music categories. The list of choices in Q2 was developed from the qualitative interviews, and from research into the types of content available on Internet simulcasts of terrestrial commercial radio. For example, TuneIn Radio, a platform for listening to Internet simulcasts of terrestrial commercial radio, summarizes its categories of content as Sports, Music, and News.27
Another platform for listening to Internet simulcasts of terrestrial commercial radio, iHeartRadio, includes genres such as Comedy, Kids & Family, and News & Talk, among numerous different types of music content.28 The list of choices was refined in response to pretest respondents’ descriptions of the content to which they listen. To ensure that respondents were not biased by the choices presented, they were also permitted to fill a text box for “other content” or to answer “don’t know/unsure.”
30. Respondents who indicated they listened to at least one type of content over the prior three days were shown a subsequent question asking them to specify the importance of each of these types of content.29 For each type of content to which a respondent indicated
26 See Appendix D, Q2. 27 See TuneIn, available at https://tunein.com/. 28 See iHeartRadio, “Genre” dropdown menu, available at https://www.iheart.com/live/country/US/. 29 See Appendix D, Q3.
13 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) that he or she listened, he or she was asked to indicate whether that type of content was “very important,” “somewhat important,” or “not important” to the respondent when he or she was listening to Internet simulcasts of terrestrial commercial radio over the prior three days.
Respondents were also given the option of “don’t know/unsure” for each type of content.
c) Alternatives to Internet Simulcasts of Terrestrial
Commercial Radio
31. To measure what listeners of Internet simulcasts of terrestrial commercial radio would do if those simulcasts were no longer available, I first asked respondents to indicate what they would consider doing, if anything, if Internet simulcasts of terrestrial commercial radio were no longer available for the next five years.30 Specifically, respondents were presented with a list of alternative activities and, for each alternative activity, each respondent was asked to specify whether he or she “would consider” or “would not consider” that alternative activity. Pretests confirmed that respondents were aware they could choose “would not consider” for all alternative activities, if the respondent would not consider doing anything in place of listening to Internet simulcasts of terrestrial commercial radio. Respondents were also aware that they could enter additional options in the “other” category and that they could also select “don’t know/unsure” for each individual alternative activity.
32. The alternative activities in the list were generated from the qualitative interviews, which explored what listeners of Internet simulcasts of terrestrial commercial radio considered as substitutes for listening to Internet simulcasts, and augmented with
30 See Appendix D, Q4.
14 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) additional background research into the different ways in which respondents may access different types of content.31 The activities and the descriptions of the activities were refined based on feedback received during survey pretests. Pretests assured that respondents viewed the list of alternative activities as comprehensive. To ensure that respondents could flexibly indicate what they considered as substitutes for Internet simulcasts of terrestrial commercial radio, respondents were also provided the option of filling additional activities into a text box.
33. For listening activities that require subscriptions, I provided examples of the potential price for each subscription so that respondents would be aware of the cost of choosing that option as a potential substitute. I provided both monthly and annualized example prices so respondents could more easily consider the cost of each option over the five-year period during which Internet simulcasts of terrestrial commercial radio were not available as posed hypothetically in the survey. Prices provided in these response options were based on the modal (non-zero) monthly subscription prices for on-demand music streaming services and not-on-demand music streaming services.32 Prices provided for satellite radio were based on monthly subscription prices charged by SiriusXM. Survey language reinforced, in words and phrases the respondents could understand, that the prices were examples rather than an exhaustive list of potential prices. And, indeed, pretests confirmed that respondents understood that these were example prices.
31 See, e.g., Edison Research & Triton Digital, “The Infinite Dial – The Heavy Radio Listeners Report,” April 2018, available at https://www.edisonresearch.com/heavy-radio-listeners-new-insights-from-the-infinite-dial, p. 8; Edison Research & Triton Digital, “The Infinite Dial 2019,” 2019, available at https://www.edisonresearch.com/infinite-dial-2019/, p. 30. 32 See Appendix F for details.
15 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 34. To determine which one activity each respondent would do in place of listening to Internet simulcasts of terrestrial commercial radio, I asked a focused question of respondents who selected “would consider doing” for at least one activity.33 The purpose of this question was for respondents to choose one activity they would do in place of Internet simulcasts of terrestrial commercial radio. In order to draw statistical inferences about the population of listeners of Internet simulcasts of terrestrial commercial radio, I designed the question so that I obtained an unbiased sample of the object of interest. In this case, I sought to sample the percentage of respondents who would do a particular activity in place of listening to Internet simulcasts of terrestrial commercial radio.
35. Each respondent was asked to “think about the most recent time” the respondent listened to Internet simulcasts of terrestrial commercial radio.34 Once the respondent was focused on his or her most recent instance of listening, the respondent was asked “which one of the following” the respondent would do in place of listening to Internet simulcasts of terrestrial commercial radio. Each respondent was presented with the activities for which he or she selected “would consider doing” in the prior question.35 Pretests assured that respondents found this list of alternatives to be comprehensive, and that they understood that they were asked to choose a single alternative. Respondents were permitted to indicate
“don’t know/unsure.”
36. I asked respondents to consider the most recent time they listened to Internet simulcasts of terrestrial commercial radio so that the responses to this question will give an unbiased estimate of the distribution of activities respondents would do in place of Internet
33 Respondents who selected “would consider” for none of the options and who did not write an answer into the text box succeeding “I would consider doing the following instead” were sent to the end of the survey. 34 See Appendix D, Q5. 35 See Appendix D, Q5.
16 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) simulcasts of terrestrial commercial radio. Assuming that the time at which respondents click on survey invitations is uncorrelated with the most recent time they listened to Internet simulcasts of terrestrial commercial radio, the most recent time respondents listened to an
Internet simulcast of terrestrial commercial radio is a random draw in time from the distribution of all instances of listening to Internet simulcasts of terrestrial commercial radio.36 Because the survey sample as a whole will consist of random draws from the distribution of listening to Internet simulcasts of terrestrial commercial radio, the responses to this question will be an unbiased estimator of the activities respondents would do in place of listening to Internet simulcasts of terrestrial commercial radio.
37. A simple example illustrates the importance of asking about a random sample of listening instances. Suppose all respondents’ listening behavior is such that they would listen to terrestrial commercial radio as a substitute for 60 percent of their listening to Internet simulcasts of terrestrial commercial radio, but would listen to on-demand music streaming services as a substitute for the remaining 40 percent of their listening to Internet simulcasts of terrestrial commercial radio. If I were to ask respondents which one activity they would do in place of most of their listening, 100 percent of respondents would choose terrestrial commercial radio. However, assuming that the listening is reasonably randomly distributed, when asked about the most recent time they listened, 60 percent of respondents in the example would indicate that they would listen to terrestrial commercial radio, while 40 percent would indicate on-demand music streaming services as a substitute. As a result, by sampling randomly with respect to time and by asking about the most recent instance of listening, the responses provide a complete and unbiased estimate of the distribution of
36 Two variables are said to be uncorrelated if, on average, a change in one variable implies no change in the other variable. See Casella, George and Roger L. Berger, Statistical Inference, Second Edition, Belmont, CA: Brooks/Cole Cengage Learning, 2002, p. 169.
17 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) activities respondents consider as substitutes for Internet simulcasts of terrestrial commercial radio.
38. After answering this question, respondents were sent to the end of the survey and presented with a thank you message.
C. Principles of Survey Design
39. My survey design adopted standard scientific methods to maximize the reliability of the survey instrument. I included “attention checks” to verify that respondents read the survey questions carefully. I used a “double-blind” methodology and included question and response options unrelated to the study’s objective to avoid unintended biases or
“demand artifacts.”37 I used “filters,” and randomization or rotation of response options
(when appropriate).
1. Attention Checks
40. In scientific survey practice, it is appropriate to include questions in a survey instrument that test whether respondents are sufficiently engaged in the survey to provide reliable and accurate answers. Such questions are known as “attention checks.” I included two attention checks in the screening questions to eliminate respondents who were not paying attention to the survey.
41. The first attention check was included as QS6 in the screening questions, and asked respondents to select “Lenovo” from a list of computer, tablet, and smartphone brand
37 Demand artifacts are aspects of a study that influence research results based on the chosen survey procedure and not phenomenon under study. Demand artifacts are analogous to leading questions asked to a witness during testimony. For a discussion of demand artifacts, see, e.g., Sawyer, Alan G., “Demand Artifacts in Laboratory Experiments in Consumer Research,” Journal of Consumer Research 1, 4, 1975, pp. 20–30; Shrimp, Terence A., Eva M. Hyatt, and David J. Snyder, “A Critical Appraisal of Demand Artifacts in Consumer Research,” Journal of Consumer Research 18, 3, 1991, pp. 273–283.
18 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) options, regardless of what brand computer, tablet, or smartphone they were using.38 The second check was included in QS9, which asked respondents to select which activities they engaged in over the last three days.39 One of the response options included in this list of options is “I watched on-demand holographic telecast(s).” Because this type of media is unavailable, respondents who read and answered the question carefully should not indicate that they have done this activity in the last three days. This serves as an additional way to confirm that respondents are paying attention and providing thoughtful responses to the survey questions. The second check, QS9, also serves to eliminate any respondents who are prone to checking every option or checking many options.
42. I included a prompt in the main part of the survey to ensure that respondents are thinking carefully about the questions asked. In Q1a, I asked respondents to report the total number of hours they listened to Internet simulcasts of terrestrial commercial radio over the past three days. If a respondent had indicated that he or she listened to more than 48 hours of such broadcasts over the last three days (more than 16 hours per day), the respondent would have been reminded that there are a total of 72 hours in three days, and would have been asked to either confirm or update their response to the question. (It is possible that a respondent might have listened to an Internet simulcast in the background continuously while the respondent is awake, but I expect such instances to be rare.) For respondents who were prompted to confirm or update their response to this question, both responses would have
38 See Appendix D, QS6. 39 See Appendix D, QS9.
19 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) been recorded in the survey data.40 No respondent answered more than 48 hours, so this contingency was not needed.
2. Double-Blind Design
43. Scientific survey practice avoids indicating the sponsor and/or purpose of the survey to ensure respondents’ objectivity. According to the Reference Manual on Scientific
Evidence, “the survey instrument should provide no explicit clues [(e.g., a sponsor’s letterhead appearing on the survey)] or implicit clues [(e.g., reversing the usual order of the yes and no response boxes on the interviewer’s form next to a crucial question, thereby potentially increasing the likelihood that no will be checked)] about the sponsorship of the survey or the expected responses.” The goal of the survey design is to make the respondent
“blind” to the sponsor and purpose of the survey.41
44. It is important to conceal the sponsor and purpose of the survey from respondents in order to avoid demand artifacts. Demand artifacts are aspects of a study that influence research results based on the chosen survey procedure, and not the phenomenon under study. Demand artifacts are analogous to leading questions asked to a witness during testimony. I used the standard and accepted scientific survey-research procedures to identify, and if necessary, eliminate or at least minimize demand artifacts. Because of these steps, the answers provided by respondents are not biased due to any demand artifacts.42
40 See, e.g., Diamond, Shari S., “Reference Guide on Survey Research,” in Reference Manual on Scientific Evidence, Third Edition, Washington, D.C.: Federal Judicial Center and National Research Council of the National Academies, 2011, pp. 359–423, available at https://www.fjc.gov/content/reference-guide-survey- research-2, at p. 394. 41 See, e.g., Diamond, Shari S., “Reference Guide on Survey Research,” in Reference Manual on Scientific Evidence, Third Edition, Washington, D.C.: Federal Judicial Center and National Research Council of the National Academies, 2011, pp. 359–423, available at https://www.fjc.gov/content/reference-guide-survey- research-2, at pp. 410–411. 42 See, e.g., Sawyer, Alan G., “Demand Artifacts in Laboratory Experiments in Consumer Research,” Journal of Consumer Research 1, 4, 1975, pp. 20–30; Shrimp, Terence A., Eva M. Hyatt, and David J. Snyder, “A Critical Appraisal of Demand Artifacts in Consumer Research,” Journal of Consumer Research 18, 3, 1991, pp. 273– 283.
20 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 45. The design and administration of my survey can be characterized as double- blind. Because the survey was administered via the Internet, respondents were not exposed to human interviewers, thereby eliminating the possibility of an interviewer communicating the sponsor or purpose of the survey and influencing the outcome (intentionally or not). An
Internet-based survey avoids demand artifacts that might be induced by means of intonation or facial expressions during the delivery of particular questions or answers. An Internet- based survey removes, or at least greatly diminishes, any “interviewer bias” which may arise from the desire of the respondents to please, displease, or impress the interviewer.
46. To ensure that respondents were unaware of the sponsor and purpose of the survey, I was careful not to convey information in the introductory or screening questions that would influence responses to the main survey or otherwise provide respondents with information that otherwise would not occur to them.43 One way in which this can be accomplished is to include unrelated response options in closed-ended respondent qualification questions which serves to distract respondents from an item of interest.44 Such questions and response options help to conceal from the respondents the intention of the survey and to minimize the potential for demand artifacts. For example, if a survey is conducted to determine whether respondents might be interested in a specific genre of novels, the survey can ask the respondent to choose the genres in which he or she is interested from a
43 See, e.g., Diamond, Shari S., “Reference Guide on Survey Research,” in Reference Manual on Scientific Evidence, Third Edition, Washington, D.C.: Federal Judicial Center and National Research Council of the National Academies, 2011, pp. 359–423, available at https://www.fjc.gov/content/reference-guide-survey- research-2, at pp. 386–387; Smith, Dylan M., Norbert Schwarz, Todd R. Roberts, and Peter A. Ubel, “Why are You Calling Me? How Study Introductions Change Response Patterns,” Quality of Life Research 15, 2006, pp. 621–630. 44 “Closed-ended” questions provide the respondent with a set of potential response options from which to choose. These are distinct from “open-ended” questions, which allow the respondent to formulate his/her own answers. For a discussion of closed-ended and open-ended questions, see Diamond, Shari S., “Reference Guide on Survey Research,” in Reference Manual on Scientific Evidence, Third Edition, Washington, D.C.: Federal Judicial Center and National Research Council of the National Academies, 2011, pp. 359–423, available at https://www.fjc.gov/content/reference-guide-survey-research-2, at pp. 391–394.
21 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) set of genre options including the genre of interest. The other genres within the option set mask the target of the survey, and therefore serve to distract the respondent from the purpose of the study.
47. I took several steps in the survey to minimize demand artifacts. For example,
I included media activities in QS9 that are done by watching and reading, as well as by listening. These activities masked that the purpose of the survey was to evaluate how respondents might substitute away from listening to Internet simulcasts of terrestrial commercial radio.45 Similarly, in QINTRO and QS10, I described and provided a variety of ways in which respondents might listen to music or non-music content other than “live
AM/FM radio broadcasts over the Internet,” including on-demand music streaming services, not-on-demand music streaming services, and satellite radio.46 A similar set of options was included in the main part of the survey instrument, both to mirror the options provided in
QS9 and QS10, and to avoid suggesting to respondents that there was a specific desired response to the survey in either Q4 or Q5.
48. During the pretest debriefs, at my direction, experienced interviewers from
AMS tested explicitly for demand artifacts. No demand artifacts were detected in the final phrasing and layout of the questions. Respondents did not find the questions to be leading and respondents were not able to guess that any particular result was desired by the survey designer. Respondents were not able to guess the purpose or sponsor of the survey.
3. Filters
49. To avoid influencing respondents’ responses and to minimize guessing by respondents, I used carefully designed “filters” and “quasi-filters.” Filters are questions
45 See Appendix D, QS9. 46 See Appendix D, QS10.
22 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) and/or response options that eliminate respondents who are not relevant or who do not have opinions. Quasi-filters avoid speculation and guessing that may arise when a respondent is forced to offer an opinion or to answer a question for which he or she has no opinion. For example, typical quasi-filters offer response options such as “don’t know” or “no opinion.”
According to the Reference Manual on Scientific Evidence, “[b]y signaling to the respondent that it is appropriate not to have an opinion, the question reduces the demand for an answer and, as a result, the inclination to hazard a guess just to comply.”47
50. I used numerous filters and quasi-filters in my survey questions and response options. For example, appropriate questions in the main part of my survey (that is, after the introductory questions) included quasi-filters (that is, the option of “don’t know/unsure”).48
The survey’s screening questions served as filters. For example, in Question QS9, QS10, and
QS11, respondents who answer “don’t know/unsure” are terminated.49
51. In the main survey, questions Q2 and Q4 also serve as filters for Q3 and Q5, respectively. Q2 asks respondents which types of content they listened to through Internet simulcasts of terrestrial commercial radio over the last three days.50 Each respondent is then asked to indicate the level of importance to the respondent of each type of content.51 This question is asked only for the types of content to which the respondent listened over the past
47 Diamond, Shari S., “Reference Guide on Survey Research,” in Reference Manual on Scientific Evidence, Third Edition, Washington, D.C.: Federal Judicial Center and National Research Council of the National Academies, 2011, pp. 359–423, available at https://www.fjc.gov/content/reference-guide-survey-research-2, at pp. 389–391. 48 See Appendix D, Q1–Q5. 49 See Appendix D, QS9–QS11. No respondents were eliminated because they chose “don’t know/unsure” for Question QS9. Nine and fourteen respondents were eliminated because they chose “don’t know/unsure” for Questions QS10 and QS11, respectively. They were eliminated to ensure that the respondents in the final sample were members of the target population and knowledgeable about the service they were using. 50 See Appendix D, Q2. 51 See Appendix D, Q3.
23 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) three days. For each type of content, each respondent was given the opportunity to indicate
“don’t know/unsure” if the respondent was unsure of what level of importance to assign to the types of content to which he or she listened over the prior three days.52
52. In the next question, Q4, each respondent is asked to indicate which of several different activities he or she “would consider” or “would not consider” doing if Internet simulcasts of terrestrial commercial radio were not available for the next five years.53 This question includes two quasi-filters to accommodate respondents who either have no opinion, or who would prefer to do something not listed. For each of the options, respondents are given the opportunity to indicate “don’t know/unsure” if they are unsure of whether they would or would not consider doing something in place of listening to Internet simulcasts of terrestrial commercial radio. The question also explicitly asks respondents what they would consider doing, “if anything,” indicating that respondents need not choose any substitute at all from the list. If it accurately reflects how they would behave, respondents could select
“would not consider” or “don’t know/unsure” for all activities on the list. Respondents are also given the opportunity to fill in their own substitute activity if they would consider doing something other than, or in addition to, the activities available as responses to this question.
Pretests assured that respondents understood these options and understood that these options could be selected.
53. Q4 serves as a filter for the Q5 question in the survey. Respondents are only asked to choose a substitute for Internet simulcasts of terrestrial commercial radio from among the options they indicated they “would consider” in Q4, including any option they indicated in the free-response “other” box for Q4. This filter allows respondents to evaluate
52 See Appendix D, Q3. 53 See Appendix D, Q4.
24 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) the full range of substitutes they would consider in place of listening to Internet simulcasts of terrestrial commercial radio. The filter avoids asking respondents what they would do for any option they would not consider, thus avoiding asking respondents about options on which they have no opinion. The filter also avoids any potential respondent fatigue because the filter limits the number of alternatives to only relevant options when respondents are asked to select a single substitute for Internet simulcasts of terrestrial commercial radio.
54. By using filters appropriately, I carefully avoided asking questions of respondents that might not be relevant and I avoided asking respondents to express a belief when the respondent had none or was not sure.
4. Rotation or Randomization of Response Options
55. In closed-ended questions with several response options, respondents might be more likely to choose a certain option simply because it is first or last on the list. Such phenomena are known as “order effects.”54 To avoid order effects, I randomized or rotated response options so that different respondents see the options in different orders and any possible order effects cancel out across respondents. There are standard exceptions to these rules. For example, certain options—such as “other,” “none of the above,” and “don’t know/unsure”—always come last in order for the question to preserve logical flow. Another exception to response randomization or rotation occurs when response options come in a certain logical order, such as those for age or education levels. In such circumstances, response options are usually not rotated.
54 For a discussion of order effects, see Diamond, Shari S., “Reference Guide on Survey Research,” in Reference Manual on Scientific Evidence, Third Edition, Washington, D.C.: Federal Judicial Center and National Research Council of the National Academies, 2011, pp. 359–423, available at https://www.fjc.gov/content/reference-guide-survey-research-2, at pp. 395–396.
25 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 56. I rotated and/or randomized response options in the introductory questions and closed-ended filter questions, where it was appropriate. For example, in QS9, I kept response options of watching, listening, and reading together, but randomized the ordering of the three types of options, and randomized the ordering of the watching, listening, and reading options.55 This randomization concealed the options of interest from respondents. In question QS11, I asked the respondents “which of the following types of live AM/FM radio broadcasts over the Internet did you listen to?”56 Although I am interested only in respondents who listened to broadcasts from commercial radio stations, I rotated the order in which “broadcasts from not-for-profit radio stations” and “broadcasts from commercial radio stations” were presented. These questions filter respondents and minimize or eliminate order effects.
57. I performed similar randomization in the main survey instrument, in particular for questions Q2 (the different types of content to which respondents may listen) and in Q4
(the activities that respondents would consider doing in place of listening to Internet simulcasts of terrestrial commercial radio). Importantly, while I randomized the response options in those questions, I kept the response options in the same order respondents saw them for questions Q3 and Q5. This approach minimizes order effects while ensuring that respondents are not confused by different orders of the response options in related questions.
D. Survey Pretest
58. Prior to administering the final survey, it is important to pretest the proposed series of questions with a small sample of “the same type of respondents who would be
55 See Appendix D, QS9. 56 See Appendix D, QS11.
26 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) eligible to participate in the full-scale survey.”57 Such pretests assess the potential for demand artifacts and ensure that all survey questions were understood as intended.58
59. Pretests ensure that the survey questionnaire uses words and phrases with which respondents are familiar so that respondents understand the questions and the response options.59 If respondents do not understand the words and phrases used, respondents will be confused and their responses may not be accurate. To the extent that the words and phrases are not clear to the respondents, pretests determine and evaluate alternative words and phrases that respondents may understand.
60. The pretest interviews themselves were open-ended verbal debriefs of pretest respondents after the respondents answered the survey questions.60 These results are typically reported to me orally and with a summary report. The briefing was conducted by experienced interviewers who debriefed respondents at my direction and by Cornerstone
Research who listened to all of the pretests. I listened to some of the pretests to ensure that they were being conducted as I required.
57 Diamond, Shari S., “Reference Guide on Survey Research,” in Reference Manual on Scientific Evidence, Third Edition, Washington, D.C.: Federal Judicial Center and National Research Council of the National Academies, 2011, pp.359–423, available at https://www.fjc.gov/content/reference-guide-survey-research-2, at pp. 388–389. 58 Diamond, Shari S., “Reference Guide on Survey Research,” in Reference Manual on Scientific Evidence, Third Edition, Washington, D.C.: Federal Judicial Center and National Research Council of the National Academies, 2011, pp. 359–423, available at https://www.fjc.gov/content/reference-guide-survey-research-2, at pp. 387–389. 59 Payne, Stanley L. B., “What’s the Good Word?” in The Art of Asking Questions (Princeton, NJ: Princeton University Press, 1980), pp. 138–157. 60 Urban, Glen L. and John R. Hauser, Design and Marketing of New Products, (Englewood Cliffs, NJ; Prentice- Hall, Inc.), 1980, pp. 194–195: “A sample size of 10 is common. After a question is answered, you can ask respondents what they thought each question asked. You can try different forms of the questions. You can watch for careless response or no response. . . . You can do whatever is necessary to ensure that what you think is being asked is actually what is being answered.”
27 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 61. The number of pretest interviews varies by study based on how well respondents understand the initial survey instrument. Pretesting (and questionnaire improvement) continues until respondents answer the survey questions easily, do not find the questions difficult or ambiguous, and feel that their answers represent their opinions.
62. To ensure that the questions were understood by respondents and relevant to their decision making, I instructed Cornerstone Research and AMS to conduct pretests of the survey instrument. Between August 13, 2019 and August 28, 2019, at my direction, experienced interviewers from AMS pretested the survey with 22 adults in the United States who listened to Internet simulcasts of terrestrial commercial radio within the last three days.61
Based on my experience, 22 respondents are sufficient for the purpose of ensuring that the questions were understood well by respondents and that the respondents’ answers accurately reflected respondents’ beliefs and/or behavior. Pretest responses were used solely for pretesting and are not included in the final survey results. For a summary of changes made to the survey instrument based on the pretests and conclusions from the pretests, see
Appendix G to this report.
63. Pretesting assured that the appropriate vocabulary was used in the survey instrument. To make sure respondents understood the words and phrases in the survey instrument, AMS asked pretest respondents for their understanding of any potentially unfamiliar words or phrases. AMS also asked respondents if they would prefer different wording or phrasing. In QINTRO, for example, pretesting confirmed that respondents were generally comfortable with the definitions of various ways of listening as listed in the survey.
61 Pretest respondents were recruited from ROIRocket. See ROIRocket, available at www.roirocket.com.
28 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) However, pretesting indicated how I could improve that understanding by clarifying part of the definitions.62 For example, I added a sentence about the type of content available on satellite radio, inserted the word “simultaneously” into the definition of live AM/FM radio broadcasts over the Internet, and removed examples of smart speaker devices that were unfamiliar to respondents.63 After making these edits, pretests continued and I found that respondents understood the definitions and no longer sought clarification of these terms.
64. Pretesting assured that I used the appropriate set of response options to survey instrument questions.64 During pretests, AMS asked respondents if the set of response options provided in each question of the survey instrument was complete and, if it was not complete, which additional response options would respondents recommend for inclusion.
For example, some respondents indicated that religious content was a type of content to which they listened.65 As a result, I added “religion” as a response option in Q2.66 While I originally had “news” and “weather and traffic” as separate response options, I found through pretesting that respondents typically viewed “news, weather, and traffic” as a bundle.
Respondents found the question more relevant if I did not list “news” and “weather and traffic” as separate categories.67 Based on the pretests, I merged “news” and “weather and traffic” into one response option. After making these changes to the response options in Q2, I found that respondents no longer sought additional categories of content or requested further refinement to response options.
62 See Appendix G. 63 See Appendix G. 64 Providing too limited a set of response options can result in biased responses. See Diamond, Shari S., “Reference Guide on Survey Research,” in Reference Manual on Scientific Evidence, Third Edition, Washington, D.C.: Federal Judicial Center and National Research Council of the National Academies, 2011, pp. 359–423, available at https://www.fjc.gov/content/reference-guide-survey-research-2, at p. 393. 65 See Appendix G. 66 See Appendix D, Q2. 67 See Appendix G.
29 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 65. Pretesting assured that respondents understood the survey instrument questions and accompanying instructions. During pretests, AMS asked respondents to describe, in their own words, their understanding of the survey questions and accompanying instructions. When any survey question or instruction was not clear, AMS asked respondents how the survey question or instruction could be reworded so that the wording or phrasing would be more natural to the respondents. For example, some respondents mentioned that it was difficult to remember the instruction that they should choose what they would consider doing “in place of” listening to Internet simulcasts of terrestrial radio as they considered the alternatives in Q4. In response to comments by respondents during pretests, I added language to the content category headers to remind respondents appropriately.68 After modifying the words and phrases (as well as the conforming change in Q5), I found that respondents no longer expressed difficulty in answering this question. The resulting questions were clear to respondents and respondents believed that their answers reflected their opinions and behavior.
66. Pretesting assured that respondents understood that the prices provided in response options were examples. During pretests, AMS asked respondents to describe how they understood the monthly and annualized prices provided for new subscription services.
Respondents confirmed that they understood the monthly and annualized prices to be example prices. I reinforced the “example” nature of the prices with the following additional language in Q4 and Q5 regarding example prices: “The prices below are examples and do not include promotional discounts, taxes, or fees.”69
68 See Appendix D, Q4. 69 See Appendix D, Q4, Q5.
30 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 67. AMS asked respondents if they believed the set of activities, included as potential substitutes for Internet simulcasts of terrestrial commercial radio, was exhaustive.70
The pretests assured that respondents viewed the list of activities as complete and that respondents understood the differences between activities within each block.71
68. As described in an earlier paragraph, at my direction during the pretests, experienced interviewers from AMS tested explicitly for demand artifacts.72 I repeat the results here. No demand artifacts were detected in the final phrasing and layout of the questions. Respondents did not find the questions to be leading and respondents were not able to guess that any particular result was desired by the survey designer. Respondents were not able to guess the purpose or sponsor of the survey.
IV. Survey Administration
A. Use of the Internet for the Survey
69. The survey was administered via the Internet. Internet surveys are used widely by major corporations to make substantial business decisions. I have extensive experience with Internet surveys in the contexts of litigation, corporate applications, and academic research.73 In my experience, if best practices are followed, Internet-based samples are representative of target populations and can be used to project to target populations both reliably and validly. Online survey instruments have many benefits: they eliminate
70 See Appendix D, Q4. 71 See Appendix G. 72 See ¶ 47. 73 For many years, I headed the Virtual Customer Initiative (“VCI”), a key initiative within MIT’s Center for Innovation in Product Development. The VCI studies the use of Internet-based surveys and methods that are developed explicitly for such surveys. An article on the virtual customer that I co-authored (Dahan, Ely, and John R. Hauser, “The Virtual Customer,” Journal of Product Innovation Management 19, 5, 2002, pp. 332–353) is highly cited. I have won many awards for research that relied upon Internet-based surveys. Another article compares respondents’ answers in an Internet survey to their actual choices of a product worth approximately $100. In addition, projections from the study were compared to market-place results. This article is highly cited and has won international awards (see Toubia, Olivier, Duncan I. Simester, John R. Hauser, and Ely Dahan, “Fast Polyhedral Adaptive Conjoint Estimation,” Marketing Science 22, 3, 2003, pp. 273–303).
31 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) interviewer bias (that is, they create a “blind” environment); they produce acceptable completion rates; and, due to the anonymous nature of the Internet, they allow for truthful responses, particularly when the subject matter is sensitive. Online survey instruments allow researchers instant access to results and enable the use of advanced design capabilities, such as complex randomization, screening logic, and error checking. Internet surveys are an increasingly common form of market research. Over 87 percent of the U.S. population has access to the Internet.74 Internet surveys are particularly relevant in this case because, in order to listen to streaming broadcasts, the respondents, by definition, have access to the
Internet. The largest corporations use Internet surveys to support multi-million dollar marketing decisions. Courts accept the results of Internet surveys in a wide range of cases.75
I have personal prior experience in formulating Internet surveys for litigation which have been accepted by the courts.
70. The Internet survey was conducted by contracting with one of the premier panels that provide pre-recruited potential respondents who have indicated their willingness to participate in market research surveys. These panels are used by major corporations to make important decisions. In this case, I selected ProdegeMR, a leading provider of market research services that maintains a diverse panel of 60 million registered members globally.76
I have worked with ProdegeMR on a number of other projects.77 I have found them to be
74 “Internet Usage in the United States – Statistics & Facts,” Statista, available at https://www.statista.com/topics/2237/internet-usage-in-the-united-states/. 75 Gelb, Gabriel M. and Betsy D. Gelb, “Internet Surveys for Trademark Litigation: Ready or Not, Here They Come,” The Trademark Reporter 97, 5, 2007, pp1073–1088; Thornburg, Robert H., “Trademark Surveys: Development of Computer-Based Survey Methods,” The John Marshall Review of Intellectual Property Law 4, 1, 2005, pp. 91–124. 76 ProdegeMR Panel Book, 2019, available at https://www.prodegemr.com/resources-page/, p. 4. 77 For example, I recently developed a pedagogical exercise to help students learn how to use conjoint analysis. The exercise uses real respondents in a national sample provided by ProdegeMR. I have also used ProdegeMR
32 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) consistently reliable and a high quality supplier of qualified survey respondents. As part of the panel recruitment process, all panel members complete a questionnaire that includes basic demographic information (age, gender, education, etc.)78 In addition, panel members have the option to answer questions about their personal habits and behaviors (e.g., drinking habits, cell phone usage).79
71. The validation process for an Internet survey is different from that for telephone, mall, or mail surveys, because only the Internet panel provider is allowed to contact the respondents. Security steps assure that only panel members receive invitations, that the survey is not answered by a “bot,” and that the survey taker cannot take the survey more than once. In addition, ProdegeMR is a reputable panel provider which itself employs security procedures.80 To provide further validation, each respondent’s age, gender, education level and region of residence (mapped from state of residence) were compared to values for that respondent in the panel provider’s database. Any respondents whose stated age, gender, education level, or region of residence did not match the values in the database were terminated from the survey.81
in academic research, for example, Burnap, Alex and John R. Hauser, “Design and Evaluation of Product Aesthetics: A Human-Machine Hybrid Approach,” MIT Sloan School of Management Working Paper, 2019. 78 For statistics on demographics of the ProdegeMR panel in the United States, see ProdegeMR Panel Book, 2019, available at https://www.prodegemr.com/resources-page/, p. 20. 79 See ProdegeMR Panel Book, 2019, available at https://www.prodegemr.com/resources-page/, pp. 9–15. 80 See ProdegeMR ESOMAR, “28 Questions to Help Buyers of Online Samples,” 2019, available at https://www.prodegemr.com/resources-page/, pp. 12–14; ProdegeMR Panel Book, 2019, available at https://www.prodegemr.com/resources-page/, p. 7. 81 See Appendix D, QS1–QS4.
33 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) B. Survey Rollout
72. The pretest interviews ensured that the questions were understood by the respondents. To ensure that the survey operated properly, Cornerstone Research, at my direction, extensively tested the links, skip logic, and screening questions.
73. An invitation to participate in the survey was emailed to 97,600 potential participants. The invitation email included a personally encoded link to the actual survey.
This link contained an embedded identification number that assured that only invited respondents could take the survey and that each respondent could only complete the survey once.82
74. To ensure the representativeness of the survey population, the inbound sample was “click-balanced” (i.e., targeting a representative sample from the market research panel based on the distribution of individuals by validated demographics) using U.S. Census
Bureau data. The demographic variables used for balancing were gender, age, and Census region.83
75. To ensure representativeness within the day and by day of week, AMS released invitations to the survey in several batches over the course of ten days and at different times of day. To yield a sample of at least 500 completed surveys, I instructed AMS and Cornerstone Research to target approximately 10,000 click-ins, based on the qualification
82 See Appendix H for the text of the email. 83 Gender, age, and census region quotas for the survey were set using U.S. Census Bureau postcensal population estimates from July 1, 2018 and applied to inbound “clicks” (i.e., responses to the survey invitation) (see “Annual Estimates of the Resident Population for Selected Age Groups by Sex for the United States, States, Counties and Puerto Rico Commonwealth and Municipios: April 1, 2010 to July 1, 2018,” U.S. Census Bureau, available at https://factfinder.census.gov/bkmk/table/1.0/en/PEP/2017/PEPAGESEX; https://factfinder.census.gov/bkmk/table/1.0/en/PEP/2018/PEPANNRES/0100000US). See Appendix I for a comparison of the click-balancing targets and the demographic characteristics of click-through respondents.
34 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) rate for pretest recruiting.84,85 I instructed AMS and Cornerstone Research to monitor the qualification rate for the first few batches of invitations released, and to make adjustments if necessary to ensure that the sample would be collected over the course of at least a full week.
No quotas or other constraints were imposed on the post-screening sample. The survey remained in the field for ten days, ensuring that respondents had ample opportunity to click in to the survey on all days of the week.
76. A total of 10,044 invited participants clicked on the survey link.86 This click- in rate is typical of Internet panels. After clicking on the link from the email invitation, respondents were directed to a browser window with a generic message thanking participants for their willingness to participate in the study and providing instructions for completing the survey.87 After clicking the next button, respondents were prompted with a CAPTCHA challenge to ensure that responses were not computer-generated.88 After completing the
CAPTCHA challenge, respondents moved to the screening portion of the survey. Recall that the screening portion of the survey determines whether or not a respondent is within the target sample, passes an attention check question, is validated on stated age, gender,
84 The screening criteria for the pretest recruitment were less strict than the screening criteria for the full survey. For example, panel member region was not validated in conjunction with other survey demographics, and the pretest recruiting was not click-balanced to the U.S. Census. To ensure that I would collect at least 500 completes in a week, I asked AMS and Cornerstone Research to target more clicks than would have been implied by the pretest recruiting data alone. 85 Appendix J shows the distribution of survey click-ins by day of week and time of day. Individuals clicked into the survey on each day of the week and at different times of the day. Because click-ins were not equally distributed across the seven days of the week, as a robustness check I weighted the survey responses to Q5 to match the scenario in which click-ins were evenly distributed across days of the week. I found that this did not meaningfully change the results of the survey. See Appendix T. 86 This represents a click-in rate of 10,044 / 97,600 = 10.3%. 87 See Appendix E. 88 A CAPTCHA challenge refers to a program that protects websites against bots (i.e., computer-generated responses) by generating and grading tests that humans can pass, but current computer programs cannot. The acronym CAPTCHA stands for Completely Automated Public Turing Test To Tell Computers and Humans Apart. See, e.g., “CAPTCHA: Telling Humans and Computers Apart Automatically,” CAPTCHA, available at http://www.captcha.net/. See Appendix D, QS0.
35 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) education level, or region of residence, and is using a proper device for the survey.89 After screening 536 respondents moved to the main survey. The qualification rate was thus
5.3 percent. By balancing the click-in respondents to the US population and then accepting only respondents who were in the target population, I assure that the target sample is representative of the target population. The completion rate was quite high: 532
(99.3 percent) of qualified respondents completed the survey between September 4, 2019 and
September 13, 2019.90 This sample size was adequate to enable me to provide statistically significant estimates.91
77. Respondents who qualified and completed the survey were awarded 75 SB in
Prodege currency (known as SwagBucks).92 In my experience, such honoraria are common in survey research and do not influence the accuracy of the responses.
V. Analysis of Survey Results
A. Overview of Qualified Survey Responses
78. As discussed in Section III.B., I balanced the incoming sample of survey respondents against U.S. Census Bureau statistics on the age, region, and gender for the U.S. population. Appendix I presents the percentages of incoming respondents from each age group, region, and gender and the corresponding percentages of each of these in the U.S.
89 A total of 9,508 respondents did not qualify because (1) they did not listen to music or non-music content via Internet simulcasts of terrestrial commercial radio within the last three days (4,197 respondents); (2) they did not meet other screening criteria (e.g., selected “my area is not listed” in QS1, “prefer not to answer” in QS2 or QS3, or “under 18” in QS3, took a survey on a similar topic in the prior six months, is employed by or is a member of a household with someone employed by a radio broadcasting company, Internet audio streaming company, or market research company) (422 respondents); (3) their responses to introductory questions regarding age, gender, region, or education level could not be validated against panel data (1,183 respondents); or (4) they did not pass attention check questions (3,548 respondents). An additional 140 respondents did not qualify because they began the screening portion of survey but opted not to complete it. Eighteen respondents did not qualify because the survey was not formatted for viewing on their device. 90 A small number of respondents were eliminated from the final survey sample based upon what I judged to be unreasonable responses. See Section V.A for details. 91 Detailed screening statistics are shown in Appendix K. 92 75 SB is worth approximately 75 cents when converted to gift cards on the SwagBucks website. See SwagBucks, available at https://www.swagbucks.com/p/category/17/Denominations.
36 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) population. The percentages are similar, illustrating that the incoming sample is representative of the U.S. population on these demographic characteristics.
79. Appendix K presents the number of respondents who terminated during the screening portion of the survey instrument, the number of respondents who completed the survey, and the number of qualified survey respondents. As part of my analysis, I performed checks to ensure that the data collected from respondents were of high quality by evaluating respondents with results and responses that suggested that it was possible that they may not have been sufficiently engaged in the survey to provide reliable and accurate answers. Out of the 532 respondents who completed the survey, I dropped 31 respondents from the analysis because of straight-lining, resulting in a sample of 501 qualified respondents.93,94
1. Analysis of Time Taken to Complete the Survey
80. Based on my experience conducting surveys, extremely long completion times generally suggest that respondents may have been interrupted. This does not necessarily bias the results, but it is appropriate to examine the results carefully in such a situation. On the other hand, extremely short completion times suggest that either respondents were sure of their answers and answered rapidly or that respondents may not have paid attention to the questions or may not have been sufficiently engaged in the survey. This, too, does not necessarily bias the results, but it is appropriate to examine the results carefully. Hence, I examined more closely the responses provided by respondents with extremely long and extremely short completion times.
93 I define “straight-lining” respondents as respondents who selected the same answer for every option in Q4. 94 My sample size of 501 respondents provides sufficient statistical power to draw reliable conclusions regarding the questions of interest. With 501 respondents, the maximum survey margin of error is 4.4 percent. See Thompson, Steven K., Sampling, (Hoboken, NJ; John Wiley & Sons, Inc.), 2012, pp. 58–59.
37 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 81. I examined the times that each respondent took to complete the survey. The median time to complete the survey was 8.95 minutes. I compared the expected substitution patterns of listeners (Q5) for the group comprised of the fastest 5 percent of respondents
(27 respondents with fewer than 3.95 minutes completion time) and the slowest 5 percent of respondents (27 respondents with more than 22.4 minutes completion time) with the expected substitution patterns of listeners for the remaining 90 percent. Based on the responses to Q5,
I found that including the fastest 5 percent and slowest 5 percent of respondents in the sample did not change the basic results. As a result, I did not remove these respondents from the sample.
2. Quality Control by the Exclusion Based on Inconsistent or
Unlikely Responses
82. Prior to the analysis of any data and based on a review of the screening criteria, I evaluated whether any respondents provided responses that were internally inconsistent and/or unlikely.
83. I asked a few questions that allowed respondents to provide open-ended responses in a text box. In particular, 62, 2, and 34 respondents provided an answer in the text box in response to questions QS10, Q2, and Q4, respectively. I reviewed the open-ended responses provided by these respondents. No respondents provided incoherent free-response options. For Q4, of the 34 respondents who provided an answer in the text box, 15 indicated that there was nothing else they would consider by writing “nothing,” “none,” “all of my
38 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) options were covered above,” or something similar. Only 3 respondents chose their open- ended response in Q5.95
84. I examined the consistency of respondents’ answers in screening question
QS10 with their responses in question Q4. This included checking whether a respondent selected that they listened to audio content through a paid subscription in QS10 and also selected that they would consider a new paid subscription of the same type in question Q4. I found that 81, 49, and 36 respondents selected both of these for on-demand, not-on-demand, and satellite radio content categories, respectively.
85. These responses do not generate logical inconsistencies. It is not inconsistent for a respondent to indicate in screening question QS10 that they listened to content through a paid subscription and then, in question Q4, to indicate that they would consider purchasing a new paid subscription to a service of the same type for at least three reasons. First, based on the qualitative interviews and pretest interviews, I learned that it is not uncommon for individuals to have subscriptions to multiple services, even within the same service type.
Respondents indicated that they may have multiple subscriptions because different services within the same service type may offer different features for listeners and different libraries of content. Second, a respondent may consider upgrading or downgrading to a different tier of service with the same company to be a “new” paid subscription, even if they reported listening to an existing paid subscription in the past three days. Third, a respondent who answers that they listened to a paid subscription service within the last three days may have listened to a friend’s or family member’s subscription, but would consider buying their own
95 For Q4, 9 respondents provided open-ended responses that were similar to alternatives in the list. These open-ended responses as a whole, however, do not include sufficient detail to match these responses to alternatives in the list. Therefore, I summarize these responses separately in the “Other” category for Appendix Q.
39 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) subscription if Internet simulcasts of terrestrial commercial radio were not available for the next five years.
86. In addition, 115, 107, and 78 respondents indicated in Q4 that they would consider listening to their existing paid subscription and a new paid subscription within the on-demand, not-on-demand, and satellite radio service types, respectively. For similar reasons to those discussed above, this does not represent a logical inconsistency; respondents may consider purchasing a subscription to different services from ones they already have or they may consider upgrading their existing subscription with the same service.
87. Nevertheless, as a robustness check, I tabulated responses after dropping these individuals and found that the basic results did not change.96
3. Consistency of Survey Findings
88. As a partial test of whether the incoming sample was representative of audio consumption, I compared the responses to screening question QS10 in my survey against an
Edison Research “Share of Ear” industry report on audio consumption in the United States.97
The two surveys differ in many ways that make exact comparisons difficult, but they are sufficiently similar so that qualitative comparisons are informative. Appendix L compares the percentage of survey respondents from my survey who selected each source of music content in QS10 against the share of time spent listening to music for Americans at least
13 years of age, broken down by audio source.
89. There are a number of reasons why the “Share of Ear” quantities may differ from the results of QS10 in my survey. First, respondents to my survey were asked to specify
96 See Appendix U. 97 Edison Research, “Share of Ear: Americans’ Share of Time Spent Listening to Audio Sources,” Q2 2019.
40 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) all of the ways they listened to music and non-music audio content during the “last three days.”98 Of the 4,971 respondents asked QS9 about types of activities, 3,889 listened to music content.99,100 3,889 respondents selected a total of 10,470 media options that they listened to in the past three days. (For example, a respondent might select three media options in QS10. That respondent’s options selected count three times toward the total of
10,470 media options selected.) In contrast, the “Share of Ear” industry report summarized the “share of time spent listening to music” by audio source.101 This will differ from share of media options selected. For example, if each respondent spends more time listening to broadcast AM/FM radio than he or she does listening to streaming audio, then the “Share of
Ear” share for broadcast AM/FM will be higher than the share of respondents who listen to broadcast AM/FM radio. Depending on how much time individuals spend listening to each media option, the “Share of Ear” share for that option may be larger or smaller than the share of media options selected by respondents in QS10. Thus, I do not expect share of media options selected in QS10 to be identical to “Share of Ear,” but I do expect that they will not differ dramatically.
90. Second, respondents to my survey were at least 18 years old, whereas the
“Share of Ear” report summarizes listening time by individuals who are at least 13 years old.
To the extent that the consumption of audio content differs between Americans aged 13
98 See Appendix D, QS10. 99 The number of respondents who listened to music excludes those who were terminated from the survey at QS9. 100 Respondents could select both music and non-music content in QS9 while QS10 asked about listening to both music and non-music content. The “Share of Ear” quantities are of music listening content only. To compare the two, I excluded respondents who selected only non-music content in QS9. However, because QS10 does not separately ask about ways of listening to music and non-music content, respondents may have listened exclusively to non-music content through one or more of the ways of listening selected in QS10. This is another reason “Share of Ear” quantities may differ from the results of QS10 of my survey. 101 Edison Research, “Share of Ear: Americans’ Share of Time Spent Listening to Audio Sources,” Q2 2019, p. 21.
41 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) through 17 and Americans over the age of 18, the share of respondents and share of media options selected from QS10 may differ from the quantities reported in the “Share of Ear” industry report. However, if Americans aged 13 through 17 do not differ dramatically from other young Americans over the age of 18 in their consumption of audio content, I would not expect the various shares to be substantially different due to this difference in target population.
91. Despite the differences in the type of share that is measured and despite the slight differences in the age distribution of respondents, the share of media options selected in my screening question QS10 is qualitatively similar to and in the same rank order as the shares of time spent listening to music options reported in the “Share of Ear” industry report.
For example, “Share of Ear” reports that, of all time spent listening to music by Americans at least 13 years of age, 40 percent is spent listening to broadcast AM/FM radio. Based on the results of screening question QS10 in my survey, I find that approximately 34 percent of the media options selected by respondents are for AM/FM radio within a three-day period.
Similarly, “Share of Ear” reports that, of all time spent listening to music by Americans at least 13 years of age, 15 percent is spent listening to owned music. Based on the results of my screening question QS10, I find that approximately 14 percent of media options selected by respondents are for owned music within a three-day period.
92. The qualitative similarities and rank order of media between the results of
QS10 in my survey and the quantities reported in the “Share of Ear” industry report, despite the differences in the type of share that is being measured and despite the slight differences in the age range of the respondents, suggest that the results of my survey are representative of audio consumption within the expected variation.
42 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) B. Survey Results
1. Hours Spent Listening to Internet Simulcasts of Terrestrial
Commercial Radio
93. The first question in the main survey instrument asked respondents to approximate the total number of hours they spent listening to live AM/FM broadcasts from commercial radio stations over the Internet over the prior three days.102
94. Appendix M shows the distribution of responses to this question. On average, respondents estimated that they spent 5.3 hours listening to Internet simulcasts of terrestrial commercial radio during the past three days (approximately 1¾ hours per day). The median respondent estimated that they spent 4 hours listening to Internet simulcasts of terrestrial commercial radio during the past three days (approximately 1⅓ hours per day). Appendix M indicates that 91.6 percent of the respondents spent less than twelve hours over three days
(that is, four hours per day) and 96.7 percent spent less than eighteen hours over three days
(that is, six hours per day). Three respondents spent more than ten hours per day and no respondents spent more than forty-eight hours over the three-day period.
95. Appendix N summarizes the estimated number of hours spent listening to
Internet simulcasts of terrestrial commercial radio by day of week. The number of hours spent listening to simulcasts of terrestrial commercial radio is similar by day of week. The average estimated number of hours spent listening to Internet simulcasts of terrestrial commercial radio by day of week ranged from 1.7–1.8 hours.103
102 See Appendix D, Q1a. 103 To assess whether the number of hours spent listening to Internet simulcasts of terrestrial commercial radio over the prior three days differed by day of the week of the survey response, I performed a one-way analysis of variance (one-way “ANOVA”). One-way ANOVA is a statistical test used to measure whether differences in
43 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 2. Content to Which Respondents Listened on Internet Simulcasts of
Terrestrial Commercial Radio
96. The next question asked respondents about the types of content to which they listened on Internet simulcasts of terrestrial commercial radio in the last three days.104
Respondents were prompted to select all types of content to which they listened on Internet simulcasts of terrestrial commercial radio in the last three days. Appendix O summarizes the responses to this question. It is reproduced here as Table 1.
means between groups are statistically significant. Before performing the test, I dropped the five observations in which respondents reported listening to over 20 hours of Internet simulcasts of terrestrial commercial radio. The F-statistic from the test is 1.5 and the corresponding p-value is 0.18. This provides evidence that, on average, respondents’ time spent listening to Internet simulcasts of terrestrial commercial radio is unlikely to vary by day of week. 104 See Appendix D, Q2.
44 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Table 1: Simulcast Content to Which Respondents Listened
95% Confidence Response Options Respondent Count Percentage Interval
Music (all genres, e.g., pop, country, rock, 413 82.4% [79.1%, 85.8%] children’s music, religious music)
News, weather, and traffic 277 55.3% [50.9%, 59.7%]
Talk (e.g., live DJ commentary, politics, 248 49.5% [45.1%, 53.9%] personal finance) Sports (e.g., game broadcasts, 182 36.3% [32.1%, 40.6%] commentary)
Comedy (e.g., sketch comedy, stand-up) 89 17.8% [14.4%, 21.1%]
Religion (non-music content, e.g., 34 6.8% [4.6%, 9.0%] preaching, education) Kids and family (non-music content, e.g., 32 6.4% [4.2%, 8.5%] educational programs)
Other content 2 0.4% (0.0%, 1.0%]
Don’t know/Unsure 1 0.2% (0.0%, 0.6%]
Average Number of Selections per 2.6 Respondent
Source: Simulcast Switching Survey (N=501), Appendix O.
97. On average, respondents indicated that they listened to 2.6 types of content on
Internet simulcasts of terrestrial commercial radio in the last three days. The breakdown was as follows: 413 respondents (82.4 percent) selected music; 277 respondents (55.3 percent) selected news, weather, and traffic; 248 respondents (49.5 percent) selected talk;
182 respondents (36.3 percent) selected sports; 89 respondents (17.8 percent) selected
45 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) comedy; 34 respondents (6.8 percent) selected religion; 32 respondents (6.4 percent) selected kids and family, and 2 respondents (0.4 percent) selected other content types.105
98. Appendix O reports the 95 percent confidence interval for each of the computed percentages.106,107 The 95 percent confidence interval for the percentage of the population of Internet simulcast of terrestrial commercial radio listeners that listens to music is 79.1 percent to 85.8 percent. That is, the probability that the interval from 79.1 percent to
85.8 percent contains the true percentage of listeners of Internet simulcasts who listen to music is at least 95 percent.
99. If respondents indicated that they listened to one or more types of content in the past three days, they were next asked to indicate the level of importance each type of content had for them, choosing between “not important,” “somewhat important,” and “very important” for each type of content.108
100. Appendix P, reproduced as Table 2 below, summarizes the responses to this question. For each type of content, Appendix P reports the number of respondents who selected “very important,” “somewhat important,” and “not important.”109 Of the analysis sample of 501 respondents, 256 (51.1 percent) indicated music was very important, 185 (36.9 percent) indicated news, weather and traffic was very important, 123 (24.6 percent) indicated talk content was very important, 99 (19.8 percent) indicated sports content was very
105 Respondents who selected “other content” were prompted to fill in a text box specifying the type of content they listened to on Internet simulcasts of terrestrial commercial radio during the last three days. Only two respondents filled different content types into the text box included in Q2 (“Astrology” and “Drama play”). 106 See Thompson, Steven K., Sampling, (Hoboken, NJ; John Wiley & Sons, Inc.), 2012, pp. 58–59. As I do not know the size of the population of Internet simulcast of terrestrial commercial radio listeners, I do not adjust for population size in computing these confidence intervals. This makes the confidence intervals conservative. 107 The lower bounds of the confidence intervals included in the table are set to zero when the 95% symmetric confidence interval would otherwise include values smaller than zero. 108 See Appendix D, Q3. 109 For each type of content not selected by a respondent in Q2, I coded the respondent’s answer for that type of content as “not important” in Q3.
46 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) important, 45 (9.0 percent) indicated comedy was very important, 22 (4.4 percent) indicated religious content was very important, and 18 (3.6 percent) indicated that kids and family content was very important.
Table 2: Importance of Simulcast Content
Did not Select Not Somewhat Very Don’t know Content Area Response Options important important important / Unsure in Q2
Music (all genres, e.g., pop, 24 130 256 3 88 country, rock, children’s music, (4.8%) (25.9%) (51.1%) (0.6%) (17.6%) religious music)
8 82 185 2 224 News, weather, and traffic (1.6%) (16.4%) (36.9%) (0.4%) (44.7%)
Talk (e.g., live DJ commentary, 18 106 123 1 253 politics, personal finance) (3.6%) (21.2%) (24.6%) (0.2%) (50.5%)
Sports (e.g., game broadcasts, 10 72 99 1 319 commentary) (2.0%) (14.4%) (19.8%) (0.2%) (63.7%)
Comedy (e.g., sketch comedy, 5 37 45 2 412 stand-up) (1.0%) (7.4%) (9.0%) (0.4%) (82.2%)
Religion (non-music content, e.g., 3 9 22 467 – preaching, education) (0.6%) (1.8%) (4.4%) (93.2%)
Kids and family (non-music content, 2 11 18 1 469 e.g., educational programs) (0.4%) (2.2%) (3.6%) (0.2%) (93.6%)
1 1 499 Other content – – (0.2%) (0.2%) (99.6%)
Don’t know/Unsure – – – – –
Average Number of Selections 0.1 0.9 1.5 0.0 – per Respondent
Source: Simulcast Switching Survey (N=501), Appendix P.
47 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 3. Alternatives to Internet Simulcasts of Terrestrial Commercial
Radio
101. Next, I asked each respondent what he or she would consider doing instead if listening to live AM/FM radio broadcasts from commercial radio stations over the Internet were not available for the next five years.110
102. The consideration question serves two important functions in my survey.
First, the consideration question is a filter question. Respondents cannot choose a medium if they would not at least consider that medium. By using such a filter question, I avoid asking respondents to guess about which medium they would choose. Second, there is strong scientific evidence that consumers use a two-stage consider-then-choose decision process when they make a choice or consumption decision.111 By asking a consideration question prior to a choice question, my survey is more realistic and provides a better representation of the decision processes that consumers use. It is important to recognize that consideration is not choice. Consumers might consider and reject a medium for a particular listening experience. Furthermore, they might consider multiple media before deciding on the one medium to which to listen.
110 See Appendix D, Q4. 111 See Hauser, John R., “Consideration-Set Heuristics,” Journal of Business Research 67, 8, 2014, pp. 1688– 1699, at p. 1688 (“Evidence suggests that consumers, who are faced with many products from which to choose, simplify their decisions with a consider-then-choose decision process in which they first identify a set of products, the consideration set, for further evaluation and then choose from the consideration set.”) See also, Payne, John W., “Task Complexity and Contingent Processing in Decision Making: An Information Search and Protocol Analysis,” Organizational Behavior and Human Performance 16, 2, 1976, pp. 366–387; Hauser, John R. and Birger Wernerfelt, “An Evaluation Cost Model of Consideration Sets,” The Journal of Consumer Research 16, 4, 1990, pp. 393–408; Payne, John W., James R. Bettman, and Eric J. Johnson, “Adaptive Strategy Selection in Decision Making,” Journal of Experimental Psychology: Learning, Memory, and Cognition 14, 3, 1988, pp. 534–552; Roberts, John H. and James M. Lattin, “Development and Testing of a Model of Consideration Set Composition,” Journal of Marketing Research 28, 4, 1991, pp. 429–440; Shocker, Allan D., Moshe Ben-Akiva, Bruno Boccara, and Prakash Nedungadi, “Consideration Set Influences on Consumer Decision-Making and Choice: Issues, Models, and Suggestions,” Marketing Letters 2, 3, 1991, pp. 181–197.
48 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 103. Appendix Q summarizes the responses to the consideration question.
Respondents selected “would consider” for an average of 12.6 alternatives and “would not consider” for an average of 6.7 alternatives.
104. For each of the alternatives to Internet simulcasts of terrestrial commercial radio, Appendix Q reports the number and percentage of survey respondents who selected
“would consider,” “would not consider,” and “don’t know/unsure.” For example, for alternative 1 (“I would listen to on-demand music streaming service(s) through the paid subscription(s) I already have (e.g., Apple Music, Spotify Premium, Google Play Music).”),
295 respondents (58.9 percent) answered that they would consider doing this and
141 respondents (28.1 percent) answered that they would not consider doing this if Internet simulcasts of terrestrial commercial radio were not available for the next five years.
65 respondents (13.0 percent) indicated “don’t know/unsure” about whether they would consider this alternative if Internet simulcasts of terrestrial commercial radio were not available for the next five years.
105. Respondents who indicated they would consider doing one or more activities in place of listening to internet simulcasts of terrestrial commercial radio were next shown
Q5.112 This question asked each respondent to choose which one of the activities (from among those that he or she would consider) that the respondent would do in place of listening to live AM/FM radio broadcasts from commercial radio stations over the Internet, in situations similar to the most recent time they listened to such broadcasts. Respondents could also choose “don’t know/unsure.” By sampling their most recent listening experience and by
112 See Appendix D, Q5.
49 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) using an inbound sample that is balanced by time of day and day of week, I obtain a representative sample of the listening actions of my respondents.
106. Appendix R summarizes the responses to this question. Appendix R reports the number and percentage of respondents who selected a response within each category as well as the number and percentage of respondents who selected each alternative.
107. In Appendix R, I bolded each category and assigned a letter to the category.
Alternatives within category D (“Other ways of listening to live AM/FM radio broadcasts in place of such broadcasts from commercial radio stations over the Internet”) were most frequently selected. 161 respondents (32.1 percent) selected an alternative within this category. Alternatives within category A (“On-demand music streaming services in place of live AM/FM radio broadcasts from commercial radio stations over the Internet”) were selected by 92 respondents (18.4 percent). Appendix R indicates the number and percentage
(with accompanying 95 percent confidence interval) of respondents selecting alternatives within each of the other content categories.
108. Within each content category of alternatives, Appendix R reports the number and percentage (with accompanying 95 percent confidence interval) of total respondents selecting an individual alternative. Each percentage is calculated based on the full qualified sample of respondents, and is not limited to respondents who selected alternatives within the content category. Table 3 below summarizes the alternatives that were selected by more than
3.0 percent of survey respondents.
50 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Table 3: Activities to Which More Than Three Percent of Respondents Would Switch If Internet Simulcasts of Terrestrial Commercial Radio Were Unavailable for Five Years
95% Confidence Response Options Count Percentage Interval
I would listen to live AM/FM radio broadcasts from commercial radio stations through a radio. 127 25.3% [21.5%, 29.2%]
I would listen to on-demand music streaming service(s) through the paid subscription(s) I 37 7.4% [5.1%, 9.7%] already have (e.g., Apple Music, Spotify Premium, Google Play Music).
I would watch video content that I already purchased, subscribe to, or have access to (e.g., 37 7.4% [5.1%, 9.7%] movies, cable television, Hulu, Netflix).
I would listen to not-on-demand music streaming service(s) that have ads and that I do not 34 6.8% [4.6%, 9.0%] need to pay for (e.g., ad-supported Pandora).
I would listen to digital music files or CDs that I already purchased. 30 6.0% [3.9%, 8.1%]
I would listen to satellite radio through the paid subscription I already have (SiriusXM). 26 5.2% [3.2%, 7.1%]
I would listen to on-demand music streaming service(s) that have ads and that I do not need to 25 5.0% [3.1%, 6.9%] pay for (e.g., ad-supported Spotify).
I would listen to music on video site(s) that have ads and that I do not need to pay for (e.g., ad- 23 4.6% [2.8%, 6.4%] supported YouTube).
I would listen to live AM/FM radio broadcasts from not-for-profit radio stations (e.g., NPR, 18 3.6% [2.0%, 5.2%] college radio stations) through a radio.
I would purchase a new paid subscription to satellite radio that I don’t currently subscribe to (e.g., a SiriusXM subscription at $10.99 per month or $131.88 per year for ad-free music, 16 3.2% [1.6%, 4.7%] $15.99 per month or $191.88 per year for ad-free music, news, traffic, weather, and other content).
I would listen to live AM/FM radio broadcasts from not-for-profit radio stations (e.g., NPR, 16 3.2% [1.6%, 4.7%] college radio stations) over the Internet.
Source: Simulcast Switching Survey (N=501), Appendix R.
109. “I would listen to live AM/FM radio broadcasts from commercial radio stations through a radio” was selected by 127 respondents (25.3 percent), and was the most commonly selected alternative. Other commonly-selected alternatives included “I would listen to on-demand music streaming service(s) through the paid subscription(s) I already have (e.g., Apple Music, Spotify Premium, Google Play Music),” which was selected by
37 respondents (7.4 percent), and “I would watch video content that I already purchased, subscribe to, or have access to (e.g., movies, cable television, Hulu, Netflix),” which was selected by 37 respondents (7.4 percent). The table above shows the number and percentage
51 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) of respondents selecting each alternative, for those alternatives that were selected by at least
3.0 percent of the sample. Fourteen respondents (2.8 percent) selected “don’t know/unsure” in response to this question.
110. Out of the survey sample of 501 respondents, 490 indicate the total number of hours spent listening to Internet simulcasts of terrestrial commercial radio over the prior three days. The total number of hours spent listening varies across respondents (see Appendix M).
To evaluate whether the alternatives respondents consider as substitutes for Internet simulcasts of terrestrial radio varies based on the total amount of time respondents spend listening to such simulcasts, I weighted the results of Q5 by the total number of hours each respondent reported listening to Internet simulcasts of terrestrial commercial radio in Q1.
That is, if a respondent listened to only one hour of such simulcasts over the prior three days, his or her response to Q5 would count as one, while if a respondent listened to four hours of such simulcasts over the prior three days, his or her response to Q5 would count as four.
These results are presented in Appendix S. While I do not expect that the percentages will be identical because Appendix R is share of respondents and Appendix S is share of hours, I do expect the results not to differ dramatically. Comparing Appendix R and Appendix S suggests that the relative shares of alternatives selected instead of listening to Internet simulcasts of terrestrial commercial radio are similar whether the shares are based on consumers or based on hours. For example, the shares reported in Appendix R and
Appendix S are highly correlated (ρ = 0.990).113
113 To assess the similarity of the percentages in Appendix R and Appendix S, I compute the Pearson correlation coefficient across the percentages reported in the appendices (alternatives 1–22, “other,” “don’t know/unsure,” and “blank responses”). The Pearson correlation coefficient is 0.990, suggesting that weighting Q5 responses by hours listened reported in Q1 does not dramatically change the results.
52 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 111. I also performed statistical analyses to assess whether respondents’ demographic characteristics are related to the distribution of alternatives selected in Q5. I find that the distribution of respondents’ selections in Q5 do not statistically differ by sex, region, or education level.114 I find that respondents’ ages are statistically related to the distribution of respondents’ selections in Q5.115 I examined respondents’ selections to Q5 by age group and observed that the proportion of respondents in the 65 or older age group who selected that they would listen to terrestrial commercial radio in place of Internet simulcasts of terrestrial commercial radio was over 2.5 times the proportion of respondents in the 18–34 age group who made the same selection.116
VI. Summary
112. A scientifically designed Internet survey was conducted under my direction to measure what consumers would do in place of listening to Internet simulcasts of terrestrial commercial radio if such simulcasts were not available for the next five years. Respondents reported that they would consider a variety of alternatives to such simulcasts. When asked to select one alternative to Internet simulcasts of terrestrial commercial radio based on the most recent time they listened to such simulcasts, respondents were most likely to select that they would listen to terrestrial broadcasts of commercial radio. Other commonly-selected alternatives included listening to on-demand music streaming services through paid subscriptions respondents already had, and watching video content that respondents already
114 To assess whether respondents’ selection of an alternative in Q5 varied with demographic variables, I performed χ2 tests for each of the demographics variables respondents provided data on in QS1–QS4. A χ2 test is a statistical test used to measure whether differences in the distribution of a categorical variable (such as responses to Q5) between groups are statistically significant. The significance levels (p-values) from the χ2 test for sex, region, and education are 0.54, 0.15, and 0.99, respectively. This provides evidence that respondents’ selection of an alternative in Q5 is unlikely to vary by sex, region, or education level. 115 For age group, the significance level (p-value) from the χ2 test is less than 0.01. 116 Terrestrial commercial radio (alternative 10) was chosen by 45.9 percent of respondents aged 65 or older and by 17.2 percent of respondents between ages 18 and 34.
53 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) purchased, subscribed to, or had access to. These results are robust to different approaches to analyzing the data.
113. The results of the survey also demonstrate that respondents listened to a variety of types of content on Internet simulcasts of terrestrial radio, and varied in the degree to which each type of content was important to them.
114. The survey was conducted and the data were analyzed according to scientific principles to assure that the survey and data are reliable and representative, that the results are analyzed and reported reliably, and that the results of the survey can be relied upon to draw inferences about the behavior of adults in the US who listen to Internet simulcasts of terrestrial commercial radio.
54 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX A Update September 17, 2019
ACADEMIC VITA (long version) John R. Hauser
Address
MIT Sloan School of Management Massachusetts Institute of Technology, E62-538 Cambridge, Massachusetts 02142 (617) 253-2929 [email protected]; web.mit.edu/hauser/www mitsloan.mit.edu/faculty-and-research/academic-groups/marketing/
Education
Sc.D. M.I.T., 1975, Operations Research Dissertation: "A Normative Methodology for Predicting Consumer Response to Design Decisions: Issues, Models, Theory and Use.”
Advisor: John D. C. Little. Committee members: Glen L. Urban and Moshe Ben-Akiva.
S.M. M.I.T., 1973, Civil Engineering (Transportation Systems Division)
S.M. M.I.T., 1973, Electrical Engineering
S.B. M.I.T., 1973, Electrical Engineering Joint Thesis (S.M.'s and S.B.): "An Efficient Method to Predict the Impacts of Operating Decisions for Conventional Bus Systems." Advisor: Nigel Wilson.
Honorary Degree
Doctor Honoris Causa, Erasmus School of Economics, Erasmus University, Dies Natalis 2016.
Lifetime Achievement Awards
Buck Weaver Award 2013, INFORMS Society of Marketing Science (ISMS).This award recognizes lifetime contributions to the theory and practice of marketing science.
Parlin Award 2001, The American Marketing Association describes this award as “the oldest and most distinguished award in the marketing research field.”
Converse Award 1996, the American Marketing Association, for “outstanding contributions to the development of the science of marketing.”
Churchill Award 2011, the American Marketing Association, Market Research Special Interest Group, for “Lifetime achievement in the academic study of marketing research.”
Fellow of the Institute for Operations Research and Management Science (INFORMS)
Inaugural Fellow of the INFORMS Society of Marketing Science (ISMS)
Highly Cited Researcher (ISI Web of Science), Since 2006.
A-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Awards for Published Papers
INFORMS Society of Marketing Science ISMS Long Term Impact Award, 2019, Finalist ISMS Long Term Impact Award, 2018, Finalist (formerly The Institute ISMS Long Term Impact Award, 2017, Finalist of Management Science) ISMS Long Term Impact Award, 2012, Finalist ISMS Long Term Impact Award, 2011, Finalist John D.C. Little Best-paper Award, 2015, Finalist John D.C. Little Best-paper Award, 2009, Finalist John D.C. Little Best-paper Award, 2003, First Place John D.C. Little Best-paper Award, 1998, Finalist John D.C. Little Best-paper Award, 1994, Finalist John D.C. Little Best-paper Award, 1993, First Place John D.C. Little Best-paper Award, 1990, Honorable Mention Best paper in Marketing Sciences Literature, 1984, Honorable mention. Best Paper in Marketing Sciences Literature, 1983, First Place. Best Paper in Marketing Sciences Literature, 1982, First Place. Two published articles were cited in 2007 as one of “the top 20 marketing science articles in the past 25 years.
American Marketing Association: Explor Award (Leadership is on-line market research), 2004, First-Place Finalist, Paul Green Award for contributions to marketing research, 2004 MSI Award for Most Significant Contribution to Practice of Marketing in 1996. Finalist, O'dell Award for best paper in the Journal of Marketing Research, published in 1986, awarded in 1991.
One of the top 50 most prolific marketing scholars (top journals) in the last 25 years (1982-2006). Total articles, rate of publication, and author-adjusted rate.
Product Development Management Assoc. Best Paper Award, Finalist, 2003. Best Paper Award, Finalist, 2002. One of ten most-cited papers in the Journal of Product Innovation Management. One of the top articles in educational citations in the last twenty years.
European Marketing Academy Best Paper in IJRM, Finalist, 2014
Sawtooth Software Conference Best Presentation and Paper, 2006; Runner-up, 2008, Honorable Mention, 2016.
European Society of Marketing Research Best Paper at Rome conference, September 1984.
Emerald Management Reviews 2010 Citation of Excellence (top 50 of 15,000 published papers in 2009)
Doctoral Consortia Faculty American Marketing Association, 1979, 1984, 1985, 1986, 1988, 1989, 1991, 1993, 1995, 1997, 1998, 2001, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2012, 2013, 2014.
INFORMS Society of Marketing Science, 2002 (founding member), 2003, 2004, 2012, 2014, 2015, 2017, 2018.
European Marketing Academy, 1985 Awards, Teaching
MIT Sloan School of Management: Nominated for Excellence in Teaching Award 2000, 2007, 2008. Named "Outstanding Faculty" by Business Week Guide to the Best Business Schools (1995).
A-2 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Excellence in Teaching Award 1994 (Awarded by the Master's Student class).
Awards for Thesis Supervision
American Marketing Association (Ph.D.): Winner John Howard Dissertation Award (2010, Matt Selove, Committee) Co-winner John Howard Dissertation Award (2005, Olivier Toubia) 1st Place (1981, Ken Wisniewski) Honorable Mention (1979, Patricia Simmie).
INFORMS (Ph.D.) ISMS Doctoral Dissertation Proposal Award (2016, Artem Timoshenko) Winner of the Frank Bass Award (2004, Olivier Toubia, awarded 2005) Winner of the Frank Bass Award (1989, Abbie Griffin, awarded 1995)
MIT Sloan School of Management (Ph.D.): 1st Place (1987, Peter Fader)
MIT Sloan School of Management (Master's): 1st Place (1991, Jon Silver and John Thompson) 1st Place (1983, Steve Gaskin) Honorable Mention (1982, Larry Kahn).
Marketing Science Institute MSI Alden G. Clayton Doctoral Dissertation Proposal Competition 2017, Artem Timoshenko
Awards, Other
Who’s Who in America Since 1997
Who’s Who in Management Science Since 2000
Who’s Who in Economics Since 2003
Who’s Who in Finance and Business Since 2009
Harvard Business School: Marvin Bower Fellow, 1987 - 1988.
National Science Foundation Fellowship: 1971 - 1974.
M.I.T. National Scholar, 1967 - 1971.
Honor Societies: Tau Beta Pi, Eta Kappa Nu, Sigma Xi
Directorships, Trustee, Advisory Board
2016 – Present Founder, Board of Directors, Hyper Morphing Technologies, B.V.
1988 – Present Founder, Senior Product Development Consultant at Applied Marketing Science, Inc.
March 2003 – July 2009 Trustee, Marketing Science Institute
Academic Appointments
January 1989 - Present Kirin Professor of Marketing MIT Sloan School of Management Massachusetts Institute of Technology Cambridge, Massachusetts 02142
July 2017 – present Head, Marketing Group
A-3 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) July 2010 – June 2011 Head, Marketing Group
July 2005 – June 2009 Area Head, Management Science Area
July 1988 – June 2003 Head, Marketing Group
September 1993 - May 2000 co-Director, International Center for Research on the Management of Technology
September 1997 - May 2000 Research Director, Center for Innovation in Product Development
June 2001 – June 2006 Virtual Customer Initiative Leader, Center for Innovation in Product Development
July 1984 - January 1989 Professor of Management Science MIT Sloan School of Management Massachusetts Institute of Technology Cambridge, Massachusetts 02142
July 1987 - June 1988 Marvin Bower Fellow Harvard Business School Harvard University Cambridge, Massachusetts 02163
March 1985 - May 1985 Visiting Lecturer European Institute of Business Administration Fontainebleau, FRANCE
September 1980 - June 1984 Associate Professor of Management Science MIT Sloan School of Management Massachusetts Institute of Technology Cambridge, Massachusetts 02142
September 1975 - August 1980 Assistant Professor of Marketing and of Transportation (granted tenure and promoted in 1980) Graduate School of Management and Transportation Center Northwestern University Evanston, Illinois 60201
Teaching Interests Marketing Management, New Product and Service Development, Competitive Marketing Strategy, Marketing Models, Measurement and Marketing Research, Research Methodology, Marketing Analytics.
Research Interests Consumer decision measurement: conjoint analysis, non-compensatory methods, adaptive methods, machine- learning methods, strategic importance of accuracy. Product forecasting: information acceleration, really-new products, incentive-aligned games. Consumer behavior: cognitive simplicity in decision making and in dynamic models, theory-based models, vivid stimuli. Morphing: website, banner, product assortment. Voice of the customer methods, defensive and competitive strategy, new product development, experimental and quasi-experimental methods.
Books
Hauser, John R. and Glen L. Urban (2016), From Little's Law to Marketing Science: Essays in Honor of John D. C. Little, MIT Press: Cambridge MA.
This is an edited volume that serves as a Festschrift to honor the lifetime achievements of John D. C. Little.
A-4 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Urban, Glen L. and John R. Hauser (1993), Design and Marketing of New Products, 2E, Prentice-Hall.
A comprehensive text that integrates advanced, state-of-the-art techniques to provide graduate-level students and marketing professionals with an understanding of the techniques and an operating ability to design, test, and implement new products and services.
This text has been honored by being selected for both the Prentice-Hall International Series in Management and the Series in Marketing. It has been adopted at a number of major universities. In a 1988 survey it was identified the 1980 version as the most widely used new product textbook at the graduate level.
The revision includes new material on designing for quality, reduced cycle times, prelaunch forecasting, quality improvement, defensive and competitive strategy, value mapping, the integration of marketing and engineering, new issues of organization, customer satisfaction, and new international examples. It is available in Korean and is being translated into Japanese and Chinese. Many current texts draw heavily from our material.
Third most cited work in the Journal of Product Innovation, 1984-2004. (Cited May 2010.)
Urban, Glen L., John R. Hauser, and Niki Dholakia (1986), Essentials of New Product Management, Prentice Hall.
This is an undergraduate textbook which presents the essential concepts but written for a non-technical audience. It has been translated to Japanese and has sold well in Japan.
Hauser, John R. (1986), Applying Marketing Management: Four Simulations, Scientific Press.
This mini-text and software package contains four tutorial exercises for marketing management concepts. With this package students learn positioning, competitive strategy, new product development, and life cycle forecasting while using the personal computer to simulate marketing management problems. A detailed instructor's manual and transparency masters are also available. It is available in Japanese.
Hauser, John R. (1989), ENTERPRISE: An Integrating Management Exercise, Scientific Press.
This mini-text and software package contains a comprehensive competitive simulation. Students compete in six markets by making marketing and production decisions. A detailed instructor's manual and administrative software is also available. It is available in Japanese.
Journal Editor
Marketing Science, Editor-in-Chief for volumes 8, 9, 10, 11, 12, and 13 (1989-1994). Four issues per year including periodic editorials and journal management. Processed about 120 new papers per year. Special Editor for issues on the Theory and Practice of Marketing (2014) and Big Data (2016).
A-5 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Journal Publications (Almost all available for download at web.mit.edu/hauser/www.)
Citations Reports: December 28, 2018 Google Scholar; 27,697 citations and an H-index of 56. ISI Web of Science (automated, December 28, 2018): 6,214 citations with an H-index of 36. Not included in automatic ISI report: Design and Marketing of New Products (474 2E, 286 1E, 35 UG), Defensive Marketing Strategies (236), Testing Competitive Market Structures (94). Application of Defender (45), Dynamic Markov Application (28). Revised total of 7,412; revised ISI H-index of 38. Addition citations updated January 2018 (books) & December 2018 (articles).
Hauser, John R., Felix Eggers, and Matthew Selove (2019), "The Strategic Implications of Scale in Choice-Based Conjoint Analysis," forthcoming, Marketing Science.
Dzyabura, Daria and John R. Hauser (2019), "Recommending Products When Consumers Learn their Preferences," forthcoming, Marketing Science, 38, 3.
Timoshenko, Artem and John R. Hauser (2019), "Identifying Customer Needs from User-Generated Content," Marketing Science, 38, 1, 1-20.
Lin, Song, Juanjuan Zhang, and John R. Hauser (2015), “Learning from Experience, Simply,” Marketing Science, 34, 1, (January-February), 1-19.
Finalist, John D. C. Little Award for Best Article in the Marketing Sciences Literature, 2015.
Hauser, John R., Guilherme Liberali , and Glen L. Urban (2014), “Website Morphing 2.0: Switching Costs, Partial Exposure, Random Exit, and When to Morph,” Management Science, 60, 6, (June), 1594–1616.
Hauser, John R. (2014), “Consideration-Set Heuristics,” Journal of Business Research, 67 (8), 1688-1699.
Urban, Glen L., Guilherme Liberali, Erin MacDonald, Robert Bordley, and John R. Hauser (2014), “Morphing Banner Advertisements,” Marketing Science, 33, 1.
Hauser, John R., Songting Dong, and Min Ding (2014), “ Self-Reflection and Articulated Consumer Preferences,” Journal of Product Innovation Management, 31, 1, 17-32.
Liberali, Guilherme, Glen L. Urban, and John R. Hauser (2013), “ Competitive Information, Trust, Brand Consideration, and Sales: Two Field Experiments ” International Journal for Research in Marketing, 30, 2, (June), 101-113.
Finalist, IJRM Best Paper Award, 2014.
Dzyabura, Daria and John R. Hauser (2011), “Active Machine Learning for Consideration Heuristics,” Marketing Science, 30, 5, (September-October), 801-819.
Hauser, John R. (2011), “A Marketing Science Perspective on Recognition-Based Heuristics (and the Fast and Frugal Paradigm),” Judgment and Decision Making, 6, 5, (July), 396-408.
Ding, Min, John Hauser, Songting Dong, Daria Dzyabura, Zhilin Yang, Chenting Su, and Steven Gaskin (2011), “Unstructured Direct Elicitation of Decision Rules,” Journal of Marketing Research, 48, (February), 116-127.
Hauser, John R., Olivier Toubia, Theodoros Evgeniou, Daria Dzyabura, and Rene Befurt (2010), “Disjunctions of Conjunctions: Cognitive Simplicity and Consideration Sets,” Journal of Marketing Research, 47, (June), 485-496.
Urban, Glen L., John R. Hauser, Guilherme Liberali, Michael Braun, and Fareena Sultan (2009), “Morph the Web to Build Empathy, Trust, and Sales,” Sloan Management Review, 50, 4, (Summer), 53-61.
Hauser, John R., Glen L. Urban, Guilherme Liberali, and Michael Braun (2009), “Website Morphing,” Marketing Science., 28, 2, (March-April), 202-224. Lead article with commentaries by Andrew Gelman, John Gittins, and Hal
A-6 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Varian. Includes rejoinder.
Finalist, John D. C. Little Award for Best Article in the Marketing Sciences Literature, 2009.
Finalist, INFORMS Society for Marketing Science Long Term Impact Award, 2017, 2018, 2019
2010 Emerald Management Reviews Citation of Excellence for one of best articles published in the top 400 business and management journals in 2009. (Top 50 of 15,000 articles.)
Toubia, Olivier, John R. Hauser and Rosanna Garcia (2007), “Probabilistic Polyhedral Methods for Adaptive Choice- Based Conjoint Analysis: Theory and Application,” Marketing Science, 26, 5, (September-October), 596-610.
Co-winner, American Marketing Association, John Howard Dissertation Award, 2005
Yee, Michael, Ely Dahan, John Hauser, and James Orlin (2007), “Greedoid-Based Non-compensatory Two-Stage Consideration-then-Choice Inference,” Marketing Science, 26, 4, (July-August), 532-549.
First Place, American Marketing Association Explor Award, 2004
Toubia, Olivier and John R. Hauser (2007), “On Managerial Efficient Designs,” Marketing Science, 26, 6, (November- December), 851-858.
Garcia, Rosanna, Paul Rummel, and John R. Hauser (2007), “Validating Agent-Based Marketing Models Using Conjoint-Analysis,” Journal of Business Research, 60, 8, (August), 848-857.
Hauser, John R., Gerald Tellis, and Abbie Griffin (2006), “Research on Innovation: A Review and Agenda for Marketing Science,” Marketing Science, 25, 6, (November-December), 687-717.
Cited by Thomson Reuters’ Essential Science Indicators as a Fast Breaking Paper in Economics and Business in April 2009.
Cited in 2014 by the International Journal of Research in Marketing as one of the top 10 impactful articles published in Marketing Science during 2004-2012..
Hauser, John R. and Olivier Toubia (2005), “The Impact of Utility Balance and Endogeneity in Conjoint Analysis,” Marketing Science, 24, 3, (Summer), 498-507.
Glen L. Urban and John R. Hauser (2004), “’Listening-In’ to Find and Explore New Combinations of Customer Needs,” Journal of Marketing, 68, (April), 72-87.
Toubia, Olivier, John R. Hauser, and Duncan Simester (2004), “Polyhedral Methods for Adaptive Choice-based Conjoint Analysis,” Journal of Marketing Research, 41, 1, (February), 116-131.
Finalist, Paul Green Award for contributions to the practice of marketing research.
Toubia, Olivier, Duncan I. Simester, John R. Hauser, and Ely Dahan (2003), “Fast Polyhedral Adaptive Conjoint Estimation,” Marketing Science, 22, 3, (Summer), 273-303.
First Place, John D. C. Little Award for Best Article in the Marketing Sciences Literature, 2003
First Place, Frank M. Bass Award for Best Article Based on a Dissertation, 2005.
Finalist, INFORMS Society for Marketing Science Long Term Impact Award, 2011
Finalist, INFORMS Society for Marketing Science Long Term Impact Award, 2012
A-7 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Dahan, Ely and John R. Hauser (2002), “The Virtual Customer,” Journal of Product Innovation Management, 19, 5, (September), 332-354.
Finalist, PDMA Best Paper Award in 2003.
Hauser, John R. (2001), "Metrics Thermostat," Journal of Product Innovation Management, 18, 3. (May), 134-153.
Finalist PDMA Best Paper Award in 2002.
Cited by the PDMA in 2007 as one of the top articles in the last twenty years in educational citations.
Simester, Duncan I, John R. Hauser, Birger Wernerfelt, and Roland Rust (2000), "Implementing Quality Improvement Programs Designed to Enhance Customer Satisfaction: Quasi-experiments in the United States and Spain," Journal of Marketing Research, 37, 1, (February), 102-112.
Hauser, John R. (1998), "Research, Development, and Engineering Metrics." Management Science, 44, 12, December, 1670-1689.
Hauser, John R. and Gerry Katz (1998), “Metrics: You Are What You Measure!.” European Management Journal, 16, 5, (October), 516-528. Highlighted in “A Round-up of Important Articles from Business Periodicals,” in Mastering Management Review published by the Financial Times.
Hauser, John R., Duncan I. Simester, and Birger Wernerfelt (1997), "Side Payments in Marketing," Marketing Science, 16, 3, 246-255.
Finalist, John D. C. Little Award for Best Article in the Marketing Sciences Literature, 1997.
Urban, Glen L., John R. Hauser, William J. Qualls, Bruce D. Weinberg, Jonathan D. Bohlmann and Roberta A. Chicos (1997), "Validation and Lessons from the Field: Applications of Information Acceleration," Journal of Marketing Research, 34, 1, (February), 143-153.
Hauser, John R. and Florian Zettelmeyer (1997), “Metrics to Evaluate R,D&E,” Research Technology Management, 40, 4, (July-August), 32-38.
Griffin, Abbie, and John R. Hauser (1996), "Integrating Mechanisms for Marketing and R&D," Journal of Product Innovation Management, 13, 3, (May), 191-215.
One of ten most-cited papers in the Journal of Product Innovation Management (JPIM 24, 3, 2007, p.209)
Hauser, John R., Duncan I. Simester, and Birger Wernerfelt (1996), "Internal Customers and Internal Suppliers," Journal of Marketing Research, 33, 3, (August), 268-280. Urban, Glen L., Bruce Weinberg and John R. Hauser (1996), "Premarket Forecasting of Really-New Products," Journal of Marketing, 60,1, (January), 47-60. Abstracted in the Journal of Financial Abstracts, 2, 23A, (June) 1995.
1996 MSI Award for the most significant contribution to the advancement of the practice of marketing. Hauser, John R., Duncan I. Simester, and Birger Wernerfelt (1994), "Customer Satisfaction Incentives," Marketing Science, 13, 4, (Fall), 327-350.
Finalist, John D. C. Little Award for Best Article in the Marketing Sciences Literature, 1994. Hauser, John R., Glen L. Urban, and Bruce Weinberg (1993), "How Consumers Allocate their Time When Searching for Information," Journal of Marketing Research,30, 4, (November), 452-466.
Hauser, John R. (1993), "How Puritan Bennett Used the House of Quality," Sloan Management Review, 34, 3, (Spring), 61-70. Reprinted in Taiwan Philips News (in Chinese), 23, 1, (Feb), 1994.
A-8 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Griffin, Abbie and John R. Hauser (1993), "The Voice of the Customer," Marketing Science, 12, 1, (Winter), 1-27.
First-place, John D. C. Little Award for Best Article in Marketing Sciences Literature, 1993.
First Place, Frank M. Bass Award for Best Article Based on a Dissertation, 1995.
Cited in 2007 by the INFORMS Society of Marketing Science as one “of the top 20 marketing science articles in the past 25 years.
Cited in 2014 by the International Journal of Research in Marketing as one of the top 10 academically most impactful marketing science papers.
Griffin, Abbie and John R. Hauser (1992), "Patterns of Communication Among Marketing, Engineering, and Manufacturing -- A Comparison between Two New Product Teams," Management Science, 38, 3, (March), 360- 373.
One of the 500 most-cited articles in the first 50 years of Management Science.
Urban, Glen. L., John. R. Hauser, and John. H. Roberts (1990), "Prelaunch Forecasting of New Automobiles: Models and Implementation," Management Science, 36, 4, (April), 401-421. Reprinted in Modeling for Management, Vol. 1, George P. Richardson, ed., Dartmouth Publishing Co., Hampshire England.
INFORMS (TIMS) Finalist, Best Article in Marketing Science Literature, 1990.
Hauser, John R. and Birger Wernerfelt (1990), "An Evaluation Cost Model of Consideration Sets," Journal of Consumer Research, 16, (March), 393-408.
Hauser, John R. and Birger Wernerfelt (1989), "The Competitive Implications of Relevant-Set/Response Analysis," Journal of Marketing Research, 26, 4, (November), 391-405.
Hauser, John R. and Don Clausing (1988), "The House of Quality," Harvard Business Review, 66, 3, (May-June), 63-73. Reprinted in The Product Development Challenge, Kim B. Clark and Steven C. Wheelwright, eds., Harvard Business Review Book, Boston MA 1995. Reprinted in IEEE Engineering Management Review, 24, 1, Spring 1996. Translated into German and published in Hermann Simon and Christian Homburg (1998), Kunderzufriedenheit, (Druck and Buchbinder, Hubert & Co.: Gottingen, Germany).
Fader, Peter and John R. Hauser (1988), "Implicit Coalitions in a Generalized Prisoner's Dilemma," Journal of Conflict Resolution, 32, 3, (September), 553-582.
Hauser, John R. (1988), "Competitive Price and Positioning Strategies," Marketing Science, 7, 1, (Winter), 76-91.
Hauser, John R. (1986), "Agendas and Consumer Choice," Journal of Marketing Research, 2 , 3, (August), 199-212. (Includes unpublished appendix containing "Proofs of Theorems and Other Results." ) Reprinted in Gregory S. Carpenter, Rashi Glazer, and Kent Nakamota (1997), Readings on Market-Driving Strategies, Towards a New Theory of Competitive Advantage, (Reading, MA: Addison-Wesley Longman ,Inc.)
Finalist, 1991 American Marketing Associations O'dell Award for Best Paper in JMR (5-year lag)
Hauser, John R. and Glen L. Urban (1986), "Value Priority Hypotheses for Consumer Budget Plans," Journal of Consumer Research, 12, 4, (March), 446-462.
Eliashberg, Jehoshua and John R. Hauser (1985), "A Measurement Error Approach for Modeling Consumer Risk Preference," Management Science, 31, 1, (January), 1-25.
Hauser, John R., and Steven P. Gaskin (1984), "Application of the `DEFENDER' Consumer Model," Marketing Science, 3, 4, (Fall), 327-351. Reprinted (in French) in Recherche et Applications on Marketing, Vol. 1, April 1986,
A-9 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) pp. 59-92.
Urban, Glen L., P. L. Johnson and John R. Hauser (1984), "Testing Competitive Market Structures," Marketing Science, 3, 2, (Spring), 83-112.
INFORMS (TIMS) Finalist, Best Article in Marketing Science Literature, 1984.
Hauser, John R. (1984), "Consumer Research to Focus R&D Projects" Journal of Product Innovation Management, 1, 2, (January), 70.84.
Hauser, John R., and Steven M. Shugan (1983), "Defensive Marketing Strategy," Marketing Science, 2, 4, (Fall), 319-360.
INFORMS (TIMS) Best Article in Marketing Science Literature, 1983.
Cited in 2007 by the INFORMS Society of Marketing Science as one “of the top 20 marketing science articles in the past 25 years.
Republished in 2008 as one of eight “classic” articles in Marketing Science.
Cited in 2014 by the International Journal of Research in Marketing as one of the top 10 academically most impactful marketing science papers.
Hauser, John R., and Kenneth J. Wisniewski (1982), "Application Predictive Test, and Strategy Implications of a Dynamic Model of Consumer Response," Marketing Science, 1, 2, (Spring), 143-179.
Hauser, John R., and Kenneth J. Wisniewski (1982), "Dynamic Analysis of Consumer Response to Marketing Strategies," Management Science, 28, 5, (May), 455-486.
INFORMS (TIMS) Best Article in Marketing Science Literature, 1982.
Tybout, Alice M. and John R. Hauser (1981), "A Marketing Audit Using a Conceptual Model of Consumer Behavior: Application and Evaluation," Journal of Marketing, 45, 3, (Summer), 81-101.
Hauser, John R., and Patricia Simmie (1981), "Profit Maximizing Perceptual Positions: An Integrated Theory for the Selection of Product Features and Price," Management Science, 27, 2, (January), 33-56.
One of the 500 most-cited articles in the first 50 years of Management Science.
Hauser, John R., Frank S. Koppelman and Alice M. Tybout (1981), "Consumer-Oriented Transportation Service Planning: "Consumer Analysis and Strategies," Applications of Management Science, 1, 91-138.
Hauser, John R., and Steven M. Shugan (1980), "Intensity Measures of Consumer Preference," Operation Research, 28, 2, (March-April), 278-320.
Hauser, John R., and Frank S. Koppelman (1979), "Alternative Perceptual Mapping Techniques: Relative Accuracy and Usefulness, Journal of Marketing Research, 16, 4, (November), 495-506.
Hauser, John R., and Glen L. Urban (1979), "Assessment of Attribute Importances and Consumer Utility Functions: von Neumann-Morgenstern Theory Applied to Consumer Behavior," Journal of Consumer Research, 5, (March), 251-262.
Koppelman, Frank S. and John R. Hauser (1979), "Destination Choice Behavior for Non-Grocery Shopping Trips," Transportation Research Record, 673, 157-165.
Hauser, John R. (1978), "Consumer Preference Axioms: Behavioral Postulates for Describing and Predicting
A-10 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Stochastic Choice," Management Science, 24, 13, (September), 1331-1341.
Hauser, John R. (1978), "Testing the Accuracy, Usefulness and Significance of Probabilistic Models: An Information Theoretic Approach," Operations Research, 26, 3, (May-June), 406-421.
Hauser, John R. and Glen L. Urban (1977), "A Normative Methodology for Modeling Consumer Response to Innovation," Operations Research, 25, 4. (July-August), 579-619.
Published Notes and Commentaries Hauser, John R. (2016), “The Marketing Science Revolution and Subsequent Evolution,” 103rd Dies Natalis of Erasmus University, November 2016.
Hauser, John R. (2016), “Phenomena, Theory, Application, Data, and Methods all Have Impact,” Journal of the Academy of Marketing Sciences, forthcoming.
Chintagunta, Pradeep, Dominique Hanssens, John R. Hauser (2016), “Marketing Science and Big Data,” Marketing Science, 35, 1, 1-2.
Hauser, John R. (2016), “Paul E. Green: An Applications’ Guru,” in Vithala Rao and V. Srinivasan, Eds., Paul Green’s Legends Volume: Conjoint Analysis Applications, (Newbury Park, CA: Sage Publications). Forthcoming.
Hauser, John R. (2016), “Perspectives on Paul E. Green,” in Vithala Rao and V. Srinivasan, Eds., Paul Green’s Legends Volume: Paul Green’s Contributions to Conjoint Analysis – Early Years, (Newbury Park, CA: Sage Publications). Forthcoming.
Sunil Gupta, Dominique Hanssens, John Hauser, Donald Lehmann, and Bernd Schmitt (2014), “Theory and Practice in Marketing Special Section in Marketing Science,” Marketing Science, 33, 1.
Chintagunta, Pradeep, Dominique Hanssens, John R. Hauser, Jagmohan Singh Raju, Kannan Srinivasan, and Richard Staelin (2013), “Marketing Science: A Strategic Review,” Marketing Science, 33, 1, (January-February).
Hauser, John R. (2011), “New Developments in Product-Line Optimization,” International Journal on Research in Marketing, 28, 26-27. Commentary on papers by Michalek, Ebbes, Adigüzel, Feinberg, and Papalambros, “Enhancing Marketing with Engineering,” and Tsafarakis, Marinakis, and Matsatsinis, “Particle Swarm Optimization for Optimal Product Line Design.”
Hauser, John R. and Steven M. Shugan (2007), “Comments on ‘Defensive Marketing Strategy,’” Marketing Science, 27, 1, (January-February), 85-87.
Rangaswamy, Arvind , Jim Cochran, Tülin Erdem, John R. Hauser, and Robert J. Meyer (2007), “Editor-in-Chief Search Committee Report: The Digital Future is Here,” Marketing Science, 27, 1, (January-February), 1-3.
Hauser, John R. (2006), “Twenty-Five Years of Eclectic Growth in Marketing Science,” Marketing Science (invited commentary), 25, 6, (November-December), 557-558.
Hauser, John R., Greg Allenby, Frederic H. Murphy, Jagmohan Raju, Richard Staelin, and Joel Steckel (2005), “Marketing Science – Growth and Evolution,” Marketing Science, 24, 1, (Winter), 1-2, invited editorial.
Hauser, John R., Scott Carr, Barbara Kahn, James Hess, and Richard Staelin (2002), "Marketing Science: A Strong Franchise with a Bright Future," Marketing Science, 21, 1, (Winter), invited editorial.
Hauser, John R. (1984), "Price Theory and the Role of Marketing Science," Journal of Business, Vol. 57, No. 1, (January), S65-S72. Hauser, John R. (1980), "Comments on 'Econometric Models of Probabilistic Choice Among Products'," Journal of Business, 53, 3, Part 2, (July 1980), S31-S34.
A-11 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25)
Papers in Edited Volumes and/or Proceedings
Eggers, Felix, John R. Hauser, Matthew Selove (2016), “The Effects of Incentive Alignment, Realistic Images, Video Instructions, and Ceteris Paribus Instructions on Willingness to Pay and Price Equilibria,” forthcoming, Proceedings of the Sawtooth Software Conference, Park City, Utah ,September 28-30, 2016.
Honorable Mention, Best Paper at Sawtooth Software Conference, 2016.
Timoshenko, Artem and John R. Hauser (2016). “Mining and Organizing User-Generated Content to Identify Attributes and Attribute Levels,” forthcoming, Proceedings of the Sawtooth Software Conference, Park City, Utah ,September 28-30, 2016.
Hauser, John R. (2016), “Comments on “How Many Options? Behavioral Responses to Two Versus Five Alternatives Per Choice” by Martin Meissner, Harmen Oppewal, And Joel Huber, Proceedings of the Sawtooth Software Conference, Park City, Utah ,September 28-30, 2016.
Liberali, Gui, John R. Hauser, and Glen L. Urban (2017), "Morphing Theory and Applications," forthcoming, Handbook of Marketing Decision Models (New Edition, 2017), International Series in Operations Research & Management Science published by Springer Science and Business Media, Berend Wierenga and Ralf van der Lans, Editors.
Selove, Matthew and John R. Hauser (2010), “How Does Incorporating Price Competition into Market Simulators Affect Product Design Decisions?,” Proceedings of the Sawtooth Software Conference, Newport Beach, CA, Oct 6- 8, 2010.
Hauser, John R. and Glen L. Urban (2009), “Profile of John D. C. Little,” in Saul I. Gass and Arjang A. Assad eds. Profiles in Operations Research, (New York, NY: Springer).
Ding, Min, Steven Gaskin, and John Hauser (2009), “A Critical Review of Non-compensatory and Compensatory Models of Consideration-Set Decisions,” 2009 Sawtooth Software Conference Proceedings, Delray, FL, March 23- 27, 2009, 207-232.
Runner-up, Best Paper at Sawtooth Software Conference, 2009.
Gaskin, Steven, Theodoros Evgeniou, Daniel Bailiff, John Hauser (2007), “Two-Stage Models: Identifying Non- Compensatory Heuristics for the Consideration Set then Adaptive Polyhedral Methods Within the Consideration Set,” Proceedings of the Sawtooth Software Conference in Santa Rosa, CA, October 17-19, 2007.
Hauser, John R. and Ely Dahan (2010), “New Product Development,” in Rajiv Grover, Ed., Essentials of Marketing Management, (Englewood Cliffs, NJ: Prentice Hall), forthcoming January 2011.
Toubia, Olivier, Theodoros Evgeniou, and John Hauser (2007), “Optimization-Based and Machine-Learning Methods for Conjoint Analysis: Estimation and Question Design,” in Anders Gustafsson, Andreas Herrmann and Frank Huber, Eds, Conjoint Measurement: Methods and Applications, 4E, (New York, NY: Springer). 231-258.
Hauser, John R., Ely Dahan, Michael Yee, and James Orlin (2006), ““Must Have” Aspects vs. Tradeoff Aspects in Models of Customer Decisions,” Proceedings of the Sawtooth Software Conference in Del Ray Beach, FL, March 29-31, 2006
Best Paper at the Sawtooth Software Conference, 2006.
Hauser, John R. and Vithala Rao (2004), “Conjoint Analysis, Related Modeling, and Applications,” Advances in Market Research and Modeling: Progress and Prospects,, Jerry Wind and Paul Green, Eds., (Boston, MA: Kluwer Academic Publishers), 141-168.
A-12 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Dahan, Ely and John R. Hauser (2003), "Product Management: New Product Development and Launching," Handbook of Marketing, Barton Weitz and Robin Wensley, Eds, Sage Press, (June), 179-222.
Hauser, John R. (1997), “The Role of Mathematical Models in the Study of Product Development,” Proceedings of the 14th Paul D. Converse Awards Conference, University of Illinois, Champaign-Urbana, IL, 72-90.
Swanson, Derby A. and John R. Hauser (1995), "The Voice of the Customer: How Can You Be Sure You Know What Customers Really Want?," Proceedings of the 1st Pacific Rim Symposium of Quality Function Deployment, MacQuarie University, NSW Australia, February 15-17.
Little, John D. C., Leonard M. Lodish, John R. Hauser, and Glen L. Urban (1993), "Comment on `Marketing Science's Pilgrimage to the Ivory Tower' by Hermann Simon," in Research Traditions in Marketing, Gary L. Lilien, Bernard Pras, and Gilles Laurent, eds, (Kluwer), 45-51.
Hauser, John R. (1986), "Theory and Application of Defensive Strategy" in The Economics of Strategic Planning, Lacy G. Thomas, ed., (Lexington Books, D. C. Heath & Co.: Lexington, MA), 113-140. Reprinted by the Marketing Science Institute.
Hauser, John R. (1985), "The Coming revolution in Marketing Theory," in R. Russell, ed., Marketing in an Electronic Age, (Harvard Business School Press: Boston, MA), 344-363.
Hauser, John R. and Glen L. Urban (1984), "Consumer Durables: Actual Budgets Compared to Value Priority Model - Preliminary Results and Managerial Implications," Proceedings of the ESOMAR-Congress, Rome, Italy, (September).
Best Paper at ESOMAR Rome Conference, 1984.
Hauser, John R., John H. Roberts and Glen L. Urban (1983), "Forecasting Sales of a New Consumer Durable: A Prelaunch Modeling and Measurement Methodology," Advances and Practices of Marketing Science, Fred S. Zufryden, ed., (The Institute of Management Science: Providence, RI), 115-128.
Hauser, John R., and Glen L. Urban (1982), "Prelaunch Forecasting of New Consumer Durables: Ideas on a Consumer Value-Priority Model," in A. D. Shocker and R. Srivastava, eds., Analytic Approaches to Product and Market Planning, Vol. 2, (Marketing Science Institute: Cambridge Massachusetts), 276-296.
Hauser, John R. (1982), "Comments on 'A Survey of Experimental Market Mechanisms for Classical Environments'," Research in Marketing, Supplement 1: Choice Models for Buyer Behavior, L. McAlister, ed., (JAI Press: Greenwich, CT), Spring, 49-56.
Hauser, John R. (1981), "Comments on 'Violations of Regularity and the Similarity Hypothesis by Adding Asymmetrically Dominated Alternatives to the Choice Set'," Proceedings of the Special Conference on Choice Theory, Joel Huber, ed., (Duke University: Durham, NC), June.
Hauser, John R., and Frank S. Koppelman (1979), "An Empirical Comparison of Techniques to Model Consumer Perceptions and Preferences," in A. D. Shocker, ed., Analytic Approaches to Product and Marketing Planning, (Marketing Science Institute: Cambridge, Massachusetts), 216-238.
Tybout, Alice M., John R. Hauser, and Frank S. Koppelman (1977), "Consumer-Oriented Transportation Planning: An Integrated Methodology for Modeling Consumer Perceptions, Preferences and Behavior," Advances in Consumer Research, Vol. 5, (Chicago, Illinois), October. Hauser, John R. and Steven M. Shugan (1977), "Extended Conjoint Analysis with Intensity Measures and Computer Assisted Interviews: Applications to Telecommunications and Travel, " Advances in Consumer Research, Vol. 5, (Chicago, Illinois), October.
Hauser, John R. and Frank S. Koppelman (1977), "Designing Transportation Services: A Marketing Approach." Proceedings of the Transportation Research Forum, (Atlanta, GA), October, 638-652.
A-13 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Hauser, John R. and Peter R. Stopher (1976), "Choosing an Objective Function Based on Modeling Consumer Perceptions and Preferences," Proceedings of the International Conference on Cybernetics and Society, (Washington, D.C.), November, 26-31.
Magazine Article, Etc.
Hauser, John R (2017). "How companies like United and Wells Fargo can win back consumer trust." The Conversation, April 19, 2017.
Chintagunta, Pradeep, Dominique Hanssens, John R. Hauser (2016), “Marketing and Data Science: Together the Future is Ours,” forthcoming, The GfK Marketing Intelligence Review, Special Issue on Data Science, November 2016
Hauser, John R., Abbie Griffin, and Steve Gaskin (2011), “The House of Quality,” Wiley International Encyclopedia of Marketing, (Chichester, West Sussex UK: John Wiley & Sons, Ltd.).
Abbie Griffin, Steve Gaskin, Robert Klein, Gerry Katz, and John R. Hauser (2009), “The Voice of the Customer,” Wiley International Encyclopedia of Marketing, (Chichester, West Sussex UK: John Wiley & Sons, Ltd.).
Hauser, John R. (2002), “Marketing Makes a Difference,” Marketing Management, (January/February), 11, 1, 46- 47.
Hauser, John R. (2000), “Going Overboard on Platforms,” AMS Voices, 8.
Hauser, John R. (1997), “The Problem with Pinball,” AMS Voices, 4.
Hauser, John R. (1996), "You Are What You Measure," AMS Voices, 1.
Hauser, John R. (1995), "Internal Customers," Insight, 4, 1.
Hauser, John R. (1994), "Quality Function Deployment," Marketing Encyclopedia for the Year 2000, Jeffrey Heilbrunn, ed., American Marketing Association, Chicago, IL, 60606.
Hauser, John R. (1993), "Are Customer-Satisfaction Programs Profitable?, Insight, 3.
Hauser, John R. (1988), "Customer Driven Engineering," Design News, (July 18), p. 50.
Hauser, John R. and Robert L. Klein (1988), "Without Good Research, Quality is a Shot in the Dark," Marketing News, Vol. 22, No. 1, January 4. Page 1.
Hauser, John R. (1986), "`Defender' Helps Mature Brands Ward off New Foes," Marketing Educator, 5, 3, (Fall), 5.
Working Papers
Dzyabura, Daria, Siham El Kihal, John R. Hauser, and Marat Ibragimov (2019), "Leveraging the Power of Images in Predicting Product Return Rates, " (Cambridge, MA: MIT Sloan School of Management). Under review, Marketing Science.
Eggers, Felix, John R. Hauser, Matthew Selove (2017), “Scale Matters: How Craft in Conjoint Analysis Affects Price and Positioning Strategies,” (Cambridge, MA: MIT Sloan School of Management).
Burnap, Alex and John R. Hauser (2019), "Design and Evaluation of Product Aesthetics: A Human-Machine Hybrid Approach," (Cambridge, MA: MIT Sloan School of Management). Under review, Marketing Science.
Burnap, Alex and John R. Hauser (2019), "Predicting “Design Gaps” in the Market: Deep Consumer Choice Models
A-14 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) under Probabilistic Design Constraints," (Cambridge, MA: MIT Sloan School of Management).
Glen Urban, Artem Timoshenko, Paramveer Dhillon, and John Hauser (2019), „Cutting Through the Hype of Deep Learning," (Cambridge, MA: MIT Sloan School of Management). Under review, Sloan Management Review.
Davide Proserpio, John R. Hauser, Tomomichi Amano, Alex Burnap, Tong Guo, Dokiun Lee, Xiao Liu, Randall Lewis, Kanishka Misra, Eric Schwarz, Artem Timoshenko, Lilei Xu, Hema Yoganarasimhan (2019), „Soul and Machine (Learning),“ (Cambridge, MA: MIT Sloan School of Management). Under review, Marketing Letters.
Classic Working Papers (Support published papers with additional information)
Braun, Michael, Clarence Lee, Glen L. Urban, and John R. Hauser (2009), “Does Matching Website Characteristics to Cognitive Styles Increase Online Sales?,” (Cambridge, MA: MIT Sloan School of Management).
Zettelmeyer, Florian and John R. Hauser (1995), "Metrics to Evaluate R&D Groups: Phase I, Qualitative Interviews," Working Paper, International Center for Research on the Management of Technology, MIT, Cambridge, MA, 02142.
Hauser, John R. (1991), "Comparison of Importance Measurement Methodologies and their Relationship to Consumer Satisfaction," (Cambridge, MA: MIT Sloan School of Management).
Shugan, Steven M. and John R. Hauser (1978), „Designing and Building a Marketing Research Information System,“ Working Paper, Northwestern University, Evanston, IL.
Research in Progress
Field application and test of website morphing.
The effect of vivid stimuli in conjoint analysis. Machine learning to identify non-linearities.
Machine-learning methods to identify customer needs from user-generated content.
Convolutional Neural Networks to automatically identify aesthetic judgments from pictures of products.
Research Reports (not otherwise listed)
Hauser, John R. (1996), “R&D Metrics: An Annotated Bibliography,” ICRMOT Working Paper, M.I.T., Cambridge, MA 02142. (June) Also available as a Marketing Science Institute Working Paper (November).
Hauser, John R. and Greg Cirmak (1987), "Consumer Driven Engineering for the CHEK Automobiles," Information Resources, Inc. Report to General Motors, Inc. Details the results of a major study on consumer perceptions and preferences of luxury automobiles. April.
Hauser, John R. (1983), "Critique of Market Studies for Cellular Radio Telephone:. Affidavits before the FCC evaluating market studies, June and September.
Hauser, John R. (1983), "Forecasts of Demand and Cellular Radio Telephone,: Affidavits before the FCC for five major and nine minor markets. June and April.
Hauser, John R., and J. Bertan (1982), "Auto Show Interviews," Internal Report to Buick Division of General Motors, June.
Hauser, John R., and Kenneth J. Wisniewski (1981), "Monitoring the Implementation of Innovative Transportation Services, Phase I: Final Report," Technical Report to the Urban Mass Transit Administration, Research Grant IL-11- 0012, May.
A-15 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Hauser, John R. and Kenneth J. Wisniewski (1979), "Consumer Analysis for General Travel Destinations," Technical Report, Transportation Center, Northwestern University, March.
Hauser, John R. and Steven M. Shugan (1978), "Designing and Building a Market Research Information System," Technical Report, Transportation Center, Northwestern University, February.
Hauser, John R. (1978), "Forecasting and Influencing the Adoption of Technological Innovations," Technical Report, Transportation Center, Northwestern University, October.
Hauser, John R., Alice M. Tybout and Frank S. Koppelman (1978), "Consumer-Oriented Transportation Services Planning: The Development and Implementation of a Questionnaire to Determine Consumer Wants and Needs," Technical Report, Transportation Center, Northwestern University, October.
Tybout, Alice M., Frank S. Koppelman and John R. Hauser (1977), "Consumer Views of Transportation in Evanston: A Report Based on Focus Group Interviews," Technical Report, Transportation Center, Northwestern University, June.
Koppelman, Frank S., John R. Hauser and Alice M. Tybout (1977), "Preliminary Analysis of Perceptions, Preferences, Beliefs and Usage of Transportation Services for Travel to Downtown Evanston," Technical, Report, Transportation Center, Northwestern University, May.
Hauser, John R. (1977), "Results of the Focus Group Interviews for Shared Ride Auto Transit," Cambridge Systematics Consultant's Report, May.
Hauser, John R. (1976), "Report on the Applicability of Attitudinal research for Improving the Effectiveness of Transportation Demand Models," Position Paper commissioned by Cambridge Systematics, Inc., April.
Wilson, Nigel, R. W. Weissberg and John R. Hauser (1976), "Advanced Dial-a-Ride Algorithms--Final Report," M.I.T. Department of Civil Engineering Technical Report, April.
Hauser, John R., et al. (1974), "The Chemung County Transit Survey." Volunteers in Technical Assistance (a division of VISTA) publication for Chemung County, NY, June. (Includes analysis of transportation options based on the results of the survey designed and implemented by the technical team.)
Hauser, John R. (1974), "A Cost Model for RTS (Rochester, NY) Conventional Bus Routes," M.I.T., Department of Civil Engineering Report, January.
Hauser, John R. (1973), "An Efficient Model for Planning Bus Routes in Communities with Populations Between 20,000 and 250,000," M.I.T., Operations Research Center Working Paper OR-029-993, November.
Research Grants
July 2007 – June 2008 Understanding Non-compensatory Decision Making for Consideration Decisions (under Consortium with MIT Center for eBusiness and General Motors, Inc.)
June 2000 – May 2006 Center for Innovation in Product Development, MIT, Initiative Leader, Virtual Customer.
January 2001 – May 2002 eBusiness Center at MIT. Design and Delivery of Online Promotions. (with John Little, Duncan Simester, and Glen Urban).
January 1997 – May 2000 Center for Innovation in Product Development, Engineering Research Center Grant from the National Science Foundation. Research Director. In addition, research grants for non-monetary incentives, procurement metrics, and virtual customer methods.
A-16 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) June 1999 – May 2000 “Metrics Thermostat,” International Center for Research on the Management of Technology (Principal Investigator).
June 1999- May 2001 “New Product Metrics at Ford and the US Navy,” Center for Innovation in Product Development
June 1999- May 2001 “Lean Sustainment Metrics at the USAF,” Lean Sustainment Initiative at MIT
June 1994 - May 1999 "Metrics to Value R&D," International Center for Research on the Management of Technology (Principal Investigator). General topic. Detailed proposals were for various aspects of the problem.
June 1991 - May 1994 "Customer Needs, Customer Satisfaction, Sales, and Profit: Providing the Right Incentives to Engineering and R&D," International Center for Research on the Management of Technology (co-Principal Investigator with Birger Wernerfelt)
January 1990 - June 1992 "Information Acceleration and Preproduction Forecasting of New Autos, Phases I and II." General Motors Electric Vehicle Project. (Associate)
December 1988 - June 1990 "Improved Methodologies to Measure Consumer Needs," Procter & Gamble Company. (Principal Investigator)
September 1981 - December 1985 "Prelaunch Forecasting System for New Consumer Durables and Its Applications to Auto Purchases," General Motors, Buick Division (co-Principal Investigator with Glen L. Urban).
January 1981 - May 1981 "Marketing Approaches in Travel Demand," United Parcel Service Grant (Faculty Advisor). January 1979 - August 1980 "Monitoring the Implementation of Innovative Public Transportation Services" from University Research Program of the Urban Mass Transportation Administration (Principal Investigator). July 1975 - September 1977 "Consumer-Oriented Transportation Service Planning." from the Program of University Research, U.S. Department of Transportation (Faculty Associate).
September 1977 - January 1978 "Consumer-oriented Transportation Service: Modification and Evaluation" from Program of University Research, USDOT (Faculty Associate).
May 1976 - September 1978 "Enhancement of Communications with a Small Scientific Community Using Slow-Scan Televideo Terminals and Voice-Grade Telephone Lines" from the National Science Foundation (Faculty Associate).
January 1976 - December 1976 "A Method for Assessing Pricing and Structural Changes on Transport Mode Use," U.S. Department of Transportation (Faculty Associate).
September 1976 - June 1977 "Prediction of Urban Recreational Demand" from the National Science Foundation (Faculty Consultant).
Invited Lectures (Outside the MIT Sloan School)
Carnegie Mellon University, April 8, 2016, “The Effect of Precision on Strategic Positioning.”
University of North Carolina, Kenan-Flagler Business School, Marketing Department. March 7, 2014. “Learning from Experience, Simply.”
A-17 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Marketing Science Institute, November 2012, “Panel Discussion: Perspectives on Big Data from Marketing Scholars,” Cambridge, MA.
Wharton School, University of Pennsylvania, April 2009, “Website Morphing”
Max Planck Institute for Human Development, Center for Adaptive Behavior and Cognition, Summer Institute on Bounded Rationality in Psychology and Economics, August 2006, “Greedoid-Based Non-Compensatory Consider-then-Choice Inference.”
Northwestern University, Evanston, IL, April 2006, “Greedoid-based Non-compensatory Inference.”
University of Michigan, Seminar Series, October 2004, “Table Stakes: Non-compensatory Consideration-then- Choice Inference.”
Management Roundtable Special Conference on “Taking the Voice of the Customer to the Next Level,” Boston, MA October 2004, “The Virtual Customer.”
Marketing Science Institute Research Generation Conference, Atlanta, GA, May 2004, “New Products/Innovation,” (with Gerry Tellis).
Marketing Science Institute Conference on Emerging Approaches for Successful Innovation, Chicago, IL, May 2003, "'Listening-In' to Find Unmet Customer Needs and Solutions."
University of California at Los Angeles, "Polyhedral CBC (and other fun stuff), February 2003
New York University, "Polyhedral Methods," March 2003.
Industrial Liaison Program – Research Directors' Conference, April 2002, "The Virtual Customer."
University of Maryland, "Polyhedral Methods for Conjoint Analysis," March 2002.
Marketing Science Institute Trustees Meeting on Marketing Outside the Silo, Boston, MA, April 2002, "Challenges and Visions for Marketing's Role in Product Development Processes."
Managing Corporate Innovation -- ILP Symposium celebrating ten years of Management of Technology Research at MIT. “Dealing with the Virtual Customer: Fast Web-based Customer Input.” April 2001
Epoch Foundation, Cambridge, MA, October 2000, “The Virtual Customer.”
Yale University Research Seminar in Marketing, New Haven, CN, March 2000, "Metrics Thermostat."
Analysis Group Economics Seminar, Boston, MA, December 1999, "The Use of Marketing Research in Litigation." Also New York, NY, March 2000 and Washington, D. C., March 2002.
Boston Chapter of the Society for Concurrent Engineering, Waltham, MA, October 1999, "Metrics Thermostat."
University of Michigan DuPont Distinguished Speakers’ Series, Ann Arbor, MI, March 1998, “New Product Metrics.”
Kirin Brewery Co. Limited, Tokyo, JAPAN, December 1998, “You Are What You Measure!” and “Scientific Studies of the Voice of the Customer.”
NEC Corporation, Tokyo, JAPA, December 1998, “Scientific Studies of the Voice of the Customer.”
University of California at Los Angeles, Los Angeles, CA, February 1997, “Research, Development, and Engineering Metrics”
A-18 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25)
Stanford University, Stanford, CA, December 1996, “Metrics to Value R,D&E”
University of California at Los Angeles, Los Angeles, CA, February 1997, “Research, Development, and Engineering Metrics”
Duke University, Durham, NC, "Internal Customers and Internal Suppliers," Nov. 1995.
University of Minnesota, Minneapolis, MN, "Voice of the Customer," "Internal Customers and Captive Suppliers," May 1995.
Winter Retreat, University of Florida, Gainesville, FL, "Internal Customers and Captive Suppliers," December 1993.
Product Development Association - Boston, "Design and Marketing of New Products II: Advances in Product Development Management over the Last 13 Years," May 1993.
3M, Minneapolis, MN, "Incentives to Encourage a Long-term Perspective and a Customer Focus," Workshop on "Towards a World-class Research, Development, and Engineering Organization," November 1992.
Baxter Health Care, Orange County, CA, "The Voice of the Customer," August 1992.
TIMS College on the Practice of Management Science (New Directions in Management Science), Cambridge, MA: "The Voice of the Customer," October 1991.
IBM, Inc., Boca Raton, FL: "Voice of the Customer for Performance Graphics," May 1991.
Kirin Brewery Company, Ltd. Tokyo, JAPAN: "New Product Development" and "Customer Satisfaction and Customer Needs," April 1991.
American Iron and Steel Institute, Detroit, MI: "Satisfying the Customer -- Technical Issues," February 1991.
Warner Lambert, Inc., Mountain Laurel, PA: "Communication Among R&D and Marketing," October 1990.
Digital Equipment Corporation, Maynard, MA: "Voice of the Customer," May 1990.
Life Insurance Marketing and Research Association, Inc.: 31st Research Planning Conference, Boston, MA, "The House of Quality." June 1989.
University of Illinois: "Customer Driven Engineering." April, 1988.
Marketing Science Institute and IBM Thornwood Educational Facility: Quality through Customer Driven Engineering." April, 1988.
Harvard Business School: "Customer Driven Engineering: Integrating Marketing and Engineering." February, 1988.
Vanderbilt University: "Competitive Price and Advertising Strategies" and "Customer Driven Engineering." October, 1988.
Columbia University: "Price, Positioning, and Advertising Games: To Equilibrate of Not, Does it Pay to be Smart?" May, 1987.
New York Marketing Modelers' Club: "Would You Really Rather Have a Buick?: Prelaunch Forecasting of New Automobiles," May 1987.
M.I.T. Applied Economics: "Competitive Product Selection and Advertising Models." April, 1987.
A-19 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Northwestern University: "Agendas and Consumer Choice," August, 1986.
AMA Faculty Consortium on Marketing Strategy at the University Tennessee, Knoxville. "Defender: Analyses for Competitive Strategy," July, 1986.
Ohio State University: "Defensive and Competitive Strategy." May, 1986.
Boston University: "Research in Competitive Strategy." November, 1985.
Midwest Electronics Association, Minneapolis, MN: "New Products for High-Tech Firms." October, 1985.
University of Pennsylvania: "Agendas and Consumer Choice," August, 1985.
Herstein Institute, Vienna Austria: "Competitive Strategy," May, 1985.
Cadbury-Schweppes, Birmingham, England: "New Product Development and Defensive Strategy." May, 1985.
Rhone-Poulenc and Aluminum Pechiney, Paris, France: "New Product Development." April, 1985.
University of Michigan: "Defensive and Competitive Strategy." February, 1985.
Marketing Science Institute Special Mini-Conference: "Defensive Marketing Strategies for Consumer Firms." September 1983.
University of Chicago, Graduate School of Business, Chicago, IL. "Agendas and Consumer Choice," May 1984.
European Institute for Business Administration (INSEAD), Fontainebleau, FRANCE. "Agendas and Consumer Choice," June 1984.
University of Connecticut. "Defensive Marketing: Theory, Measurement, and Models," April, 1983.
University of Osaka, JAPAN "Defensive Marketing: Theory, Measurement, and Models," August, 1983.
Kao Soap, Ltd., Tokyo, JAPAN: "Defensive Marketing," August, 1983.
Johnson & Johnson, K. K., Tokyo, JAPAN: "Defensive Marketing," August, 1983.
Analog Devices, Inc., Norwood, MA. "New Product Development," May, 1982.
University of Rochester Research Seminar, "Prelaunch Forecasting of New Consumer Durables," April 1982.
Frito-Lay R & D Laboratory, Dallas, TX, "Marketing and R & D for New Products," October 1981.
University of California at Los Angeles Research Seminar, "Defensive Marketing Strategies," July, 1981.
Purdue University Research Seminar, "Product Realization," October 1979.
Stanford University Research Seminar, "Product Realization," October 1979.
Elrick and Lavidge, Inc., Chicago, Illinois, "Product Realization," October 1979.
Booz, Allen and Hamilton, Inc., Chicago, Illinois, "New Service Planning for Hospitals," April 1979.
Cornell University Research Seminar, "Intensity Measures of Consumer Preference," February 1979.
A-20 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) University of Rochester Research Seminar, "Product Realization: Synthesis of Marketing and Economic Theory," December 1978.
Region VI Center of Health Planning, New Orleans, LA, "Finding the Linkage Through Marketing,: August 1978.
Nebraska Hospital Association, Kearney, NE, "Hospital Marketing Surveys," May 1978.
Executive Development Group, Waterloo Management Education Centre, Toronto, Ontario, Canada, "Designing New Industrial Products," February 1978.
Academic Update, Xavier University Graduate Program in Hospital and Health Administration, Cincinnati, OH, "Designing Hospital Services: A Marketing Approach," October 1977.
The Hospital Marketing Workshop, Ireland Educational Corporation, Chicago, Illinois, "Analyzing the Hospital Markets," January 1977 and May 1977.
Association for College Unions - International, 1976 Fall Conference in Green Bay, WI, Keynote Speech - "Designing Successful Services: A Marketing Approach," October 1976.
University of Chicago, Graduate School of Business, Research Seminar, "Testing Probabilistic Models," April 1976.
Council for the Advancement and Support of Education, Conference on Marketing Alumni Program, New York, NY, Keynote Speech, February 1976.
Presentations at Professional Meetings (No published proceedings, some co-presented or presented by co-author[s]*)
New England Marketing Conference (NEMC),Cambridge, MA, October 11. 2019. “Issues In Ensuring That Marketing is a Viable Discipline Over the Next Decade.”
INFORMS Doctoral Consortium, Temple University, Philadelphia, PA. June 13, 2018. “Big Data and Machine Learning.”
INFORMS Marketing Science Conference, Temple University, Philadelphia, PA. June 14-16, 2018. John R. Hauser*, “Marketing Science’s Field Guide to Machine Learning and Algorithms.” Plenary Panel. John R. Hauser*, “Digital Marketing Applications of AI and Deep Learning ,” Panel Discussion Alex Burnap*, Artem Timoshenko, and John R. Hauser , “Deep Learning to Predict Consumer Aesthetic Preferences and Augment Product Designers” Artem Timoshenko* and John R. Hauser, “Combining Machine Learning and Human Judgment to Identify Customer Needs—New Tests and Applications” Gui Liberali* and John R Hauser, “Morphing Randomized Controlled Trials”
INFORMS Doctoral Consortium, University of Southern California, Los Angeles, CA. June 7, 2017. “Machine learning applications for customer-oriented recommendation systems and the voice of the customer.”
INFORMS Marketing Science Conference, University of Southern California, Los Angeles, CA. June 8-10, 2017. Daria Dzyabura and John R. Hauser*, “Recommending Products When Consumers Learn Their Preferences.” Felix Eggers* and John R. Hauser, “Precision Matters: How Craft in Conjoint Analysis Affects Price and Positioning Strategies.” Artem Timoshenko* and John R. Hauser, “Identifying Customer Needs from User Generated Content.”
Dies Natalis Academic Symposium, Erasmus University, Rotterdam, The Netherlands, November 8, 2016, “Recommending Products When Consumers Learn their Preferences.” Based on research with Daria Dzyabura.
Erasmus Centre for Marketing and Innovation, Econometric Workshop, Erasmus University, Rotterdam, The Netherlands, “Strategic Implications of Precision in Conjoint Analysis. Based on research with Felix Eggers.
A-21 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 2016 Paul D. Converse Symposium, University of Illinois, Champaign, IL, April 21-23, 2016, “Academic Achievements of Steven M. Shugan, Converse Winner.”
INFORMS Marketing Science Conference, Shanghai, China. June 16-18, 2016, Xinyu Cao*, T. Tony Ke, John R. Hauser, Juanjuan Zhang, “Competing for Limited Attention on Social Media.”
INFORMS Marketing Science Conference, Baltimore MD, June 2015. Songting Dong, John Hauser*, Min Ding, Lixin Huang, and Holger Dietrich, “The Sleuth Game: Predicting Consumer Response to as-yet-unspecified Product Features for Really New Products.”
AMA/Sheth Foundation Doctoral Consortium, Northwestern University, Evanston, IL, June 2014, “Bridging Empircs and Practice.”
INFORMS Marketing Science Consortium, Emory University, Atlanta GA, June 2014, “Learning from Experience Simply.”
AMA Summer Educators’ Conference, San Francisco, CA, August 1-3, 2014. Guilherme Liberali,* Hauser, John R., and Glen L. Urban “Recent Advances in Morphing Theory: Challenges and Opportunities for Research."
INFORMS Marketing Science Conference, Atlanta, GA, June 2014. Aliaa Atwi* and John R. Hauser, “Exploration vs. Exploitation in Rapid Coupon Personalization.”
AMA Sheth Foundation Doctoral Consortium 2013, University of Michigan, Ann Arbor, MI, June 6-9. “Managing Your Career (as a Marketing Academic).”
AMA Summer Educators’ Conference, Boston MA August 9-11, 2013. Panel on “Academic Integrity in the Publication Process” with Robert Meyer, Richard Lusch, John Hauser.*
10th Marketing Dynamics Conference, The University of North Carolina at Chapel Hill, May 30 – June 1, 2013. Song Lin*, Juanjuan Zhang, and John Hauser, “Learning from Experience, Simply.”
Joint Statistical Meetings 2013, Montreal, Ontario, August 2013. Song Lin*, Juanjuan Zhang, and John Hauser, “Learning from Experience, Simply.”
2012 AMA Sheth Foundation Doctoral Consortium, Foster School of Business, University of Washington, June 2012, Panel: 10 Steps to Successful Publishing.
INFORMS Marketing Science Conference, Boston, MA, June 2012. Song Lin*, Juanjuan Zhang, and John R. Hauser, “Learning from Experience, Simply.” Glen L. Urban, Guilherme Liberali, Erin MacDonald, Robert Bordley, and John R. Hauser*, “Morphing Banner Advertising” Matt Selove* and John R. Hauser, “The Strategic Importance of Accuracy in Conjoint Design.” Panel: Research Opportunities at the Marketing/Operations Interface
The 2012 Theory & Practice in Marketing (TPM) Conference on Marketing Strategy, Harvard University, Boston, MA. May 2-3, 2012. Glen L. Urban, Guilherme Liberali, Erin MacDonald, Robert Bordley, and John R. Hauser*, “Morphing Banner Advertising.”
New England Marketing Conference, Cambridge, MA, October 28, 2011. Gui Liberali, Glen L. Urban and John R. Hauser*, “ Providing Unbiased Competitive Information to Encourage Trust, Consideration, and Sales: Two Field Experiments.”
Yale School of Management, Center for Customer Insight, The Customer Insights Conference, New Haven, CT, May 12-14, 2011. John R. Hauser and Matthew Selove*, “The Strategic Importance of Accuracy in the Relative Quality of Conjoint Analysis.”
A-22 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) INFORMS Marketing Science Conference, Cologne, Germany, June 2010 (*indicates primary presenter if not me) Liberali, Guilherme*, John R. Hauser, and Glen L. Urban, “Optimal Time-to-Morph and Cognitive Costs of Morphing.” Liberali, Guilherme, Glen L. Urban, and John R. Hauser, “Do Competitive Test Drives and Product Brochures Improve Sales?” Urban, Glen L.*, Jong Moon Kim, Erin MacDonald, John R. Hauser and Daria Dzyabura, “Developing Consideration Rules for Durable Goods Markets.”
2010 Advanced Research Techniques Forum, San Francisco, CA, June 6-9, 2010, “Unstructured Direct Elicitation of Non-compensatory and Compensatory Decision Rules,” with Min Ding, Songting Dong*, Daria Dzyabura (listed as Silinskaia), Zhilin Yang, Chenting Su, and Steven Gaskin.
2009 AMA Sheth Foundation Doctoral Consortium, J. Mack Robinson College of Business, Georgia State University, June 2009. E-Commerce and Digital Marketing Topics.
INFORMS Marketing Science Conference, Ann Arbor, MI, June 2009 (* indicates primary presenter if not me) “An Empirical Test of Incentive-Compatible Direct Elicitation of Heuristic Decision Rules for Consideration and Choice,” with Min Ding, Songting Dong, Daria Dzyabura, Zhilin Yang, Chenting Su, and Steven Gaskin “Adaptive Profile Evaluation to Identify Heuristic Decision Rules in “Large” and Challenging Experimental Designs,” with Daria Dzyabura (formerly Silinskaia)* and Glen L. Urban.. “Morphing Websites in the Presence of Switching Costs,” with Guilherme Liberali* and Glen L. Urban. “Continuous-Time Markov-Process with Misclassification: Modeling and Application to Auto Marketing,” with Glen L. Urban* and Guilherme Liberali. “An Incentive-Aligned Sleuthing Game For Survey Research,” with Min Ding* “Would You Consider a Buick Even if It Were #1 in JD Power?” with Erin MacDonald* and Glen Urban “Cognitive Simplicity and Consideration Sets,” with Rene Befurt*, Daria Dzyabura, Olivier Toubia, and Theodoros Evgeniou “John D. C. Little, a Pioneer in Marketing Science (Festschrift paper),” with Glen L. Urban
INFORMS Marketing Science Conference, Vancouver, B.C., June 2008 (* indicates primary presenter if not me) “Cognitive Styles and Website Design,” with Michael Braun, Glen L. Urban, and Clarence Lee. Modeling Cognitive Complexity to Predict Consideration Sets,” with Daria Dzyabura (formerly Silinskaia)*, Theodoros Evgeniou, Olivier Toubia, and Rene Befurt. “Morphing Websites to Match Individual Cognitive Styles,” with Michael Braun*, Glen L. Urban, and Guilherme Liberali
Sawtooth Software Conference, Delray, FL, March 2009, “A Critical Review of Non-compensatory and Compensatory Models of Consideration-Set Decisions,” with Min Ding and Steven Gaskin
AMA Doctoral Consortium, Robert J. Trulaske, Sr. College of Business, University of Missouri, June 2007, “Looking Ahead: Directions for Scholarly Research in Marketing” and “Building Teaching Effectiveness: Stimulating Student Interest.”
Sawtooth Software Conference, Santa Rosa, CA, October 2007, “Two-Stage Models: Identifying Non- Compensatory Heuristics for the Consideration Set then Adaptive Polyhedral Methods Within the Consideration Set,” with Steven Gaskin, Theodoros Evgeniou, Daniel Bailiff.
AMA Advance Research Technologies Forum, Sante Fe, New Mexico, June 2007, “Two-Stage Models: Identifying Non-Compensatory Heuristics for the Consideration Set then Adaptive Polyhedral Methods Within the Consideration Set,” with Steven Gaskin, Theodoros Evgeniou, and Daniel Bailiff.
AMA Doctoral Consortium, W. P. Carey School of Business, Arizona State University, May 2007, “Consideration The New Battlefield in Product Development.”
Agent-based Models of Market Dynamics and Consumer Behaviour, University of Surrey, Guildford, UK, January
A-23 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 2006, “Co-opetition for the Diffusion of Resistant Innovations: A Case Study in the Global Wine Industry using an Agent-based Model.” with Rosanna Garcia. Also presented at the American Marketing Association’s Advanced Research Techniques (ART) Forum in June 2006 at Monterrey CA.
AMA Doctoral Consortium, University of Maryland, College Park, MD, July 2006, “Creating Value: Products and Brands.”
Marketing Science Conference, University of Pittsburgh, Pittsburgh, PA, June 2006, “A Truth-telling Sleuthing Game for Survey Research,” with Min Ding.
Marketing Science Conference, University of Pittsburgh, Pittsburgh, PA, June 2006, On Managerially Efficient Experimental Designs,: with Olivier Toubia.
Sawtooth Software Conference on Conjoint Analysis, Delray Beach, FL, March 2006, “Must Have” Aspects vs. Tradeoff Aspects in Models of Customer Decisions,” with Michael Yee, James Orlin, Ely Dahan.
AMA Doctoral Consortium, University of Connecticut, Storrs CT, June 2005, “The Virtual Customer.”
Marketing Science Conference, Emory, Atlanta, GA, June 2005, “Direct, Nonparametric Product Optimization Using Interactive Genetic Algorithms,” with Kamal Malek and Kevin Karty.
Marketing Science Conference, Emory, Atlanta, GA, June 2005, “Non-Deterministic Polyhedral Methods for Adaptive Choice-Based Conjoint Analysis: Application to the Diffusion of the New Wine Cork,” with Olivier Toubia and Rosanna Garcia.
Marketing Science Conference, Emory, Atlanta, GA, June 2005, “Greedoid-Based Non-compensatory Two-Stage Consideration-then-Choice Inference,” with Michael Yee, Jim Orlin, and Ely Dahan.
Marketing Science Doctoral Consortium, Rotterdam, The Netherlands, June 2004, “Research that Has Impact.”
Marketing Science Conference, Rotterdam, The Netherlands, June 2004, “Improving Choice-Based Polyhedral Methods by Taking Response Error into Account,” with Olivier Toubia.
Marketing Science Conference, Rotterdam, The Netherlands, June 2004, “The Dream Versus Reality of CRM,” with Glen L. Urban, Eric Bradlow, and, Mahesh Kumar.
Marketing Science Conference, Rotterdam, The Netherlands, June 2004, “Non-compensatory Consideration-then- Choice Adaptive Conjoint Analysis,” with Michael Yee and James Orlin.
AMA Doctoral Consortium, Texas A&M University, College Station, TX, June 2004, "Virtual Customer Initiative."
AMA Advanced Research Techniques Forum, June 2004, “Conjoint Adaptive Ranking Database System (CARDS),” with Ely Dahan, James Orlin, and Michael Yee.
AMA Doctoral Consortium, University of Minnesota, Minneapolis, MN, June 2003, "The Review Process."
Marketing Science Doctoral Consortium, University of Maryland, June 2003, “Roots of Marketing Science Thought,” with John Little.
Marketing Science Conference, University of Maryland, June 12-15, 2003, "Individual-level Adaptation of Choice- Based Conjoint Questions: More Efficient Questions and More Accurate Estimation," (with Olivier Toubia and Duncan Simester).
Marketing Science Conference, University of Alberta, Canada, June 28, 2002, "Configurators, Utility Balance, and Managerial Use," (with Duncan Simester and Olivier Toubia).
A-24 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Marketing Science Doctoral Consortium, University of Alberta, Canada, "Helping Managers Structure and Make Decisions," June 27, 2002. (Founding Consortium).
Marketing Science Conference, University of Alberta, Canada, June 28, 2002, "Adaptive Choice-Based Conjoint Analysis with Polyhedral Methods," (with Duncan Simester and Olivier Toubia*).
Advances in Marketing Research and Modeling: The Academic and Industry Impact of Paul E. Green, Wharton, Philadelphia, PA, May 2002, "New Methods of Data Collection and Estimation Using Polyhedral Estimation Techniques."
Production and Operations Management Society (POMS) Conference 2002 - High Tech POM, San Francisco, CA, April 2002, "The Virtual Customer," (with Ely Dahan*).
Product Development Association (PDMA) International Research Conference, Santa Clara, CA, October 2001, "The Virtual Customer," (with Ely Dahan*).
New England Marketing Conference, Cambridge, MA, September 2002, "Fast Polyhedral Adaptive Conjoint Estimation," (with Ely Dahan, Duncan Simester, and Olivier Toubia).
Marketing Science Conference, Wiesbaden, Germany, July 2001, "Empirical Test of Web-based Conjoint Analysis Including ACA, Efficient Fixed Designs, Polyhedral Methods, and Hybrid Methods," (with Ely Dahan, Duncan Simester, and Olivier Toubia*)
Marketing Science Conference, Wiesbaden, Germany, July 2001, "Evaluation of Fast Polyhedral Adaptive Conjoint Estimation," (with Duncan Simester and Olivier Toubia).
The 12th Annual Advanced Research Techniques Forum, Amelia Island, Florida, June 2001, "The Virtual Customer: Communication, Conceptualization, and Computation," (with Ely Dahan*).
AMA Doctoral Consortium, University of Miami, June 2001, "Role of Technology in Marketing."
Marketing Science Conference, UCLA, June 2000, "Applications of the Metrics Thermostat."
Marketing Science Conference, UCLA, June 2000, "The Virtual Customer." (with Ely Dahan and Duncan Simester).
Marketing Science Institute Marketing Metrics Workshop, Washington, D.C. October 1999, "Metrics for New Product Development: Making Agency Theory Practical," Plenary Speaker.
Marketing Science Conference, Syracuse, NY, May 1999, “Balancing Customer Input, Speed to Market, and Reduced Cost in New Product Development: What is the Most Profitable Strategy”
ICRMOT Conference on Technology Alliances and New Product Development: A Cross-cultural Perspective, Mishima, JAPAN, December 1998, “You Are What You Measure!”
AMA Doctoral Consortium, Athens, Georgia, August 1998, “Quantitative Advances in Marketing Models.”
AMA Winter Educators’ Conference, Austin, TX, February 1998 (Plenary Speaker), “New Challenges in the Marketing-Product Development Interface.”
AMA Doctoral Consortium, Cincinnati OH, August 1997, "Working with Industry."
Marketing Science Conference, Berkeley CA, March 1997, “Cultivating Technological Managers for Customer Expertise.”
Marketing Science Institute Conference on Interfunctional Interfaces: The Management of Corporate Fault Zones, Palo Alto, CA, December 1996, “Multi-Stage Modeling of R&D/Marketing Interfaces in New Product Development.”
A-25 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Marketing Science Conference, Berkeley CA, March 1997, “Cultivating Technological Managers for Customer Expertise.”
Envisioning the Future on Internet Marketing: Research and Strategy Implications, M.I.T., September 1996, “Agents and Intermediaries: Roles, Trust, and Value.”
"Can R&D be Evaluated on Market-Driven Criteria?," (with Florian Zettelmeyer). Marketing Science Conference, University of Florida, Gainesville, March 1996
"Information Acceleration," (with Glen Urban, William Qualls, Bruce Weinberg, Jon Bohlmann, and Roberta Chicos). Wharton Conference on Innovation in Product Development, Philadelphia, PA, May 1995.
"Metrics by Which Managers Evaluate R&D Groups," (with Florian Zettelmeyer). Association of Consumer Research, Boston, MA, October 1994.
"Satisfying the Internal Customer," (with Birger Wernerfelt and Duncan Simester) Marketing Science Conference, University of Arizona, Tucson, AZ, March 1994.
"Customer-Satisfaction Based Incentive Systems," AMA Educator's Conference, Boston, MA, August 1993.
"Marketing in the 1990s: Emerging Issues," AMA Doctoral Consortium, University of Illinois, August 1993.
"Quality Function Deployment and the Voice of the Customer," Pharmaceutical Management Science Association, Phoenix AZ, May 1993.
"In a World of Active Time-constrained Customers, How Can a Firm be the Great Communicator," (with Birger Wernerfelt), Marketing Science Conference, Washington University, St. Louis, MO, March 1993.
"Customer Needs, Customer Satisfaction, Sales, and Profit," (with Birger Wernerfelt, Ronit Bodner, and Duncan Simester), ORSA/TIMS Joint National Conference, San Francisco, CA, November 1992.
"Customer Satisfaction and Employee Rewards," (with Birger Wernerfelt, Ronit Bodner, and Duncan Semester), Marketing Science Conference, London, England, June 1992.
"Information Acceleration and Preproduction Forecasting of Electric Autos," (with Glen L. Urban and Bruce Weinberg), Marketing Science Conference, London, England, June 1992.
"The Voice of the Customer and Customer Satisfaction," ORSA/TIMS Joint National Meeting, Anaheim, CA, October 1991.
"Modeling Marketing Phenomena," AMA Doctoral Consortium, University of Southern Calif. August 1991.
"Relationship of Satisfaction to Customer Needs and to Market Share," 1st Congress on Customer Satisfaction and Market-Driven Quality, American Marketing Association, Orlando FL, May 1991.
"Time Flies When You're Having Fun: How Consumers Allocate Their Time When Evaluating Products" (with Bruce Weinberg, Glen Urban, and Miguel Villas-Boas), Marketing Science Conference, Wilmington, DL, March 1991.
"Information Acceleration and Preproduction Forecasting of New Autos," (with Glen Urban, and Bruce Weinberg), Marketing Science Conference, Wilmington, DL, March 1991.
"Beyond Quality Function Deployment," ORSA/TIMS Joint National Meeting, Philadelphia, PA October 1990. (Conference-wide Tutorial)
A-26 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) "Competitive Marketing Strategies," Operations Research 1990 (Osterreichische Gesellschaft fur Operations Research), Vienna, Austria, August 1990. (Invited Speaker)
"New Product Development: A Quantitative Analysis of Interfunctional Communication" (with Abbie Griffin), Marketing Science Conference, Urbana, IL, March 1990.
"Integrated Product Development: New Methodological Developments" (with Abbie Griffin), Marketing Science Conference, Durham, N.C., March 1989.
"Customer Driven Engineering" (with Gregory Cirmak and Robert Klein), ORSA/TIMS Joint National Meeting, Washington, D.C., April 1988.
"Competitive Advertising and Pricing in Duopolies" (with Birger Wernerfelt), Marketing Science Conference, Seattle, Washington, March 1988.
"Customer Driven Engineering" (with Abbie Griffin), Marketing Science Conference, Seattle, Washington, March 1988.
"Customer Needs," Visions of Design Practices for the Future, Newton, MA, October 1987.
"Effective Strategies in Oligopoly" (with Peter Fader), ORSA/TIMS Joint National Meeting, Miami Beach, Florida, November 1986.
"Competitive Strategy Contest: Result and Analysis" (with Peter Fader), Marketing Science Conference, Dallas, TX, March 1986.
"The PC As a Tool to Teach Complex Marketing Science Concepts," Marketing Science Conference, Dallas, TX, March 1986.
"The Coming Revolution in Marketing Theory," Plenary Speaker, European Marketing Conference, Bielefeld, West Germany. April 1985.
"Defensive Strategy" Confer. on Economics of the Firm, Universite de Paris X, Nanterre, France, April 1985.
"Competitive Marketing Strategies" Marketing Science Conference, Nashville, Tennessee, March 1985.
"Developing New Product Management: Past Progress, Current Efforts, Current Needs" (Panel) Marketing Science Conference, Nashville, Tennessee, March 1985.
"Testing Competitive Marketing Structures: Theory and Applications" (with Glen Urban) ORSA/TIMS Joint National Meeting, Dallas, TX November 1984.
"Competitive Strategy," ORSA/TIMS Joint National Meeting, Dallas, Texas, November 1984.
"Forecasting Automobile Sales: An Application of a Value Priority Algorithm," (with Glen Urban), John Roberts and John Dabels), TIMS XXVI International Meeting, Copenhagen, Denmark, June 1984.
"Consumer Durables: The Actual Consumer Budgets Compared to the Value Priority Model," (with Glen Urban), Marketing Science Conference, Chicago, Illinois, March 1984.
"Defensive Strategy Models: Application and Predictive Text," (with Steven Gaskin, and Karl Irons) ORSA/TIMS Joint National Meeting, Orlando, Florida, November 1983.
"New Product Research: Focus on Defensive strategies," Roundtable Program, ORSA/TIMS Joint National Meeting, Orlando, FL, November 1983.
A-27 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) "Intensity of Preference," (with Steven Shugan) ORSA/TIMS Joint National meeting, San Diego, CA, October 1982.
"Measurement Error Theories for von Neumann-Morgenstern Utility Functions," (with Jehoshua Eliashberg) ORSA/TIMS Joint National Meeting, San Diego, CA, October 1982.
"Consumer Preference Models: Axioms and Statistics," ORSA/TIMS Joint National Meeting, Houston, Texas, October 1981.
"Economic Models of Consumer Behavior," (panel discussion), ORSA/TIMS Joint National Meeting, Houston, Texas, October 1981.
"Defensive Marketing Strategies, Part II," (with Steven Shugan), ORSA/TIMS Joint National Meeting, Houston, Texas, October 1981.
"Agendas and Choice Probabilities," (with Amos Tversky), Association of Consumer Research, St. Louis, Missouri, October 1981, and Special Conference on Choice Theory, Durham, North Carolina , June 1981.
"Strategic Response to Competitive New Products," (with Steven Shugan), ORSA/TIMS Joint National Meeting, Toronto, Ontario, Canada, May 1981.
"Applications of a Dynamic Semi-Markov Model of Consumer Choice," (with Ken Wisniewski), ORSA/TIMS Joint National Meeting, Colorado Springs, Colorado, November 1980.
"Models of Consumer Behavior," (panel discussion), ORSA/TIMS joint National Meetings, Colorado Springs, Colorado, November 1980.
"Dynamic Semi-Markov Models of Consumer Behavior," (with Ken Wisniewski) TIMS International Conference on Marketing, Paris, June 1980.
"Profit Maximizing Perceptual Positioning," (with Patricia Simmie) TIMS International Conference on Marketing, Paris, June 1980.
"An Error Theory for von Neumann-Morgenstern Utility Assessment," (with Jehoshua Eliashberg), ORSA/TIMS Joint National Meeting, Washington, D.C., May 1980.
"Defender: Defensive Strategies Against New Products" (with Steven Shugan), ORSA/TIMS Second Special Interest Conference on Marketing Measurement and Analysis, Austin, Texas, March 1980.
"Adaptive Control of New Product Launches," (with Ken Wisniewski), ORSA/TIMS Joint National Meeting, Milwaukee, Wisconsin, October 1979.
"The Value of Up-front Research in New Products," (with Glen Urban), TIMS International Meeting, Honolulu, Hawaii, June 1979.
"Methods for Computing Probabilities of Choice," (with Steven Shugan), TIMS International Meeting, Honolulu, Hawaii, June 1979.
"Forecasting and Improving the Adoption of New High Technology Products," (with Pat Lyon), ORSA/TIMS Joint National Meeting, New Orleans, Louisiana, May 1979.
"A Methodology for Product Realization: Multi-method Procedures," (with Patricia Simmie), ORSA/TIMS Joint National Meeting, Los Angeles, California, November 1978.
"Searching for Marketing Segments" (with Ken Wisniewski), ORSA/TIMS Joint National Meeting, New York, New York, May 1978.
A-28 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) "P.A.R.I.S.: An Interactive Market Research System," (with Steven Shugan), ORSA/TIMS Joint National Meeting, New York, New York, May 1978. "Extended Conjoint Analysis," (with Steven Shugan), ORSA/TIMS Joint National Meeting, Atlanta, Georgia, November 1977.
"Consumer Preference Functions: Theory, Measurement, Estimation , and Application," (with Steven Shugan), ORSA/TIMS Joint National Meeting, Atlanta, Georgia, November 1977.
"Measuring Consumer Preferences for Health Care Plans," (with Glen Urban), ORSA/TIMS Joint National Meeting, San Francisco, California, May 1977.
"Improved Transportation Design with Consumer Response Models: An AMTRAK Example" (with Frank Koppelman), ORSA/TIMS Joint National Meeting, Miami, Florida, November 1976.
"A Comparison of Statistical and Direct Multiattribute Utility Assessment Procedures," (with Glen Urban), ORSA/TIMS Joint National Meeting, Las Vegas, Nevada, November 1985.
"Measuring Consumer Preferences: An Axiomization for Describing Choice," ORSA/TIMS Joint National Meeting, Las Vegas, Nevada, November 1975.
"Modeling Consumer Response to Innovations," (1) Milwaukee Chapter of ORSA/TIMS, November 1985; (2) Chicago Chapter of ORSA/TIMS, December 1975.
"Modeling Decisions of Choice Among Finite Alternatives: Applications to Marketing and to Transportation Demand Theory," ORSA/TIMS Joint National Meeting, San Juan, Puerto, Rico, October 1974.
"An Efficient Model for Planning Bus Routes in Medium Sized Communities," ORSA/TIMS Joint National Meeting, San Diego, CA, November 1973.
Professional Affiliations
The Institute for Operations Research and Management Science (INFORMS)
INFORMS Society of Marketing Science (ISMS)
American Marketing Association
Product Development and Management Association, Certified New Product Development Professional
Professional Services
President, INFORMS Society of Marketing Science (January 2014 –December 2015). President-elect (a board position, January 2012 – December 2013). Past-President (a board position, January 2016 – December 2017).
Secretary, INFORMS Society of Marketing (January 2002 – December 2005). Founding Officer.
Advisory Council, INFORMS College of Marketing (1994 - 2002)
Council of The Institute of Management Sciences (TIMS, 1987 - 1989)
Associate Editor for Marketing, Management Science, (1980 - 1981)
Department Editor for Marketing, Management Science, (1982 - 1988)
Editor-in-Chief, Marketing Science, (1989 - 1994)
A-29 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Editor, Special Issue on Big Data, Marketing Science, 2016. Senior Editor, Practice Papers, Marketing Science, 2016-2018. Associate Editor, Special Issue on the Theory and Practice of Marketing, Marketing Science, 2014.
Editorial Advisory Board, Sloan Management Review (2000-2002).
Associate Editor, Journal of Marketing Research (April 2006 – June 2009). First time in journal history that Associate Editors had been appointed.
Senior Advisory Board, Journal of Marketing Research (July 2009 – 2016). First time such an advisory board was formed.
Advisory Board, Marketing Science (2010 – 2018).
Advisory Board, Journal of Product Innovation Management (2011 – 2018)
Emeritus Editorial Board, Marketing Science (includes active reviewing of papers).
Editorial Boards, Marketing Science, (1980 – 1988, Editor 1989-1995, 2003- 2008, including acting Area Editor), Journal of Product Innovation Management (1997 - 2010), Journal of Marketing (2005- 2008, outstanding reviewer 2006), European Management Journal (advisory, 1998 - 2002), International Journal for Research in Marketing (2007 – 2014).
Reviewer: Advances in Consumer Research, Applications in Management Science, European Journal of Research in Marketing, Journal of the Academy of Marketing Science, Journal of Consumer Research, Journal of Marketing, Journal of Marketing Research, Journal of Mathematical Psychology, Journal of Product Innovation Management, Management Science, Marketing Science, Proceedings of the National Academy of Sciences, Operations Research, Review of Marketing, Sloan Management Review, Transportation Research Record, Transportation Science, Journal of Business Research, AMA Dissertation Prize, AMA Educators' Conference, American Institute of Decision Sciences Dissertation Prize, Nicholson Dissertation Prize, Marketing Science Institute Dissertation Award, Product Development Management Association Dissertation Prize, Prentice-Hall Books, National Science Foundation.
Conference Chairman: Conference Chair, Profitable Customer-Driven Organizations: Developing the Blueprint, Management Roundtable, May 1994.
Segment Chairman: Yale School of Management, Center for Customer Insight, The Customer Insights Conference, New Haven, CT. May 12-14, 2011. New Product Innovations.
Non-traditional Models of Consumer Preference and Choice, Adaptive Preference and Estimation, Optimizing Product Design and Customer Targeting, Obtaining Information From or About Consumers (Atlanta, GA, 2005, co-chair four sessions)
TIMS International Meeting, Copenhagen, Denmark, June 1984 (two sessions).
TIMS College of Marketing, Houston, Texas, October 1981 (twelve sessions).
TIMS College of Marketing, Milwaukee, Wisconsin, October 1979 (five sessions).
American Marketing Association Educator's Conference, Chicago, Illinois, August 1978, (three sessions).
INFORMS Marketing Science Conference, Atlanta GA, June 2005 (four sessions)
Session Chairman: INFORMS (Previously named ORSA or TIMS)
Virtual Customer Initiative (Rotterdam, The Netherlands, 2004)
A-30 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) New Approaches to Mapping (University of Maryland, 2003)
The Virtual Customer (University of Alberta, Canada 2002)
The Virtual Customer (Wiesbaden, Germany 2001)
Building Competitive Advantage Through Product Quality and R&D (Gainesville, FL 1996)
Customer Satisfaction and Its Role in Global Competition (San Francisco, CA 1992)
Competitive R&D (Washington, D.C., April 1988)
Competitive Marketing Strategy, (St. Louis, Michigan, November 1987)
Competition in Multiattributed Spaces (Atlanta, Georgia, November 1985).
Marketing: Consumer Measurement (Copenhagen, Denmark, June 1984)
Marketing: Dynamic Structures (Copenhagen, Denmark, June 1984)
Product Policy (Orlando, Florida, November 1983) Product Policy (San Diego, California, October 1982)
New Product Introduction and Defense in Competitive Environments, (Detroit, Michigan, April 1982) New Product and Product Policy Models, (Houston, Texas, October 1981)
New Product Models (Toronto, Ontario, Canada, May 1981)
Models of Consumer Behavior (Colorado Springs, Colorado, November 1980)
New Product Realization and Selection (Los Angeles, California, November 1978).
Session Chairman: Association of Consumer Research
Mathematical Theories of Consumer Behavior (St. Louis, Missouri, October 1981)
Committee Memberships
Editor Selection Committee, Marketing Science, INFORMS College of Marketing, 2001 (chair), 2004 (chair), 2007.
Editor Selection Committee, Journal of Marketing Research, American Marketing Association, 1999.
Conference Steering Committee, Duke Invitational Symposium on Choice Modeling and Behavior, June 1993.
Editor Selection Committee, Management Science, TIMS.
Founding Committee for Marketing Science, TIMS College of Marketing, (1979 - 1982).
Management Science Roundtable, TIMS, (1982 - 1988)
Marketing Strategy Steering Committee, Marketing Science Institute, (1983 - 1984).
Organizing Committee for Conference on Economics of the Firm, April 1985, Universite de Paris X Nanterre.
A-31 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25)
Organizing Committee for 1985 Conference in Bielefeld, West Germany, European Marketing Academy.
Publications Committee (1980 - 1982), Operations Society of America.
Scientific Committee for 1986 Conference in Helsinki, Finland.
Student Affairs Committee (1978 - 1979), Operations Society of America.
Litigation Consulting (on behalf of, *deposition testimony, †court, commission, or arbitration testimony)
ABC, Inc., American Broadcasting Company, Inc., and Disney Enterprises, Inc., Plaintiffs, v. Dish Network L.L.C. and Dish Network Corp., (Preliminary Injunction) Joseph Adinolfe, et al., v. United Technologies Corp., d/b/a Pratt & Whitney (class action, damages)* † Alcatel-Lucent USA Inc. v. Amazon.com, Inc. et al. (Patent Infringement)* † Allergan, Inc. Engagement. (Off-label Prescriptions) American Express Travel Related Services, Inc. v. Visa USA, Inc., et. al. (Evaluation of marketing research) * In Re American Express Anti-Steering Rules Antitrust Litigation (II) (Evaluation of marketing research)* American Multi-Cinema, Inc. v. American Movie Classics Company, Inc., et. al. (Confusion) Amway v. Procter & Gamble (Damages)* Garth A. Anderson, et al. v. American Family Insurance Company (Class Action) * Anoush Cab, Inc., et al. v. Uber Technologies, Inc., Rasier, LLC (damages) † Apple, Inc. v. Samsung Electronics Company, Ltd, et al. (Patent infringement, two cases) ** ††† Atlantic Recording Corporation, et. al. v. XM Satellite Radio, Inc. (Copyright infringement). Axcan Scandipharm, Inc. V. Global Pharmaceuticals And Impax Laboratories, Inc. (False Advertising) Avaya Inc. v. SNMP Research International, C.A. (Damages) * Berlex v. Biogen, Inc. (Damages)* Blue Mountain Arts, Susan Polis Schutz, and Stephen Schutz v. Hallmark Card, Inc. (Trade Dress) James And Lisa Camenson, et al.; v. Milgard Manufacturing Inc., et. al. (Class action) CBS Corporation, CBS Broadcasting Inc., CBS Studios Inc., and Survivor Productions, LLC. v. and DISH Network Corporation, DISH Network L.L.C. (damages). Clearchannel Communications, Inc. in the Webcasting IV. (Damages) *† Comm-Tract Corp. v. Northern Telecom, Inc. (Advice only) Comcast Cable Communications. LLC v. Sprint Communications Company (Patent Infringement)* Computer Aid, Inc. v. Hewlett Packard (damages)* Dayna Craft, et al. v. Philip Morris Companies, Inc. and Philip Morris Inc. (Class Action).* Creative Laboratories, Inc. v. Apple Computer, Inc. (Intellectual Property) CTC Communications Corporation v. Bell Atlantic Corporation (Damages) Eagle Harbor Holdings LLC, and Mediustech LLC, v. Ford Motor Company (Patent infringement). Anne Elkind And Sharon Rosen, et al. v. Revlon Consumer Products Corporation, Inc. (Class Action) EPD v. Curtis (Product Confusion)†
A-32 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) FCA Canada Inc. and FCA US LLC, re Canadian Class Actions re Diesel Fuel Emissions, specifically, Shane Witham, et al. v. FCA Canada Inc., FCA US LLC, and FIAT Chrysler Automobiles N.V. (Class Action) Fox Broadcasting Company, Inc., Twentieth Century Fox Film Corp., and Fox Television Holdings. Inc., Plaintiffs, v. Dish Network L.L.C. and Dish Network Corp., (Preliminary Injunction, Damages)* Stephen S. Gallagher, et. al. v. State Farm Mutual Automobile Insurance Company, et al. (Class Action) Geico v. Google and Overture Services (Yahoo), Inc. (Trademark Infringement) In Re: General Motors, LLC Ignition Switch Litigation (non-testifying expert) Gillette v. S. C. Johnson (Patent Infringement) Gyrodata, Inc. v. Atlantic Inertial Systems Inc (“AIS”), et al. (consulting expert) Heublein vs. Seagrams and Gallo (Liability) Hewlett-Packard, Inc. v. Factory Mutual Insurance Company (Insurance Coverage)* IMS Health Incorporated v. Symphony Health Solutions Corporation, Source Healthcare Analytics, LLC, and ImpactRx, Inc., C.A. No. 1:13-cv-2071-GMS (D. Del.). (Patent infringement, technical expert.) Intel v. Advanced Micro Devices (Damages)* J. B. D. L. Corp. d/b/a, Beckett Apothecary v. Wyeth-Ayerst Laboratories, Inc. and American Home Products Corporation, (Class Action) Jerry Jacobs, et. al. v. Osmose Inc., et. al. (Class Action)* Jay Kordich, et. al. v. Salton Maxim Housewares, Inc., et. al. (Trademark)† In RE J.P. Morgan Chase Cash Balance Litigation (Class Action)* Michael Kors, Inc. v. Costco Wholesale Corporation (False Advertising)* L.A. Taxi Cooperative, Inc. et al. v. Uber Technologies, Inc.; Rasier, LLC; and Rasier-CA, LLC. (False Advertising)*. Lending Tree, Inc. v. The Gator Corporation (Intellectual Property) Lotus v. Borland (Damages)* Louis Vuitton Malletier, S. A. v. Hyundai Motor America (Trademark Infringement)* Malden Transportation, Inc. et al. vs. Uber Technologies, Inc., Rasier, LLC* (damages). See also Anoush. Marvin Lumber and Cedar Company v. PPG Industries, Inc., et. al. (Survey Design) MasterCard International, Inc. v. First National Bank of Omaha (Product Confusion)* Mayo Foundation v. Mayo Health Facilities (Product Confusion)† Mead Johnson Nutritionals v. unnamed party (False Advertising) Merck & Co. (Lanham Act Advice) Michael Kors (USA), Inc. and Michael Kors, L.L.C. v. Costco Wholesale Corporation, Civil Action No. 13-CV- 4832, the United States District Court Southern District of New York. (Damages)* In Re Microsoft Corporation Antitrust Litigation (Multi-district Litigation)* Millennium Laboratories, Inc. v. Ameritox, Ltd. (False Advertising) Scott Miller, et al. v. Fuhu, Inc. and Fuhu Holdings, Inc. (Class Certification)* MillerCoors, LLC v. Anheuser-Busch Companies, LLC. (False Advertising) Pacific Bell Telephone Company in New Regulatory Framework Review of Customer Satisfaction before the
A-33 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) California Public Utility Commission† Luciano F. Paone v. Microsoft Corporation (Patent Infringement)* Pfizer Consumer Healthcare (Lanham Act Advice) Playtex v. Procter & Gamble (Claims Substantiation)*† Procter & Gamble v. Amway (Liability and Damages)*† Procter & Gamble v. Haugan, et. al. (Liability and Damages)† Putnum Fund Trustees, (Investment Fraud, advice on market research) Ram Broadcasting, Inc. (Cellular Telephone Filings) RealPlayer, Inc. v. Microsoft Corporation (Anti-trust) Roberts et. al. v. Enterprise Rent-a-Car Company of Boston, Inc. (Class Action) The Republic of Columbia v. Diageo North America, et al. (Anti-trust). St. Clair Intellectual Property Consultants, Inc. v. Research in Motion, Ltd. and General Imaging Co. (Patent infringement) Curt Schlesinger and Peter Lore, on behalf themselves and the Certified Class, Plaintiffs, v. Ticketmaster (Class action, false advertising, confusion)* Barbara Schwab, et. al. v. Philip Morris, USA (Class Action)* SoundExhange, Inc. vs. Sirius Satellite Radio, Inc. and XM Satellite Radio, Inc.: In the Matter of Adjustment of Rates and Terms for Preexisting Subscription Services and Satellite Digital Radio Services. 2007*†. 2012*†. 2017*†. Sprint Communications Company L.P. et al. v. Comcast Cable Communications, LLC. et al. (Damages)* State of Colorado, et. al. v. Warner Chilcott Holdings Company III, Ltd., et. al. (Anti-trust)* † State of Florida and Plaintiff States Antitrust Litigation for Disposable Contact Lenses (Survey Analysis)† State of Washington v. Comcast, et al. (False Advertising)* † Stipic, et. al. v. Behr Process Corporation and Masco International (Class Action)* Straumann Company v. Lifecore Biomedical, Inc. (Product Confusion)* Sun Microsystems, Inc. v. Microsoft Corporation (Anti-trust). Symphony Health Solutions Corporation v. IMS Medical Radar (Technical Expert)*. Takada Pharmaceuticals USA, Inc. v. Par Pharmaceutical Companies, Inc. Par Pharmaceutical, Inc., Amneal Pharmaceuticals, LLC, Watson Laboratories, Inc. West-Ward Pharmaceutical Corp., Hikma Americas PLC. (Patent Infringement). Tivo, Inc. v. Echostar Communications Corporation, et. al* (Patent Infringement) Tropicana Products, Inc. v. Vero Beach Groves, Inc. (Lanham Act)† (Declaration accepted as court testimony.) United States of America Department of Justice v. AT&T Inc., DirecTV Group Holdings, LLC, And Time Warner Inc.* † Wal-Mart Stores, Inc (and other retailers) v. Mastercard International, Inc. (Liability and Damages, Anti-trust)* We Media, Inc. v. We: Women’s Entertainment, LLC. (Product Confusion)*. Yahoo Holdings, Inc., et al. v. Mozilla Corporation* (customer satisfaction) Olua Zakaria, et al. v. Gerber Products Co. d/b/a Nestle Nutrition, Nestle Infant and Nestle Nutrition North America
A-34 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) (class action, damages)*.
Marketing, Marketing Research, and Product Development Consulting Not Otherwise Listed
American Home Foods, Inc.; American Airlines; American Hospital Supply Corporation; Analog Devices, Inc; Andersen Consulting, Inc. (Accenture), Applied Marketing Science, Inc.; A.T.&T.; Avon; Barton-Aschmann Associates; Baxter Cardiovascular Group, Booz Allen Hamilton, Inc., Cambridge Systematics, Inc.; Chrysler, LLC; Colgate-Palmolive; Costello Associates, Inc.; Economics’ Laboratories, Inc.; Elrick and Lavidge, Inc.; Evanston Hospital; Evanston, Illinois and Schaumburg, Illinois (Transportation Planning); Fiat Chrysler Automobiles, Fidelity Investments; Ford Motor Company; French's Inc., G.D. Searle, Inc.; General Foods, Inc.; General Motors, Inc., Buick Division, Chevrolet Division, Marketing and Product Planning; Gillette; IBM, Inc.; Information Resources, Inc.; Intel, Inc., Johnson & Johnson; Kodak; Macromedia, Inc., Management Decision Systems, Inc.; M/A/R/C, Inc.; Merck, Inc., Navistar International, Inc.; Pacific Gas and Electric Company, Pepsi-Cola, Inc.; Polaroid; Procter & Gamble Company; Product Genesis, Inc.; RAM Broadcasting, Inc.; Regional Transportation Authority; Richardson- Vicks, Inc.; Southern Company Services, Inc.; Time-Life Books; Volunteers in Technical Assistance, and Wyeth- Ayerst Laboratories, Inc. Co-founder, senior product development consultant, Applied Marketing Science, Inc., Advisory Board (former), Affinnova, Inc.
M.I.T. or MIT Sloan Committee Work
Associated Faculty Committee to Review the Organizational Learning Center (MIT Sloan), 1995.
Building Committee for the E51 Expansion, MIT Sloan, 1992, Ad Hoc.
Center for Innovation in Product Development
Leader, Virtual Customer Initiative, 2000 - 2006
Research Director, 1997 – 2000
Center for Transportation Studies, 1981 - 1982.
Master of Science in Transportation Committee.
Committee on the Masters in Analytics, 2014-2016.
Committee on the Undergraduate Program, 2003 – 2005.
Committee to Investigate Sloan-Logo Research Notes (MIT Sloan, chair), 2001-2002.
Dean’s Consultation Committee (MIT Sloan), 2008-2009.
Dean Search Committee (MIT Sloan), 1993.
Executive Educational Programs Committee (MIT Sloan), 1983 – 1985, 1998-1999, 2007.
Faculty Admissions Committee, 2004-2009.
Faculty Council (MIT Sloan), 1999.
A-35 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) International Center on Research for the Management of Technology (MIT Sloan).
Co-Director, (1993 - 2000).
Joint Steering Committee (1990 - 1993).
Management Science Area, MIT Sloan School of Management.
Area Head, (2005- 2009).
Chairman of Subcommittee on Peer Group Comparisons, (1981 - 1982).
Committee on Management Science Curriculum Redesign, (1982 - 1983).
Marketing Group Head (1986, 1988 – 2003, 2010-2011).
Marketing PhD Admissions, Head (2015, 2016)
Management of Technology Program Committee (MIT Sloan), (2001- 2003).
Master's Program Committee, MIT Sloan, (1980 – 1987, 2007 – 2015).
Ad hoc committee to develop a Marketing, Operations and Strategy Track (2011-2012).
Ad hoc committee to understand gender issues in class participation (2015-2016)
Chairman: Subcommittee On Placement, (1981 - 1982).
Core Curriculum Implementation Committee (1992-1994).
Core Curriculum Reassessment Committee (1991-1992).
Subcommittee on Admissions, Special Consideration, (2007 – 2009).
Subcommittee on Course Ratings (2011).
Subcommittee on Entrepreneurship and Innovation Evaluation (Chair, 2008).
Subcommittee on Fellowship Awards (2014-2015)
Subcommittee on the Management Science Core, (1982 - 1983).
Subcommittee on Tracks (2008-2009).
Subcommittee on Strategy Curriculum (2009).
MIT Sloan Committee on Educational Technology, 2004 – 2006.
Operations Research Center
Admissions Committee, (1981 - 1982).
Associated Faculty (1980 – 2000).
Operations Research Committee (2001- 2003).
A-36 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) President's Committee (1984).
Organization Committee for the New MIT Sloan Building, E62, (2007- 2009).
Personnel and Policy Committee, MIT Sloan (Executive Committee, 2005 – 2009, 2013-2014).
Chair of ad hoc committees for reappointment, promotion, and tenure (1983 - 2014).
Member of ad hoc committees for reappointment, promotion, and tenure (1981 - 2014).
Sloan Appreciation Awards Committee (2013-2014)
Symposium Director, Marketing Center, MIT Sloan School, M.I.T., (1981 - 1982).
Zannetos Dissertation Award Committee, MIT Sloan, (1981-82, 1996-97, chair 1997-1998).
M.I.T. Subjects Taught (often multiple sections)
15.810, Marketing Management (Core) Spring 1990, 1991, 1992, 1993, 1994, 1995, 1997, 1998, 1999, 2001, 2004, 2005. 2006, 2018. Fall 1999, 2006, 2007, 2008, 2011, 2012, 2013, 2014, 2015. (Teaching awards listed on page 2 of vita.). Retitled Marketing Innovation in 2018.
15.812, Marketing Management (UG) Fall 1981, 1982, 1984, 1985, 1986. Spring 1981, 1984, 2006, 2018. Retitled Marketing Innovation in 2018.
15.813, Marketing Management in Public Sector Fall 1980.
15.814, Marketing Innovation Spring 2019
15.8141, Marketing Innovation (UG) Spring 2019
15.814, Marketing Mgmt (Mgmt of Technology) Fall 1988, 1993, 1999, 2001.
15.820, Advanced Marketing Management Spring 1990
15.828, New Product Development Spring 1981, 1982, 1989; Fall 1982, 1984; 1985.
15.838, Ph.D. Seminar (Various Topics) Spring 1986, 1997, 2002, 2006, 2011, 2013, 2014, 2015, 2016.
15.839, Marketing and Statistics Workshop Spring 1982; Fall 1982, 1984.
15.TH4. Thesis Project on Competitive Strategy Spring 1985, 1986.
CS.113 A Core Ethics: Ethics in Marketing Fall 2014, 2015, 2016, 2017.
Summer Session, ILP, and External Executive
A.T.&T Course on New Product Development, 1986.
European Institute for Business Administration (INSEAD) European Marketing Programme, 1985.
Greater Boston Area Executive Program, 1982, 1983.
M.I.T. Civil Engineering, Demand Theory, 1980, 1981, and 1982.
A-37 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) M.I.T. ILP, Marketing Strategy and Models in the Information age, 1983.
M.I.T., Management of R&D, 1989, 1990, 1991, 1992, 1993, 1994. 1995, 1996, 1997, 1998, 1999.
M.I.T. Marketing Science Symposium, 1981, 1982, 1983, 1984, 1985, 1986, 1987, 1988.
M.I.T./M.I.P. Executive Program, 1992.
M.I.T. New Product Development, 1997.
Pedagogical Developments.
In 2017-209, I headed an effort to redesign the basic marketing course with further consideration of redesigning the entire marketing curriculum.
In 2012, I redesigned the core curriculum in marketing to reflect new developments in marketing analytics, big data, and new media.
In 1990 and 1991, Prof. John D. C. Little and I redesigned the core curriculum in Marketing Management and taught the course to the entire Master's class.
In the 1991-1992 I was part of a committee of six faculty members that redesigned the core curriculum at the Sloan School. I supervised the voice-of-the-customer analyses of students and recruiters and encouraged the committee to design a program that these customers would find exciting. The new core was implemented in the 1993-1994 academic year. Student satisfaction increased significantly.
Teaching Notes
Note on Defensive Marketing Strategy (2005, for 15.810, Marketing Management)
Note on Product Development (2105, for 15.810, Marketing Management)
Note on the Voice of the Customer (2018 for 15.814, Marketing Innovation)
Note on Consumer Behavior (2015, for 15.810, Marketing Management)
Note on Life Cycle Diffusion Models (2005, for 15.810, Marketing Management)
Note on Engineering Product Design (2006, for 15.810, Marketing Management)
Note on Conjoint Analysis (2018, for 15.814, Marketing Innovation)
M.I.T. Thesis Supervision
(a) MIT Sloan School of Management, Master's Theses
Hafiz Adamjee (joint with John Scaife), "The Face of the Customer: The Use of Multimedia in Quality Function Deployment," - (1993). This product was subsequently commercialized and was a finalist for the New Media Invision 1994 Multimedia award at COMDEX/Spring '94.
Ramay Akras, "Competitive Strategy in the Marketing of Small DDP Computers: an Analysis of Emerging Price and Product Position Patterns," - (1986).
Frederic Amerson, "Strategic Marketing Simulation: Improvements to the Enterprise Integrating Exercise," - (1989).
A-38 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Sébastien Andrivet (Sloan Fellows Program), “Customer research, customer-driven design, and business strategy in Massively Multiplayer Online Games,” – (2007)
Andrew Anagnos (joint with Karen Van Kirk), "A Framework for Analyzing Quality in the News Media," - (1991)
Allen Aerni, "Measurement of Customer Satisfaction," - (1994).
Joel Berez, "An Investigation of Decision Hierarchies" - (1981).
Harel Beit-on, "Competitive Strategy for Small Business Jet Aircraft," - (1985).
Willy Biberstein (SDM Program), "Framework for Customer Interaction Throughout the Automotive Product Development Process," (February 2002).
Andre Borschberg (joint with Webb Elkins), "Defensive Marketing Strategy: Its Application to a financial Decision Support System" - Reader (1983).
Philippe Bosquet, "European Airline Deregulation: Defining Air France's Strategy for the 1990's," - Reader (1989)
Jill A. Christians, (joint with Cheryl M. Duckworth), "Expectations and Customer Satisfaction: A Market Research Study for Plimoth Plantation," Reader (1994).
Poh-Kian Chua (MOT Program), “R,D&E Metrics: Shaping the Outcomes of Your R,D&E Investment,” – (1998).
Leslie K. Cooper, "The Structure of Recruiter Needs at the Sloan School of Management: A Quantitative Assessment," - (1992).
Teruyuki Daino (Sloan Fellows Program), “How a Leading Company Can Overcome a Competitive Challenge: A Case Study of Anheuser-Busch Company.” – (1998).
Laura E. Donohue, "Software Product Development: An Application of the Integration of R&D and Marketing via Quality Function Deployment" - (1990)
Cheryl M. Duckworth (joint with Jill A. Christians), "Expectations and Customer Satisfaction: A Market Research Study for Plimoth Plantation," Reader (1994).
Webb Elkins (joint with Andre Borschberg), "Defensive Marketing Strategy: Its Application to a Financial Decision Support System" - Reader (1983).
Rasheed El-Moslimany (LFM Program), "Getting Value from the Value Chain: Comfort Choice," Co-Advisor. (June 2002)
Merve Ergez (Master of Science in Management Studies), Strategic Scent Selection: A Marketing Research Study for Olivita Brand,” (June 2014).
Julio Faura (MOT Program), "Contribution to Web-based Conjoint Analysis for Market Research," (2000).
Richard Feldman, "Decision Support Systems for Forecasting Communications in the Home," - Reader (1985).
Anders T. Fornander, "The Continuing Operating System Battle in the Personal Computer Industry," - Reader (1994).
Carl Frank (MOT Program), "Metrics Thermostat for Strategic Priorities in Military System Acquisition Projects," (2000).
Mihaela Fulga, "Competitive Pricing and Positioning Strategies in the Dating Service Market," - (1986).
A-39 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25)
Steven P. Gaskin, "Defender: Test and Application of a Defensive Marketing Model" - (1986). 1st Place, Brooks Award.
Peter N. Goettler, "A Pre-market Forecasting Model of New Consumer Durables: Development and Application," - Reader (1986).
Patti N. Goldberger, "Competitive Strategy in the Market for Running Shoes," - (1985).
Akhil Gupta, "The Personal Computer Industry: Economic and Market Influences on Product Positioning Strategies," - (1986).
Michael Halloran (joint with Marc Silver), "Defensive Marketing Strategy: Empirical Applications" - (1983).
Carla Heaton, "Competitive Strategy in the Facsimile Market," - (1985).
Judith Hee, "Determining Manufacturer's Coupon Strategies" - Reader (1981).
Jonathan E. Higginson, “Understanding Dependencies in Research and Development at the Charles Stark Draper Laboratory.” - (1997).
Scott D. Hill, "Correlation of Core Competencies with Market-Driven or Self-Guided Research," - (1995).
Dan Isaacs, "Competitive Pricing and Positioning Strategies in the Imported Beer Marketing," - (1986).
Francois Jacques, "Marketing Strategies in Innovative Industries: The Case of Package/Document Delivery Services," - Co-Advisor (1985).
Lawrence Kahn, "Competitive Positioning: A Study of Recruiter's and Employer's Perceptions of the Sloan School of Management" - (1982). Honorable mention Brooke's Thesis Prize.
D. Darcy Kay, "Competitive Strategy for Anti-arthritic Drugs" - (1985).
Young Joo Kim (MOT Program), “R&D Management Applications of The Dynamic Metrics Framework” – (1998)
Priya Kher (Systems Design and Management Program), “Using Application Generated Data to Provide Personalized User Experience in Software Applications” – (2018)
Sidney A. Kriger, "The Effect of Quality Function Deployment on Communications of the New Product Development Teams," - (1989)
Yasuke Kume, "New Marketing Strategy of Telecommunications in Japan" - Reader (1981).
Elvind Lange, "Measuring Market Response to Marketing Mix Variables Using Dynamic Modeling and Its Implications for Brand Strategy" - Reader (1981).
Stephen P. Langhans, "Defensive Marketing Strategy: A Consumer Semi-Durable Case Example" - (1983).
In-Kyu Lee, "Evaluating System for the Upstream Center of R&D for being Market-Oriented in a Consumer Electronics Company," - (1995).
Michael Leslie (joint with Joel Wachtler), "A Methodology for Making International Marketing Mix Decisions," - Reader (1985).
Kit Mee Lim, "Competitive Strategy among Companies Offering Credit Cards," - Reader (1985).
A-40 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) James A. Lutz, "Competitive Marketing Strategy in the CAD Marketplace," - (1985).
Larry D. Lyons, "Forecasting the Impact of Competitive Entries on Sales of a New Consumer Durable" - Reader (1984).
Arpita Majundar (SDM Program), "Strategic Metrics for Product Development at Ford Motor Company," - (2000).
Catherine E. Manion, "A Survey of Customer Satisfaction Incentive Systems for Salespersons," - (1993).
Maureen E. Matamoros, "Information Overload," – Reader (1986).
Meghan McArdle (LFM Program), "Internet-based Rapid Customer Feedback for Design Feature Tradeoff Analysis," – co-Advisor (2000)
Fernando Motta, "Competitive Strategy Among Panamanian Banks," - (1985).
Neil Novich, "Price and Promotion Analysis Using Scanner Data" - Reader (1981).
Kenji Nozaki, "Marketing and Technology Strategy for the Japanese Architectural Design Company," - (1989).
Seiji Nozawa, “Voice of the Customer Analysis in the Japanese Beer Market.” - (1997).
Minho Park (MOT Program), “R&D Matrix at LG Electronics.” - (1997)
Stephen Pearse, "Production and Sales Forecasting: A Case Study and Analysis" - Reader (1982).
Ning P. Peng, "An Exploration of the Impact and Success of Customer Satisfaction Programs," - (1994). Homer Pien (MOT Program), “Competitive Advantage through Successful Management of R&D.” - (1997) Susan B. Poulin, "Defensive Strategy in the Automatic Test Equipment Industry" (1984).
Jill W. Roberts, "MBA Recruiters' Needs: Voice of the Customer Analysis," - (1992).
Lisa Gayle Ross, "A Voice of the Customer Analysis of M.B.A. Schools: The Student Segment," - (1992). Lisa was a runner-up for the George Hay Brown Marketing Scholar of the Year in 1992.
Tamaki Sano, “Strategy for Kirin as a Global Brand” – (2009) Sloan Fellow.
John Scaife (joint with Hafiz Adamjee), "The Face of the Customer: The Use of Multimedia in Quality Function Deployment," - (1993). See award listed under Adamjee.
Paul E. Schoidtz, "Advertising, Price, and Positioning Equilibria," - (1986).
Hongmei Shang, "A Simulation Analysis of Optimal Task Assignment for Growing Managers from R&D Labs," – (February 2000).
Rosemarie Shield, "Competitive Pricing and Positioning Strategies in the Chromatographic Instruments Market," - , (1986).
Jon Silver (joint with John C. Thompson, Jr.), "Beta-binomial Analysis of Customer Needs -- Channels for Personal Computers," - (1991). 1st Prize, Brooks Award.
Marc Silver (joint with Michael Halloran), "Defensive Marketing Strategy: Empirical Applications" - (1983).
Lisa Silverman, "An Application of New Product Growth Modeling to Automobile Introductions" - (1982).
A-41 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Sheryl Sligh, "An Assessment of the Analog Modem Market," - (1991).
Jamie Smith, "Industrial Buying Process of Pension Funds for Real Estate," - (1982).
Yoshihito Takahashi (MOT), "Analysis of Strategy in an Ethical Drug Industry," – Reader ( 2000).
Genevieve Tchang, "A Methodology for Planning and Evaluating External Relations at Business Schools" - Reader (1982).
John C. Thompson, Jr. (joint with Jon Silver), "Beta-binomial Analysis of Customer Needs -- Channels for Personal Computers," - (1991). 1st Place, Brooks Award.
V.Mullin Traynor, "The Dissemination and Adoption of New Technology: Control Data's Computer-Based Training System, Plato, and the Electric Utilities" - (1982).
Karen Van Kirk (joint with Andrew Anagnos), "A Framework for Analyzing Quality in the News Media," - (1991)
Joel Wachtler (joint with Michael Leslie), "A Methodology for Making International Marketing Mix Decisions," - Reader (1985).
Tamao Watanabe, "Customer Analysis of the U.S. Cardiovascular Drug Market: Focusing on Physician's Drug Choice" - (1991)
Stephen L. Weise, "Expert Decision Support Systems for Marketing Management," – Reader (1986).
Nancy Werner, "Competitive Price and Positioning in the Integrated Office Automation Systems Market" - (1986).
Julie Wherry, “Pre-Test Marketing: Its Current State in the Consumer Goods Industry and Its Effect on Determining a Networked Good.” - (2006).
Ali Yalcin, "The Potentials and Limitations of Customer Satisfaction Indices in Captive Customer-Supplier Environments," - (1995)
Sandra Yie, "The Core Curriculum at Sloan: Establishing a Hierarchy of Needs," - (1992).
Judy Young, "Responsive Marketing Strategy at AT&T" - (1982).
(b) Aeronautics S.M. Theses
Keith Russell (LSI), "Reengineering Metrics Systems for Aircraft Sustainment Teams: A Metrics Thermostat for Use in Strategic Priority Management," (February 2001).
(c) Electrical Engineering, S.B. and M.Eng. Theses
Chan, Christine W. Y. (M. Eng), “Measuring Non-Monetary Incentives Using Conjoint Analysis,” Co-Advisor (1999).
Emily Hui (M.Eng.), "Application of Polyhedral Conjoint Analysis to the Design of Sloan's Executive Education Programs." June 2003.
Brian T. Miller (S. B.), "A Verification of Price Equilibria Based on Non-Zero Conjectural Variation," (1986).
(d) Mechanical Engineering, Master’s Theses
Burt D. LaFountain, “An Empirical Exploration of Metrics for Product Development Teams” – (1999)
A-42 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Tina Savage, “The Virtual Customer: A Distributed Methodology for Linking Product Design and Customer Preferences.” Co-Advisor (1998).
(e) Operations Research Center, Master’s Theses
Jeffrey Moffit (ORC), " Applying the Metrics Thermostat to Naval Acquisitions for Improving the Total Ownership Cost – Effectiveness of New Systems," (2001)
Olivier Toubia (ORC), "Interior-point Methods Applied to Internet Conjoint Analysis," (February 2001), Co- Advisor.
(f) Urban Studies, Master's Theses
Marijoan Bull, "Affirmative Fair Housing Marketing" - Committee Member (1982).
Barry Cosgrove, "Marketing Analysis for the Brockton Area Transportation Authority" – Committee Member (1981).
(g) Sloan School of Management, Ph.D. Theses
Makoto Abe, "A Marketing Mix Model Developed from Single Source Data: A Semiparametric Approach." Committee member (August 1991). Abe is on the faculty at the University of Tokyo.
Cao, Xinyu, “Consumer Inattention, Uncertainty, and Marketing Strategy.” Committee member (June 2018). Cao is joining the faculty at New York University.
Daria Dzyabura, “Essays on Machine Learning in Marketing (tentative title),” Chairman (June 2012). Dzyabura is on the faculty at the New Economic School in Russia.
Peter Fader, "Effective Strategies in Oligopolies," Chairman (February 1987). Sloan School of Management, Zannetos Prize, 1st Place. Fader is on the faculty at the University of Pennsylvania. Fred Feinberg, "Pulsing Policies for Aggregate Advertising Models" Committee Member (August 1988). Feinberg is on the faculty of the University of Michigan. Dave Godes, " Friend or Foe?: The Relationship Between Learning and Incentives and two additional essays in marketing," (June 2000), Committee Member. Primary advisor on listed essay. Zannetos Prize, 1st Place. Godes is on the faculty of the University of Maryland. Abbie Griffin, "Functionally Integrated New Product Development: Improving the Product Development Process Through Linking Marketing and Technology Development," Chairman. (June 1989). Griffin is on the faculty at the University of Utah and was editor of Journal of Product Innovation Management from 1997-2003 Frank Bass Dissertation Award (INFORMS).
Gurumurthy Kalyanaram, "Empirical Modeling of the Dynamics of the Order of Entry Effect on Market Share, Trial Penetration and Repeat Purchases for Frequently Purchased Consumer Goods," Committee Member (March 1989). G. K. was on the faculty at the University of Texas, Dallas.
Eriko Kitazawa, "Customer Satisfaction at Japanese Utility Franchises," Committee Member (1996).
Li, Xitong, “Using Web Data and Services: Technology, Theory, and Evidence,” Co-chairman (2014). Li is on the faculty at HEC Paris.
Eleanor (Nell) Putnam-Farr, “The Effects of Framing on Enrollment and Participation – Field Experiments Using Different Recruitment Language.” June 2015. Putnam-Farr joined Yale University as a post doctoral fellow. She is joining the faculty at Rice University.
John H. Roberts, "A Multiattributed Utility Diffusion Model: Theory and Application to the Prelaunch Forecasting
A-43 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) of Autos". Committee Member (February 1984). Roberts is on the faculty at the London Business School and the Australian Graduate School of Management..
Matt Selove, “The Strategic Importance of Accuracy in Conjoint Design,” Committee Member (June 2010). Selove joined the faculty at the University of Southern California. He is now on the faculty at the University of Florida. John Howard Dissertation Award (AMA), 2010.
Duncan I. Simester, "Analytical Essays on Marketing," Committee Member, (June 1993). Sloan School of Management, Zannetos Prize, Honorable Mention. Simester is on the faculty of M.I.T.
Artem Timoshenko, "Essays on Machine Learning in Marketing (tentative ,June 2019),." Timoshenko is on the faculty of Northwestern University.
Olivier Toubia, “New Approaches to Idea Generation and Consumer Input in the Product Development Process,” (June 2004). Toubia is on the faculty of Columbia University. Frank M. Bass Dissertation Award (INFORMS), 2005, John Howard Dissertation Award (AMA), 2005. ISMS Long-term Impact Award 2016.
Miguel Villas-Boas, "On Promotions and Advertising Policies: A Strategic Approach." Committee member (February 1991). Villas-Boas is on the faculty at the University of California, Berkeley.
Bruce Weinberg, "An Information-Acceleration-Based Methodology for Developing Preproduction Forecasts for Durable Goods: Design, Development, and Initial Validation." Committee Member. (August 1992). Weinberg was on the faculty at Boston University.
Florian Zettelmeyer, “Three Essays on Strategic and Organizational Uses of Information in Marketing.” Committee Member. Zettelmeyer is on the faculty of Northwestern University.
(h) Civil Engineering, Ph.D. Thesis
Karla Karash (Ph.D.), "An Application of the Lens Model in Measuring Retail Attractiveness and the Effects of Transportation Programs" - Committee Member (August 1983). Karash was at the MBTA.
(j) Mechanical Engineering, Ph.D. Thesis
Javier Gonzalez-Zugasti (Mechanical Engineering, Ph.D.), "Models for Product Family Design and Selection," (June 2000), Committee Member.
(k) Operations Research Center, Ph.D. Thesis
Yee, Michael (Operations Research, Ph.D.), “Inferring Non-Compensatory Choice Heuristics,” (June 2006), Co- Advisor. Yee is at MIT’s Lincoln Laboratories.
Northwestern University Ph.D. Thesis Supervision (1975 - 1980 Academic Years)
Steven M. Shugan, "A Descriptive Stochastic Preference Theory and Dynamic Optimization: Applications Toward Predicting Consumer Choice' Chairman (September 1977). Shugan is on the faculty at the University of Florida and was editor of Marketing Science for six years.
Patricia Simmie, "Product Realization: Theory, Models, and Application" - Chairman (June 1979), American Marketing Association Dissertation Prize, Honorable Mention. Simmie was at York University.
Ken J. Wisniewski, "A Semi-Markov Theory of Consumer Response: New Theoretical Properties, Simulation Testing, and Empirical Application" Chairman (June 1981). American Marketing Association Dissertation Prize, First Place. Wisniewski was on the University of Chicago.
A-44 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX B John R. Hauser Prior Testimony 2014–2019
Yahoo Holdings, Inc., et al. v. Mozilla Corporation, Case No. 17-CV-319921, Superior Court of the State of California, County of Santa Clara. Deposition testimony, September 13, 2019.
Anoush Cab, Inc., et al. v. Uber Technologies, Inc., Rasier, LLC, Case No. 1:16-cv- 12538-NMG, United States District Court, District of Massachusetts. Deposition testimony, January 30, 2019. Trial testimony, August 1, 2019 – August 2, 2019.
State of Washington v. Comcast Cable Communications Management, LLC; Comcast Cable Communications, LLC; and Comcast of Colorado/Florida/Michigan/New Mexico/Pennsylvania/Washington, LLC, Case No. 16-2-18224-1 SEA, State of Washington King County Superior Court. Deposition testimony, August 9, 2018.
United States of America v. AT&T Inc., DirecTV Group Holdings, LLC, and Time Warner Inc., Case No. 1:17-cv-02511, United States District Court for the District of Columbia. Deposition testimony, March 9, 2018. Trial testimony, March 29, 2018.
Joseph Adinolfe, et al., v. United Technologies Corp., d/b/a Pratt & Whitney, Case No. 10-80840-CIVKAM, In the United States District Court, Southern District of Florida, West Palm Beach Division. Deposition testimony, July 12, 2016. Class certification hearing testimony, January 9, 2018.
Garth Anderson, et al., v. American Family Insurance Company, Case No. 5:15-CV-475 (MTT), United States District Court for the Middle District of Georgia, Macon Division. Deposition testimony, November 14, 2017.
In the Matter of Determination of Royalty Rates and Terms for Transmission of Sound Recordings by Satellite Radio and “Preexisting” Subscription Services (SDARS III) before United States Copyright Royalty Judges, Library of Congress, Washington, DC, Docket No. 16-CRB-0001-SR/PSSR (2018-2022). Deposition testimony, March 17, 2017. Trial testimony, May 9, 2017.
Oula Zakaria vs. Gerber Products Co., a Corporation, d/b/a Nestle Nutrition, Nestle Infant Nutrition, and Nestle Nutrition North America, No. 2:15-cv- 0200-JAK, United States District Court, Central District of California. Deposition testimony, November 17, 2016.
Sprint Communications Company L.P. et al. v. Comcast Cable Communications, LLC. et al., Case No. 2:12-cv-00859-JD, United States District Court for the Eastern District of Pennsylvania. Deposition testimony, April 5, 2016.
B-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Scott Miller v. Fuhu, Inc. and Fuhu Holdings, Inc, Case No. 14-cv-6119 CAS-AS, United States District Court for the Central District of California, Western Division. Deposition testimony, October 20, 2015.
Symphony Health Solutions Corporation v. IMS Medical Radar, Case CBM2014-00188, United States Patent and Trademark Office. Deposition testimony, June 15, 2015. B-2
In the Matter of Determination Of Rates And Terms For Digital Performance In Sound Recordings And Ephemeral Recordings (Web IV) before United States Copyright Royalty Judges, Library of Congress, Washington, DC, Docket No. 14-CRB-0001-WR. Deposition testimony, March 25, 2015. Trial testimony, May 22, 2015.
Fox Broadcasting Company, Inc. v. Dish Network LLC, Civil Action No. 12-04536- DMB-SHx, United States District Court for the Central District of California. Deposition testimony, December 15, 2014.
Michael Kors, Inc. v. Costco Wholesale Corporation, Civil Action No. 13-CV-4832, United States District Court for the Southern District of New York. Deposition testimony, June 9, 2014.
Apple Inc. v. Samsung Electronics Co. Ltd. et al., Case No. 12-CV-00630, United States District Court for the Northern District of California San Jose Division. Deposition testimony, September 27, 2013. Trial testimony, April 8, 2014.
B-2 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX C Materials Relied Upon
Books
Casella, George and Roger L. Berger, Statistical Inference, Second Edition, Belmont, CA: Brooks/Cole Cengage Learning, 2002
Diamond, Shari S., “Reference Guide on Survey Research,” in Reference Manual on Scientific Evidence, Third Edition, Washington, D.C.: Federal Judicial Center and National Research Council of the National Academies, 2011, pp. 359–423, available at https://www.fjc.gov/content/reference-guide-survey-research-2.
Payne, Stanley L. B., “What’s the Good Word?” in The Art of Asking Questions, Princeton, NJ: Princeton University Press, 1980, pp. 138–157.
Thompson, Steven K., Sampling, Hoboken, NJ: John Wiley & Sons, Inc., 2012.
Urban, Glen L. and John R. Hauser, Design and Marketing of New Products, Englewood Cliffs, NJ: Prentice-Hall, Inc., 1980.
Academic Articles
Burnap, Alex and John R. Hauser, “Design and Evaluation of Product Aesthetics: A Human-Machine Hybrid Approach,” MIT Sloan School of Management Working Paper, 2019.
Dahan, Ely and John R. Hauser, “The Virtual Customer,” Journal of Product Innovation Management 19, 5, 2002, pp. 332–353.
Gelb, Gabriel M. and Betsy D. Gelb, “Internet Surveys for Trademark Litigation: Ready or Not, Here They Come,” The Trademark Reporter 97, 5, 2007, pp. 1073– 1088.
Hauser, John R., “Consideration-Set Heuristics,” Journal of Business Research 67, 8, 2014, pp. 1688–1699.
Hauser, John R. and Birger Wernerfelt, “An Evaluation Cost Model of Consideration Sets,” The Journal of Consumer Research 16, 4, 1990, pp. 393–408.
Payne, John W., “Task Complexity and Contingent Processing in Decision Making: An Information Search and Protocol Analysis,” Organizational Behavior and Human Performance 16, 2, 1976, pp. 366–387.
Payne, John W., James R. Bettman, and Eric J. Johnson, “Adaptive Strategy Selection in Decision Making,” Journal of Experimental Psychology: Learning, Memory, and Cognition 14, 3, 1988, pp. 534–552.
C-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Roberts, John H. and James M. Lattin, “Development and Testing of a Model of Consideration Set Composition,” Journal of Marketing Research 28, 4, 1991, pp. 429–440.
Sawyer, Alan G., “Demand Artifacts in Laboratory Experiments in Consumer Research,” Journal of Consumer Research 1, 4, 1975, pp. 20–30.
Shocker, Allan D., Moshe Ben-Akiva, Bruno Boccara, and Prakash Nedungadi, “Consideration Set Influences on Consumer Decision-Making and Choice: Issues, Models, and Suggestions,” Marketing Letters 2, 3, 1991, pp. 181–197.
Shrimp, Terence A., Eva M. Hyatt, and David J. Snyder, “A Critical Appraisal of Demand Artifacts in Consumer Research,” Journal of Consumer Research 18, 3, 1991, pp. 273–283.
Smith, Dylan M., Norbert Schwarz, Todd R. Roberts, and Peter A. Ubel, “Why are You Calling Me? How Study Introductions Change Response Patterns,” Quality of Life Research 15, 2006, pp. 621–630.
Thornburg, Robert H., “Trademark Surveys: Development of Computer-Based Survey Methods,” The John Marshall Review of Intellectual Property Law 4, 1, 2005, pp. 91–124.
Toubia, Oliver, John R. Hauser, and Duncan I. Simester, “Polyhedral Methods for Adaptive Choice-Based Conjoint Analysis,” Journal of Marketing Research 41, 1, 2004, pp. 116–131.
Toubia, Olivier, Duncan I. Simester, John R. Hauser, and Ely Dahan, “Fast Polyhedral Adaptive Conjoint Estimation,” Marketing Science 22, 3, 2003, pp. 273– 303.
Toubia, Olivier, John Hauser, and Rosanna Garcia, “Probabilistic Polyhedral Methods for Adaptive Choice-Based Conjoint Analysis: Theory and Application,” Marketing Science 26, 5, 2007, pp. 596–610.
Yee, Michael, Ely Dahan, John R. Hauser, and James Orlin,“Greedoid-Based Noncompensatory Inference,” Marketing Science 26, 4, 2007, pp. 532–549.
Internet Sources
“18th Paul D. Converse Marketing Symposium,” University of Illinois at Urbana- Champaign, available at http://www.business.illinois.edu/converse/generalinfo.html.
“Annual Estimates of the Resident Population for Selected Age Groups by Sex for the United States, States, Counties and Puerto Rico Commonwealth and Municipios: April 1, 2010 to July 1, 2018,” U.S. Census Bureau, available at https://factfinder.census.gov/bkmk/table/1.0/en/PEP/2017/PEPAGESEX; https://factfinder.census.gov/bkmk/table/1.0/en/PEP/2018/PEPANNRES/0100000US.
C-2 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) “Awards: Marketing Research SIG,” American Marketing Association, available at https://www.ama.org/awards-marketing-research-sig/.
“Buck Weaver Award,” INFORMS, available at https://www.informs.org/Recognizing-Excellence/Community-Prizes/Marketing- Science-Society/Buck-Weaver-Award.
“CAPTCHA: Telling Humans and Computers Apart Automatically,” CAPTCHA, available at http://www.captcha.net/.
“Charles Coolidge Parlin Marketing Research Award,” American Marketing Association, available at https://www.ama.org/AboutAMA/Pages/Parlin-Award.aspx.
“Determination of Rates and Terms for Digital Performance of Sound Recordings and Making of Ephemeral Copies to Facilitate Those Performances (Web V),” Federal Register, January 24, 2019, available at https://www.federalregister.gov/d/2019- 00102.
“INFORMS Fellows: Class of 2006,” INFORMS, available at https://www.informs.org/Recognizing-Excellence/Fellows/INFORMS-Fellows-Class- of-2006.
“Internet Usage in the United States – Statistics & Facts,” Statista, available at https://www.statista.com/topics/2237/internet-usage-in-the-united-states/.
“Leading Market Researchers Honored as Inaugural INFORMS Marketing Fellows,” INFORMS, available at https://www.informs.org/About-INFORMS/News- Room/Press-Releases/Leading-Market-Researchers-Honored-as-Inaugural- INFORMS-Marketing-Fellows.
iHeartRadio, “Genre” dropdown menu, available at https://www.iheart.com/live/country/US.
ROIRocket, available at www.roirocket.com.
SwagBucks, available at https://www.swagbucks.com/p/category/17/Denominations.
TuneIn, available at https://tunein.com.
Industry Reports
Edison Research, “Share of Ear: Americans’ Share of Time Spent Listening to Audio Sources,” Q2 2019.
Edison Research & Triton Digital, “The Infinite Dial – The Heavy Radio Listeners Report,” April 2018, available at https://www.edisonresearch.com/heavy-radio- listeners-new-insights-from-the-infinite-dial/.
C-3 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) • Edison Research & Triton Digital, “The Infinite Dial 2019,” 2019, available at https://www.edisonresearch.com/infinite-dial-2019/.
Other Sources
ProdegeMR ESOMAR, “28 Questions to Help Buyers of Online Samples,” 2019, available at https://www.prodegemr.com/resources-page/.
ProdegeMR Panel Book, 2019, available at https://www.prodegemr.com/resources- page/.
Data
Simulcast Switching Survey Data
Simulcast Switching Survey Data Glossary
Pretest Recruiting Data
C-4 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX D Simulcast Switching Survey Questionnaire
[PROGRAMMER NOTES IN BOLD CAPS AND BRACKETS] Notes to respondent in italics
Overview Sample: Approximately 500 respondents recruited from an online panel Click balanced on age, gender, and region to U.S. Census Bureau 2018 postcensal population estimates
Introduction and Screening
[NO SURVEY TITLE TO BE DISPLAYED TO RESPONDENTS. WHEN RESPONDENT CLICKS ON INVITATION LINK, DISPLAY MESSAGE BELOW:]
Thank you for your willingness to participate in this study. The responses you give to these questions are very important to us. If you don't know an answer to a question or if you are unsure, please indicate this in your response. It is very important that you do not guess.
Your answers will be kept in confidence. The results of this study will not be used to try to sell you anything. Please take the survey in one session without interruption. These questions should take 10–15 minutes to complete.
When you are ready to get started, please click on the “NEXT” button below.
[“NEXT” BUTTON TAKES RESPONDENT TO QUESTION QS0]
[NEXT PAGE]
QS0. Please enter the code exactly as it appears in the image above, and then click "NEXT" to continue. [INSERT CAPTCHA]
[NEXT PAGE]
D-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) SCREENING QUESTIONS (QS-SERIES OF QUESTIONS)
QS1. In which state do you live? (Select one only)
[INSERT DROP DOWN LIST OF 50 STATES + DC + “MY AREA IS NOT LISTED HERE”. TERMINATE IF “MY AREA IS NOT LISTED HERE” SELECTED. ASSIGN REGION VARIABLE]
[NEXT PAGE]
QS2. Are you…? (Select one only) Male Female Prefer not to answer [TERMINATE]
[NEXT PAGE]
QS3. Which of the following includes your age? (Select one only) Under 18 [TERMINATE] 18 - 34 35 - 49 50 - 64 65 or older Prefer not to answer [TERMINATE]
[NEXT PAGE]
QS4. What is the highest degree or level of education you have completed? (Select one only) Elementary school Middle school Completed some high school High school graduate Other post high school vocational training Completed some college Associate’s degree Bachelor’s degree Completed some postgraduate Master’s degree Doctorate/PhD None of the above
[REGION/AGE/GENDER/EDUCATION DESIGNATION MUST MATCH PANEL DATA, OTHERWISE TERMINATE]
[NEXT PAGE]
D-2 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) QS5. What type of electronic device are you using to complete this survey? (Select one only) [RANDOMIZE FIRST FOUR RESPONSES; ANCHOR “OTHER MOBILE OR ELECTRONIC DEVICE”] Desktop computer Laptop computer Tablet computer (e.g., Apple iPad, Kindle Fire, Samsung Galaxy Tab) Smartphone (e.g., Apple iPhone, Samsung Galaxy, HTC 10) Other mobile or electronic device [ANCHOR; ON HOLD]
[DISPLAY A MESSAGE TO ON-HOLD RESPONDENTS AND ASK THEM TO RE-ENTER USING AN APPROPRIATE DEVICE (USING THE SAME LINK): “This survey is not formatted for viewing on other mobile or electronic devices. Please return to the survey, using the same link, from a desktop, laptop, tablet computer, or smartphone.”]
[NEXT PAGE]
QS6. You indicated that you are using a [insert answer from QS5] to complete this survey. Your [insert answer from QS5] could be of any brand. However, people vary in the amount they pay attention to these kinds of surveys. Some take surveys seriously and read each question, while others take surveys very quickly and barely read the questions at all. If you are the type of person who takes surveys seriously and reads all of the questions, please select Lenovo from the list. (Select one only) [RANDOMIZE LIST, ANCHOR “OTHER” AND “DON’T KNOW” LAST] Apple HP Dell Acer Samsung LG Lenovo [CONTINUE IF “LENOVO” SELECTED, OTHERWISE TERMINATE] Other. Please specify: [ANCHOR; TEXTBOX, DO NOT ALLOW BLANK IF CHECKED] Don’t know/Unsure [ANCHOR]
[NEXT PAGE]
D-3 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) QS7. Do you or does anyone in your household work in any of the following areas? (Select all that apply) [RANDOMIZE LIST, ANCHOR “NONE OF THE ABOVE” AND “DON’T KNOW/UNSURE” LAST] For a radio broadcasting company [TERMINATE] For an Internet audio streaming company [TERMINATE] For a video game company For a food or beverage company For a pharmaceutical or medical device company For an Internet service provider For a market research company or public relations agency [TERMINATE] None of the above [EXCLUSIVE; ANCHOR] Don’t know/Unsure [EXCLUSIVE; ANCHOR]
[TERMINATE IF “MARKET RESEARCH”, “RADIO BROADCASTING” OR “INTERNET AUDIO STREAMING” SELECTED]
[NEXT PAGE]
QS8. Have you taken a survey relating to any of the following products or services in the past 6 months? (Select all that apply) [RANDOMIZE LIST, ANCHOR “NONE OF THE ABOVE” AND “DON’T KNOW/UNSURE” LAST] Music services [TERMINATE] Radio broadcasting [TERMINATE] Search engines Prescription drugs or medical devices Food and beverage Video games None of the above [EXCLUSIVE; ANCHOR] Don’t know/Unsure [EXCLUSIVE; ANCHOR]
[TERMINATE IF “MUSIC SERVICES” OR “RADIO BROADCASTING” SELECTED]
[NEXT PAGE]
D-4 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) QS9. There is a variety of media content available for people to watch, listen to, or read. The next questions ask about your media habits.
Thinking of the last three days, which of the following types of activities did you engage in? (Select all that apply) [TERMINATE UNLESS MUSIC OR NON-MUSIC CONTENT ARE SELECTED; ANCHOR “NONE OF THE ABOVE” AND “DON’T KNOW” LAST]
[ANSWER OPTIONS SHOULD BE KEPT IN ORDER IN THREE BLOCKS: OPTIONS STARTING “I WATCHED,” “I LISTENED” AND “I READ.” ROTATE ORDERING OF THE BLOCKS] I watched TV program(s) (e.g., shows, sports, news). I watched movie(s) (e.g., at home or in a theater). I watched on-demand holographic telecast(s). [TERMINATE] I listened to music (e.g., pop, country, rock). [CONTINUE] I listened to non-music content (e.g., news, sports, talk, podcasts). [CONTINUE] I read magazine(s) or newspaper(s) (e.g., in print or online). I read book(s) (e.g., physical or digital). None of the above. [EXCLUSIVE; ANCHOR] Don’t know/Unsure. [EXCLUSIVE; ANCHOR]
[NEXT PAGE]
D-5 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) [QINTRO]
You mentioned that you listened to music and/or non-music content in the last three days. There are various ways in which you can listen to content, some of which are defined below. Please read these definitions carefully, and keep them in mind when responding to questions in this survey.
[RANDOMIZE DESCRIPTIONS, KEEPING “LIVE RADIO BROADCASTS THROUGH A RADIO” AND “LIVE RADIO BROADCASTS OVER THE INTERNET” TOGETHER, AND IN THE SAME ORDER, KEEPING “ON-DEMAND MUSIC STREAMING SERVICES” AND “NOT-ON-DEMAND MUSIC STREAMING SERVICES” TOGETHER AND ROTATING]
Live AM/FM radio broadcasts through a radio: Live AM/FM radio is broadcast locally, thus allowing listeners to listen to local stations that may offer news, sports, weather, talk, and/or music through an AM/FM radio that is portable, in the home, or built into a car. Stations may broadcast programming created locally (e.g., morning shows with local traffic and weather), or nationally. Radio stations may be not-for-profit (e.g., NPR, college radio stations) or commercially supported by ad sales (commercial radio). Live AM/FM radio broadcasts over the Internet: Live AM/FM radio broadcasts over the Internet allow listeners to listen to the same content through their computers or other Internet-capable devices that is simultaneously transmitted to AM/FM radios. Live AM/FM radio broadcasts over the Internet may be accessed by going to the website or app of a radio station, or to the website or app for a platform such as iHeartRadio or TuneIn. Satellite radio (SiriusXM): Satellite radio is broadcast nationwide via satellite, thus allowing listeners to listen to the same stations anywhere in the country through a receiver that is portable, in the home, or built into a car. Satellite radio is available by subscription and offers commercial-free music as well as sports, news, talk, and other programming. Satellite radio may offer different stations that are not available on live AM/FM radio broadcasts through a radio or over the Internet. On-demand music streaming services: On-demand music streaming services allow listeners to choose the specific song, artist, or playlist they wish to hear, in addition to playlists provided by the service. These services may be available for free with ads, or through a paid subscription without ads. On-demand music streaming services include Apple Music, ad- supported Spotify, Spotify Premium, Google Play Music, and others. Not-on-demand music streaming services: Not-on-demand music streaming services do not allow listeners to choose the specific song or artist they wish to hear, but instead provide a pre-programmed list of songs based on listener preferences. The specific planned selection and order of songs remain unknown to the listener (i.e., no prepublished playlist). These services may be available for free with ads, or through a paid subscription
D-6 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) without ads. Not-on-demand music streaming services include ad- supported Pandora, Pandora Plus, and others.
[DISPLAY “NEXT” BUTTON AFTER 30 SECONDS] [NEXT PAGE]
QS10. You mentioned that you listened to music or non-music content in the last three days. In which, if any, of the following ways did you listen to that content? (Select all that apply)
You may click here to review the definitions you read earlier in the survey. [ADD LINK TO A POPUP WINDOW SHOWING DEFINITIONS (ONLY THE BULLET POINTS) FROM QINTRO IN THE SAME ORDER]
[RANDOMIZE LIST;
KEEP TOGETHER AND ROTATE THE FOLLOWING PAIRS OF OPTIONS: - OPTIONS 1 AND 2; - OPTIONS 4 AND 5; - OPTIONS 9 and 10;
ANCHOR OPTIONS 13 AND 14 LAST.]
1. I listened to on-demand music streaming service(s) through paid subscription(s) (e.g., Apple Music, Spotify Premium, Google Play Music). 2. I listened to on-demand music streaming service(s) that have ads and that I do not need to pay for (e.g., ad-supported Spotify). 3. I listened to music on video site(s) that have ads and that I do not need to pay for (e.g., ad-supported YouTube). 4. I listened to not-on-demand music streaming service(s) through paid subscription(s) (e.g., Pandora Plus). 5. I listened to not-on-demand music streaming service(s) that have ads and that I do not need to pay for (e.g., ad-supported Pandora). 6. I listened to satellite radio through a paid subscription (SiriusXM). 7. I listened to digital music files or CDs. 8. I listened to music obtained through peer-to-peer file sharing or free download sites. 9. I listened to live AM/FM radio broadcasts through a radio. 10. I listened to live AM/FM radio broadcasts over the Internet. [CONTINUE] 11. I listened to non-music digital content (e.g., podcasts, audiobooks). 12. I listened to music channels through a cable or satellite television subscription (e.g., Music Choice). 13. Other. (Please specify, if not already selected in the list above): [TEXTBOX, DO NOT ALLOW BLANK; ANCHOR] 14. Don’t know/Unsure. [EXCLUSIVE; ANCHOR]
[CONTINUE ONLY FOR RESPONDENTS WHO SELECT OPTION 10]
[NEXT PAGE]
D-7 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) QS11. You mentioned that you listened to live AM/FM radio broadcasts over the Internet in the last three days. Which of the following types of live AM/FM radio broadcasts over the Internet did you listen to? (Select all that apply) [ROTATE; ANCHOR “DON’T KNOW” LAST] Broadcasts from not-for-profit radio stations (e.g., NPR, college radio stations) Broadcasts from commercial radio stations (e.g., ad-supported radio stations) [CONTINUE] Don’t know/Unsure [EXCLUSIVE; ANCHOR]
[CONTINUE ONLY FOR RESPONDENTS WHO SELECT COMMERCIAL RADIO; TERMINATE IF COMMERCIAL RADIO IS NOT SELECTED]
[NEXT PAGE]
D-8 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) MAIN QUESTIONAIRE (Q-SERIES OF QUESTIONS)
Q1a. You mentioned that in the last three days you have listened to live AM/FM radio broadcasts from commercial radio stations over the Internet. We will now focus on your experience listening to live AM/FM radio broadcasts from commercial radio stations over the Internet. As a reminder, commercial radio stations are supported by ads, and are different from not-for-profit radio stations (e.g., NPR, college radio stations).
Thinking about the last three days, approximately how many total hours did you spend listening to live AM/FM radio broadcasts from commercial radio stations over the Internet?
Please enter whole numbers only – do not use decimal points or other punctuation. If less than 1 hour, please enter 1.
[INSERT BOX TO FILL IN A NUMBER BETWEEN 1 AND 72, INCLUSIVE] Don’t know/Unsure
[NEXT PAGE]
[IF NUMBER IS HIGHER THAN 48, DISPLAY Q1B ON THE NEXT SCREEN]
Q1b. You indicated that in the last three days you listened to approximately [INSERT ANSWER FROM Q1a] hours of live AM/FM radio broadcasts from commercial radio stations over the Internet.
Remember that there are 72 hours in three days. Approximately how many total hours did you spend listening to live AM/FM radio broadcasts from commercial radio stations over the Internet in the last three days? In the box below, you can update your previous response to this question or enter the same number of hours you previously provided.
[INSERT BOX TO FILL IN A NUMBER BETWEEN 1 AND 72, INCLUSIVE] Don’t know/Unsure
[NEXT PAGE]
D-9 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Q2. A live AM/FM radio broadcast from a commercial radio station over the Internet may feature different types of content. Thinking about the last three days, which of the following different types of content did you listen to through live AM/FM radio broadcasts from commercial radio stations over the Internet? (Select all that apply) [RANDOMIZE LIST, ANCHOR “OTHER” AND “DON’T KNOW/UNSURE” LAST] Music (all genres, e.g., pop, country, rock, children’s music, religious music) Sports (e.g., game broadcasts, commentary) News, weather, and traffic Religion (non-music content, e.g., preaching, education) Talk (e.g., live DJ commentary, politics, personal finance) Comedy (e.g., sketch comedy, stand-up) Kids and family (non-music content, e.g., educational programs) Other content. Please specify: [TEXT BOX, DO NOT ALLOW BLANK; ANCHOR; GO TO Q4 IF ONLY OTHER IS SELECTED; ANCHOR] Don’t know/Unsure [EXCLUSIVE; ANCHOR]
[IF “DON’T KNOW/UNSURE” IS SELECTED, GO TO Q4; OTHERWISE, GO TO Q3]
[NEXT PAGE]
Q3. You mentioned that in the last three days you listened to the following type(s) of content through live AM/FM radio broadcasts from commercial radio stations over the Internet. Again thinking about the last three days, please indicate how important that content was to you when you listened to live AM/FM radio broadcasts from commercial radio stations over the Internet. (Select one response per row) [ONLY INCLUDE RESPONSE OPTIONS SELECTED IN Q2; PRESENT RESPONSE OPTIONS IN THE SAME ORDER AS Q2; ROTATE COLUMNS AROUND “SOMEWHAT IMPORTANT”]
NotSomewhat Very Don’t important important important know/Unsure [ANCHOR] Music (all genres, e.g., pop, country, rock, children’s music, religious music) Sports (e.g., game broadcasts, commentary) News, weather, and traffic Religion (non-music content, e.g.,
D-10 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) preaching, education) Talk (e.g., live DJ commentary, politics, personal finance) Comedy (e.g., sketch comedy, stand-up) Kids and family (non-music content, e.g., educational programs) [FILL IN TEXT CORRESPONDING TO “Other content” FROM Q2 IF RESPONDENT SELECTS THAT OPTION IN Q2]
[NEXT PAGE]
Q4. Now suppose that live AM/FM radio broadcasts from commercial radio stations over the Internet were not available for the next five years. Assume that everything else would be available for the next five years as it is now.
Which of the following, if anything, would you consider doing in place of listening to such broadcasts over the Internet during the next five years?
The prices below are examples and do not include promotional discounts, taxes, or fees. If you are unable to say whether you would do or would not do a particular activity, please indicate this by choosing the “Don’t know/Unsure” option. It is important that you do not guess.
(Select one response per row)
You may click here to review the definitions you read earlier in the survey. [ADD LINK TO A POPUP WINDOW SHOWING DEFINITIONS (ONLY THE BULLET POINTS) FROM QINTRO IN THE SAME ORDER]
[RANDOMIZE BLOCKS A–G;
RANDOMIZE CHOICES WITHIN BLOCKS;
D-11 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) ROTATE AND KEEP TOGETHER THE FOLLOWING RESPONSE OPTIONS WITHIN BLOCKS: - 1 AND 2 IN BLOCK A; - 5 AND 6 IN BLOCK B; - 11 AND 12 IN BLOCK D; - 13 AND 14 IN BLOCK E; - 16 AND 17 IN BLOCK E; - 18 AND 19 IN BLOCK F
ROTATE “WOULD CONSIDER” AND “WOULD NOT CONSIDER” COLUMNS; CARRY “WOULD CONSIDER” AND “WOULD NOT CONSIDER” HEADER ABOVE EACH BLOCK]
Would Don’t Would not know/Unsure consider consider [ANCHOR] A) On-demand music streaming services in place of live AM/FM radio broadcasts from commercial radio stations over the Internet 1. I would listen to on-demand music streaming service(s) through the paid subscription(s) I already have (e.g., Apple Music, Spotify Premium, Google Play Music). 2. I would purchase new paid subscription(s) to on-demand music streaming service(s) that I don’t currently subscribe to (e.g., an individual subscription to Apple Music, Spotify Premium, or Google Play Music at $9.99 per month or $119.88 per year). 3. I would listen to on-demand music streaming service(s) that have ads and that I do not need to pay for (e.g., ad-supported Spotify). 4. I would listen to music on video site(s) that have ads and that I do not need to pay for (e.g., ad-supported YouTube). B) Not-on-demand music streaming services in place of live AM/FM radio broadcasts from commercial radio stations over the Internet 5. I would listen to not-on-demand music streaming service(s) through the paid subscription(s) I already have (e.g., Pandora Plus). 6. I would purchase new paid subscription(s) to not-on-demand music streaming service(s) that I don’t currently subscribe to (e.g., an individual subscription to Pandora Plus at $4.99 per month or $59.88 per year).
D-12 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 7. I would listen to not-on-demand music streaming service(s) that have ads and that I do not need to pay for (e.g., ad-supported Pandora). C) Satellite radio (SiriusXM) in place of live AM/FM radio broadcasts from commercial radio stations over the Internet 8. I would listen to satellite radio through the paid subscription I already have (SiriusXM). 9. I would purchase a new paid subscription to satellite radio that I don’t currently subscribe to (e.g., a SiriusXM subscription at $10.99 per month or $131.88 per year for ad-free music, $15.99 per month or $191.88 per year for ad-free music, news, traffic, weather, and other content). D) Other ways of listening to live AM/FM radio broadcasts in place of such broadcasts from commercial radio stations over the Internet 10. I would listen to live AM/FM radio broadcasts from commercial radio stations through a radio. 11. I would listen to live AM/FM radio broadcasts from not-for-profit radio stations (e.g., NPR, college radio stations) through a radio. 12. I would listen to live AM/FM radio broadcasts from not-for-profit radio stations (e.g., NPR, college radio stations) over the Internet. E) Owned or purchased audio in place of live AM/FM radio broadcasts from commercial radio stations over the Internet 13. I would listen to digital music files or CDs that I already purchased. 14. I would purchase and listen to digital music files or CDs that I don’t currently own. 15. I would listen to music obtained through peer-to-peer file sharing or free download sites. 16. I would listen to non-music digital content that I already purchased or downloaded (e.g., podcasts, audiobooks). 17. I would purchase or download and listen to non-music digital content that I don’t currently own (e.g., podcasts, audiobooks).
D-13 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) F) Television and video options in place of live AM/FM radio broadcasts from commercial radio stations over the Internet 18. I would watch video content that I already purchased, subscribe to, or have access to (e.g., movies, cable television, Hulu, Netflix). 19. I would purchase or subscribe to video content that I don’t currently own or subscribe to (e.g., movies, cable television, a Hulu subscription at $5.99 per month or $71.88 per year, a Netflix subscription at $8.99 per month or $107.88 per year). 20. I would listen to music channels through my existing cable or satellite television subscription (e.g., Music Choice). G) Print options in place of live AM/FM radio broadcasts from commercial radio stations over the Internet 21. I would read print or online content that I already purchased, subscribe to, or have access to (e.g., books, newspapers, magazines). 22. I would purchase or subscribe to print or online content that I don’t currently own or subscribe to (e.g., books, newspapers, magazines).
I would consider doing the following instead. (Please specify, if not already selected in the list above): [TEXTBOX; ANCHOR]
[GO TO END IF RESPONDENT INDICATES “WOULD NOT DO” AND/OR “DON’T KNOW/UNSURE” FOR ALL OPTIONS, AND DOES NOT INDICATE ANY ALTERNATIVE IN THE TEXTBOX.]
[NEXT PAGE]
D-14 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Q5. Continue to suppose that live AM/FM radio broadcasts from commercial radio stations over the Internet were not available for the next five years. Assume that everything else would be available for the next five years as it is now. Now think about the most recent time you listened to live AM/FM radio broadcasts from commercial radio stations over the Internet. Please consider situations similar to that time and the content you listened to at that time. Which one of the following would you do in place of listening to such broadcasts over the Internet in similar situations during the next five years?
The prices below are examples and do not include promotional discounts, taxes, or fees. If you are unable to say which particular activity you would do, please indicate this by choosing the “Don’t know/Unsure” option. It is important that you do not guess. (Select one only) You may click here to review the definitions you read earlier in the survey. [ADD LINK TO A POPUP WINDOW SHOWING DEFINITIONS (ONLY THE BULLET POINTS) FROM QINTRO IN THE SAME ORDER]
[INSERT ONLY CHOICES SELECTED AS “WOULD DO” IN Q4;
DO NOT DISPLAY SECTION HEADING IF NO CHOICES ARE SELECTED IN THAT CATEGORY;
PRESENT RESPONSE OPTIONS IN THE SAME ORDER AS PRESENTED IN Q4;
DISPLAY TEXT FROM FREE-RESPONSE TEXTBOX AS AN OPTION IF POPULATED IN Q4.]
A) On-demand music streaming services in place of live AM/FM radio broadcasts from commercial radio stations over the Internet 1. I would listen to on-demand music streaming service(s) through the paid subscription(s) I already have (e.g., Apple Music, Spotify Premium, Google Play Music). 2. I would purchase new paid subscription(s) to on-demand music streaming service(s) that I don’t currently subscribe to (e.g., an individual subscription to Apple Music, Spotify Premium, or Google Play Music at $9.99 per month or $119.88 per year). 3. I would listen to on-demand music streaming service(s) that have ads and that I do not need to pay for (e.g., ad-supported Spotify). 4. I would listen to music on video site(s) that have ads and that I do not need to pay for (e.g., ad-supported YouTube).
D-15 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) B) Not-on-demand music streaming services in place of live AM/FM radio broadcasts from commercial radio stations over the Internet 5. I would listen to not-on-demand music streaming service(s) through the paid subscription(s) I already have (e.g., Pandora Plus). 6. I would purchase new paid subscription(s) to not-on-demand music streaming service(s) that I don’t currently subscribe to (e.g., an individual subscription to Pandora Plus at $4.99 per month or $59.88 per year). 7. I would listen to not-on-demand music streaming service(s) that have ads and that I do not need to pay for (e.g., ad-supported Pandora). C) Satellite radio (SiriusXM) in place of live AM/FM radio broadcasts from commercial radio stations over the Internet 8. I would listen to satellite radio through the paid subscription I already have (SiriusXM). 9. I would purchase a new paid subscription to satellite radio that I don’t currently subscribe to (e.g., a SiriusXM subscription at $10.99 per month or $131.88 per year for ad-free music, $15.99 per month or $191.88 per year for ad-free music, news, traffic, weather, and other content). D) Other ways of listening to live AM/FM radio broadcasts in place of such broadcasts from commercial radio stations over the Internet 10. I would listen to live AM/FM radio broadcasts from commercial radio stations through a radio. 11. I would listen to live AM/FM radio broadcasts from not-for-profit radio stations (e.g., NPR, college radio stations) through a radio. 12. I would listen to live AM/FM radio broadcasts from not-for-profit radio stations (e.g., NPR, college radio stations) over the Internet. E) Owned or purchased audio in place of live AM/FM radio broadcasts from commercial radio stations over the Internet 13. I would listen to digital music files or CDs that I already purchased. 14. I would purchase and listen to digital music files or CDs that I don’t currently own. 15. I would listen to music obtained through peer-to-peer file sharing or free download sites. 16. I would listen to non-music digital content that I already purchased or downloaded (e.g., podcasts, audiobooks). 17. I would purchase or download and listen to non-music digital content that I don’t currently own (e.g., podcasts, audiobooks). F) Television and video options in place of live AM/FM radio broadcasts from commercial radio stations over the Internet
D-16 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 18. I would watch video content that I already purchased, subscribe to, or have access to (e.g., movies, cable television, Hulu, Netflix). 19. I would purchase or subscribe to video content that I don’t currently own or subscribe to (e.g., movies, cable television, a Hulu subscription at $5.99 per month or $71.88 per year, a Netflix subscription at $8.99 per month or $107.88 per year). 20. I would listen to music channels through my existing cable or satellite television subscription (e.g., Music Choice). G) Print options in place of live AM/FM radio broadcasts from commercial radio stations over the Internet 21. I would read print or online content that I already purchased, subscribe to, or have access to (e.g., books, newspapers, magazines). 22. I would purchase or subscribe to print or online content that I don’t currently own or subscribe to (e.g., books, newspapers, magazines).
23. Other: [PIPE IN RESPONSE TEXT FROM Q4] 24. Don’t know/Unsure.
[GO TO END]
END Thank you for taking the time to complete this survey today. [END OF SURVEY; RESPONDENT FORWARDED TO PANEL THANK-YOU PAGE]
D-17 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX E Screenshots Introduction and Screening
QS0.
E-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Screening Questions (QS-Series of Questions)
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E-2 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) QS4.
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E-3 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) QS6.
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E-4 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) QS8.
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E-5 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) QIntro.
E-6 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) QS10.
QS11.
E-7 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Main Questionnaire (Q-Series of Questions)
Q1a.
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E-8 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Q2.
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E-9 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Q4.
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E-10 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25)
E-11 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Q5.
E-12 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX F Regular Monthly Subscription Fees of On-Demand Audio Content Providers[1]
Ad-Supported Providers or Free[2] $4.99 $7.99 $9.99 $10.99 $12.99 $19.99
Amazon Music
Apple Music
Deezer
Google Play Music
iHeartRadio
LiveXLive
Napster unRadio
Pandora
SoundCloud
Spotify
Tidal
YouTube Music
Total Number of Services 3 1 1 11 1 1 2
Note: [1] Special pricing for consumers in specific groups is excluded (e.g., students, military, family plans). Providers may offer subscription plans at different prices based on sound quality, types of content, and whether ads are played. [2] SoundCloud offers on-demand ad-free music for free, all others offer ad-supported music.
F-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Regular Monthly Subscription Fees of Not-On-Demand Audio Content Providers[1]
Ad-Supported Providers or Free[2] $3.99 $4.99 $5.99 $9.99
8Tracks
AccuRadio
iHeartRadio
LiveXLive
Napster unRadio
NPR One
Pandora
Radio.com
TuneIn Radio
Total Number of Services81411
Note: [1] Special pricing for consumers in specific groups is excluded (e.g., students, military, family plans). Providers may offer subscription plans at different prices based on sound quality, types of content, and whether ads are played. [2] NPR One offers not-on-demand ad-free content for free, all others offer ad-supported content.
F-2 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX G Survey Instrument Pretest Findings
Twenty-two people took the full survey and were interviewed during or after survey completion. o Respondents included 13 females and 9 males from 18 different states nationwide. o Respondents indicated that they listened to Internet simulcasts of terrestrial commercial radio over the last three days. o All respondents were at least 18 years old. o Pretest interviews took place from August 13, 2019 to August 28, 2019. o Pretest interviews were conducted by AMS at my direction and were observed by me or by Cornerstone Research staff. Respondents were emailed a link to the survey at the start of the interview. Three respondents took the survey while on the phone with the interviewer. Nineteen respondents took the survey on their own and were subsequently interviewed by the interviewer. Interviewers asked questions to evaluate whether respondents understood specific questions in the survey, to evaluate respondents’ thoughts on the purpose of the survey, and to test for the presence of any demand artifacts. Solutions to address potential issues that were identified regarding respondents’ comprehension of questions, instructions, and response options are summarized in Appendix Table E–1. Pretests conducted after implementation of the solutions revealed no further issues. Pretests assured respondents did not find the instructions or questions confusing, did not find the survey to be too long, and did not find the survey to be difficult. Pretests assured respondents were unable to guess the purpose or sponsor of the survey. There was no evidence of demand artifacts. A list of conclusions from specific questions can be found in Appendix Table E–2.
G-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Appendix Table G–1
Issue Solution(s)
Response options may not be comprehensive. Questions QS10, Q4, Q5 Potential issue: Respondents observed that “cable music channels” was not included as a response option. Solution: Added “music channels through a cable or satellite television subscription (e.g., Music Choice)” to the list of response options.
Question Q2 Potential issue: Respondents observed that religious content was not included as a response option. Solution: Added “religion (non-music content, e.g., preaching, education)” as a response option.
Potential issue: Respondents believed “news” and “weather and traffic” were overlapping categories. Solution: Combined these into one response option, “news, weather, and traffic.”
Definitions of terms may be unclear. Question QINTRO Potential issue: A few respondents felt that some of the descriptions of different ways of listening could be clearer. Solutions: o Underlined key terms and points of differentiation in definitions. o Described content available through live AM/FM radio broadcasts over the Internet as “simultaneously transmitted to AM/FM radios.” o Added “Satellite radio may offer different stations that are not available on live AM/FM radio broadcasts through a radio or over the Internet.” o Clarified that paid subscriptions to on-demand or not- on-demand music streaming services allows the listener to listen to music “without ads.”
Definitions were only shown once. Questions QS10, Q4, Q5 Potential issue: Respondents wanted to revisit definitions from QINTRO in later questions. Solution: Added a link to the definitions from QINTRO.
G-2 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Issue Solution(s)
Examples provided in response options or descriptions may be unfamiliar or imprecise. Questions Potential issue: Respondents did not recognize “Napster QINTRO, QS10, Q4, Q5 unRadio” as an example of a not-on-demand music streaming service. Solution: Removed “Napster unRadio” from the list of examples of not-on-demand music streaming services.
Potential issue: Respondents did not understand how they could listen to live AM/FM radio broadcasts over the Internet via a smart speaker such as Amazon Echo or Google Home. Removed language that one could listen to live AM/FM radio broadcasts over the Internet “via a smart speaker such as Amazon Echo or Google Home.”
Question QS11 Potential issue: Respondents did not recognize “PRI” as an example of a not-for-profit radio station. Solution: Removed “PRI” from the list of examples of not-for-profit radio stations.
Question Q2 Potential issue: Respondents noted that some examples for content types were unclear or were imprecise. Solutions: o Changed “on-air DJ commentary” to “live DJ commentary” in the list of examples for the “talk” response option. o Clarified the “religion” and “kids and family” response options to specify “non-music content.” o Added “all genres” to the “music” response option and included “children’s music” and “religious music” as additional examples.
Questions Q4, Q5 Potential issue: Respondents noted that the phrasing of answer choices for existing and new paid subscription services could be clearer. Solutions: o Reworded response options for existing, paid subscription services to “through the paid subscription(s) I already have.” o Reworded response options for new paid subscription services to “new paid subscription(s)…that I don’t already subscribe to.”
G-3 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Issue Solution(s)
Questions worded in ways that respondents may not understand or may not remember while answering questions. Questions Q1a Potential issue: Some respondents answered with number of hours of listening per day, rather than total listening over three days. Solution: Changed “how many hours did you spend listening…” to “how many total hours did you spend listening…”
Potential issue: Some respondents included time spent listening to not-for-profit radio stations or time spent listening to terrestrial radio when answering this question. Solution: Changed “from commercial radio stations over the Internet” to bold font to emphasize the format of radio broadcasting relevant for the question.
Questions Q4, Q5 Potential issue: Some respondents could not remember that the question asked what they would consider doing in place of live AM/FM broadcasts from commercial radio stations as they reviewed the list of options. Solutions: o Used bold font for “in place of” in “which of the following, if anything, would you consider doing in place of listening to such broadcasts over the Internet for the next five years?” o Added “in place of live AM/FM radio broadcasts from commercial radio stations over the Internet” to the category headers in the response table.
Potential issue: Some respondents asked whether they should consider any other changes besides the unavailability of live AM/FM radio broadcasts over the Internet for the next five years. Solution: Added “assume that everything else would be available for the next five years as it is now” to the first block of text.
Question Q5 Potential issue: Some respondents did not realize they needed to select only one response option. Solution: Used bold font for “one” in “which one of the following would you do in place of listening to such broadcasts over the Internet in similar situations during the next five years?”
G-4 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Appendix Table G–2
Question Conclusions Based on Pretest Interviews Question QS2 Pretests assured that respondents did not request additional options beyond “male” and “female.”
Question QS7 Pretests assured that respondents understood the meanings of “radio broadcasting company,” “Internet audio streaming company,” and “market research company or public relations agency.”
Question QS8 Pretests assured that respondents understood the meanings of “music services” and “radio broadcasting.”
Question QS9 Pretests assured that respondents understood the meanings of “music” and “non-music content.” Pretests assured that respondents understood that “(s)” at the end of a noun could refer to the singular or plural version of the noun. Pretests assured that respondents were able to recall their activities over the prior three days.
Question QINTRO After edits outlined in Appendix Table E–1, pretests assured that respondents understood the meanings of “live AM/FM radio broadcasts through a radio,” “live AM/FM radio broadcasts over the Internet,” “satellite radio (SiriusXM),” “on-demand music streaming services,” and “not-on-demand music streaming services.” After edits outlined in Appendix Table E–1, pretests assured that respondents understood the five ways of listening as distinct, including differences between (1) on- demand and not-on-demand music streaming services; (2) satellite radio and live AM/FM radio broadcasts through a radio; (3) live AM/FM radio broadcasts through a radio and live AM/FM radio broadcasts over the Internet; and (4) live AM/FM radio broadcasts over the Internet and music streaming services (on-demand or not-on-demand). Pretests assured that respondents understood the differences between services “available for free with ads” and services “through a paid subscription without ads.”
(continued on next page)
G-5 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Question Conclusions Based on Pretest Interviews Question QINTRO After edits outlined in Appendix Table E–1, pretests (continued) assured respondents understood the examples provided for the ways of listening. After edits outlined in Appendix Table E–1, pretests assured respondents understood “live AM/FM radio broadcasts of commercial radio stations over the Internet” to refer to Internet simulcasts of terrestrial commercial radio.
Question QS10 After edits outlined in Appendix Table E–1, pretests assured that respondents viewed the list of ways of listening to music or non-music content as comprehensive. Pretests assured that respondents understood the meaning of “non-music digital content.” Pretests assured that respondents were able to recall their listening behavior over the prior three days. Pretests assured that respondents understood they could provide an open-ended response in the text box following “Other.” After edits outlined in Appendix Table E–1, pretests assured respondents understood they could revisit definitions from QINTRO via a link in the question. After edits outlined in Appendix Table E–1, pretests assured respondents understood the examples provided in response options.
Question QS11 Pretests assured that respondents understood the differences between commercial and not-for-profit radio stations. After edits outlined in Appendix Table E–1, pretests assured that respondents understood the examples provided for commercial and not-for-profit radio stations. Pretests assured that respondents were able to recall their listening behavior over the prior three days.
G-6 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Question Conclusions Based on Pretest Interviews Question 1a After edits outlined in Appendix Table E–1, pretests assured that respondents understood to limit their answers to hours spent listening to live AM/FM broadcasts of commercial radio stations over the Internet. After edits outlined in Appendix Table E–1, pretests assured that respondents understood to provide the approximate total number of hours they listened to Internet simulcasts of terrestrial commercial radio during the prior three days. Pretests assured that respondents were able to approximate their listening time over the prior three days.
Question 2 After edits outlined in Appendix Table E–1, pretests assured that respondents understood the types and examples of content listed. Pretests assured that respondents understood categories other than music to exclude music. Pretests assured that respondents understood to select only content they listened to via Internet simulcast of terrestrial commercial radio during the prior three days. Pretests assured that respondents viewed the list of types of content as comprehensive. Pretests assured that respondents were able to recall the content they listened to over the prior three days. Pretests assured that respondents understood they could provide an open-ended response in the text box following “Other content.”
Question 3 Pretests assured that respondents were able to indicate the importance of the types of content to which they listened over the prior three days.
Question 4 After edits outlined in Appendix Table E–1, pretests assured that respondents understood the hypothetical and the task posed in the question. Pretests assured that respondents understood that prices listed were examples and did not include discounts, fees, or taxes. After edits outlined in Appendix Table E–1, pretests assured that respondents viewed the list of alternatives as comprehensive.
(continued on next page)
G-7 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Question Conclusions Based on Pretest Interviews Question 4 After edits outlined in Appendix Table E–1, pretests (continued) assured that respondents understood differences between choices about paid subscription services they “already have” and paid subscription services they “don’t currently subscribe to.” Pretests assured that respondents understood they could provide an open-ended response in the text box following “I would consider doing the following instead.” Pretests assured that respondents understood they could select “would not consider” for all alternative activities. After edits outlined in Appendix Table E–1, pretests assured respondents understood they could revisit definitions from QINTRO via a link in the question. After edits outlined in Appendix Table E–1, pretests assured that respondents remembered to select alternatives they would consider doing in place of listening to Internet simulcasts of terrestrial commercial radio. After edits outlined in Appendix Table E–1, pretests assured respondents understood the examples provided for the alternatives to Internet simulcasts of terrestrial commercial radio.
Question Q5 After edits outlined in Appendix Table E–1, pretests assured that respondents understood the hypothetical and the task posed in the question. Pretests assured that respondents understood to think about the most recent time they listened to an Internet simulcast of terrestrial commercial radio. After edits outlined in Appendix Table E–1, pretests assured that respondents understood they were only to select one alternative from the list. After edits outlined in Appendix Table E–1, pretests assured respondents understood they could revisit definitions from QINTRO via a link in the question. Pretests assured that respondents viewed the list of alternatives as comprehensive.
G-8 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX H H-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX I Survey Click Balancing Demographics
Target %[1] Click-in Respondents[2] %
Gender Male 49% 4,650 46.3% Female 51% 5,394 53.7%
Age 18-34 30% 2,767 27.5% 35-49 24% 2,518 25.1% 50-64 25% 2,590 25.8% 65 or older 21% 2,169 21.6%
Region Midwest 21% 2,228 22.2% Northeast 17% 1,814 18.1% South 38% 3,871 38.5% West 24% 2,131 21.2%
Total 10,044
Source: Simulcast Switching Survey; Annual Estimates of the Resident Population for Selected Age Groups by Sex for the United States, States, Counties and Puerto Rico Commonwealth and Municipios: April 1, 2010 to July 1, 2018, U.S. Census Bureau, available at https://factfinder.census.gov/bkmk/table/1.0/en/PEP/2017/PEPAGESEX, https://factfinder.census.gov/bkmk/table/1.0/en/PEP/2018/PEPANNRES/0100000US
Note: [1] Gender, age, and census region quotas for the survey were set using U.S. Census Bureau postcensal population estimates from July 1, 2018. [2] This tabulation uses panel data on gender, age, and region.
I-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX J Summary of Survey Responses Distribution of Click-ins by Day of the Week Respondents
2000
1500
1000
500
0
Monday Tuesday Wednesday Thursday Friday Saturday Sunday Day of the week
Source: Simulcast Switching Survey Note: N = 10,044.
J-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Summary of Survey Responses Distribution of Click-ins by Time of the Day Respondents
900
600
300
0
00:00 02:00 04:00 06:00 08:00 10:00 12:00 14:00 16:00 18:00 20:00 22:00 Time of the day
Source: Simulcast Switching Survey Note: N = 10,044.
J-2 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX K Survey Sample Disposition
Number of Respondents % of Total
[A] Total Survey Click-ins 10,044
[B] Terminated during Screener[1] 9,508
[C]=[A]-[B] Total Survey Participants 536 100.0%
[D] Self-Terminated during Survey 4 0.7%
[E]=[C]-[D] Survey Completions[2] 532 99.3%
[F] “Straight-line” Responses[3] 31 5.8%
[G]=[E]-[F] Qualified Completions[4] 501 93.5%
Source: Simulcast Switching Survey
Note: [1] Respondents who voluntarily left the survey at QS1–QS11 or at logon, did not provide user information that matched values in the panel provider’s database, or were terminated based on responses to QS1–QS11. [2] Of the 10,044 screener participants, 532 respondents (5.3 percent) completed the survey. [3] Respondents who selected the same answer for every option in Q4 (“Now suppose that live AM/FM radio broadcasts from commercial radio stations over the Internet were not available for the next five years. Assume that everything else would be available for the next five years as it is now. Which of the following, if anything, would you consider doing in place of listening to such broadcasts over the Internet during the next five years?”). [4] See Section V.A.1 for an analysis of time taken to complete the survey. No respondents were dropped from the sample of qualified completions based on the time it took respondents to complete the survey.
K-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX L Sources of Music Content
Simulcast Switching Survey[1][2] Edison Research[3] Share of Time Spent Media Options Responses % of Responses Listening to Music
AM/FM Radio 3,535 33.8% 40%
Streaming Audio 2,789 26.6% 19%
Owned Music 1,486 14.2% 15%
Ad-supported Music and Video Sites (YouTube) 1,420 13.6% 13%
SiriusXM 759 7.2% 8%
TV Music Channels 423 4.0% 4%
Others 58 0.6% 1%
Source: Simulcast Switching Survey; Edison Research, “Share of Ear - Americansʼ Share of Time Spent Listening to Audio Sources,” Q2, 2019, p.21.
Note: [1] Simulcast Switching Survey is restricted to respondents of 18 years old or above. Results shown are limited to respondents who selected “I listened to music (e.g., pop, country, rock)” in QS9 of the survey (“There is a variety of media content available for people to watch, listen to, or read. The next questions ask about your media habits. Thinking of the last three days, which of the following types of activities did you engage in?”). [2] These figures include 10,470 responses in QS10 of the Simulcast Switching Survey from 3,889 respondents. On average, a respondent made 2.7 selections. [3] The Edison Research study is limited to Americans of 13 years old or above.
L-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX M Number of Hours Spent Listening to Internet Simulcasts of Terrestrial Commercial Radio Q1a Respondents
75
50
25
0
0 10 20 30 40 Number of hours spent listening to Internet simulcasts of terrestrial commercial radio over the last three days
Source: Simulcast Switching Survey (N=490) Note: [1] The mean is 5.3 hours. The median is 4 hours. The minimum is 1 hour. The maximum is 40 hours. The modal value is 3 hours. [2] This tabulation excludes 11 respondents who answered “don't know/unsure” in Q1a. [3] Q1a: “Thinking about the last three days, approximately how many total hours did you spend listening to live AM/FM radio broadcasts from commercial radio stations over the Internet? Please enter whole numbers only – do not use decimal points or other punctuation. If less than 1 hour, please enter 1.”
M-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX N Hours Spent Listening per Week Day Q1a
Day of the Week[1] Average Hours per Day[2]
Sunday 1.7
Monday 1.7
Tuesday 1.7
Wednesday 1.8
Thursday 1.7
Friday 1.8
Saturday 1.8
Source: Simulcast Switching Survey (N=490)
Note: [1] Q1a: “Thinking about the last three days, approximately how many total hours did you spend listening to live AM/FM radio broadcasts from commercial radio stations over the Internet?” [2] This tabulation excludes respondents who answered “don’t know/unsure” in Q1a. Assumed listening hours indicated in Q1a are evenly split among the three days prior to the survey date.
N-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX O Simulcast Content to Which Respondents Listened Q2
95% Confidence Response Options[1] Respondent Count Percentage Interval[2]
Music (all genres, e.g., pop, country, rock, 413 82.4% [79.1%, 85.8%] children’s music, religious music)
News, weather, and traffic 277 55.3% [50.9%, 59.7%]
Talk (e.g., live DJ commentary, politics, 248 49.5% [45.1%, 53.9%] personal finance)
Sports (e.g., game broadcasts, 182 36.3% [32.1%, 40.6%] commentary)
Comedy (e.g., sketch comedy, stand-up) 89 17.8% [14.4%, 21.1%]
Religion (non-music content, e.g., 34 6.8% [4.6%, 9.0%] preaching, education)
Kids and family (non-music content, e.g., 32 6.4% [4.2%, 8.5%] educational programs)
Other content[3] 2 0.4% (0.0%, 1.0%]
Don’t know/Unsure 1 0.2% (0.0%, 0.6%]
Average Number of Selections per 2.6 Respondent
Source: Simulcast Switching Survey (N=501)
Note: [1] Q2: “Thinking about the last three days, which of the following different types of content did you listen to through live AM/FM radio broadcasts from commercial radio stations over the Internet? (Select all that apply)” [2] The lower bound of the confidence interval is set to zero when the 95% symmetric confidence interval would otherwise include values smaller than zero. [3] Two respondents entered “Astrology” or “Drama play” in this category.
O-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX P Importance of Simulcast Content Q3
Did not Select Somewhat Don’t Content Area Response Options[1] Not important important Very important know/Unsure in Q2
24 130 256 3 88 Music (all genres, e.g., pop, country, rock, children’s music, religious music) (4.8%) (25.9%) (51.1%) (0.6%) (17.6%)
8 82 185 2 224 News, weather, and traffic (1.6%) (16.4%) (36.9%) (0.4%) (44.7%)
18 106 123 1 253 Talk (e.g., live DJ commentary, politics, personal finance) (3.6%) (21.2%) (24.6%) (0.2%) (50.5%)
10 72 99 1 319 Sports (e.g., game broadcasts, commentary) (2.0%) (14.4%) (19.8%) (0.2%) (63.7%)
5 37 45 2 412 Comedy (e.g., sketch comedy, stand-up) (1.0%) (7.4%) (9.0%) (0.4%) (82.2%)
3 9 22 467 Religion (non-music content, e.g., preaching, education) – (0.6%) (1.8%) (4.4%) (93.2%)
2 11 18 1 469 Kids and family (non-music content, e.g., educational programs) (0.4%) (2.2%) (3.6%) (0.2%) (93.6%)
1 1 499 Other content[2] – – (0.2%) (0.2%) (99.6%)
Don’t know/Unsure –––––
Average Number of Selections per Respondent 0.1 0.9 1.5 0.0 –
Source: Simulcast Switching Survey (N=501)
Note: [1] Q3 is asked for each content area respondents indicated listening to in Q2. Q3: “Again thinking about the last three days, please indicate how important that content was to you when you listened to live AM/FM radio broadcasts from commercial radio stations over the Internet. (Select one response per row)” [2] Two respondents entered “Astrology” or “Drama play” in this category.
P-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX Q Activities to Which Respondents Would Switch If Internet Simulcasts of Terrestrial Commercial Radio Were Unavailable for Five Years Q4
Would not Don’t Response Options[1] Would consider consider know/Unsure
A) On-demand music streaming services in place of live AM/FM radio broadcasts from commercial radio stations over the Internet
1. I would listen to on-demand music streaming service(s) through the paid subscription(s) I 295 141 65 already have (e.g., Apple Music, Spotify Premium, Google Play Music). (58.9%) (28.1%) (13.0%)
2. I would purchase new paid subscription(s) to on-demand music streaming service(s) that I 150 256 95 don’t currently subscribe to (e.g., an individual subscription to Apple Music, Spotify Premium, or (29.9%) (51.1%) (19.0%) Google Play Music at $9.99 per month or $119.88 per year).
3. I would listen to on-demand music streaming service(s) that have ads and that I do not need 386 72 43 to pay for (e.g., ad-supported Spotify). (77.0%) (14.4%) (8.6%)
4. I would listen to music on video site(s) that have ads and that I do not need to pay for (e.g., 381 78 42 ad-supported YouTube). (76.0%) (15.6%) (8.4%)
B) Not-on-demand music streaming services in place of live AM/FM radio broadcasts from commercial radio stations over the Internet
5. I would listen to not-on-demand music streaming service(s) through the paid subscription(s) I 229 199 73 already have (e.g., Pandora Plus). (45.7%) (39.7%) (14.6%)
6. I would purchase new paid subscription(s) to not-on-demand music streaming service(s) that 148 275 78 I don’t currently subscribe to (e.g., an individual subscription to Pandora Plus at $4.99 per month (29.5%) (54.9%) (15.6%) or $59.88 per year).
7. I would listen to not-on-demand music streaming service(s) that have ads and that I do not 350 106 45 need to pay for (e.g., ad-supported Pandora). (69.9%) (21.2%) (9.0%)
C) Satellite radio (SiriusXM) in place of live AM/FM radio broadcasts from commercial radio stations over the Internet
210 221 70 8. I would listen to satellite radio through the paid subscription I already have (SiriusXM). (41.9%) (44.1%) (14.0%)
9. I would purchase a new paid subscription to satellite radio that I don’t currently subscribe to 114 297 90 (e.g., a SiriusXM subscription at $10.99 per month or $131.88 per year for ad-free music, $15.99 (22.8%) (59.3%) (18.0%) per month or $191.88 per year for ad-free music, news, traffic, weather, and other content).
D) Other ways of listening to live AM/FM radio broadcasts in place of such broadcasts from commercial radio stations over the Internet
454 26 21 10. I would listen to live AM/FM radio broadcasts from commercial radio stations through a radio. (90.6%) (5.2%) (4.2%)
11. I would listen to live AM/FM radio broadcasts from not-for-profit radio stations (e.g., NPR, 359 82 60 college radio stations) through a radio. (71.7%) (16.4%) (12.0%)
12. I would listen to live AM/FM radio broadcasts from not-for-profit radio stations (e.g., NPR, 362 85 54 college radio stations) over the Internet. (72.3%) (17.0%) (10.8%)
Q-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Activities to Which Respondents Would Switch If Internet Simulcasts of Terrestrial Commercial Radio Were Unavailable for Five Years Q4
Would not Don’t Response Options[1] Would consider consider know/Unsure
E) Owned or purchased audio in place of live AM/FM radio broadcasts from commercial radio stations over the Internet
397 77 27 13. I would listen to digital music files or CDs that I already purchased. (79.2%) (15.4%) (5.4%)
260 167 74 14. I would purchase and listen to digital music files or CDs that I don’t currently own. (51.9%) (33.3%) (14.8%)
190 217 94 15. I would listen to music obtained through peer-to-peer file sharing or free download sites. (37.9%) (43.3%) (18.8%)
16. I would listen to non-music digital content that I already purchased or downloaded (e.g., 299 145 57 podcasts, audiobooks). (59.7%) (28.9%) (11.4%)
17. I would purchase or download and listen to non-music digital content that I don’t currently own 240 181 80 (e.g., podcasts, audiobooks). (47.9%) (36.1%) (16.0%)
F) Television and video options in place of live AM/FM radio broadcasts from commercial radio stations over the Internet
18. I would watch video content that I already purchased, subscribe to, or have access to (e.g., 420 61 20 movies, cable television, Hulu, Netflix). (83.8%) (12.2%) (4.0%)
19. I would purchase or subscribe to video content that I don’t currently own or subscribe to (e.g., 223 211 67 movies, cable television, a Hulu subscription at $5.99 per month or $71.88 per year, a Netflix (44.5%) (42.1%) (13.4%) subscription at $8.99 per month or $107.88 per year).
20. I would listen to music channels through my existing cable or satellite television subscription 315 119 67 (e.g., Music Choice). (62.9%) (23.8%) (13.4%)
G) Print options in place of live AM/FM radio broadcasts from commercial radio stations over the Internet
21. I would read print or online content that I already purchased, subscribe to, or have access to 312 127 62 (e.g., books, newspapers, magazines). (62.3%) (25.3%) (12.4%)
22. I would purchase or subscribe to print or online content that I don’t currently own or subscribe 213 205 83 to (e.g., books, newspapers, magazines). (42.5%) (40.9%) (16.6%)
34 23. Other[2] –– (100.0%)
Average Number of Selections per Respondent 12.6 6.7 2.7
Source: Simulcast Switching Survey (N=501)
Note: [1] Q4: “Now suppose that live AM/FM radio broadcasts from commercial radio stations over the Internet were not available for the next five years. Assume that everything else would be available for the next five years as it is now. Which of the following, if anything, would you consider doing in place of listening to such broadcasts over the Internet during the next five years? The prices below are examples and do not include promotional discounts, taxes, or fees.” [2] The open-ended responses to Q4 include 15 respondents who indicated that there was nothing else they would consider by writing “nothing,” “none,” “all of my options were covered above,” or something similar.
Q-2 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX R Activities to Which Respondents Would Switch If Internet Simulcasts of Terrestrial Commercial Radio Were Unavailable for Five Years Q5
95% Confidence Response Options[1] Count Percentage Interval[2]
A) On-demand music streaming services in place of live AM/FM radio broadcasts 92 18.4% [15.0%, 21.8%] from commercial radio stations over the Internet
1. I would listen to on-demand music streaming service(s) through the paid subscription(s) I 37 7.4% [5.1%, 9.7%] already have (e.g., Apple Music, Spotify Premium, Google Play Music).
2. I would purchase new paid subscription(s) to on-demand music streaming service(s) that I don’t currently subscribe to (e.g., an individual subscription to Apple Music, Spotify 7 1.4% [0.4%, 2.4%] Premium, or Google Play Music at $9.99 per month or $119.88 per year).
3. I would listen to on-demand music streaming service(s) that have ads and that I do not 25 5.0% [3.1%, 6.9%] need to pay for (e.g., ad-supported Spotify).
4. I would listen to music on video site(s) that have ads and that I do not need to pay for 23 4.6% [2.8%, 6.4%] (e.g., ad-supported YouTube).
B) Not-on-demand music streaming services in place of live AM/FM radio broadcasts 56 11.2% [8.4%, 13.9%] from commercial radio stations over the Internet
5. I would listen to not-on-demand music streaming service(s) through the paid 8 1.6% [0.5%, 2.7%] subscription(s) I already have (e.g., Pandora Plus).
6. I would purchase new paid subscription(s) to not-on-demand music streaming service(s) that I don’t currently subscribe to (e.g., an individual subscription to Pandora Plus at $4.99 14 2.8% [1.3%, 4.2%] per month or $59.88 per year).
7. I would listen to not-on-demand music streaming service(s) that have ads and that I do 34 6.8% [4.6%, 9.0%] not need to pay for (e.g., ad-supported Pandora).
C) Satellite radio (SiriusXM) in place of live AM/FM radio broadcasts from commercial 42 8.4% [5.9%, 10.8%] radio stations over the Internet
8. I would listen to satellite radio through the paid subscription I already have (SiriusXM). 26 5.2% [3.2%, 7.1%]
9. I would purchase a new paid subscription to satellite radio that I don’t currently subscribe to (e.g., a SiriusXM subscription at $10.99 per month or $131.88 per year for ad-free music, 16 3.2% [1.6%, 4.7%] $15.99 per month or $191.88 per year for ad-free music, news, traffic, weather, and other content).
D) Other ways of listening to live AM/FM radio broadcasts in place of such 161 32.1% [28.0%, 36.2%] broadcasts from commercial radio stations over the Internet
10. I would listen to live AM/FM radio broadcasts from commercial radio stations through a 127 25.3% [21.5%, 29.2%] radio.
11. I would listen to live AM/FM radio broadcasts from not-for-profit radio stations (e.g., NPR, 18 3.6% [2.0%, 5.2%] college radio stations) through a radio.
12. I would listen to live AM/FM radio broadcasts from not-for-profit radio stations (e.g., NPR, 16 3.2% [1.6%, 4.7%] college radio stations) over the Internet.
R-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Activities to Which Respondents Would Switch If Internet Simulcasts of Terrestrial Commercial Radio Were Unavailable for Five Years Q5
95% Confidence Response Options[1] Count Percentage Interval[2]
E) Owned or purchased audio in place of live AM/FM radio broadcasts from 56 11.2% [8.4%, 13.9%] commercial radio stations over the Internet
13. I would listen to digital music files or CDs that I already purchased. 30 6.0% [3.9%, 8.1%]
14. I would purchase and listen to digital music files or CDs that I don’t currently own. 9 1.8% [0.6%, 3.0%]
15. I would listen to music obtained through peer-to-peer file sharing or free download sites. 3 0.6% (0.0%, 1.3%]
16. I would listen to non-music digital content that I already purchased or downloaded (e.g., 8 1.6% [0.5%, 2.7%] podcasts, audiobooks).
17. I would purchase or download and listen to non-music digital content that I don’t currently 6 1.2% [0.2%, 2.2%] own (e.g., podcasts, audiobooks).
F) Television and video options in place of live AM/FM radio broadcasts from 59 11.8% [8.9%, 14.6%] commercial radio stations over the Internet
18. I would watch video content that I already purchased, subscribe to, or have access to 37 7.4% [5.1%, 9.7%] (e.g., movies, cable television, Hulu, Netflix).
19. I would purchase or subscribe to video content that I don’t currently own or subscribe to (e.g., movies, cable television, a Hulu subscription at $5.99 per month or $71.88 per year, a 12 2.4% [1.1%, 3.7%] Netflix subscription at $8.99 per month or $107.88 per year).
20. I would listen to music channels through my existing cable or satellite television 10 2.0% [0.8%, 3.2%] subscription (e.g., Music Choice).
G) Print options in place of live AM/FM radio broadcasts from commercial radio 15 3.0% [1.5%, 4.5%] stations over the Internet
21. I would read print or online content that I already purchased, subscribe to, or have access 10 2.0% [0.8%, 3.2%] to (e.g., books, newspapers, magazines).
22. I would purchase or subscribe to print or online content that I don’t currently own or 5 1.0% [0.1%, 1.9%] subscribe to (e.g., books, newspapers, magazines).
R-2 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Activities to Which Respondents Would Switch If Internet Simulcasts of Terrestrial Commercial Radio Were Unavailable for Five Years Q5
95% Confidence Response Options[1] Count Percentage Interval[2]
H) Others 17 3.4% [1.8%, 5.0%]
23. Other[3] 3 0.6% (0.0%, 1.3%]
24. Don’t know / Unsure 14 2.8% [1.3%, 4.2%]
I) Blank responses[4] 3 0.6% (0.0%, 1.3%]
Source: Simulcast Switching Survey (N=501)
Note: [1] Q5: “Continue to suppose that live AM/FM radio broadcasts from commercial radio stations over the Internet were not available for the next five years. Assume that everything else would be available for the next five years as it is now. Now think about the most recent time you listened to live AM/FM radio broadcasts from commercial radio stations over the Internet. Please consider situations similar to that time and the content you listened to at that time. Which one of the following would you do in place of listening to such broadcasts over the Internet in similar situations during the next five years? The prices below are examples and do not include promotional discounts, taxes, or fees.” [2] The lower bound of the confidence interval is set to zero when the 95% symmetric confidence interval would otherwise include values smaller than zero. [3] Three respondents selected their self-entered responses from Q4 in Q5. Those responses were: “nothing,” “listening to amazon music,” and “Listening to radio with ads.” [4] Three respondents did not select “Would consider” for any options in Q4, thus were not directed to Q5.
R-3 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25)
APPENDIX S
Activities to Which Respondents Would Switch If Internet Simulcasts of Terrestrial Commercial Radio Were Unavailable for Five Years Weighted by Hours Listened Q5
Percentage Weighted 95% Confidence Response Options[1] by Hours Listened[2][3] Interval[4]
A) On-demand music streaming services in place of live AM/FM radio broadcasts from 17.2% [13.8%, 20.5%] commercial radio stations over the Internet
1. I would listen to on-demand music streaming service(s) through the paid subscription(s) I 7.5% [5.2%, 9.9%] already have (e.g., Apple Music, Spotify Premium, Google Play Music).
2. I would purchase new paid subscription(s) to on-demand music streaming service(s) that I don’t currently subscribe to (e.g., an individual subscription to Apple Music, Spotify Premium, 1.6% [0.5%, 2.7%] or Google Play Music at $9.99 per month or $119.88 per year).
3. I would listen to on-demand music streaming service(s) that have ads and that I do not 4.7% [2.8%, 6.6%] need to pay for (e.g., ad-supported Spotify).
4. I would listen to music on video site(s) that have ads and that I do not need to pay for 3.3% [1.7%, 4.9%] (e.g., ad-supported YouTube).
B) Not-on-demand music streaming services in place of live AM/FM radio broadcasts 14.0% [11.0%, 17.1%] from commercial radio stations over the Internet
5. I would listen to not-on-demand music streaming service(s) through the paid 2.8% [1.3%, 4.2%] subscription(s) I already have (e.g., Pandora Plus).
6. I would purchase new paid subscription(s) to not-on-demand music streaming service(s) that I don’t currently subscribe to (e.g., an individual subscription to Pandora Plus at $4.99 per 2.7% [1.2%, 4.1%] month or $59.88 per year).
7. I would listen to not-on-demand music streaming service(s) that have ads and that I do 8.6% [6.1%, 11.1%] not need to pay for (e.g., ad-supported Pandora).
C) Satellite radio (SiriusXM) in place of live AM/FM radio broadcasts from commercial 6.8% [4.5%, 9.0%] radio stations over the Internet
8. I would listen to satellite radio through the paid subscription I already have (SiriusXM). 4.3% [2.5%, 6.1%]
9. I would purchase a new paid subscription to satellite radio that I don’t currently subscribe to (e.g., a SiriusXM subscription at $10.99 per month or $131.88 per year for ad-free music, 2.4% [1.1%, 3.8%] $15.99 per month or $191.88 per year for ad-free music, news, traffic, weather, and other content).
D) Other ways of listening to live AM/FM radio broadcasts in place of such broadcasts 31.2% [27.1%, 35.3%] from commercial radio stations over the Internet
10. I would listen to live AM/FM radio broadcasts from commercial radio stations through a 24.8% [21.0%, 28.7%] radio.
11. I would listen to live AM/FM radio broadcasts from not-for-profit radio stations (e.g., NPR, 2.9% [1.4%, 4.5%] college radio stations) through a radio.
12. I would listen to live AM/FM radio broadcasts from not-for-profit radio stations (e.g., NPR, 3.4% [1.8%, 5.0%] college radio stations) over the Internet.
S-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Activities to Which Respondents Would Switch If Internet Simulcasts of Terrestrial Commercial Radio Were Unavailable for Five Years Weighted by Hours Listened Q5
Percentage Weighted 95% Confidence Response Options[1] by Hours Listened[2][3] Interval[4]
E) Owned or purchased audio in place of live AM/FM radio broadcasts from 11.3% [8.5%, 14.1%] commercial radio stations over the Internet
13. I would listen to digital music files or CDs that I already purchased. 6.2% [4.1%, 8.4%]
14. I would purchase and listen to digital music files or CDs that I don’t currently own. 1.7% [0.5%, 2.8%]
15. I would listen to music obtained through peer-to-peer file sharing or free download sites. 0.5% (0.0%, 1.1%]
16. I would listen to non-music digital content that I already purchased or downloaded (e.g., 1.3% [0.3%, 2.3%] podcasts, audiobooks).
17. I would purchase or download and listen to non-music digital content that I don’t currently 1.6% [0.5%, 2.7%] own (e.g., podcasts, audiobooks).
F) Television and video options in place of live AM/FM radio broadcasts from 11.3% [8.5%, 14.1%] commercial radio stations over the Internet
18. I would watch video content that I already purchased, subscribe to, or have access to 8.0% [5.6%, 10.4%] (e.g., movies, cable television, Hulu, Netflix).
19. I would purchase or subscribe to video content that I don’t currently own or subscribe to (e.g., movies, cable television, a Hulu subscription at $5.99 per month or $71.88 per year, a 1.8% [0.6%, 3.0%] Netflix subscription at $8.99 per month or $107.88 per year).
20. I would listen to music channels through my existing cable or satellite television 1.6% [0.5%, 2.7%] subscription (e.g., Music Choice).
G) Print options in place of live AM/FM radio broadcasts from commercial radio 3.0% [1.5%, 4.5%] stations over the Internet
21. I would read print or online content that I already purchased, subscribe to, or have access 1.4% [0.4%, 2.5%] to (e.g., books, newspapers, magazines).
22. I would purchase or subscribe to print or online content that I don’t currently own or 1.6% [0.5%, 2.7%] subscribe to (e.g., books, newspapers, magazines).
S-2 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Activities to Which Respondents Would Switch If Internet Simulcasts of Terrestrial Commercial Radio Were Unavailable for Five Years Weighted by Hours Listened Q5
Percentage Weighted 95% Confidence Response Options[1] by Hours Listened[2][3] Interval[4]
H) Others 4.8% [2.9%, 6.7%]
23. Other 0.8% (0.0%, 1.6%]
24.Don’t know / Unsure 4.0% [2.3%, 5.7%]
I) Blank responses[5] 0.5% (0.0%, 1.1%]
Source: Simulcast Switching Survey (N=490)
Note: [1] Q5: “Continue to suppose that live AM/FM radio broadcasts from commercial radio stations over the Internet were not available for the next five years. Assume that everything else would be available for the next five years as it is now. Now think about the most recent time you listened to live AM/FM radio broadcasts from commercial radio stations over the Internet. Please consider situations similar to that time and the content you listened to at that time. Which one of the following would you do in place of listening to such broadcasts over the Internet in similar situations during the next five years? The prices below are examples and do not include promotional discounts, taxes, or fees.” [2] This tabulation excludes respondents who answered “don't know/unsure” in Q1a. Q1a: “Thinking about the last three days, approximately how many total hours did you spend listening to live AM/FM radio broadcasts from commercial radio stations over the Internet?” [3] The percentage of respondents making each selection from Q5 is weighted by hours listened reported in Q1a. [4] The lower bound of the confidence interval is set to zero when the 95% symmetric confidence interval would otherwise include values smaller than zero. [5] Three respondents did not select “Would consider” for any options in Q4, thus were not directed to Q5.
S-3 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX T Activities to Which Respondents Would Switch If Internet Simulcasts of Terrestrial Commercial Radio Were Unavailable for Five Years Weighted by Day of the Week Q5
Percentage Weighted 95% Confidence Response Options[1] by Day of the Week[2] Interval[3]
A) On-demand music streaming services in place of live AM/FM radio broadcasts from 18.5% [15.0%, 22.1%] commercial radio stations over the Internet
1. I would listen to on-demand music streaming service(s) through the paid subscription(s) I 7.6% [5.2%, 10.0%] already have (e.g., Apple Music, Spotify Premium, Google Play Music).
2. I would purchase new paid subscription(s) to on-demand music streaming service(s) that I don’t currently subscribe to (e.g., an individual subscription to Apple Music, Spotify Premium, 1.1% [0.1%, 2.0%] or Google Play Music at $9.99 per month or $119.88 per year).
3. I would listen to on-demand music streaming service(s) that have ads and that I do not 4.7% [2.8%, 6.7%] need to pay for (e.g., ad-supported Spotify).
4. I would listen to music on video site(s) that have ads and that I do not need to pay for 5.2% [3.1%, 7.2%] (e.g., ad-supported YouTube).
B) Not-on-demand music streaming services in place of live AM/FM radio broadcasts 10.9% [8.0%, 13.7%] from commercial radio stations over the Internet
5. I would listen to not-on-demand music streaming service(s) through the paid 1.5% [0.4%, 2.6%] subscription(s) I already have (e.g., Pandora Plus).
6. I would purchase new paid subscription(s) to not-on-demand music streaming service(s) that I don’t currently subscribe to (e.g., an individual subscription to Pandora Plus at $4.99 per 2.8% [1.3%, 4.3%] month or $59.88 per year).
7. I would listen to not-on-demand music streaming service(s) that have ads and that I do 6.5% [4.3%, 8.8%] not need to pay for (e.g., ad-supported Pandora).
C) Satellite radio (SiriusXM) in place of live AM/FM radio broadcasts from commercial 8.3% [5.7%, 10.8%] radio stations over the Internet
8. I would listen to satellite radio through the paid subscription I already have (SiriusXM). 5.5% [3.4%, 7.6%]
9. I would purchase a new paid subscription to satellite radio that I don’t currently subscribe to (e.g., a SiriusXM subscription at $10.99 per month or $131.88 per year for ad-free music, 2.8% [1.3%, 4.3%] $15.99 per month or $191.88 per year for ad-free music, news, traffic, weather, and other content).
D) Other ways of listening to live AM/FM radio broadcasts in place of such broadcasts 32.4% [28.1%, 36.7%] from commercial radio stations over the Internet
10. I would listen to live AM/FM radio broadcasts from commercial radio stations through a 25.6% [21.6%, 29.6%] radio.
11. I would listen to live AM/FM radio broadcasts from not-for-profit radio stations (e.g., NPR, 3.6% [1.9%, 5.3%] college radio stations) through a radio.
12. I would listen to live AM/FM radio broadcasts from not-for-profit radio stations (e.g., NPR, 3.2% [1.6%, 4.8%] college radio stations) over the Internet.
T-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Activities to Which Respondents Would Switch If Internet Simulcasts of Terrestrial Commercial Radio Were Unavailable for Five Years Weighted by Day of the Week Q5
Percentage Weighted 95% Confidence Response Options[1] by Day of the Week[2] Interval[3]
E) Owned or purchased audio in place of live AM/FM radio broadcasts from 11.5% [8.6%, 14.4%] commercial radio stations over the Internet
13. I would listen to digital music files or CDs that I already purchased. 6.0% [3.8%, 8.2%]
14. I would purchase and listen to digital music files or CDs that I don’t currently own. 1.7% [0.5%, 2.9%]
15. I would listen to music obtained through peer-to-peer file sharing or free download sites. 0.6% (0.0%, 1.3%]
16. I would listen to non-music digital content that I already purchased or downloaded (e.g., 1.8% [0.6%, 3.0%] podcasts, audiobooks).
17. I would purchase or download and listen to non-music digital content that I don’t currently 1.4% [0.3%, 2.5%] own (e.g., podcasts, audiobooks).
F) Television and video options in place of live AM/FM radio broadcasts from 11.7% [8.7%, 14.6%] commercial radio stations over the Internet
18. I would watch video content that I already purchased, subscribe to, or have access to 7.7% [5.3%, 10.2%] (e.g., movies, cable television, Hulu, Netflix).
19. I would purchase or subscribe to video content that I don’t currently own or subscribe to (e.g., movies, cable television, a Hulu subscription at $5.99 per month or $71.88 per year, a 2.3% [0.9%, 3.6%] Netflix subscription at $8.99 per month or $107.88 per year).
20. I would listen to music channels through my existing cable or satellite television 1.6% [0.5%, 2.8%] subscription (e.g., Music Choice).
G) Print options in place of live AM/FM radio broadcasts from commercial radio 3.0% [1.4%, 4.5%] stations over the Internet
21. I would read print or online content that I already purchased, subscribe to, or have access 1.9% [0.7%, 3.2%] to (e.g., books, newspapers, magazines).
22. I would purchase or subscribe to print or online content that I don’t currently own or 1.0% [0.1%, 2.0%] subscribe to (e.g., books, newspapers, magazines).
T-2 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Activities to Which Respondents Would Switch If Internet Simulcasts of Terrestrial Commercial Radio Were Unavailable for Five Years Weighted by Day of the Week Q5
Percentage Weighted 95% Confidence Response Options[1] by Day of the Week[2] Interval[3]
H) Others 3.4% [1.8%, 5.1%]
23. Other 0.6% (0.0%, 1.3%]
24.Don’t know / Unsure 2.8% [1.3%, 4.3%]
I) Blank responses[4] 0.4% (0.0%, 1.0%]
Source: Simulcast Switching Survey (N=501)
Note: [1] Q5: “Continue to suppose that live AM/FM radio broadcasts from commercial radio stations over the Internet were not available for the next five years. Assume that everything else would be available for the next five years as it is now. Now think about the most recent time you listened to live AM/FM radio broadcasts from commercial radio stations over the Internet. Please consider situations similar to that time and the content you listened to at that time. Which one of the following would you do in place of listening to such broadcasts over the Internet in similar situations during the next five years? The prices below are examples and do not include promotional discounts, taxes, or fees.” [2] Responses were weighted so that click-ins across days of the week are equally represented. [3] The lower bound of the confidence interval is set to zero when the 95% symmetric confidence interval would otherwise include values smaller than zero. [4] Three respondents did not select “Would consider” for any options in Q4, thus were not directed to Q5.
T-3 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) APPENDIX U Activities to Which Respondents Would Switch If Internet Simulcasts of Terrestrial Commercial Radio Were Unavailable For Five Years Excluding Simultaneous Selection of New and Existing Paid Subscriptions Q5
95% Confidence Response Options[1] Percentage[2] Interval[3]
A) On-demand music streaming services in place of live AM/FM radio broadcasts from 16.4% [12.3%, 20.4%] commercial radio stations over the Internet
1. I would listen to on-demand music streaming service(s) through the paid subscription(s) I 4.3% [2.1%, 6.5%] already have (e.g., Apple Music, Spotify Premium, Google Play Music).
2. I would purchase new paid subscription(s) to on-demand music streaming service(s) that I don’t currently subscribe to (e.g., an individual subscription to Apple Music, Spotify Premium, 0.3% (0.0%, 0.9%] or Google Play Music at $9.99 per month or $119.88 per year).
3. I would listen to on-demand music streaming service(s) that have ads and that I do not 6.2% [3.5%, 8.8%] need to pay for (e.g., ad-supported Spotify).
4. I would listen to music on video site(s) that have ads and that I do not need to pay for 5.6% [3.0%, 8.1%] (e.g., ad-supported YouTube).
B) Not-on-demand music streaming services in place of live AM/FM radio broadcasts 9.3% [6.1%, 12.4%] from commercial radio stations over the Internet
5. I would listen to not-on-demand music streaming service(s) through the paid 0.9% (0.0%, 2.0%] subscription(s) I already have (e.g., Pandora Plus).
6. I would purchase new paid subscription(s) to not-on-demand music streaming service(s) that I don’t currently subscribe to (e.g., an individual subscription to Pandora Plus at $4.99 per 0.6% (0.0%, 1.5%] month or $59.88 per year).
7. I would listen to not-on-demand music streaming service(s) that have ads and that I do 7.7% [4.8%, 10.6%] not need to pay for (e.g., ad-supported Pandora).
C) Satellite radio (SiriusXM) in place of live AM/FM radio broadcasts from commercial 6.2% [3.5%, 8.8%] radio stations over the Internet
8. I would listen to satellite radio through the paid subscription I already have (SiriusXM). 5.2% [2.8%, 7.7%]
9. I would purchase a new paid subscription to satellite radio that I don’t currently subscribe to (e.g., a SiriusXM subscription at $10.99 per month or $131.88 per year for ad-free music, 0.9% (0.0%, 2.0%] $15.99 per month or $191.88 per year for ad-free music, news, traffic, weather, and other content).
D) Other ways of listening to live AM/FM radio broadcasts in place of such broadcasts 38.3% [33.0%, 43.6%] from commercial radio stations over the Internet
10. I would listen to live AM/FM radio broadcasts from commercial radio stations through a 31.8% [26.7%, 36.9%] radio.
11. I would listen to live AM/FM radio broadcasts from not-for-profit radio stations (e.g., NPR, 3.1% [1.2%, 5.0%] college radio stations) through a radio.
12. I would listen to live AM/FM radio broadcasts from not-for-profit radio stations (e.g., NPR, 3.4% [1.4%, 5.4%] college radio stations) over the Internet.
U-1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Activities to Which Respondents Would Switch If Internet Simulcasts of Terrestrial Commercial Radio Were Unavailable For Five Years Excluding Simultaneous Selection of New and Existing Paid Subscriptions Q5
95% Confidence Response Options[1] Percentage[2] Interval[3]
E) Owned or purchased audio in place of live AM/FM radio broadcasts from 12.3% [8.7%, 15.9%] commercial radio stations over the Internet
13. I would listen to digital music files or CDs that I already purchased. 7.4% [4.5%, 10.3%]
14. I would purchase and listen to digital music files or CDs that I don’t currently own. 1.2% [0.0%, 2.4%]
15. I would listen to music obtained through peer-to-peer file sharing or free download sites. 0.6% (0.0%, 1.5%]
16. I would listen to non-music digital content that I already purchased or downloaded (e.g., 1.9% [0.4%, 3.3%] podcasts, audiobooks).
17. I would purchase or download and listen to non-music digital content that I don’t currently 1.2% [0.0%, 2.4%] own (e.g., podcasts, audiobooks).
F) Television and video options in place of live AM/FM radio broadcasts from 10.5% [7.1%, 13.8%] commercial radio stations over the Internet
18. I would watch video content that I already purchased, subscribe to, or have access to 8.0% [5.1%, 11.0%] (e.g., movies, cable television, Hulu, Netflix).
19. I would purchase or subscribe to video content that I don’t currently own or subscribe to (e.g., movies, cable television, a Hulu subscription at $5.99 per month or $71.88 per year, a –– Netflix subscription at $8.99 per month or $107.88 per year).
20. I would listen to music channels through my existing cable or satellite television 2.5% [0.8%, 4.2%] subscription (e.g., Music Choice).
G) Print options in place of live AM/FM radio broadcasts from commercial radio 2.8% [1.0%, 4.6%] stations over the Internet
21. I would read print or online content that I already purchased, subscribe to, or have access 1.9% [0.4%, 3.3%] to (e.g., books, newspapers, magazines).
22. I would purchase or subscribe to print or online content that I don’t currently own or 0.9% (0.0%, 2.0%] subscribe to (e.g., books, newspapers, magazines).
U-2 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Activities to Which Respondents Would Switch If Internet Simulcasts of Terrestrial Commercial Radio Were Unavailable For Five Years Excluding Simultaneous Selection of New and Existing Paid Subscriptions Q5
95% Confidence Response Options[1] Percentage[2] Interval[3]
H) Others 3.4% [1.4%, 5.4%]
23. Other 0.3% (0.0%, 0.9%]
24. Don’t know / Unsure 3.1% [1.2%, 5.0%]
I) Blank responses[4] 0.9% (0.0%, 2.0%]
Source: Simulcast Switching Survey (N=324)
Note: [1] Q5: “Continue to suppose that live AM/FM radio broadcasts from commercial radio stations over the Internet were not available for the next five years. Assume that everything else would be available for the next five years as it is now. Now think about the most recent time you listened to live AM/FM radio broadcasts from commercial radio stations over the Internet. Please consider situations similar to that time and the content you listened to at that time. Which one of the following would you do in place of listening to such broadcasts over the Internet in similar situations during the next five years? The prices below are examples and do not include promotional discounts, taxes, or fees.” [2] Respondents are excluded if they meet at least one of the following criteria: a) Selected “I listened to on-demand music streaming service(s) through paid subscription(s) (e.g., Apple Music, Spotify Premium, Google Play Music)” in QS10 and “I would purchase new paid subscription(s) to on-demand music streaming service(s) that I don’t currently subscribe to (e.g., an individual subscription to Apple Music, Spotify Premium, or Google Play Music at $9.99 per month or $119.88 per year)” in Q4; b) Selected “I listened to not-on-demand music streaming service(s) through paid subscription(s) (e.g., Pandora Plus)” in QS10 and “I would purchase new paid subscription(s) to not-on-demand music streaming service(s) that I don’t currently subscribe to (e.g., an individual subscription to Pandora Plus at $4.99 per month or $59.88 per year)” in Q4; c) Selected “I listened to satellite radio through a paid subscription (SiriusXM)” in QS10 and “I would purchase a new paid subscription to satellite radio that I don’t currently subscribe to (e.g., a SiriusXM subscription at $10.99 per month or $131.88 per year for ad-free music, $15.99 per month or $191.88 per year for ad-free music, news, traffic, weather, and other content)” in Q4; d) Selected both “I would listen to on-demand music streaming service(s) through the paid subscription(s) I already have (e.g., Apple Music, Spotify Premium, Google Play Music)” and “I would purchase new paid subscription(s) to on-demand music streaming service(s) that I don’t currently subscribe to (e.g., an individual subscription to Apple Music, Spotify Premium, or Google Play Music at $9.99 per month or $119.88 per year)” in Q4; e) Selected both “I would listen to not-on-demand music streaming service(s) through the paid subscription(s) I already have (e.g., Pandora Plus)” and “I would purchase new paid subscription(s) to not-on-demand music streaming service(s) that I don’t currently subscribe to (e.g., an individual subscription to Pandora Plus at $4.99 per month or $59.88 per year)” in Q4; f) Selected both “I would listen to satellite radio through the paid subscription I already have (SiriusXM)” and “I would purchase a new paid subscription to satellite radio that I don’t currently subscribe to (e.g., a SiriusXM subscription at $10.99 per month or $131.88 per year for ad-free music, $15.99 per month or $191.88 per year for ad-free music, news, traffic, weather, and other content)” in Q4. [3] The lower bound of the confidence interval is set to zero when the 95% symmetric confidence interval would otherwise include values smaller than zero. [4] Three respondents did not select “Would consider” for any options in Q4, thus were not directed to Q5.
U-3 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) Before the UNITED STATES COPYRIGHT ROYALTY BOARD LIBRARY OF CONGRESS Washington, D.C.
In the Matter of:
Determination of Rates and Terms for Docket No. 19-CRB-0005-WR Digital Performance of Sound Recordings (2021-2025) and Making of Ephemeral Copies to Facilitate those Performances (Web V)
DECLARATION OF JOHN HAUSER
I, John Hauser, declare under penalty of perjury that the matters set forth in my expert report in the above-captioned proceeding are true and correct to the best of my knowledge,
information, and belief.
Executed this 7-o day of September 2019. TAB C Before the UNITED STATES COPYRIGHT ROYALTY BOARD LIBRARY OF CONGRESS Washington, D.C.
In the Matter of:
Determination of Rates and Terms for Docket No. 19-CRB-0005-WR Digital Performance of Sound Recordings (2021-2025) and Making of Ephemeral Copies to Facilitate those Performances (Web V)
WRITTEN DIRECT TESTIMONY OF ROBERT PITTMAN (On behalf of iHeartMedia, a National Association of Broadcasters Member Company)
1. I am the Chief Executive Officer and Chairman of the Board of Directors for
iHeartMedia, Inc. (“iHeart”). I submit this statement in support of the National Association of
Broadcaster’s (“NAB”) direct case in the above-captioned proceeding.
BACKGROUND AND QUALIFICATIONS
2. I began my career in the music industry more than 50 years ago as a radio
announcer in Mississippi. I was hired into my first management position at the age of 19, where
I worked as a radio programmer in Pittsburgh, PA. At age 20, I joined NBC station WMAQ in
Chicago. At 23, I became program director of WNBC, the NBC flagship radio station in New
York.
3. At WNBC, I also produced and hosted Album Tracks, one of the first television
shows to blend music, news, and video, and one of the first to use the music video format. I then led the programming team that created MTV in 1980, and served as MTV’s first programming chief. I became Chief Operating Officer (“COO”) of MTV Networks and, later, its Chief
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) Executive Officer (“CEO”) where I oversaw its growth into the country’s first profitable cable television network.
4. In 1986, I left MTV to found multimedia company Quantum Media, a joint venture with MCA, Inc., where among other businesses I invested in a record label and a television production company. In 1989, I bought out MCA’s stake in Quantum Media and sold assets of Quantum Media to Warner Communications. In 1990, I was appointed President and
CEO of Time Warner Enterprises, the new business division of Time Warner. In 1991, I also became Chairman and CEO of Six Flags Entertainment, where I led a branding effort that increased attendance at the company’s theme parks by 50 percent. In 1995, after I oversaw the majority sale of Six Flags to Boston Ventures, I became CEO of Century 21 Real Estate, where I grew the company by embracing new, Internet-based technologies that expanded the real estate market into the digital world.
5. While at Century 21, I became a member of the board of directors of America
Online, Inc. In 1996, I joined AOL Networks as its President and CEO, and later became
President and COO of America Online, Inc. At AOL, I led a team that expanded membership from 6 million subscribers to more than 30 million, pioneered the development of digital advertising and made the company profitable for the first time. In 2001, AOL merged with Time
Warner, and I became first the combined company’s co-COO and later its sole COO, where I oversaw Warner Music Group, among other businesses.
6. I left AOL Time Warner in 2002, and in 2003 co-founded Pilot Group LLC, a private investment firm. There, I oversaw the creation, growth, and successful acquisition of a number of companies, including television broadcasting group Barrington Broadcasting, radio broadcasting group Double O Radio, and internet gaming company Zynga Inc. 2 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 7. In November 2010, I became Chairman of Media and Entertainment Platforms for
Clear Channel, where I oversaw the development of iHeartRadio, Clear Channel’s digital music platform. In October 2012, I was named CEO of Clear Channel, and in 2013, I was named
Chairman of Clear Channel’s Board of Directors. In September 2014, I led Clear Channel’s rebranding as iHeartMedia, a name that reflects the company’s efforts to enhance its relationship with consumers using the company’s multiple audio platforms. In my current role, I oversee all of iHeart’s businesses, including its broadcast radio operations; its digital platforms, including the iHeartRadio digital audio service; podcasting; social media; live concerts and events; music research services; and independent media representation.
iHEART’S BUSINESS
8. iHeart operates nearly 850 broadcast radio stations in 160 local U.S. markets, covering 48 of the top 50 markets, and 86 of the top 100 markets. As the number one audio company in the U.S., and the largest broadcast radio company, the most important responsibility we have is to the communities we serve. While iHeart has a national reach in terms of its overall footprint, each individual iHeart radio station is committed to serving and informing the people of its local community. iHeart broadcast radio stations—and the personalities associated with them—connect with listeners on the topics that matter to them, including entertainment, topical discussions—especially during morning drive time shows—as well as weather, news, traffic, and subjects of interest to the local community, like new hot spots, restaurants and local businesses for listeners to visit. Even more importantly, during times of crisis when broadcast radio stations are often the sole information source for disrupted areas, our stations provide news and critical information on everything from storm updates and evacuation routes to food banks, rescue and medical care. 3 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 9. Approximately 75 percent of iHeart’s nearly 850 stations are music-format stations. While music is an important component of these stations, iHeart stations differentiate themselves from digital streaming services by what they bring to the table in addition to the music—the sense of companionship with their listeners.
10. Every radio station and streaming service in the county has access to the same music—but listeners choose one over the other for reasons other than the music. Listeners choose radio and simulcast rather than wall-to-wall music streaming services for the human connection. And listeners choose iHeart stations over different music stations in the same city because of the quality of iHeart’s programming.
11. This was exemplified recently by iHeart radio stations located in Hurricane
Dorian’s “cone of uncertainty.” A number of iHeart’s talk and music format stations in Florida suspended portions of their regular programming to instead cover the hurricane’s impending landfall on the Florida coastline. Local iHeart news/talk stations offered wall-to-wall “Operation
Stormwatch” coverage, while music format stations interrupted programming with critical news updates several times an hour. iHeart’s simulcasts extended this important coverage beyond the immediate vicinity of the disaster, enabling listeners in different cities to tune in and track the impact of the storm on those in its path.
12. As with other natural disasters that have affected communities across America, iHeart offered its listeners information and a sense of companionship in a scary situation, letting listeners know how to prepare for the imminent storm, that they weren’t alone, and that they had a friend on the other side of the dial who would stay with them and keep them up to date on issues of critical concern. For some, the voice on the radio may be the only voice they hear as
4 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) they prepare themselves for the fallout of a natural disaster. For others, it’s another sense of comfort and source of strength in a tough time.
13. As in the case of Hurricane Dorian, iHeart radio stations located in El Paso, TX suspended their regular programming in favor of round-the-clock coverage of the devastating
August 3, 2019 mass shooting at a local shopping center. This coverage provided a vital community service to El Paso residents, enabling them to hear the latest updates on a devastating event rocking their community.
iHEART'S RADIO BROADCASTS AND SIMULCASTS ARE DISTINCT FROM MUSIC-CENTRIC STREAMING-ONLY SERVICES
14. In looking at the overall audio marketplace, I see two very distinct kinds of product markets. iHeart’s broadcast radio transmissions and simulcasts are built on the companionship model of audio consumption. Nothing is more important to people than companionship; consumers who listen to broadcast radio and its simulcasts consider the on-air personalities their friends and companions. This is because broadcast radio and simulcasts offer listeners a conversation. They speak to topics of interest to their listenership and give people a place to come together as a community. iHeart’s radio broadcasts and simulcasts aim to engage the listener on this front.
15. This companionship audio model is differentiated from what we at iHeart call the
“me time” model of audio consumption—streaming audio—where the listener is more focused on curating specific music or building a music collection. The latter model finds footing in custom radio and on-demand environments, where a user can select a particular genre of music to focus on—or even a particular artist, album or song—without any non-music programming.
See NAB Ex. 1 (iHeartMedia, Inc. Amendment No. 1 to Form S-1 (May 9, 2019)) at 169-170.
5 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) This form of listening has progressed over time from record albums to 8-tracks and tapes; CDs;
MP3s; and digital downloads. Custom and on-demand streaming services are simply the latest iteration of the music collection experience. iHeart serves both the companionship and “me time” interests with separate products.
16. As such, while music is certainly an important part of many broadcast radio stations, it plays a relatively less significant role in the success of iHeart’s broadcast radio stations and simulcast products as compared to custom radio and on-demand services that depend entirely on music. The latter are, in essence, retail outlets for music. iHeart’s music stations and simulcasts, by contrast, play music not for the sake of music, but rather because of the connection the music fosters in addition to the station’s other non-music offerings. We envision two friends spending time together and listening to the music and discussing it. Then they laugh together over the on-air personality’s commentary that follows. That’s who simulcast serves—those two friends—not the listener looking to hear the latest Bruno Mars song on repeat.
THE COMPANIONSHIP MODEL DEPENDS ON ON-AIR TALENT
17. To compete effectively in the “companionship” market, iHeart is required to and does invest significant amounts of money into attracting and retaining on-air talent. In 2018 alone, iHeart spent nearly REDACTED] on its on-air personalities. iHeart takes seriously the
need to keep pace with the market and demand for our best-in-class talent.
18. An on-air personality can make or break a station. To that end, iHeart faces stiff
competition to retain popular personalities with loyal fan bases. Even our most recent S-1 filing
with the SEC acknowledges the loss of a favorite personality as a risk factor for investors. See
NAB Ex. 2 (iHeartMedia, Inc. Form 10-K for Fiscal Year Ended December 31, 2018) at 26. The
on-air personalities are the lifeblood of iHeart’s radio broadcasts and simulcasts. 6 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 19. The connection that broadcast and simulcast listeners experience with their favorite stations and on-air personalities is all the more obvious in the age of social media. Now listeners can follow their most loved personalities on Facebook, Instagram and Twitter, and even engage with them directly via these platforms. This enables listeners to feel even more connected to their favorite on-air personalities. They share milestones, laugh over the same celebrity gossip, and mourn local and national tragedies together.
20. For example, fans of popular New York City radio station z100 and morning DJ
Mo’ Bounce can follow and interact with the station and Mo’ on Instagram and Twitter. Mo’ recently posted about z100’s birthday and the pride he feels from being a part of the station’s history, stating: “I was born and raised in #Brooklyn. I was in love with @z100newyork since day 1 listening as a kid. . . . I'm so thankful and humbled every single day that I get to talk to millions of people through the power of Z. To my home!” Posts like these prompt significant positive engagement from listeners. NAB Ex. 3 (screenshot of Mo’ Bounce’s August 2, 2019
Instagram post, last accessed Aug. 27, 2019 at 3:18 pm PT).
21. Similarly, listeners of Wild 94.9’s The JV show in San Francisco, CA, comment on host JV’s twitter feeds. Listeners thank JV and his co-hosts for the show because it helped pick them up on a bad day or get through a stressful week. See NAB Exs. 4 and 5 (screenshots of Aug. 22, 2019 and August 14, 2019 tweets, respectively, from JV twitter page, last accessed
Aug. 27 at 3:55 pm PT). Tweets like this are examples of the very real connection that the audience feels with their local DJs. They chat as friends, with JV often responding to tweets with words of thanks or encouragement. In my experience, this is a typical interaction between a local DJ and listener.
7 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) THE COMPANIONSHIP MODEL REQUIRES ATTENTION TO LOCAL COMMUNITIES
22. Another important aspect of the companionship model of audio listening is its focus on the day-to-day concerns of the local community that each station serves. This is separate and apart from broader discussions by on-air personalities during drive-time programming. Local residents want to know the day’s weather and traffic, as well as hear updates concerning both local and national news. In fact, iHeart invests hundreds of millions of dollars a year in its Total Traffic and Weather Network programming (“TTWN”), which it curates for each locality so that residents know the upcoming weather and traffic in their area.
23. Many people are familiar with the ritual of waking up, getting ready for work, and listening—either at home or during the commute—to their favorite radio station. You hear what the weather will be for the week in your area, which informs you how to dress. You hear about the traffic you’re about to hit as you commute. As you drive (or walk, or take the bus or subway), you perhaps hear your favorite personality conduct an interview, followed by a local news break. Then the station news correspondent comes on and tells you the latest updates relevant to your community. This could be information on local events taking place during an upcoming weekend, such as a concert, fair or parade; an update on local or state politics and even a short primer on national news; the latest movies coming out and their box office scores and reviews; or celebrity gossip.
24. This connection to and reliance on local radio has remained unchanged over time.
People flock to radio for more than just music, which makes it different than, for example,
Pandora or Spotify. Local radio is part of America’s daily routine. So many of us have had the experience of responding aloud in the car to something we hear on the radio, as if the DJ or news
8 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) correspondent can hear us. We gasp at news of tragedies, laugh at the out-of-touch call-in listener, and even complain when the weather person tells us it’s going to rain seemingly forever.
That’s the power of radio and simulcast: it fosters listener engagement.
CONSUMERS RECOGNIZE THAT THE COMPANIONSHIP ASPECT OF RADIO MAKES IT A DISTINCT PRODUCT
25. We at iHeart take very seriously the connection and sense of community that listeners feel with their local radio stations. To that end, we have invested in surveys to better understand the listener experience. These surveys fuel our understanding of the connection between on-air talent and listeners, and influence how we at iHeart promote and nurture this relationship.
26. In 2017, iHeart conducted its Power of Personality & State of Listening study.
The study explored broadcast radio’s role in driving human connection in an increasingly digital and social world, and sought to better understand the relationships between on-air personalities and listeners in the age of social media, among other topics. See NAB Ex. 6 (excerpts from iHeart surveys conducted in years 2017-2019).1
27. Of note in the study, 78% of respondents said that on-air personalities “keep me
up to date on what’s going on in my community;” 62% said “my day would not be the same
without them;” 83% agreed that on-air personalities “say things that are personally relevant to
me;” and 82% said that on-air personalities “care about things that matter to me.” Id. at 3.2
1 Data from iHeartMedia, Power of Personality & State of Listening Study (August 2017) (surveyed Americans, aged 18-44, who listen weekly to AM/FM via regular radio or via streamed AM/FM stations). 2 Data from iHeartMedia, Power of Personality & State of Listening Study (August 2017, as refreshed in August 2019). 9 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) Again, this survey evidence reinforces the point that consumers view broadcast radio and simulcasts as distinct from pure digital streaming music services like Pandora.
28. In addition to larger studies like this, iHeart routinely researches how listeners perceive the personalities on their local stations. These perception studies help us determine whether any adjustments need to be made to our talent roster. We also pay close attention to what listeners are saying on social media. For example, if we hear from listeners that a host beloved for being an underdog is coming off as a bully lately, we approach him about softening his tone. If a host’s sidekick hasn’t been heard from in a while and listeners protest, then we similarly make sure to highlight that sidekick in an upcoming broadcast. In short, we take cues from our listeners about what matters to them, and we adjust accordingly.
iHEART ITSELF TREATS BROADCAST RADIO AND SIMULCASTS AS DISTINCT FROM ITS CUSTOM RADIO PRODUCTS
29. Radio personalities and their increased presence in a listener’s daily life help draw listeners to iHeart over other stations in the area. It’s also why iHeart is able to simultaneously operate AM/FM radio stations and their associated simulcasts, as well as a custom radio product that is wall-to-wall music, a la the Pandora model.
30. These two products serve distinct interests and purposes. If they did not, iHeart would lose business from one product to the other—but it doesn’t. This is because listeners tune into traditional radio and the corresponding simulcasts for different reasons than they use iHeart’s custom radio product, or even its on-demand offerings, iHeart Plus and iHeart All
Access. They clearly understand the difference between the types of services. This was highlighted in a survey that iHeart conducted in August of 2019, where nine out of 10 consumers reported that they “listen to both FM radio and music collections, but for different times, for
10 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) different reasons.” NAB Ex. 6 (excerpts from iHeart surveys conducted in years 2017-2019) at
2.3 iHeart’s Power of Personality & State of Listening” study further reports that even users of
streaming services turn to broadcast radio to discover new music: 80% of consumers said that
“FM radio is the main way I discover new music.” This includes 84% of users of on-demand
services like Spotify and 83% of users of custom playlist services like Pandora. Id. at 1.4
31. iHeart (formerly Clear Channel Communications) has been in the business of radio since the early 1970s. We launched iHeart Artist Radio—a service akin to Pandora—in
2011. Before doing so, we investigated the effects that such a launch could have on our broadcast radio and simulcast business. We learned that consumers view simulcasts and custom radio as fundamentally different products. This became more apparent when iHeart launched its app where listeners could access either option from the same location—both iHeart’s simulcast and custom radio audiences have grown on the app since its launch.
32. It goes without saying that iHeart simply would not have launched a custom radio product if doing so would have hurt our broadcast radio business, which is the meat and potatoes of iHeart’s business. In fact, to this day, iHeart derives significantly more revenue from broadcast radio than it does from custom radio.
3 Data from Radio vs. Music Collection study (Maru/Blue US Omni, August 2019) (Surveyed Americans aged 18- 44 who listen weekly to AM/FM radio via regular radio or streaming. Respondents were asked: “To what extent do you personally agree or disagree with the following statements about music and FM radio? (Completely or Somewhat Agree).”) 4 Data from iHeartMedia, Power of Personality & State of Listening Study (August 2017) (surveyed Americans, aged 18-44, who listen weekly to AM/FM via regular radio or via streamed AM/FM stations. Respondents were asked the question: “To what extent do you agree or disagree with the following statements about music and FM radio? F/M music is the main way I discover new music.”) 11 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) CONCLUSION
33. It is my understanding that the NAB, of which iHeart is a member, is offering the
Copyright Royalty Board (“CRB”) judges a two-pronged approach to webcasting rates. The
NAB proposes a top-line rate for pureplay webcasts (including custom radio services), and a second, lower rate, for simulcasts. iHeart offers that, should the CRB accept this proposal, its custom radio product would be subject to the top-line rate, while its simulcasts would be subject to the lesser simulcast rate. This is in recognition of the fact that iHeart’s custom radio and simulcasting offerings are, in fact, distinct products in the market. They serve different purposes for different audiences and place different emphasis on music.
12 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25)
TAB D Before the UNITED STATES COPYRIGHT ROYALTY BOARD LIBRARY OF CONGRESS Washington, D.C.
In the Matter of:
Determination of Rates and Terms for Docket No. 19-CRB-0005-WR Digital Performance of Sound Recordings (2021-2025) and Making of Ephemeral Copies to Facilitate those Performances (Web V)
WRITTEN DIRECT TESTIMONY OF TOM POLEMAN (On behalf of iHeartMedia, Inc., a National Association of Broadcasters Member Company)
BACKGROUND AND QUALIFICATIONS
1. I am the Chief Programming Officer and President of National Programming
Platforms Group for iHeartMedia, Inc. (“iHeart”). I am in charge of selecting the content for iHeart’s broadcast radio stations, which are simulcast online by iHeartRadio; iHeartRadio’s custom webcasting stations; iHeart’s live events, many of which are transmitted on broadcast radio and simulcast; and artist relations.
2. I have been in the radio industry since 1983. In that time, I have selected music for radio stations for markets as diverse as Ithaca, NY, New Haven, CT, Houston, TX, and New
York, NY.
3. Early in my career at iHeart, I was Program Director for Z100, an iHeart broadcast radio station in New York City. When I became Programming Director in 1996, Z100 was ranked #18 in popularity in New York. Within a year, Z100 was not only the #1 station in
New York, it was the most listened-to station in the United States.
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 4. Immediately before becoming President of National Programming Platforms in
August 2011, I was Senior Vice President of Programming and oversaw programming and marketing for all our radio stations in New York, Philadelphia, Boston and Providence.
5. I am submitting this statement in support of NAB’s direct case in the above- captioned proceeding.
LIVE RADIO & SIMULCAST HAS A UNIQUELY POWERFUL ABILITY TO PROMOTE ARTISTS AND THEIR MUSIC
6. In my roles as Chief Programming Officer and President of National
Programming Platforms for iHeart, I work with teams of programmers and brand managers to choose music that will resonate with listeners in each of the communities in which iHeart operates a radio station, and on iHeart’s digital-only platforms. In those roles, I have gained a deep perspective on the unique power of radio—regardless of the format in which it is delivered to the listener—to promote artists and their music.
7. Indeed, as discussed below, record labels themselves recognize this fact. Every day, record labels ask me to include their songs on the radio. In doing that, the labels have never sought to distinguish between iHeart’s terrestrial radio broadcasts and its simulcast streams; they simply treat the two as one and the same. At the same time, labels devote significantly less attention to placing songs in the rotation on iHeart’s custom webcasting channels. This tells me that the record labels treat radio as significantly more promotional than custom webcasting.
8. Several factors make radio a far more powerful promotional tool than custom webcasting and other forms of digital streaming.
2 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) A. Radio Reaches Far More People Than Digital-Only Streaming
9. Even in the competitive realm of audio services, radio stands head and shoulders
above digital streaming and other audio platforms in its ability to reach American consumers.
Radio continues to have significant amplification and discovery value for new artists and
songs—it reaches REDACTED ] NAB
Ex. 7 (The Nielsen Company, The Nielsen Total Audience Report (Q1 2019)) at 12. By
comparison, Nielsen reported that the weekly reach was [ REDACTED
] Id. at 7.
10. In addition to reaching more consumers, consumers spend far more time listening
to radio than to internet-only audio.
B. Radio Provides a Human Connection Between Artists and Listeners
11. Another reason radio is such a uniquely powerful promotional tool for record
labels is that radio DJs and other on-air hosts form trusted bonds with their listeners. In a survey
conducted by iHeartRadio, 78% of those surveyed reported that on-air personalities keep them
“up to date on what’s going on in [their] community” and 62% said their “day would not be the
same without them.” NAB Ex. 6 (iHeart, Excerpts from 2017-2019 iHeart Surveys) at 3.1
Likewise, [ REDACTED
] NAB Ex. 8 (iHeart, Influencer Marketing: DJs – The Original
1 Data from iHeartMedia, Power of Personality & State of Listening / Influencer Study Refresh (Aug. 2019). 3 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) Influencers (Aug. 2017)) at 8. [ REDACTED
] Id. at 4.
12. That element of trust is critical to radio’s force as a promotional tool. DJs are a human connection between artists and the radio audience. A recommendation from an on-air host like Bobby Bones can break a song, or even make an artist’s career. Even a simple introduction—“Here’s a great new song from an up-and-coming artist!”—can be invaluable. For
that reason, record labels, promoters, managers, and artists regularly ask iHeart DJs to conduct
on-air interviews, promote live concerts, and recommend their songs to their audiences.
C. Consumers Themselves Report That Radio is the Primary Mechanism for Discovering New Music
13. Listening to live radio and simulcasts continues to be the primary way that
Americans discover new music. In August 2017, iHeart conducted a national survey that showed
that the vast majority (80%) of people age who listen weekly to AM/FM via regular radio or via
streamed AM/FM stations say “FM radio is the main way I discover new music.” NAB Ex. 6
(iHeart, Excerpts from 2017-2019 iHeart Surveys) at 1.2 This holds true even of people who also
use custom playlist services, such as Pandora or iHeartRadio’s custom radio service, and people
that also use on-demand services, such as Spotify or iHeart’s subscription on-demand service.
Id. (finding that [ REDACTED
).
2 Data from iHeartMedia, Power of Personality & State of Listening Study (Aug. 2017) (surveyed Americans, aged 18-44, who listen weekly to AM/FM via regular radio or via streamed AM/FM stations). 4 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 14. Recent Nielsen studies also make clear [ REDACTED
] NAB Ex. 9 (Nielsen,
Music 360 2017 U.S. Report (Sept. 2017)) at 18; NAB Ex. 10 (Nielsen, Music 360 2018 U.S.
Report (Sept. 2018)) at 58; NAB Ex. 11 (Nielsen, Music 360 2019 U.S. Report (Aug. 2019)) at
54.
15. When listeners hear a song they like on the radio, it fosters their interest in the
artist and in buying the songs they’ve heard. iHeart’s 2017 study found that [ REDACTED
] NAB Ex. 8 (iHeart, Influencer Marketing: DJs – The Original Influencers
(Aug. 2017)) at 6. Likewise, [ REDACTED
] Id. at 5. The [ REDACTED
] Id. at 6. In addition, [REDACTED
] Id.
D. Radio Continues to Turn Talented Artists Into Superstars
16. I have seen first-hand that playing new music on live radio and simulcasts has the power to launch new hit songs and hit artists. I have repeatedly helped “break” artists that are now well known by selecting their songs to be played on the radio. For example, I was the first
5 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) programmer to play Rihanna on the radio. Rihanna is today one of the biggest artists on the
planet, and has reportedly sold over 280 million records and singles since that first spin.3
17. More recently, iHeart played a substantial role in the breakout success of New
York-based pop singer Halsey. In April 2017, iHeart hosted a listening preview of Halsey’s second studio album, Hopeless Fountain Kingdom, and invited her to On-Air with Ryan
Seacrest. Two months later, on June 2, 2017, she received an iHeart Radio Titanium Award, which recognizes artists who have achieved a threshold of a billion total audience spins, for “Bad
At Love,” a single from the same album. In November through December 2017, Halsey performed at the iHeart 2017 Jingle Ball Tour, a multi-city national tour with the year’s top artists performing their number one hits, which is aired on iHeart’s radio and simulcast. On
December 5, 2017, Halsey released “Him & I” with G-Eazy. By March 10, 2018 “Him & I” was number one on the Pop Radio Chart and also received an iHeart Radio Titanium Award for achieving a billion total audience spins. In October through November 2018, iHeartRadio World
Premiered Halsey’s new single, “Without Me,” and she did an interview on iHeart’s Elvis Duran and the Morning Show. In November through December 2018 she was a featured performer at iHeart’s 2018 Jingle Ball Tour, which was again broadcast on the radio. On January 29, 2019,
“Without Me” reached number one on the Pop Radio Chart and number one on the Hot Adult
Contemporary (“AC”) Radio Chart. On February 14, 2019 iHeartRadio’s network of 33
3 Alan B. Krueger, The Economics of Rihanna’s Superstardom, New York Times (June 1, 2019), available at https://www.nytimes.com/2019/06/01/opinion/sunday/music-economics-alan- krueger.html (“In 2016, the most popular artist, Drake, was streamed 6.1 billion times, followed by Rihanna (3.3 billion streams), Twenty One Pilots (2.7 billion streams) and The Weeknd (2.6 billion streams).”); Louis Mallowa, Rihanna Leads As the Best Selling Single Female Artist in UK-2019, Varcity (May 27, 2019), available at https://www.varcity.co.ke/rihanna-leads-as-the- best-selling-single-female-artist-in-uk-2019/?cn-reloaded=1. 6 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) Alternative stations World Premiered Yungblud’s “11 minutes” featuring Halsey and Travis
Barker. On March 14, 2019, Halsey opened the iHeartRadio Music Awards that were aired live on FOX and 150 radio stations nationwide. Finally, in May 2019, iHeart did a World Premiere of “Nightmare,” playing the song across our network of 96 CHR stations every hour all day long, with programmers talking about the powerhouse that Halsey has become. NAB Ex. 12 (May 20,
2019 Email from T. Poleman to [REDACTED] et al. re: iHeartRadio World Premiere //
[REDACTED]). With the support of iHeart stations behind the premiere, [REDACTED
] Id. This consistent promotion of Halsey from 2017 to the present through iHeart’s various platforms—primarily over-the-air broadcasts and simulcasts—
has helped her to become a superstar.
18. In just the past year, 45 songs received Titanium Awards for reaching a threshold
of a billion total audience spins on iHeart stations. This calculation is based on certified
MediaBase airplay and is multiplied by the number of persons listening to the radio at the time of
those plays, delivering total audience impression count. Titanium Award recipients have
included Ed Sheeran; Bruno Mars; The Chainsmokers and Coldplay; James Arthur; Zedd and
Alessia Cara; Charlie Puth; Shawn Mendes; Kygo and Selena Gomez; Imagine Dragons; Luis
Fonsi and Daddy Yankee; Maroon 5; Rihanna; Niall Horan; Sam Hunt; Zayn and Taylor Swift;
DJ Snake; DJ Khaled, Rihanna, and Bryson Tiller; and French Montana.4 It is no coincidence that these artists are some of the highest paid in the business in recent years.
4 iHeartMedia Celebrates Music’s Biggest Stars With Fifth Annual iHeartRadio Music Awards Live on TBS, TNT And truTV (March 12, 2018), available at https://www.iheartmedia.com/press/ iheartmedia-celebrates-musics-biggest-stars-fifth-annual-iheartradio-music-awards-live-tbs. 7 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 19. One of the ways in which iHeart discovers both new artists and songs to broadcast
is by holding music summits for each genre of music where we invite the record labels, artists,
and managers to tell iHeart’s program directors about the music they will be releasing over the
next several months. The iHeart program directors use the summits as a means of identifying
promising new releases to promote on their stations. For example, [ REDACTED
] After the Summit, thanks in part to iHeart’s program directors giving REDACTED
5 At the same CHR Summit, [ REDACTED
REDACTED
8 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED ].9 The summits are an opportunity
for artists to get exposure to the most influential radio programmers across the country.
E. Radio’s Promotional Power Does Not Differ Depending on the Transmission Channel Used to Listen To It
20. I have also seen that radio’s power to introduce listeners to new music has
remained strong even as the technology listeners use to tune in has evolved. Today, listeners can tune in to iHeart’s live radio programming by using a traditional broadcast radio, going to the iHeartRadio website, or using the iHeartRadio application on their mobile phone or other device,
including a Google Home or Amazon Alexa. iHeartRadio has over 130 million registered users,
and 64 million unique consumers visit iHeartRadio Network websites and applications each
month.
21. The opportunities for listening to live radio have expanded, but the special
immediacy and relevance of live radio is still the same. Listeners feel a bond with their favorite
radio stations and personalities, and trust them to find and play music they will like. The promotional power of live radio does not depend on whether listeners are tuning in to broadcast
radio or simulcast, but rather on the talent of programmers to select the music listeners will love,
the personal connection between listeners and radio personalities, and the sense of community
fostered by knowing that many others are listening to the same songs at the same time.
REDACTED
9 Gary Trust, Trevor Anderson, Lizzo & Taylor Swift’s Landmark Chart Feats Recapped & a Preview of the 20th Americanafest (Sept. 6, 2019), available at https://www.billboard.com/articles/columns/podcasts/8529302/lizzo-taylor-swift-americanafest- jed-hilly-interview-chart-beat-podcast. 9 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 22. Indeed, based on my interactions with record labels, they do not distinguish between the over-the-air transmissions and internet streams of radio station broadcasts in terms of the promotional benefits they bring. No record label has suggested to me that they would prefer that their recordings not be played on a radio station’s simulcast stream. Instead, the labels treat “radio” as a single channel, regardless of the particular technology used to reach the listener.
iHEART’S RADIO-BASED PROMOTIONAL PROGRAMS
23. iHeart has a number of programs designed to enhance our radio stations’ organic roles as music discovery platforms, including the “On the Verge” Program for new songs and artists, the Artist Integration Program (“AIP”), Album Release Parties, and World Premieres.
The promotional power of these programs does not depend on whether listeners are tuning in to broadcast radio or simulcast. Of the artists that iHeart showcases through its promotional programs, 85% make the top 20.
24. Record labels, promoters, managers, and artists have credited iHeart’s promotional programs – including those that are exclusive to simulcast – with breaking artists and increasing music sales. In fact, record labels of all sizes have told us that they consider us partners in their efforts to expand their rosters of successful artists and sell records as a result of these programs. For example, in January 2019, [ REDACTED
] NAB Ex. 13 (Jan. 28, 2019 Email from
[REDACTED ] to T. Poleman et al. re: [ REDACTED ]). Similarly, in June of 2018,
[ REDACTED 10 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25)
REDACTED
NAB Ex. 14 (June 17, 2018 Email
from [REDACTED ]).
A. “On the Verge”: Launching Hit Songs
25. iHeart introduced the “On the Verge” Program in early 2014. iHeart’s “On the
Verge” Program helps our listeners find their new favorite songs. Once every 6 to 8 weeks, our
local programmers for each current-based format (e.g., Country, Alternative, Rhythmic) come
together to select a new song that they believe has the potential to be a hit and increase station
audience ratings. Each programmer commits to spinning the selected song [REDACTED ] over the
next six to ten weeks on his or her station; listeners will hear the song whether they tune in to the
station by broadcast radio or simulcast. (Programmers used to commit to [ REDACTED
] gives listeners even more opportunities to hear a song several times, which provides enough familiarity with the song to judge it fairly and determine if
they like it. Increasing the number of spins has improved the overall effectiveness of the
program.) The decision to select a song for “On the Verge” is 100% a programming decision.
Labels, managers, and artists cannot purchase or bargain for this program. Often the songs
11 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) selected for “On the Verge” are first discovered by iHeart programmers at the iHeart Summits, discussed above.
26. The data shows that when iHeart’s radio stations play a song with greater frequency as part of the “On the Verge” Program, other radio stations often start spinning the
10 song more too and the song climbs up the MediaBase charts. [ REDACTED
]
27. The table below includes examples of the impact “On the Verge” has had on featured songs:
“On the Verge” Song Movement Up the Charts Streams and/or Sales REDACTED Jumped 36 spots on the Over 76 million streams and ] MediaBase Country Chart, going 132,000 singles sold from the to #1 start of the “On the Verge” program to 12/13/2018 REDACTED Jumped 20 spots on the Accumulated over 4 million ] MediaBase Alternative Chart, streams during the “On the going to #1 Alternative song in Verge” time period the country on 7/3/2018
10 MediaBase monitors the songs that are played on the radio in 180 markets in the United States and Canada and publishes charts with the most-played songs on broadcast radio. MediaBase data is used for a number of popular “countdown” shows, like “American Top 40” with Ryan Seacrest and “Weekend Countdown” on SiriusXM. 11 NAB Ex. 15 (Dec. 13, 2018 Email from REDACTED to T. Poleman et al. re: REDACTED ). 12 NAB Ex. 16 (July 4, 2018 Email from REDACTED to T. Poleman et al. re: REDACTED ). 12 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25)
“On the Verge” Song Movement Up the Charts Streams and/or Sales REDACTED Jumped 16 spots on the Sold over 36,000 units from MediaBase Hot AC Chart, and the start of the “On the Verge” held a spot in the Top 15 for five program to 6/27/2017 weeks; jumped 89 spots on the Shazam chart REDACTED Reached Top 5 on the MediaBase Was #2 iTunes for All Genres Pop Chart as the #2 spin gainer as of 9/19/2019 and in the Top and #2 audience gainer 15 since 7/2019; was #4 in National Sales for all genres; #1 US Shazam; #6 Spotify’s Today’s Top Hits (with 35+ weeks on Today’s Top Hits) REDACTED Jumped 30 spots on the More than 200 million global MediaBase Alternative Chart, streams reaching #1 Alternative by 9/15/2019; reached Top 30 Adult Pop and Top 40 US
28. Record labels will often credit “On the Verge” with moving songs up the charts and increasing sales. For example, [ REDACTED
13 NAB Ex. 17 (June 27, 2017 Email from [REDACTED ] to T. Poleman et al. [REDACTED ]). 14 NAB Ex. 18 (iHeartMedia, [ REDACTED ] On the Verge Success (Sept. 19, 2019)). 15 NAB Ex. 19 (iHeartMedia, [ REDACTED ] On the Verge Success (Sept. 19, 2019)); NAB Ex. 20 (iHeartMedia, [ REDACTED ] Alternative Radio Chart Position (Sept. 19, 2019)). 13 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED
]
29. I am regularly asked by record labels, including by e-mail, to consider songs for
inclusion in the “On the Verge” Program. In these e-mails, record labels never distinguish
REDACTED between broadcast radio and simulcast. See, e.g., NAB Ex. 23 (Feb. 27, 2018 Email from [
REDACTED ] to J. Sperling re: Introduction; iHeart Radio’s On The Verge); NAB Ex. 24 (Sept. 5,
2019 Email from [REDACTED ] to J. Zellner re: [REDACTED]). I understand these record labels
to be requesting that we play their artists’ songs on both broadcast radio and simulcast.
B. Artist Integration Program: Advertising New Music
30. iHeart launched our Artist Integration Program (“AIP”) in October 2011. AIP
advertises new songs and albums selected by iHeart’s brand managers based on what we believe
will best generate audience interest and benefit station ratings. AIP provides a valuable service
14 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) to our listeners by introducing them to new music they are likely to enjoy, and contributes to a healthy music industry by helping artists build their brands and sell their music.
31. I developed AIP in 2011 with the goal of improving iHeart’s relationships with artists and record labels by supporting their efforts to build artists’ brands and sell music. I continue to view AIP as an industry-relations tool. We put in the effort to select artists and music for AIP, and to produce and air AIP spots on our stations, in order to be good partners to artists and record labels. We have never sold AIP to an artist or record label for cash.
32. We run 30 second promotional commercial spots for the new music roughly 40 times per station for two weeks. Within these spots, we typically play about 20 seconds of the hook of the track and a clip of an interview with the artist. These spots familiarize listeners with the new music, and encourage them to buy it. The program also helps develop the artist’s profile and brand awareness with consumers, which is very important to an artist’s career development.
See, e.g., NAB Ex. 25 (June 17, 2018 Email from [ REDACTED ], Cc: T. Poleman et al. re: [ REDACTED ) (Poleman: [REDACTED
]); NAB Ex. 26 (Dec. 5, 2017 Email from [REDACTED ] to J.
Sykes, Cc: T. Poleman et al. re: [ REDACTED
15 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED]). In exchange for the promotional value of being included in AIP, artists waive
their royalties for the 30-second clip of the song played during the promotional spot. In certain
markets where radio stations do direct simulcasts of the over the air broadcast without any ad
substitution, the same 30 second AIP clip is also broadcast over the simulcast (and iHeart does
not have to pay the digital royalties for the clip played on the simulcast).
33. In May 2012, we introduced a Digital Artist Integration Program (“DAIP”).
Record labels and artists apply for DAIP and our brand managers then select songs for inclusion.
In this digital version of an on-air broadcast, we play longer 3-minute commercial spots, which
allows us to feature more of the song – often in its entirety – on our simulcast stations during
time that would otherwise be filled with paid advertisements. The DAIP spots are substitutes for
advertisements that were played over the air. Artists consider the promotional value of DAIP to
be significant enough that they waive their right to receive sound performance copyright fees for
simulcast and custom webcasting spins of both the clip of the song played within the program
and the full song for a six month promotional period. NAB Ex. 27 (DAIP Program Terms) § 2
(“This Agreement is in consideration of potential promotional opportunities afforded to you for being part of the AIP Program. iHeart shall not be subject to and shall not be required to pay any royalties to you or any third party for the use of the Label Material in accordance with this
Agreement during the Promotional Term . . . .”).
34. Record labels and artists are constantly submitting new songs for DAIP and specifically crediting DAIP with increasing their sales, improving artist recognition, and helping their songs rise in the billboard ratings. For example, [ REDACTED
16 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED
REDACTED ] This evidence shows that labels regard DAIP spots—which, again, only
play on simulcast—as significantly promotional of record sales.
C. On-Air Album Release Parties: Promoting New Albums
35. iHeart occasionally hosts iHeartRadio Album Release Parties when artists release new albums, broadcasting a live performance of the artist performing his or her new songs over both broadcast radio and simulcast. These on-air promotions and release parties have been able to drive streams both for the album’s single and the artist. For example, [ REDACTED
] NAB Ex. 31 (iHeart, 17 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25)
Album Release Analysis (June 2019)). [ REDACTED
Id.
36. Album release parties have been able to increase streams even when they occur after the album was released. For example, [ REDACTED
Id.
37. After iHeart hosts an iHeartRadio Album Release Party, I will often get messages of gratitude from record labels who note the importance of the release parties to driving record sales, ticket sales, and artist recognition. For example, [ REDACTED
18 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED
.]
38. Similarly, we ran an iHeartCountry Album Release Party campaign for [REDACTED
] Id.
D. World Premieres: Promoting Newly Released Songs
39. iHeart also promotes newly released songs through its World Premiere collaborations. iHeart will partner with artists to introduce their new songs across the country.
Artists and record labels put a very high value on partnering with iHeart to premiere new songs because of the wide reach of iHeart’s radio programs. [ REDACTED
NAB Ex. 34 (May 13, 2019
REDACTED Email from T. Poleman to [ REDACTED ] et al. re: iHeartRadio World Premiere //
]). [ REDACTED
] total audience spins, which is 19 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25)
based on how many people are listening to each radio station every time the station plays the
REDACTED song, making it a similar comparison to individual people listening to a single stream. Id. [
] Id. Likewise,
iHeart partnered with [ REDACTED
] NAB Ex. 35 (July 9, 2019 Email from T. Poleman to
[REDACTED ] et al. re: iHeartRadio World Premiere // [REDACTED]). With the power of iHeart’s stations behind the premiere, [ REDACTED
] Id.; see also NAB Ex. 36 (May 10, 2019 Email from T. Poleman to [REDACTED] et al.
re: iHeartCountry World Premiere // REDACTED ]); NAB Ex. 37 (Aug. 14,
2019 Email from T. Poleman to [REDACTED ] et al. re: iHeartRadio World Premiere // [REDACTED
]).
40. After iHeart premieres a new song, I often receive messages of gratitude from
record labels who note the importance of the premiere to driving record sales, movement up the
charts, and artist recognition. NAB Ex. 38 (June 10, 2019 Email from [REDACTED ] to T. Poleman
et al. re: iHeartCountry World Premiere // REDACTED ]); NAB Ex. 39 (June 10,
2019 Email from [REDACTED ] to T. Poleman re: iHeartCountry World Premiere // REDACTED
]).
CUSTOM WEBCASTING DOES NOT OFFER THE SAME LEVEL OF PROMOTIONAL SUPPORT FOR ARTISTS AS RADIO
41. As noted above, iHeartRadio also provides listeners with customizable
webcasting channels. In my experience, record label promotional representatives focus
20 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) relatively little effort on getting exposure for their songs on iHeartRadio’s custom channels. By far the major focus of these interactions is their efforts to place songs on radio.
42. I believe this is because custom webcasting only features music, and provides none of the human connection between the artist and the listener. Custom webcasting generally do not have on-air hosts like Bobby Bones and Elvis Duran to give personal recommendations, interview artists, provide backstory or insights, or even simply introduce the artist and title. We generally do not have local on-air hosts on our custom webcasting channels, telling listeners when an artist is coming to town for a concert, and how to buy tickets. Our custom webcasting channels generally do not feature promotional contests, take phone calls from listeners, or host local events. Likewise, our custom webcasting channels generally do not provide the context for the music or create a story behind the music, like our on-air hosts can on radio. Only one or at most a small group of listeners hears the custom webcasting stream at a time. Simply put, our custom webcasting product, while an excellent way to listen to lots of great music, does not have the same personal touch that sets our radio product apart.
CONCLUSION
43. My experience as Chief Programming Officer and President of National
Programming Platforms for iHeart has been that record labels, promoters, managers, artists, and consumers treat live radio – however transmitted – as an indispensable promotional tool.
Consumers tune in to live radio, including simulcast, to find new music. Record labels, promoters, managers, and artists ask us to play their songs on live radio, including simulcast, to help them gain fans and sell records. They consider over-the-air and simulcast radio to be one in the same. When we do play their songs, record labels, promoters, managers, and artists regularly credit those spins with increasing artists’ popularity and sales of their music. None of this occurs 21 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) to nearly the same degree for iHeart’s custom webcasting channels. One of the main conclusions
I draw from this is that the radio—whether heard over the air or via the internet—is far more promotional for record labels than custom webcasting.
22 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) Before the UNITED STATES COPYRIGHT ROYAL TY BOARD LIBRARY OF CONGRESS Washington, D.C.
In the Matter of:
Determination of Rates and Terms for Docket No. 19-CRB-0005-WR Digital Performance of Sound Recordings (2021-2025) and Making of Ephemeral Copies to Facilitate those Performances (Web V)
DECLARATION OF TOM PO LEMAN
I, Tom Poleman, declare under penalty of perjury that the matters set forth in my Written
Direct Testimony in the above-captioned proceeding are true and correct to the best of my
knowledge, information, and belief.
0. 1".ll Executed this _l _-1 day of September 2019.
~- TAB E Before the UNITED STATES COPYRIGHT ROYALTY BOARD LIBRARY OF CONGRESS Washington, D.C.
In the Matter of:
Determination of Rates and Terms for Docket No. 19-CRB-0005-WR Digital Performance of Sound Recordings (2021-2025) and Making of Ephemeral Copies to Facilitate those Performances (Web V)
WRITTEN DIRECT TESTIMONY OF JAMES RUSSELL WILLIAMS III (“TRES WILLIAMS”) (On Behalf of iHeartMedia, a National Association of Broadcasters Member Company)
1. I am the Executive Vice President of Business Affairs at iHeartMedia, Inc.
(“iHeart”). My statement below is submitted in support of the National Association of
Broadcasters’ (“NAB”) written direct case in the above-captioned proceeding.
BACKGROUND AND QUALIFICATIONS
2. I have been a music and media industry professional for over 20 years. The vast
majority of my industry experience involves legal and business strategy for various music
industry participants.
3. In 2000, I joined Zomba Group, the parent company of Jive Records, a popular pop music label. Zomba was eventually acquired by BMG, which merged with Sony Music
Entertainment. Under both corporate umbrellas, I helped manage business affairs for key album projects. From 2003-2006, I served as the Associate Director of Business Affairs at Sony BMG
Music, where I assisted with negotiating deals on behalf of the record company.
1 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 4. After spending six years at Zomba and Sony BMG Music, I went on to serve as
the Director of Business & Legal Affairs at eMusic.com, an independent digital download
distribution company, for a few years. At eMusic I negotiated several key licensing deals for
eMusic’s sister company and independent digital rights aggregator and distributor, the Orchard.
5. From 2008 to 2011, I served as the General Counsel of a music tech startup called
Thumbplay. While at Thumbplay, I played a significant role in launching the company’s cloud- based music subscription service. I was primarily responsible for licensing rights from record
labels and music publishers in order to launch the music service. In 2011, Thumbplay was
acquired by Clear Channel (now iHeartMedia) and I transitioned over to Clear Channel as part of
the acquisition.
6. Months after joining iHeart, my team and I were charged with relaunching
iHeart’s digital music and live streaming radio service—also known as iHeartRadio. This
involved developing a new media strategy and finding ways to maximize profits while
minimizing costs to run the iHeartRadio platform.
7. From March 2011 to June 2012, I served as Vice President, Business & Legal
Affairs at Clear Channel Radio. I then transitioned to a role at the parent corporation, serving as the Vice President, Business & Legal Affairs for Clear Channel Media Holdings from June 2012 to July 2014. Subsequently, I went on to serve as Senior Vice President, Business Affairs at iHeartMedia before becoming the Executive Vice President of Business Affairs at iHeart in
January 2019.
8. In my current role, I manage iHeart’s Business Affairs group and handle all strategic deal-making related to music. Specifically, I am responsible for all music licensing negotiations at iHeart, including negotiations with record labels and performance rights
2 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) organizations (“PROs”). I oversee iHeart’s business strategy and efforts to ensure iHeart pays
reasonable, fair rates across platforms, which often results in negotiating direct licenses with our partners at the labels in particular.
9. Over the last nine years, I have worked to negotiate direct licenses with record
labels and music publishers covering iHeart’s various digital streaming activities. Those
activities include digital simulcasts of iHeart’s nearly 850 broadcast radio stations, iHeart’s ad-
supported custom radio service, and, as of 2017, iHeart’s subscription on-demand streaming
services. In negotiating these direct licenses, I work closely with the finance, programming, production, digital and corporate teams at iHeart to ensure that these agreements make sense
from both economic and business perspectives for iHeart’s various digital products.
10. In addition to negotiating direct license agreements for sound recording and composition rights, I have also played a prominent role in negotiation and litigation of industry- wide PRO agreements with the American Society of Composers Authors and Publishers
(“ASCAP”), Broadcast Music, Inc. (“BMI”), and SESAC as a member of the Radio Music
License Committee (“RMLC”) Executive Committee. In late 2015 and early 2016, I negotiated an iHeart-specific agreement with new PRO, Global Music Rights, Inc.
11. Steven Cutler, who testified on behalf of iHeart in the Web IV proceedings, left the company in late 2015. I have reviewed his testimony and it is consistent with my recollection and understanding based on my involvement in iHeart’s direct licensing efforts. My testimony that follows is intended to update and supplement Steven’s Web IV testimony.
iHEART’S DIRECT LICENSE AGREEMENTS FOR SOUND RECORDING PUBLIC PERFORMANCE RIGHTS IN SECTION 114-COMPLIANT SERVICES
12. As discussed by Mr. Cutler, in 2012 iHeart began negotiating direct licenses with the sound recording industry to provide relief from the simulcasting rates and terms established 3 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) by a 10-year settlement agreement between the National Association of Broadcasters under the
Webcasting Settlement Act (“WSA”), and under the rates and terms applicable to iHeart’s then-
new custom radio product as established by the Web III proceeding.
13. Within the broadcast radio industry, iHeart was on the leading edge of adapting its
radio simulcast business to the streaming medium. However, the increasing rates and terms
established under the WSA were not conducive to this transition and, in fact, presented a strong
disincentive against modernizing the radio business. Further, because iHeart controlled a range
of diverse media businesses, it could not as a practical matter avail itself of the “pureplay” rates
established under the WSA, putting iHeart’s custom radio product at a distinct competitive
disadvantage relative to services like Pandora.
14. iHeart’s direct-licensing campaign was designed to seek mutually beneficial agreements with record companies that reflected the historical symbiosis between radio and the sound recording industry and recognized the different economics associated with (i) the inclusion of sound recordings in iHeart’s simulcasts (and, as a logical predicate, on iHeart’s over-the-air broadcasts) and (ii) pure webcasting activities such as iHeart’s custom-radio product. The campaign was also designed to bring iHeart’s custom radio rates into line with those available to
“pureplay” webcasters such as Pandora that competed with iHeart’s custom-radio product.
15. Since signing its first direct license with Big Machine Records, LLC in 2012, iHeart has negotiated direct licenses with over 25 labels, including major label Warner Music
Group.
A. iHeart’s Successfully Renewed Indie Licenses
16. The vast majority of iHeart’s licenses with independent or “indie” record labels have been voluntarily extended under the same royalty terms as the prior agreements after the
4 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) Web IV rates took effect. iHeart has also entered into new direct licenses under the same royalty
terms.
17. Those terms include that [ REDACTED
]. As Mr. Cutler discussed, this lower
effective per-play rate for iHeart’s webcasts was designed to induce additional plays of the
directly licensed music across iHeart’s music platforms, and iHeart expected to be able to
increase performances of its deal partners’ music by approximately 50% across its simulcast and
custom products.
18. iHeart’s indie deals also incorporated a [ REDACTED
for over-the-air broadcasts. We included this broadcast radio component in light of what we perceived to be a serious and ongoing threat that Congress would pass legislation that would
establish a public performance right in sound recordings applicable to over-the-air broadcasts.
iHeart expected that our voluntary efforts to engage with the sound recording industry to
establish a flow of compensation from iHeart’s radio broadcasts would demonstrate that the
industry was capable of working together to resolve this issue without Congressional
intervention. In exchange for the [ REDACTED
]. Accordingly, iHeart
firmly believes that it obtained a great deal of value from this component of the deal, separate
5 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) and apart from the amounts it agreed to pay for simulcast and custom radio streaming. The
record labels, for their part, welcomed the ability to tell their artists that they would, for the first
time, share in broadcast radio revenues. Indeed, the impetus for the [ REDACTED ] was that prominent indie label representatives wanted to take a groundbreaking step in the direction of collecting something for the recordings on broadcast radio. As a result, the NAB and the recording industry each touted the broadcast royalty aspect of iHeart’s deals as significant in and of itself.1
19. When iHeart’s direct license agreements with the indies came up for renewal,
iHeart willingly renewed the agreements because rates for digital streaming provided meaningful
relief from the statutory rates established in the Web IV proceeding. In addition, the broadcast
radio component of these deals continues to have independent value for iHeart; copyright holders
to this day press for a public performance right for broadcast radio, and these indie deals
continue to be useful in iHeart and NAB’s public policy efforts.2
20. For example, iHeart renewed its agreements with Big Machine and Glassnote
Records in 2017. The royalty terms were identical to the original Big Machine and Glassnote
1 As Billboard reported at the time, NAB took the position that, “since the Big Machine/Clear Channel deal is a market deal, it proves that Congress shouldn't enact legislation to mandate such a royalty,” while “[r]ecording executives applauded Clear Channel Media and Entertainment's breakthrough decision to pay artist royalties for terrestrial radio airplay.” See Ed Christman, Exclusive: Clear Channel, Big Machine Strike Deal to Pay Sound-Recording Performance Royalties To Label, Artists, (June 5, 2012), https://www.billboard.com/articles/business/ 1094170/clear-channel-big-machine-strike-landmark-performance-royalty-pact. 2 See Congressman Jerry Nadler, Press Release, Representatives Nadler, Blackburn, Conyers, Issa, Deutch and Rooney Re-Introduce Fair Play Fair Pay Act, Mar. 30, 2017, announcing introduction of legislation to “[c]reate a terrestrial performance right”), https://nadler.house.gov/ news/documentsingle.aspx?DocumentID=391702; Recording Academy, Press Release, Recording Academy Announces New Advocacy Committee Led By Hit Songwriters Sue Ennis and Five-Time Grammy Winner Lalah Hathaway, Sept. 9, 2019 ) (establishing committee to lobby for “a performance right on terrestrial radio”). 6 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) direct deals. NAB Ex. 40 (2012 Big Machine Agreement and 2017 First Amendment3); NAB Ex.
41 (2012 Glassnote Records Agreement and 2017 First Amendment). From iHeart’s perspective,
the post Web IV renewals were based on the same principle — an extension of the indie deal
terms would provide iHeart with an option to select songs with lower digital performance
royalties than under the prevailing statutory rates.
21. In addition to the Big Machine and Glassnote renewals, 13 other labels agreed to
renew their direct deals with iHeart post-2016, [ REDACTED
]. While these indies benefited from increased performances on iHeart’s
various music services, iHeart renewed these agreements because the effective per-play rates
remained well below the statutory rate. See NAB Ex. 42 (2014 Average Joe’s Entertainment
Agreement and 2019 First Amendment); NAB Ex. 43 (2013 Black River Entertainment
Agreement and 2017 First Amendment); NAB Ex. 44 (2014 Broken Bow Records Agreement);
NAB Ex. 45 (2012 DashGo Agreement and 2017 First Amendment); NAB Ex. 46 (2013
Dualtone Agreement and 2018 Second Amendment); NAB Ex. 47 (2013 Entertainment One
Agreement and 2018 First and Second Amendments); NAB Ex. 48 (2013 Innovative Leisure
Agreement); NAB Ex. 49 (2012 Naxos Agreement and 2017 First Amendment); NAB Ex. 50
(2012 RPM Entertainment Agreement and 2017 First Amendment); NAB Ex. 51 (2014 S-Curve
Agreement); NAB Ex. 52 (2013 Suburban Noize Agreement and 2018 Second and Third
Amendments); NAB Ex. 53 (2013 Zojak World Wide Agreement and 2018 First Amendment).4
3 The “First Amendment” to the Big Machine agreement is the operative one, and extends the terms of the license until 2020. 4 iHeart also a signed deal with Empire Distribution that covers rights licensed under section 114 as well as iHeart’s interactive streaming products; the terms that address amounts to be paid for 7 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 22. In 2016, BMG — one of the largest indie labels — acquired iHeart direct licensor
S-Curve and elected to have all of its sound recordings licensed to iHeart under the terms of S-
Curve’s license. In 2017, BMG acquired Broken Bow Records, which had its own deal with
iHeart, which BMG folded into its broader arrangement with iHeart. In 2019, BMG renewed its direct license with iHeart under the same royalty terms, on a month-to-month basis. [REDACTED
.] NAB
Ex. 77 ([ REDACTED ] to Tres Williams, Aug. 22, 2019).
23. iHeart has also negotiated a new direct license agreements covering rights
licensed under Section 114 since Web IV with Tommy Boy Music. That deal was executed on
May 1, 2019, and provided for the exact same rates from the original indie deals. I negotiated
this deal with the understanding that it would yield lower effective per-play rates than the current
Section 114 rates. NAB Ex. 54 (2019 Tommy Boy Music Agreement). Over the years the bargained-for exchange has remained the same: reduced effective per-performance royalties to
incentivize iHeart to increase the label’s total number of performances on each of its music
services.
24. I understand that, in the Web IV proceedings, the record did not include information sufficient to calculate effective per play royalties under iHeart’s various deals with indie labels. To address that issue in this proceeding, I have directed iHeart employees in the finance and royalty departments to provide to NAB’s expert with royalty reports and
broadcast radio, and simulcast and custom streaming are identical to the independent label deals described above. 8 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) performance data corresponding to each of iHeart’s direct licenses covering services licensable
under Section 114. These reports and data are kept by iHeart in the regular course of its business
and are used by iHeart to comply with its reporting requirements and to calculate royalty payments under its various direct licenses with sound recording companies.
B. Royalty-Free Performances Under iHeart’s Artist Integration Program
25. Under the terms of its Digital Artist Integration Program (“DAIP”), major and independent record labels waive royalty payments for submitted recordings altogether for a 6- month period, in order to introduce the songs on iHeart’s platform and encourage iHeart to spin their records more often.5 Last year, [ REDACTED
].
26. Accordingly, iHeart does not pay SoundExchange for performances of recordings
under the DAIP. [ REDACTED
.]
C. iHeart’s 2013 Direct License with Warner Music Group and Warner’s Unilateral Renewal
27. In October 2013, iHeart signed its first direct license deal with a major record
label, Warner Music Group (“Warner”). As with the initial round of iHeart’s indie deals, this
license was entered against the backdrop of the ever-increasing Webcaster Settlement Act rates
for simulcast and the untenably high Web III rates as the only alternatives for iHeart’s
simulcasting and custom radio activity, respectively, at the time.
5 NAB Ex. 27 (DAIP Program Terms). 9 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 28. In addition to the concerns discussed above about Congress’s potential establishment of a public performance right, [ REDACTED
]
29. During negotiations, Warner insisted [ REDACTED
] NAB Ex. 55 ([ REDACTED
6 See Ex. DD of Designated Testimony of S. Cutler (Dkt. 14-CRB-0001 Webcasting IV) (Warner Direct Licensing Sensitivities). 7 NAB Ex. 57 (Exhibit B to Amended Testimony of Fischel & Lichtman from Dkt. 14-CRB- 0001-Webcasting IV). 10 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED
]
iHEART’S STEERING TOWARDS LOWER-ROYALTY SPINS
30. [ REDACTED
REDACTED
11 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED
].
iHEART’S PRO NEGOTIATIONS ALSO DEMONSTRATE HOW LICENSORS VIEW SIMULCAST AND CUSTOM RADIO AS DISTINCT PRODUCTS
34. In late 2016, I was one of the principal negotiators of an industrywide license for commercial radio stations represented by the Radio Music License Committee with the PRO
ASCAP. The license covers the term 2017-2021. In the course of those negotiations, RMLC agreed that custom radio streams would not be covered by the industrywide license.
35. The 2017 RMLC-ASCAP license also made explicit—by way of a December
2016 Letter Agreement—that “Custom Internet Radio Services,” defined as user-specific or interactive services, were outside the scope of the agreement. The letter reads in relevant part:
REDACTED
12 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) See NAB Ex. 56, at p. 24, ¶ 6 (Custom Internet Radio Services) (emphasis added). The reason was that ASCAP took the position that its rate for custom radio needed to be much different than the rate the parties were negotiating for simulcasts.
36. Whereas ASCAP ultimately agreed to a rate of [REDACTED ] of revenues derived from
or in connection with Digital Simulcast Transmissions, [ REDACTED
] NAB Ex. 58 [(REDACTED
]).
37. The license negotiated between RMLC and ASCAP does, however, license
certain Digital Non-Simulcast Transmissions in addition to stations’ simulcasts. At ASCAP’s
insistence, these internet-only transmissions [ REDACTED ]. See
NAB Ex. 56 (ASCAP 2017 License Agreement, § 4.2 (Terrestrial Broadcast/Simulcast Fees); §
4.3 (Digital Non-Simulcast Fees)).
38. In 2017, I was a witness in the first ever arbitration between RMLC and SESAC
to set license rates for commercial radio stations in 2016-2018 under the terms of a 2015
settlement of antitrust claims brought by RMLC. That proceeding also carved out custom radio
from the scope of the license at issue, and iHeart [ REDACTED
]
13 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 39. Today, RMLC and BMI are engaged in rate-court litigation over the terms of a
radio industry license covering the period 2017-2021. This proceeding similarly has carved out custom radio and on-demand streaming services, and iHeart [ REDACTED
.] See NAB Ex. 59 (BMI [REDACTED] RMLC for
Radio License, [ REDACTED ]).
THE AUDIT TERMS SHOULD BE UPDATED
40. The existing terms related to audits of statements of account by SoundExchange should be updated in three respects:
41. Recoupment of overpayments. Under the current terms of the statutory license, if an audit finds that a licensee has overpaid, the licensee is prohibited from seeking recoupment or offset of royalties, absent the agreement of the copyright owner.8 It would be more appropriate
to update the license terms here to allow such recoupment or offset. Indeed, I understand that
regulations issued by the Copyright Office related to the audit of statements of account under the
section 111 statutory license allow such recoupment if an audit finds an overpayment.
42. Clarifying rule regarding payment of audit costs. Relatedly, under the current
terms of the statutory license, a licensee must bear the reasonable costs of the audit if “the
auditor determines that there was an underpayment of 10% or more.” I understand that NAB has proposed to clarify that the underpayment must be a “net underpayment (i.e., underpayments less
any overpayments)” of 10% or more before the licensee must pay for the audit costs. I believe
this clarification better reflects the practices in the marketplace.
8 37 C.F.R. § 380.6(g). 14 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 43. Interest rate for underpayment. Under the current terms of the statutory license,
if the audit finds an overpayment, interest is charged at late payment rate, which is an 18%
annual rate.9 Underpayments uncovered during an audit may simply reflect good faith errors or
reasonable disagreements between the parties about the proper interpretation of the terms of the
statutory license. Application of the 18% annual rate to such underpayments is thus
inappropriate, especially in light of the fact that the audit rules permit allow copyright owners to
conduct an audit for any of the prior three calendar years. A far more appropriate rate would be
the rate recently adopted by the Copyright Royalty Judges in the SDARS III proceeding—the
federal post-judgment rate in 28 U.S.C. §1961.10
9 37 C.F.R. § 380.6(g); see also 37 C.F.R. § 380.2(d). 10 Determination of Royalty Rates and Terms for Transmission of Sound Recordings by Satellite Radio and “Preexisting” Subscription Services (SDARS III), 83 Fed. Reg. 65210, 65262 (Dec. 19, 2018). 15 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25)
TAB F Before the UNITED STATES COPYRIGHT ROYALTY BOARD LIBRARY OF CONGRESS Washington, D.C.
In the Matter of:
Determination of Rates and Terms for Docket No. 19-CRB-0005-WR Digital Performance of Sound Recordings (2021-2025) and Making of Ephemeral Copies to Facilitate those Performances (Web V)
WRITTEN DIRECT TESTIMONY OF STEVEN W. NEWBERRY (On behalf of the National Association Of Broadcasters)
1. My name is Steven W. Newberry. I am the Executive Vice President for Strategic
Planning/Industry Affairs at the National Association of Broadcasters (“NAB”), a trade and advocacy association representing the interests of commercial and non-commercial over-the-air radio and television broadcasters in the United States. I have held this position since 2017. I offer this statement in support of the NAB in this proceeding. My statement is based on my decades of experience in the radio broadcasting business as well as my personal involvement in the operation of the NAB.
BACKGROUND AND QUALIFICATIONS
2. I began my career in radio at the age of fourteen, when I took a job with a local station in Glasgow, Kentucky. As a high school sophomore, I worked 24 hours on the air each weekend, and continued to work as an on‐air personality while obtaining my degree from the
University of Kentucky.
3. In 1984, during the final semester of my senior year, I purchased my first radio station at the age of 21. The station was a full-service Adult Contemporary formatted station that
1 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) operated out of a double-wide house trailer in Cave City, Kentucky. I wore a variety of hats, which helped familiarize me with virtually all of the important aspects of the radio business. In addition to running the station and managing our small staff, I managed the station’s sales, served as on-air talent for the morning show, did sports play-by-play, covered community events, and helped to keep the facilities operating by performing basic technical installations and repairs.
4. In 1996, I joined with the prior Governor of Kentucky, Brereton Jones, and formed Commonwealth Broadcasting Corporation. We started acquiring stations in 1997. The group quickly grew to 35 stations. In 2006, I acquired the Governor’s interest in the company.
5. I served as Chairman of the Joint Board (radio and television) of the NAB, which functions as the Association’s Board of Directors, from June 2009 through June 2011.
Immediately before that, I served as Chairman of the Radio Board (the radio members of the
Joint Board) from June 2008 through June 2009. I have been a member of the board of directors and executive committee of the Radio Advertising Bureau. I have also served as President of the
Kentucky Broadcasters Association (1993-1994).
6. I was honored to receive NAB’s National Radio Award, the industry’s highest leadership honor, in 2011. I have also been inducted into the Kentucky Broadcasters
Association’s Hall of Fame, and received their Distinguished Kentuckian Award in 2009.
7. In October 2017, I joined the NAB full time as Executive Vice President for
Strategic Planning/Industry Affairs. In this role, I focus on long-term policy initiatives with the goal of creating opportunities for the broadcasting industry. My responsibility is to be proactive in the face of challenges our industry faces and, likewise, opportunities that present themselves.
2 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) BACKGROUND ON THE NATIONAL ASSOCIATION OF BROADCASTERS
8. The NAB was founded in 1923 as the National Association of Radio Broadcasters
in Chicago. The NAB is the voice for the nation’s radio and television broadcasters. As the premier trade association for broadcasters, the NAB advances the interests of our members in
federal government, industry, and public affairs; improves the quality and profitability of broadcasting; encourages content and technology innovation; and spotlights the important and
unique ways that radio stations serve their communities.
9. The NAB keeps its finger on the radio broadcasting pulse. Each year, the NAB
hosts the “NAB Show” and the “NAB Radio Show.” The NAB Show is a trade show produced by the NAB that brings together industry professionals from radio broadcasting, streaming,
television, and other media. The NAB Show has a show floor where ground-breaking
technology is unveiled, innovative solutions are displayed, and game-changing trends are
exposed. Further, thought leaders come to the NAB Show to present their stories, solutions, and
techniques. Last year, we had over 90,000 attendees at the NAB Show. The NAB Radio Show
is trade show produced by the NAB and the Radio Advertising Bureau. It is a gathering of broadcasting, podcasting, and streaming professions who come together to shape the future of
the business. Last year, we had over 2,000 attendees at the NAB Radio Show.
RADIO IS MORE THAN A MUSIC SERVICE
10. I have long believed that radio is deeply engrained in the fabric of American
culture. Indeed, radio is unique because it is not simply a music service; it provides local
communities with a mix of information, entertainment, and personality. In this sense, radio broadcasters are like cake bakers—if music is the flour, we add the eggs, milk, and sugar in the
form of local content and on-air personalities to create the cake. Other music services like
Pandora only offer the flour to its listeners. In my experience, simply playing music will not 3 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) create a loyal local audience because there are multiple sources for music on-air or online.
Rather, it’s the connection that radio stations forge with their audience through their non-music
content and on-air talent that differentiates them from other music services. Those are the unique
ingredients that make up the bulk of radio’s programming and business models.
11. Unlike other music services, radio broadcasters are required by law to use the broadcast airwaves to serve the public interest. Broadcasters are subject to the public interest standard or requirement, by which the Federal Communications Commission (“FCC”) dictates that public affairs programming is offered by America’s radio broadcasters. In exchange for obtaining a FCC license to operate a broadcast station using the public airwaves, radio stations must operate in the “public interest, convenience and necessity.”1 While this is a legal
obligation, broadcasters have become very adept at integrating these requirements into their programming in a way that creates a valued, local connection for their listeners.
12. Local broadcasters primarily comply with the public interest requirement by
offering locally-produced programming that serves the targeted needs and interests of their
communities, including sports, political, religious, and other community-oriented content. NAB broadcasters produce and air segments on weather information, traffic updates, local sports, promotional contests, public service announcements, newscasts, charitable event awareness, and
so much more to create a finished product that is not simply a music service. Broadcasters
engage in contemporaneous content curation, as opposed to the set it and forget it programming
method utilized by music-centric services. We have humans—not algorithms—deciding what programming is suitable for a specific locality’s public interest and consumption. While music is
1 The Public and Broadcasting, Federal Communications Commission, https://www.fcc.gov/media/radio/public-and-broadcasting (last visited Sept. 23, 2019). 4 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) no doubt part of the mix of content we provide, it is not radio’s key differentiator. Simply put,
listeners tune into radio not just to listen to music. They do it because radio offers a mix of
content, much of which is focused on things that are important to their everyday lives.
13. In the most severe circumstances, radio broadcasters forego all entertainment and
music functions to provide continuous service to their listeners in the form of emergency journalism. Hurricanes, wildfires, earthquakes, mass shootings, train derailments, and other crisis moments create a necessity for coverage that local communities rely upon, and does not involve music. During these types of emergencies, all normal music programming stops and on- air personalities will serve as local journalists, passing along updates until the emergency is resolved. For example, during the California wildfires in Sonoma and Napa in 2017, music and non-music stations alike provided constant coverage, responding to calls and serving as a lifeline to residents and changing their programming to provide more information and remove any insensitive songs. As one local radio operations manager put it: “I don’t think many electronic media, if any, could do what local radio did. . . . In the first days, most people had no cell phone service, no Internet connectivity and no cable TV. [Radio] was the only medium people had access to.” NAB Ex. 60 (Ben Fong-Torres, How Radio Responded to Wine Country Fires, S.F.
Chronicle, Nov. 22, 2017). Following the aftermath of the wildfires, Sonoma and Napa residents thanked fire fighters, emergency personnel, police officers, and local radio. Id.
14. Local radio also served as a sounding board for community members during the
Route 91 Harvest Country Music Festival mass shooting in Las Vegas. “I just want to say thank you so much you guys,” one caller said. “You’ve been there for us through Sept. 11, [Hurricane]
Katrina, [Hurricane] Harvey and now this. You guys are our counselors.” NAB Ex. 61 (Radio
Continues As Sounding Board After Vegas Tragedy, Inside Radio, Oct. 5, 2017). As a
5 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) broadcaster, the worst thing that could happen in these dark moments is for a listener to tune into
our signal and hear music when our community is in a state of emergency. NAB’s constituents provide this type of service over-the-air and on the simulcast stream because it is the right thing
to do, and it complements radio’s overarching mission to inform and serve local communities.2
This is why radio remains one of the most trusted and irreplaceable forms of media for local
audiences.
15. Broadcasters’ commitment to serving the public interest and local communities is
also reflected in stations’ involvement in local charities. Broadcasters provide not only monetary
support by funding local events, but they also provide a public voice for organizations. As a
trusted source, radio can help local charities in their communities better leverage their
fundraising resources, public awareness, and educational efforts. NAB broadcasters host
radiothons and other events or fundraisers for local charities and causes. They support their local
food banks and homeless shelters with fundraising efforts and public service announcements and
host food and clothing drives throughout the year. NAB radio stations also heavily support the
following causes: St. Jude, Children’s Miracle Networks Hospitals, Habitat for Humanity, Toys
for Tots, and the American Red Cross. While I have no doubt that music-centric services engage
with national charities, radio’s on-the-ground presence in every village, town, county, and city in
this nation means that the radio industry’s collective charitable efforts are focused to a much
greater degree on the particular needs of its local communities.
16. Radio’s ability to serve the public interest is fundamentally premised on a
station’s economic viability. Absent that, radio stations cannot inform and serve whether over-
2 Broadcast Public Service, Stories About Disaster Relief and Recovery, http://www.broadcastpublicservice.org/storiesByKeyword.asp?id=1004 (last visited Sept. 23, 2019). 6 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) the-air or via the simulcast stream. It is expensive to serve the public interest. From staffing, producing, and airing local news and public affairs programming, radio stations expend cash and
resources to satisfy their public service requirements. The value of public interest programming
can be measured by the dedicated airtime provided at no charge to promote local charities and
fundraisers. An average local radio station runs dozens public service announcements (“PSAs”)
every week. This is the equivalent of hundreds of millions of dollars per year in donated airtime per radio station, per year. The vast majority of PSAs aired or streamed by the average radio
station are about local issues, fundraisers, or programs.
17. Another way to quantify radio’s public service contribution is with station
expenditures on non-music programming and on-air personalities. Over the last few years, there
has been a resurgence among broadcasters doubling-down on high-quality local personalities.
Major broadcast companies are producing their own talk-dominated morning shows for music-
formatted stations that can compete with national syndicated programming while maintaining the
local edge that makes radio different. These shows are creating significant value for the stations
and in return the local talent are being paid in spades.
18. It is my experience that the majority of broadcasters feel and expect that the simulcast streams of their radio stations must include the same local and community-focused programming. The majority of NAB’s member stations have deployed the digital simulcast to better reach listeners, providing an additional platform for community discourse and interaction.
During my time at Commonwealth Broadcasting, we provided streaming as a platform for the same audience to hear the same content that is broadcast over-the-air from our terrestrial station.
This is in sharp contrast to other music services like Pandora that stream to reach new listeners, regardless of local market. At Commonwealth Broadcasting, we wanted to make it possible for
7 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) the same over-the-air listeners to hear our stations over the Internet if they wanted to. Although
the main way we reached our listeners was with our over‐the‐air broadcasts, streaming offered a
secondary way to reach them and extend the same local, public service benefits and programming. Indeed, for all but the largest and most famous radio stations, the vast majority of
simulcast listening happens within the station’s market.
19. In short, radio—regardless of method of transmission—exists in a separate and distinct market from digital music services like Pandora and Spotify. Radio’s business model is local media for local listeners. The true value of broadcast radio comes from the localism and connection generated by public interest and community content for in-market listeners. This principle is the same whether that programming is broadcast on the public airwaves or by way of the matching simulcast stream. In fact, the majority of NAB broadcasters view terrestrial and simulcast components as a bundled product and often do not charge additional dollars to advertisers for streaming inventory. Instead, broadcasters simply provide that simulcast exposure as an extension of their over-the-air product. As a package, the terrestrial and simulcast channels create an even stronger community bond. For these reasons, radio stations do not see digital music services as competitors any more than they see broadcast and cable television, newspapers and magazines, and social media outlets as competitors. Radio simply exists in a distinct market.
LOCAL RADIO IS A PROMOTIONAL VEHICLE FOR ARTISTS AND LABELS
20. For decades, local radio has been, and continues to be, an extraordinary promotional vehicle for artists and record labels. Radio is a unique promoter and developer of music because it is free and it offers a direct connection to millions of listeners every day, through a local media outlet they trust. The recording industry invests a significant amount of
8 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) money and time promoting songs in order to garner radio airplay and, in return, their artists receive widespread exposure which helps drive record sales.
21. Radio personalities play a particularly vital role in promoting songs and artists.
Aside from hosting contests for free concert tickets, conducting on-air interviews with artists releasing a new single or album, or hyping new songs or newly-discovered artists, on-air personalities are the ones who build the emotional bond between listeners and a particular song or artist. Listeners trust their local air-personalities and give credence to their song and artist recommendations. While other music services may expose a new song to listeners, on-air radio personalities are the ones who turn that song into a hit .
22. Record labels and artists recognize the promotional value of this free exposure and advertising. Based on my experience, stations regularly receive calls, emails, texts, and visits from promoters trying to get a song on the radio or increasing the rate of spins or plays.
Radio program directors I know are often invited by artists to hear “showcase concerts,” during which artists typically play new music. Record labels would not expend this amount of effort if they did not believe radio airplay would beneficially impact record sales.
23. Relatedly, record labels and artists acknowledge that the promotional value they receive from free airplay on local radio stations drives consumers to purchase music. At nearly every awards show, artists praise radio for jumpstarting their careers and for getting listeners to buy their albums. Radio stations all across the country receive gold and platinum records from record labels to commemorate their contributions to record sales. Radio stations have been a driving force behind record sales in this country for generations and show no signs of slowing down.
9 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) 24. Over the course of my career, I have not encountered any evidence to suggest that record labels value simulcast streaming less than over-the-air broadcasting in terms of its promotional value. For example, no artist or recording label has asked my program directors to play their song on the radio but not on the simulcast stream. In fact, based on my interactions with record labels and artists, they simply treat streaming as an extension of the over-the-air broadcast. As a broadcaster, I share this view because the content on radio stations’ streams generally is the same as that on the over-the-air broadcast, which means that radio’s promotional value extends to the stream and inures to the benefit of record labels and artists.
HIGHER ROYALTY RATES WILL DRIVE DOWN THE AMOUNT AND QUALITY OF LOCAL PROGRAMMING
25. In order for broadcasters to maintain their high levels of local programming and other local-focused services, they must be able to profitably operate their streams. As I discussed above, broadcasters offer streaming services so their listeners can tune in from anywhere they wish within their communities. The costs associated with offering a stream, however, are large and for some broadcasters, too large to justify. Indeed, the largest expense that broadcasters incur in connection with streaming is SoundExchange royalties. Unlike with subscription services, SoundExchange royalties cannot be passed along to the listener. This means that broadcasters must find a way to profitably operate their streams or be forced to make difficult programming and operational choices.
26. Broadcasters have employed several different tactics to try and offset the costs of streaming. For example, broadcasters have attempted to monetize streams by selling pre-roll advertising (video advertisements that play before the content the listener has selected) and by inserting ads into streams. These attempts rarely result in a profit, largely because advertisers are unwilling to pay for the inclusion of their ads on the stream and because inserted ads tend to
10 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) degrade the sound quality of the stream. In fact, when I was at Commonwealth Broadcasting, on a daily basis we only streamed two of our ten music stations, both at a loss.
27. Many local broadcasters are already struggling to operate their streams at the prevailing royalty rate, and any increase will undoubtedly threaten their ability to continue serving the public in the ways they do today. While both record labels and digital services appear to be thriving, local radio, like all other local media, has never fully recovered from the twin effects of the Great Recession and the digital revolution. To be sure, Americans have in one respect benefited from that revolution: they have more content to consume, and more ways to consume it, than ever before. But it has come at a steep cost. A report from the University of
North Carolina last year, found that since 2004 between 1,300 and 1,400 U.S. communities have lost all local newspaper coverage. NAB Ex. 63 (Penelope Muse Abernathy, The Expanding
News Desert , University of North Carolina, 2018, at 9). As that report explained, “the fate of communities and the vitality of local news—whether delivered over the internet, the airwaves or in print—are intrinsically linked.” Id. at 9. Local radio fills a crucial void in these “news deserts.” According to a recent Pew Study, 26% of U.S. adults “often” get their local news from local radio stations. NAB Ex. 62 (Elisa Shearer, Pew Research Center, Social Media Outpaces
Print Newspapers in the U.S. as a News Source , Dec. 10, 2018). But local radio is being buffeted by the same forces that have eliminated local newspapers in so many of our communities—ad revenues for radio have been flat for the past decade, making it difficult for broadcasters to maintain a robust local presence. The way out of this dilemma is for radio to be given a fair opportunity to compete in the digital space.
28. Events like the NAB Show demonstrate to me that radio broadcasters unquestionably have the technical know-how and the creativity to take advantage of new digital
11 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25) platforms, and to continue to serve their local communities in new ways. For instance, our
industry is eager to take advantage of the latest revolution in audio entertainment—smart
speakers. But the simple fact is that this will not happen unless the Copyright Royalty Board
recognizes that digital transmissions of broadcast radio signals are a distinct product from the
streams provided by digital streaming companies, and sets a differentially lower royalty rate.
CONCLUSION
29. I believe that the future of the radio industry will continue to be based on localism and great, relatable on-air personalities. Indeed, these are the defining features that distinguish radio and their matching streams from other music services. The cost of maintaining radio stations’ current levels of local programming and other local-focused services is high and exacerbated by the prevailing royalty rate. I support the NAB’s rate proposal because it is a necessary measure towards ensuring that radio stations can continue to effectively serve their local communities in the ways they do today.
12 NAB Written Direct Statement Dkt. No. 19-CRB-0005-WR (2021-25)
TAB G Before the UNITED STATES COPYRIGHT ROYALTY BOARD LIBRARY OF CONGRESS Washington, D.C.
In the Matter of:
Determination of Rates and Terms for Docket No. 19-CRB-0005-WR Digital Performance of Sound Recordings (2021-2025) and Making of Ephemeral Copies to Facilitate those Performances (Web V)
WRITTEN DIRECT TESTIMONY OF ANDREW GILLE (On behalf of Midwest Communications, Inc., a National Association of Broadcasters Member Company)
1. My name is Andrew Gille. I am the Vice President of Digital Operations at
Midwest Communications and WRIG, Inc. (“Midwest”). Midwest is a mid-sized radio group that operates 82 AM and FM news and music radio stations in small to mid-sized markets across
8 states. I have 15 years of experience working in the radio industry, with the last 7 years at
Midwest. In my role, I have overall responsibility for all digital aspects of Midwest’s radio stations, including mobile apps, streaming, websites, and digital marketing sales. My statement below is offered in support of the National Association of Broadcasters (“NAB”) in the above- captioned proceeding. My statement is based on my experience in the radio industry, my personal knowledge of Midwest’s digital operations and finances, and my professional relationships with other Midwest employees.
PROFESSIONAL BACKGROUND AND QUALIFICATIONS
2. I began my career in the radio industry in November 1999 as the Webmaster of
Midwest’s Wausau, Wisconsin radio stations. In this role, I designed, created, and maintained
1 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) content for radio station local websites. I also worked with Midwest’s sales department to attempt to generate website revenue. At that time, Midwest only had 15 stations. Within about 6 months, I was promoted to Director of Websites for Midwest. As the Director, I managed the website designers and developers for the company. One of the final things I did before leaving
Midwest in 2007 was sign a contract for streaming with a company called Liquid Compass.
After this contract was signed, Midwest began streaming in 2008.
3. After leaving Midwest in 2007, I worked in a different industry in a dual marketing/aviation role for 5 years. During this period of time, Midwest acquired several more radio stations and had nearly all stations streaming when I returned to the company in November
2012 as the Vice President of Digital Operations. Upon my return to Midwest, my role was more focused on management and sales, whereas in my prior role at Midwest, I was focused on design and content creation. I was hired as Vice President of Digital Operations to make the digital department profitable, as it was losing a fair amount of money. It became clear to me that streaming on the radio stations was never going to be profitable endeavor, so I shifted the stations’ focus to non-radio digital marketing, such as programmatic display advertising on non- radio websites and Search Engine Marketing. This shift resulted in increased revenue and profits each year since 2012 for non-streaming content.
4. I am also involved with local radio trade associations. As a representative of
Midwest, I have been a member of the Wisconsin Broadcasters Association (“WBA”) for the last
3 years. I attend WBA conferences bi-annually to meet with state legislators to discuss broadcast-related issues. I have been nominated for a WBA board position pending a vote in the fall.
2 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) BACKGROUND OF MIDWEST COMMUNICATIONS, INC.
5. Midwest is a family-owned media company that owns and operates 82 AM and
FM radio stations in small to mid-sized markets in Wisconsin, Michigan, Minnesota, North
Dakota, South Dakota, Indiana, Illinois, and Tennessee. Midwest was founded in 1958 by the
D.E. Wright family in Wausau, Wisconsin and today employs over 700 people. In 2016, CEO
Duke Wright received the Conclave Learning Conference’s Rockwell Award, which honors individuals who have contributed to the industry as a leader and to the public radio serves.
Midwest prides itself on providing news, entertainment, and music to our local communities.
6. Through a series of acquisitions spanning decades, the Wright family has grown
Midwest into a prominent mid-sized radio group. Operating in 8 different states, across small to medium markets, Midwest has grown a network of stations founded on big market information and entertainment with small-town familiarity.
7. Midwest, like many terrestrial radio groups, offers a simulcast stream of its over- the-air broadcast. We began streaming in 2008 and currently stream 64 stations over the
Internet. These simulcasts stream exactly what is played over Midwest’s terrestrial stations and can be accessed through the radio stations’ websites, on a mobile app in some cases, on the
Amazon Echo platform with Alexa Skills, and through the TuneIn app. The streams for our
Peoria, Illinois stations are also accessible through iHeartRadio because of a deal between the previous owner Alpha Media and iHeartMedia. Our streaming provider is Triton Digital; we have used Triton Digital to provide streaming services since approximately 2008. Midwest streams in order to provide another avenue for our audience to hear our radio programming; it quite literally is a digital “add on” to the over-the-air terrestrial product. But our primary business has been, and for the foreseeable future will be, terrestrial radio broadcasting.
3 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) LOCAL RADIO IS A FUNDAMENTAL PART OF LOCAL COMMUNITIES
8. Midwest has expanded from a single radio station in Wausau, Wisconsin in 1958 to 82 stations today largely through a combination of our commitment to broadcasting local news and events, as well as our talented on-air personalities.
9. Midwest’s primary mission is not to be a music service. Our main goal, and our essential business model, is to give the audience in the communities we serve a particular combination of content that they cannot get anywhere else, including news, talk, and entertainment. Music plays a secondary role in our business model, and we don’t see ourselves as directly competing with music-centric companies like Pandora.
10. One other important distinguishing feature of our business is that our stations play a vital role in informing local communities about public affairs. Although many people do not think of radio stations as members of the free press, the fact is that Midwest invests significantly in local journalism. We hire local journalists to cover local events and report on local government actions in every market we serve, and feature that reporting on all of our stations, including our music stations. This is expensive—but Midwest takes its public interest obligations seriously. It is not just what the law requires, it is what differentiates us from other forms of information and entertainment in the marketplace.
11. For example, our WSAU station in Wausau, a news/talk formatted station, has a
“Mayor’s Monday” during which a local mayor will come in to speak about issues regarding his or her community. During the most recent “Mayor’s Monday” I listened to, the mayor from
Merrill, Wisconsin—a small town north of Wausau—discussed local residents’ petitions to recall council members due to a property tax hike error made by the city’s finance director. Although
4 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) the full interview is available online, these segments are also edited and broadcast on-air including on our music formatted stations.
12. Radio, and especially simulcast, provides information and assistance in a way that other non-interactive streaming services cannot. Midwest’s listeners depend on our stations to provide critical weather information, particularly during natural disasters. In fact, my home in
Kronenwetter, Wisconsin was recently affected by a tornado and when I went into my basement to seek shelter, I realized that I did not have an antenna for my tuner or my TV. Fortunately, I was able to access WIFC-FM’s simulcast which provided updates on the tornado. Absent the simulcast stream, I would have been completely in the dark during this emergency. I am not alone in relying on simulcast as the go-to source for local news, weather, and information when tragedy strikes. Again, having the “boots on the ground” to provide updates during emergencies requires a significant investment in resources, but it is what our listeners want and need in those times.
13. In addition to covering local news and events, Midwest’s stations participate in fundraising for local charities and market local non-profits’ events for free. During the annual
“Midwest Communications Radiothon for Kids,” our station, KTWB-FM in Sioux Falls, South
Dakota, broadcasts live over the course of two days to raise funds to help thousands of local children and families who are treated at Sanford Children’s Hospital in Sioux Falls. We were proud to raise nearly $300,000 last year for the hospital. Dave Kallaway, host on our station
WIFC-FM in Wausau, created the event “Disco Cures Cancer,” nearly 20 years ago which WIFC hosts; this event raises money for cancer research, education, and prevention in the local community.
5 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 14. In addition, Midwest’s on-air personalities (“air staff”) are one of our most important assets because they set our stations apart from local competitors and drive advertising revenue. We have familiar yet distinct morning, mid-day and evening on-air personalities that
Midwest audiences rely on for local news and entertainment. On-air talent is a top programming decision, especially during morning drive-time. Good talent results in loyal listenership, which leads to heightened ratings and increased ad sales.
15. Members of Midwest’s air staff form genuine connections with their listeners and build loyal followings among local listeners over the course of their careers (and, in some cases, over the course of decades on the air). For example, Dave Kallaway on WIFC-FM has been doing the morning show there since 1996; the morning show host in WIXX-FM in Green Bay has been hosting Northeast Wisconsin’s most listened to morning show since 1991. I have worked with several members of our air staff who have been on air at Midwest before I started in
1999 or who began their careers shortly thereafter and continue to work at Midwest today.
16. It is my understanding, based on my experience in the radio industry and conversations with radio professionals, that the cost of on-air talent represents a large percentage of the expense for stations with on-air personalities. On-air talent is vital to non-music programming on both music and non-music stations and remains a significant cost for stations.
These costs, however, are hardly accounted for in terms of how radio broadcaster and simulcasters differ from other non-interactive services in terms of royalty payments.
RECORD LABELS REGULARLY THANK MIDWEST FOR SUPPORTING THEIR ARTISTS
17. Midwest is proud of the partnerships it has forged with record labels and recording artists. As part of this partnership, we provide significant promotional value over-the- air and on simulcast to artists. Midwest’s stations regularly receive emails from promoters and 6 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) music labels thanking them for their support and for playing a critical role in moving their artists’ songs up the charts. NAB Exs. 64 REDACTED
65 REDACTED
; 66 REDACTED
; 67 REDACTED
].
18. Midwest’s brand managers and music directors are contacted on a weekly, and sometimes daily basis, by record label representatives requesting airplay for their artists. The requests make no distinction between radio and simulcast, and according to Midwest music directors, the representatives do not differentiate them. From the labels’ perspective, all airplay is good airplay, and they constantly seek it out from our stations, even for popular artists. See
NAB Ex. 68 REDACTED
19. Our stations also have dozens of guitars and plaques gifted to them by labels in recognition of their role in the labels’ success and sales.
7 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) Whether requesting airplay or thanking Midwest’s music directors for radio exposure, our company is courted in various ways by record labels representatives. These representatives
8 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) themselves will admit that, given the expressed gratitude and desire to get air-time, the promotional value of radio is undeniable and valuable.
20. I’ve never heard of a record label promotional representative treating terrestrial and simulcast differently. No one has ever come to us and said, “We’d love it if you would play our song on the radio but please keep it off the simulcast.” That tells me that the labels do not distinguish between radio and simulcast in terms of promotional value—they see them as one and the same.
MIDWEST HAS ALWAYS LOST MONEY ON STREAMING, AND HIGHER RATES WOULD THREATEN OUR ABILITY TO CONTINUE TO SERVE OUR COMMUNITIES
21. Much has been written about the difficult economic circumstances faced by local media of all kinds, especially in small to mid-sized markets. This is just as true in radio. Radio revenues have never fully recovered from the Great Recession, and we have had to make some difficult choices to trim back on local staff and reduce coverage of local news and events.
Midwest is eager to expand our local presence, but the simple fact is that we do not have the breathing room in our finances to fund such an effort.
22. We engage in streaming to give listeners a way to access our station content in places they may not have ready access to a radio. It is, in that respect, an add-on to our local radio product. Although we recognize the benefits to our communities of giving them easier access to our content online, streaming has not been a profitable activity for Midwest, despite our best efforts.
23. A major contributing factor to the unprofitability of our streaming activity is
SoundExchange fees. Last year we paid SoundExchange approximately [REDACTED] in royalty fees for our simulcast. With that money we could expand our local coverage and provide other
9 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) valuable non-music content our listeners tune in for. If we were not paying nearly [REDACTED
] dollars a year in SoundExchange royalties, Midwest could invest more effectively in local programming and events in our communities, such as covering local sporting events.
Raising royalty rates will likely force Midwest into a difficult choice—either trim back on staff, or stop streaming on all but our largest and most profitable stations. Midwest cannot simply raise advertising prices to return our balance sheets to radio’s glory days; the media environment is more competitive than ever, and as a result, we have had to adapt and find different ways to make money.
24. We have tried many different approaches to better monetize streaming. Like some broadcasters, Midwest began substituting ads on the stream in 2007. But, as many mid- to small-sized broadcasters like us learned, it was far from a profitable strategy. Midwest made the decision to stop substituting in-market ads on most of our streams in 2015. We did so for two primary reasons. First, revenue from ad substitution turned out to be minimal because we could not sell all of the time available on the stream and because the ad insertion technology degraded the listener’s experience. Inserted ads would often automatically insert themselves in the middle of songs or cut off local DJs during a segment and would be significantly louder than the broadcast, even after equalization attempts. It became a practical nightmare as varying song lengths and inserted ads would also often leave dead air or require us to cut a song short.
Advertisers and listeners simply were not pleased with the unpredictable nature of ad insertion and the associated costs continually exceeded revenues.
25. Second, ad substitution negatively impacted our stations’ Nielsen ratings, and thereby our ability to pitch the simulcast to advertisers. For one thing, Nielsen’s ratings model is structured in a way that does not credit or properly track streaming listeners. Put differently,
10 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) radio stations that choose to engage in ad substitution give up what we call “Total Line
Reporting”: a method by which Nielsen combines the in-market simulcast listenership with the station’s over-the-air ratings. Midwest has obtained more local market benefit and growth by utilizing Total Line Reporting to give us the audience lift we need to be marketable to local advertisers.
26. Aside from the reasons listed above, Midwest also took into consideration the technical costs of in-market ad substitution. A simulcast stream that has ad substitution requires attention, and with attention come costs. In my experience, in order to keep the substituted ad clean and smooth, broadcasters have to invest significant money to integrate their broadcasting systems with the streaming or ad substitution provider’s systems.
27. Back in 2007, Midwest thought ad substitution would be a catalyst to radio stations’ digital growth, but the traffic to the stream was never significant enough to generate advertiser interest and the quality of the stream dissatisfied our listeners. Given the lack of revenue generation and continued advertiser disinterest, it made no business sense to continue ad substitution. Instead, we reverted back to maximizing the Nielsen ratings to draw advertiser interest, keeping digital operations manageable, and ensuring quality user experience by removing ad insertion.
CONCLUSION
28. Even at the costs we currently incur, audience demand and expectations obligate us to offer a simulcast stream as an extension of the terrestrial radio offering to remain relevant and trusted in the communities we serve. Making us pay the same SoundExchange royalties as the major streaming companies, for a business model that neither displaces music sales nor competes with those companies, will discriminate against radio stations across the country, and
11 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) will do nothing more than add to the challenges faced by local media. For that reason, I support the NAB’s rate proposal.
12 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25)
TAB H Before the UNITED STATES COPYRIGHT ROYALTY BOARD LIBRARY OF CONGRESS Washington, D.C.
In the Matter of:
Determination of Rates and Terms for Docket No. 19-CRB-0005-WR Digital Performance of Sound Recordings (2021-2025) and Making of Ephemeral Copies to Facilitate those Performances (Web V)
WRITTEN DIRECT TESTIMONY OF LEONARD WHEELER (On Behalf of Mel Wheeler, Inc., a National Association of Broadcasters Member Company)
1. My name is Leonard Wheeler. I am the President and Owner of Mel Wheeler, Inc.
(“Wheeler”). My statement below is offered in support of the National Association of
Broadcasters’ (“NAB”) affirmative written direct case. It is based on my extensive radio
industry experience, my personal knowledge of Wheeler’s operations and finances, and my professional relationships and discussions with Wheeler employees.
BACKGROUND AND QUALIFICATIONS
2. I have been working in the radio industry for more than 40 years. My
broadcasting career began in 1976 in San Diego, California, where I worked in radio sales at
KITT-FM while attending college. Following college, I joined my two brothers and parents to
develop Mel Wheeler, Inc., named after my late father. Wheeler started with one small station,
KDNT-AM in Denton Texas, and now owns eight (8) radio stations in the Roanoke/Lynchburg,
Virginia market: WXLK-FM, WSLC-FM, WSLQ-FM, WFIR-AM, WLNI-FM, WVBE-FM /
1 NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) WVBB-FM (The ViBE), WPLY-AM and WXLK-HD2 (The Rock Channel). Despite expansion
over the years, Wheeler remains a family-owned and operated radio group and is considered a
small broadcaster in today’s market.
3. Since 1983, I have served as a General Manager of one or more of our Wheeler properties. I have been responsible for the day-to-day operations of the company, financial
assessments and projections, programming decisions, and promoting and marketing the Wheeler
radio brands. I also oversee national advertising in conjunction with our representation firm, and manage the various department heads.
4. For the last 23 years, I have also served as President of Wheeler. As President, I am in charge of overall budget and expense reporting. I also develop external relationships with financial institutions, advertisers, government representatives, and lobbyists.
5. During my tenure as Wheeler’s President, I have held leadership positions in the radio broadcasting industry at both the state and national level. At the state level, I have been a member of the Virginia Association of Broadcasters (“VAB”) for 27 years. In 2018, I was appointed the President of the VAB. In this role, I lead the VAB board in its local, state, and national legislative efforts on behalf of both radio and television broadcasters. For over a decade, I have advocated for the value and benefit radio contributes to the record industry and artists and against a sound recording performance royalty for terrestrial radio, among other issues facing the broadcast industry.
6. At the national level, I was appointed to the NAB Radio Board of Directors in
January 2019. I represent District Four, which includes Virginia, the District of Columbia,
Delaware, and Maryland. In this role, I act as a liaison between NAB and broadcasters in my
2
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) region. I work to ensure NAB understands the concerns and needs of broadcasters, and to keep
local and regional broadcasters apprised of relevant developments at the national level.
WHEELER’S COMMITMENT TO COMMUNITY DISTINGUISHES IT FROM OTHER WEBCASTERS
7. Radio simulcasts are distinct from wall-to-wall music services like Pandora and
Google Play. Our business model is centered on the principle that terrestrial radio and their
corresponding Internet simulcasts serve the communities in which they air through local events,
engagement, and programming.
8. Radio broadcasters like Wheeler serve the public in a manner unlike any other
commercial webcaster in this proceeding. The Federal Communications Commission (“FCC”)
requires radio broadcasters to “afford reasonable opportunity for the discussion of conflicting
views of public importance.” 47 U.S.C. § 315(a) (1988) (Fairness Doctrine). As part of this civic
duty, radio broadcasters air significant local, non-music programming. We must maintain public
inspection files detailing the programming they offer on a quarterly basis. This is a distinct
aspect of our business that sets us apart from other webcasters. Our commitment to community
is the primary driver of our broadcast business model, but it remains an expensive reality.
9. Wheeler’s commitment to community is all the more important in today’s media landscape. Local news is dying, and has been for some time. It has progressively been replaced by the expansion of cable news channels like Fox and CNN, a proliferation of national news entertainment television programming like the Daily Show, and even social media, in the form of
Facebook and Twitter. These sources do little to cover the events of our local communities— events that are more important to everyday peoples’ lives than the events in Washington, D.C.
Local radio covers city council and school board meetings, municipal and county elections, and
3
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) the stories of local men and women. Terrestrial radio and Internet simulcast are some of the last
remaining sources for trustworthy local news, which makes Wheeler’s mission even more
crucial.
10. Local Programming. Our news station, WFIR, employs five full-time and four- part time news staffers and produces over 35 hours a week of local programming. WFIR, is the
go-to source for local news in Roanoke, despite operating at a loss for the past 15 years. Further,
WFIR also produces and provides our music stations with local news programming for their broadcasts and Internet simulcasts. We continue to air WFIR and generate new content on a
daily basis because it’s crucial to our community. If WFIR no longer existed, there would not be
a single station in Roanoke with a dedicated local news-gathering operation.
11. In my decades of radio experience, I can say that it’s our journalists and on-air personalities that differentiate radio and Internet simulcast from other music mediums and create
the emotional connection and service to our communities. Listeners who want to hear Taylor
Swift’s latest release can turn to Pandora, Spotify, YouTube and countless others and
instantaneously hear the song. But radio and Internet simulcast listeners want more than just
music. It’s the “more” that sets radio and Internet simulcast apart. Trustworthy reporters ensure
that the public can engage in democratic self-government based on reliable information.
Relatable on-air personalities foster comfort and serve as trusting companions to their listeners.
Wheeler currently has five morning drive-time shows that feature beloved, local on-air personalities that are household names. NAB Ex. 69 (Wheeler Morning Show Hosts).
12. For example, Dick Daniels has hosted the morning show on WSLQ-FM for 30
years; Brett Sharp has been Roanoke’s morning confidant for almost 20 years; and Zack Jackson
has been entertaining audiences for 17 years on the Mornin’ Thang. These hosts keep audiences 4
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) engaged with valuable news, humor and other non-music content during drive-time. From local
and trending stories to contests and prizes and interviews with community leaders, the morning
hosts carry the day in terms of keeping listeners with Wheeler. We drive listenership, and
ultimately ratings, through audience engagement with these familiar voices. Without them, and
their non-music content, our family-owned broadcast business would suffer.
13. Our efforts to give local communities an engaging and balanced mix of news,
entertainment, and music are what distinguish our radio and Internet simulcast product from
large scale digital music services. Fulfilling our public interest responsibilities and developing
local on-air personalities, however, comes at a steep cost. In fact, last year Wheeler spent over
REDACTED in non-music programming expenses alone.
14. It’s an undeniable truth that radio and Internet simulcast are the lifeblood of local
information and news. This has been the case since before the advent of television, when
families gathered around the radio to find out what was going on both in their communities and
the world. Radio was then and remains today an engine of American democracy. It is
nonsensical to charge local radio the same rates to stream music on their simulcasts as those
charged to pure music services. Music is just one aspect of what local radio does.
15. Simply put, significant webcasting fees would be, and already are a significant burden—and with it, local news and content is at risk—if it is forced to pay rates equivalent to
those paid by a wall-to-wall music service. This is true even if the topline webcasting rate goes
down.
16. Community Events and Charities. Wheeler provides social and monetary support to Roanoke and Lynchburg by promoting various fundraisers, charities and community events via its terrestrial broadcasts and Internet simulcasts. We have made significant investments in 5
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) hosting annual local events, together with community partners, throughout our local
communities.
17. One prominent example is Wheeler’s support of a long-standing annual “After
Prom” event, a multi-station supported event we sponsor that gives area students an alternative to
unsafe party situations. The goal is to incentivize students, through continued entertainment, to
remain at their after proms and to not to drink and drive on prom night. We dedicate significant
resources, on-air talent, and air-time to the event as a service to the community. Since 1989, one
hundred percent of the participating schools had zero drug or alcohol-related deaths on prom
night.
18. Other local events include WSLC-FM’s Cure Kids Cancer Radiothon, and
WSLQ’s Dick & Dave’s Miracle Day Radiothon for Children, and WVBE-FM’s Honor Fest
softball game for veterans. These local radio station events support important causes and groups,
raising money year after year for the group in question. For example, WSLQ’s Dick & Dave’s
Miracle Day has raised over $2 million for our local Children’s Miracle Hospital Networks
(“CMN”). To ensure community engagement, numerous promotional announcements are run
leading up to the event. During the event, Dick and Dave air a 12-hour marathon and dedicate
every break to raising funds for CMN. They also interview local families on-site and air their
stories on WSLQ’s airwaves. Similarly, WSLC-FM’s Cure Kids Cancer Radiothon has raised
nearly $2 million for Children’s Miracle Network and the Carilion Clinic Children’s Hospital
that treats local children diagnosed with cancer. Just this year, Wheeler stations have spent
approximately 90 hours of total on-air time discussing and promoting these causes.
19. Even in the midst of the 2009 recession, Wheeler’s commitment to serving the public interest remained strong. During the height of the recession, we created a full-time 6
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) position for a Director of Community Development—someone who would serve as the liaison between Wheeler’s radio stations and the local non-profits and charities in Roanoke and
Lynchburg. Unlike other webcasters, local radio needs personnel dedicated to community
engagement and public service. The costs associated with informing and serving our
communities remain a unique line-item for digital simulcast services.
20. No-Charge PSAs. In addition to funding, hosting and promoting our own local
events, Wheeler stations contribute to 150 different local charities and causes, primarily by promoting them over the air and on the Internet simulcasts. The laundry list of charities we
contribute to includes: the Susan G. Komen Race for the Cure (fundraiser for breast cancer
awareness and research); Help Save the Next Girl Foundation (non-profit to prevent abduction
and harm of vulnerable young women); Feeding America Southwest Virginia Peanut Butter
Drive (food drive for local families in need); and ARCH Volunteer Recruitment (encouraging
listeners to volunteer their time and donate items to those in need).
21. Wheeler stations run thousands of free public service announcements (“PSAs”) on behalf of these charities. The commitment to community service is beyond a public interest
requirement; it is how local radio operates. Free exposure for our area non-profits is a distinct part of our radio business model and a method for promoting important causes, fundraisers, and
charity events in Roanoke and Lynchburg and elevating our communities. Without these PSAs,
listeners would be disconnected from their local communities. NAB Ex. 70 (Select Public
Service Announcement Reports from WSLQ-FM, WSLC-FM, WLNI-FM, WFIR-FM, and
WXLK-FM).
22. Wheeler is proud to provide a platform for our area’s non-profits and events, but
the costs associated to put on events like these and commitment to thousands of free PSAs 7
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) cannot be ignored. Such costs are both significant and unique to local radio and Internet simulcasts. Local radio stations forego advertising revenue that could otherwise fill the PSA airtime, and our staff spend valuable time scheduling and coordinating the PSAs. The public service that radio and Internet simulcasts provide simply cannot be overlooked when determining the sound recording royalties that such a distinct service like Internet simulcast must pay.
SOUNDEXCHANGE FEES ARE A SIGNIFICANT IMPEDIMENT TO WHEELER’S ABILITY TO SURVIVE A TRANSITION TO DIGITAL STREAMING
23. Wheeler currently simulcasts the feeds of each of its eight stations on our internet streams. But it took us a while to commit to do it. We were reluctant to explore digital streaming because we found simulcasting both financially challenging to jumpstart and difficult to maintain. Fortunately, Wheeler had the choice, and ability, to delay simulcasting because of the ongoing success of our primary terrestrial radio business. Indeed, that fact alone highlights the distinctive nature of simulcasting—the simulcast stream is not our main product, but an addition to our primary product, which is the terrestrial radio broadcast.
24. Primary among the financial impediments to simulcasting that we encountered were the exorbitant SoundExchange royalties that we must pay to simulcast. We simply could not see how we would be able to pay both for the technology necessary to stream, and the added royalties to SoundExchange, and still break even on our investment. Simply put, we couldn’t. It wasn’t until October 2016 that we finally began streaming three of our music format stations,
WSLC-FM, WSLQ-FM and WXLK-FM. At that time, these were our highest rated terrestrial stations, and were therefore in a better position to stomach the increased sound recording royalties.
8
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 25. We further delayed streaming our fourth music station, WVBE-FM, until July of
2018. The extended delay was solely because SoundExchange royalties were a barrier to entry.
Unlike the other music stations, in 2016 and 2017, WVBE-FM did not have the same revenue base and ability to absorb the royalty expenses. In 2017, WVBE-FM had a net operating income
of REDACTED and a net income after Amortization and Depreciation of just [REDACTED ]. Despite
this, we began streaming WVBE-FM in 2018.
26. Wheeler ultimately began streaming to fulfill an anticipated customer expectation and future-proof itself. Most of Wheeler’s listeners today are traditional radio listeners. As the
President and Owner, I feared that, without at least establishing some streaming presence, we would eventually lose listeners as they increasingly sought to listen to content digitally. In essence, Wheeler has no choice but to make our stations available digitally, to guard against the possibility that our traditional radio audience begins to tune-in, not from traditional AM/FM radios, but rather from their desktop computers, cell phones and smart speakers.
27. Even so, our transition to simulcasting has been limited. Wheeler has made a conscious effort not to materially promote the simulcast stream. While the simulcast is available on our websites, we do not go out of our way to encourage listenership or consumption because of the significant royalties that inevitably follow.
28. This was a business decision on my part. As the President and Owner, I’ve communicated to all music stations that we cannot afford to prioritize our promotion of the stream. Any royalties we would owe as a result of increased listenership to our stream far outweigh the potential revenue that we could generate from that streaming listenership if we heavily-promoted our stream. With increased simulcast listenership come increased costs. The
9
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) current sound recording royalty structure uniquely penalizes radio broadcasters because it is too expensive for us to promote and migrate listenership to our own digital product.
29. Absent hefty SoundExchange fees, Wheeler would more aggressively promote its simulcast, just as it does the terrestrial product, to expand listenership and ensure Roanoke and
Lynchburg residents are tuning in regardless of the platform. This is simply not something
Wheeler can afford to do given the current statutory rates for webcasting.
30. Indeed, Wheeler is eager to make the transition to digital streaming, and take advantage of new developments like the current spread of smart speaker systems, but until
SoundExchange royalties properly account for the differences between radio simulcast and music-centric webcasters, smaller broadcasters like Wheeler will continue to be disengaged from promoting listenership on our digital streams.
31. In short, having a foothold in streaming is a matter of necessity for a small broadcaster like Wheeler. Having said that, if our audience were actually to significantly shift to simulcast listening, I have serious doubts that a broadcaster like Wheeler would be able to survive, in large part because of the unaffordability to SoundExchange fees. The failure of a company like Wheeler wouldn’t just affect the people who work here—it would affect entire communities that our stations serve, by accelerating the decline of locally-focused media.
ADVERTISERS RECOGNIZE THAT SIMULCAST IS A DISTINCT PRODUCT
32. Radio and Internet simulcast are undifferentiated in terms of content, yet Wheeler struggles to sell ad space on its simulcasts. Many advertisers are unwilling to pay for simulcast ads separate and apart from their over-the-air media buys, and certainly not at rates that would cover the costs and expenses associated with simulcasting. In my experience, advertisers will ask that the streaming ad be removed from the station’s simulcast altogether. The best case 10
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) scenario is when the advertiser views the streaming ad as a by-product or value-add to the over-
the-air spots they purchase.
33. Wheeler simulcasts simply cannot attract the same advertisers that, for example, a
Pandora user will see when streaming. Larger national advertisers at times ask Wheeler not to
stream their advertisements because the radio simulcast is not as sophisticated as other forms of
webcasting. For instance, Subway insists that we do not stream their ads. The insertion orders
for our over-the-air ad buys with Subway provide the following disclaimer:
REDACTED
NAB Ex. 71 (Subway Insertion Order from WXLK-FM, Dec. 30, 2018).
34. Based on my conversation with one of Subway’s ad buyers, I know that, while
Subway has a notable digital audio advertising budget, it prefers to save that budget for
webcasters who, unlike Internet simulcast, can cater to their more specific needs. Subway and
other national advertisers can require that all digital ad buys be geo-targeted, or geo-fenced, to
the station’s designated market area (“DMA”). In other words, they focus their ad dollars on
digital platforms that have the ability to create virtual fences around a defined area (country,
state, city blocks, zip codes, etc.) for a specific demographic based on search history and other
relevant data. The national advertiser’s primary concern is targeting localities because the
specials that they run in certain areas do not necessarily apply outside the targeted DMA.
11
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 35. Wheeler cannot offer the type of ads that national advertisers like this seek because, as a radio simulcaster, we cannot control the geo-fencing of our digital stream with
exact precision. This distinct feature of radio simulcast is an additional reason it makes it hard
for small broadcasters like Wheeler to draw advertiser interest in the stream. We cannot ensure
accuracy in delivering ads exclusively inside the DMA for potential national advertising clients.
Coupled with advertisers’ skepticism of how to track ad impressions on the stream, small broadcasters are restricted—by virtue of our systems and business models—from pitching
certain advertisers. For this reason, Wheeler’s sales team, in particular, does not endeavor to sell
streaming ads separately, but rather, does its best to bundle them into our over-the-air ad buys.
PROMOTIONAL VALUE PROVIDED BY WHEELER STATIONS
36. No one better understands the distinct promotional opportunities that radio provides than the record labels and artists themselves. Our music stations, WSLC-FM, WSLQ-
FM, WXLK-FM, and WVBE-FM are platforms for artists to break into the industry and, later, increase their exposure. The promotional value provided by radio is priceless. For example, record labels contact Wheeler’s prominent country music station, WSLC-FM, approximately 200 times a week seeking radio airplay for their artists. Based on my experience, as well as frequent conversations with WSLC-FM’s music and program directors, in one week WSLC-FM receives:
About 150 emails from record labels and promoters asking for their artists’ songs to be added to the WSLC-FM playlist;
20 calls weekly, lasting at least 15 minutes each, from record label representatives pitching new songs and releases; and
Up to 40 unique text messages from up to 15 different record companies following up on airplay requests.
12
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) 37. In one month, the WSLC program director can expect to hear from 20 different
record label representatives, who pitch record sales information, streaming data, and other
statistics in an effort to have the song added to WSLC-FM’s playlists. This is a testament to the
value and exposure both radio provides for recording artists.
38. Record labels do not distinguish between terrestrial radio and simulcast streams in
these communications. No record label seeks to only place a song on terrestrial radio but
exclude it from Internet simulcast. In Wheeler’s experience, record representatives have never
dismissed the value of Internet simulcast in addition to the terrestrial airplay. The two are part in parcel and the more exposure the labels’ music can receive the better. That suggests to me that
labels see “radio”—terrestrial and simulcast together—as a single outlet for their music.
39. Wheeler stations produce original introductions for new songs and run 30-second promotional announcements to help listeners become familiar with new music from our label partners. By doing this, our stations create fan bases for the artists and promote the consumption
of music.
40. [ REDACTED
] NAB Ex. 72 [REDACTED REDACTED
] NAB Ex. 73 [REDACTEDREDACTED
REDACTED]; see also NAB Ex. 74 REDACTED 13
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25) REDACTED ]; NAB Ex. 75 REDACTED
41. These examples are a dime a dozen, but each demonstrate that terrestrial broadcasts and Internet simulcasts provide a distinct benefit to the recording industry. NAB Ex.
76 (Additional Examples of Record Label Correspondence With Wheeler Music Directors and
Programmers).
42. The outreach from and gratitude expressed by record labels proves that radio,
however a listener receives it, is crucial in exposing and marketing new music for the labels and
the artists they promote.
CONCLUSION
43. Internet simulcasts differ from music-only webcasts in too many ways to be treated identically from a royalty perspective. The fact that local radio airs less music, and therefore pays for fewer performances under a per-play structure, misses an important point— that the value proposition for radio is, in significant part, based on our non-music content. The fact that we air less music than the digital streaming companies is not enough to ameliorate the significant financial impediment that sound recording royalties place upon our business. Nor does it acknowledge the countless hours, dollars and manpower that we invest into serving our communities, all in the name of community, and by government mandate. I understand that
NAB has proposed setting a differential rate for simulcasters, below the rate set for non- simulcast webcasters like pure music streaming services. I fully support the NAB’s proposal, and believe it will help Wheeler and other local media outlets survive and thrive.
14
NAB Written Direct Statement RESTRICTED – Subject to Protective Order Dkt. No. 19-CRB-0005-WR (2021-25)
TAB I Before the COPYRIGHT ROYALTY JUDGES LIBRARY OF CONGRESS Washington, D.C.
) In The Matter Of: ) ) Determination of Royalty Rates ) 14-CRB-0001-WR (2016-2020) for Digital Performance in Sound ) Recordings and Ephemeral ) Recordings (Web IV) ) )
WRITTEN DIRECT TESTIMONY OF STEVEN W. NEWBERRY, COMMONWEALTH BROADCASTING CORP. (On behalf of the National Association of Broadcasters)
1. My name is Steven W. Newberry. I am the President and Chief
Executive Officer of Commonwealth Broadcasting Corporation, a twenty‐station radio broadcast group, with facilities located in several markets in Kentucky. I have held this position since 1996. I offer this statement in support of the National
Association of Broadcasters (“NAB”) in this proceeding. My statement is based on my long experience in the radio business as well as my personal involvement in the operation of Commonwealth and in the negotiations leading to the 2009 agreement under the Webcaster Settlement Act between NAB and SoundExchange.
Summary
2. As an owner and operator of radio stations and as a longtime veteran of the radio industry, I think that it is important to understand that a primary reason that people listen to local radio is the connection that the station develops with its community. This connection is developed in many ways, including through the community‐oriented information a station provides and the interaction of station personnel within the community. We are not just a music service. We take the obligation to broadcast in the public interest very seriously. Our stations, including our music‐formatted stations, therefore, are constantly providing information about community news and events and participating directly in those events, such as by providing free air time for charitable functions and broadcasting local high school games. Our streams serve this same purpose of helping to create a sense of community that is the heart of local radio.
3. As the leader of the NAB team that negotiated the 2009 agreement between the NAB and SoundExchange under the Webcaster Settlement Act, I also want to comment on that agreement. I can say without any doubt that that those negotiations did not result in an agreement between a willing buyer and a willing seller that was unaffected by the rate setting process. Rather, due to the 2007 decision by the Copyright Royalty Board dramatically hiking streaming rates, the lack of any reason for NAB to believe that another litigation would lead to a better result from the same Judges, the economic hardship in the industry resulting from the 2008 recession, and an opposing party that knew it had all the leverage while we had none, the agreement was really a take‐it‐or‐leave‐it result between a monopoly seller that held all of the cards and a buyer that had no viable alternatives. In these circumstances, the entirely one‐sided nature of the agreement, including the rates and the “precedential” designation demanded by SoundExchange, is hardly surprising.
‐ 2 ‐ Professional Background and Commonwealth Broadcasting Corp.
4. I began my career in radio at the age of fourteen, when I took a job with a local station in Glasgow, Kentucky. As a high school sophomore, I worked 24 hours on the air on weekends, and continued to work as an on‐air personality while obtaining my degree from the University of Kentucky.
5. In 1984, during the final semester of my senior year of studies, I purchased my first radio station. I was 21 years old. The station was a full-service Adult
Contemporary formatted station that operated out of a double-wide house trailer in Cave
City, Kentucky. I wore a variety of hats, which helped familiarize me with virtually all of the important aspects of the radio business. In addition to running the station and managing our small staff, I managed the station’s sales, served as on-air talent for the morning show, did sports play-by-play, covered community events, and helped to keep the facilities operating by performing basic technical installations and repairs.
6. In 1996, I joined with the prior Governor of Kentucky, Brereton Jones, and formed Commonwealth Broadcasting. We started acquiring stations in 1997. The group quickly grew to 35 stations. In 2006, I acquired the Governor’s interest in the company.
7. Commonwealth Broadcasting now has offices in seven small cities and towns in rural Kentucky, including Elizabethtown (population about 40,000), Glasgow
(population about 15,000), Princeton, Madisonville, Elizabethtown, Campbellsville, and
Bowling Green. A list of our stations and the communities they serve is attached as
Appendix A.
‐ 3 ‐ 8. I served as Chairman of the Joint Board (radio and television) of NAB, which functions as the Association’s Board of Directors, from June 2009 through June
2011. Immediately before that, I served as Chairman of the Radio Board (the radio members of the Joint Board) from June 2008 through June 2009. I am a member of the board of directors and executive committee of the Radio Advertising Bureau. I have also served as President of the Kentucky Broadcasters Association (1993-1994).
9. I was honored to receive NAB’s National Radio Award, the industry’s highest leadership honor, in 2011. I have also been inducted into the Kentucky
Broadcasters Association’s Hall of Fame, and received their Distinguished Kentuckian
Award in 2009.
10. I am a graduate of the University of Kentucky with a B.A. in
Telecommunications. In 2013, I received the Outstanding Alumnus Award from the
University’s College of Communications and Information.
Radio Serves the Community and Offers a Connection to the Community
11. Local radio provides the community with a mix of information, entertainment, and personality. In fact, we are required by law to serve the public interest. More generally, local radio establishes and provides a connection to the community. People listen because of that connection. Radio, even radio that is described by a music format, is not simply a music service. Music is just part of what we offer; it is not the only thing. There are plenty of places for people to get music, if that is what they want, including their own albums and other types of services that focus entirely on music. Other services may call themselves “radio,” but they do not
‐ 4 ‐ do what broadcasters do every day to serve their communities and they do not have obligations to serve the public interest under the law.
12. Commonwealth serves the communities in which it broadcasts in numerous ways, both on the air and off. We cover community news and events, annual Christmas parades, local school news, local obituaries, little league news, and local scouting stories. We provide free air time for charitable activities, such as
Rotary club auctions and other fund raisers, and participate in events to benefit charities such as the American Cancer Society, the American Red Cross, local food pantries and dozens of other charities. We provide play‐by‐play coverage of local high school sports. We provide critical weather information, particularly during weather emergencies, such as tornado and storm warnings.
13. A good example of what radio can do for a community occurred in
1998, when the major employer in Campbellsville closed its plant that had employed 4,500 people. The town could have been devastated, but instead it banded together and overcame the adversity. I am proud to say that
Commonwealth Broadcasting was able to help. We held a job fair, spent time on the radio talking about job opportunities, kept the community informed about developments, and generally provided a positive message and encouragement. The community was able to recover and convince new employers to come to town, including an Amazon.com distribution center.
14. At Commonwealth, we provide Internet streams of the broadcasts of four of our twelve primary music‐formatted stations (and one secondary HD2 transmission) as another way to try to connect with and serve our communities. We
‐ 5 ‐ want to make it possible for our over‐the‐air listeners to hear our stations over the
Internet, if that is what they want. Although the main way we reach our listeners is
with our over‐the‐air broadcasts, streaming offers a secondary way to reach them.
It is just another platform for the same audience to hear the same content as
provided by our over the air signal. Only a very small percentage of our audience
listens over the Internet.
15. The focus of all of our activities, including our streaming, is on our
local listeners. We do not stream to try to reach listeners outside of our markets.
Even if we reached other listeners, we could not convince our local advertisers that
distant listeners offered them any value.
The 2009 NAB-SoundExchange Agreement Did Not Adopt Reasonable Fees.
16. In late 2008, I was asked by NAB to lead its negotiations with
SoundExchange under the newly passed Webcaster Settlement Act. At the time, I
was Chairman of the NAB Radio Board.
17. Congress passed the Webcaster Settlement Act in the wake of the
Copyright Royalty Judges’ decision setting streaming fees for 2006 through 2010. I
understand that this decision is commonly referred to as “Webcasting II.”
18. NAB believed that the Webcasting II decision was a major setback for
streaming by broadcasters. It would be an understatement to say we were disappointed; more accurately, we were shocked by the outcome.
19. The Webcaster Settlement Act gave us an opportunity to try to make
the outcome of the Webcasting II case less bad. Congress gave us a very limited time
‐ 6 ‐ to work out a deal with SoundExchange. The discussions started at the beginning of
2009. The law gave us a deadline of February 15, 2009 to reach an agreement.
20. We entered the negotiations with no leverage. Unfortunately, we knew that we had no leverage, and SoundExchange knew that we had no leverage.
The rates set by the CRB for 2006 through 2010 necessarily formed the baseline of the discussions. SoundExchange knew that it had the benefit of those rates and was not willing to agree to significant financial changes.
21. SoundExchange claimed that any deal that it did to reduce broadcasters’ rates would cause problems in its dealings with others. We could not judge the truth of this statement. Although SoundExchange knew what was going on in all of its discussions, we had no information about those discussions.
22. NAB did not consider litigation over rates for the 2011 to 2015 period to be a meaningful option. That proceeding had already begun by the time that we began our discussions with SoundExchange. Having received what we viewed to be highly unfavorable rates for the 2006‐2010, we did not view the CRB as a forum that was likely to adopt reasonable license fees for broadcasters or webcasters in the next proceeding. The Judges had just raised the rate for streaming from 0.0762 cents per performance in 2005 to 0.19 cents per performance over the five‐year period. We were concerned that there was a real risk that the Judges would continue to raise rates in a similar pattern. We did not believe that the rates adopted by the Judges were reasonable or that they reflected what broadcasters or webcasters would pay in a real marketplace, but we did not expect the same Judges
‐ 7 ‐ to be more favorably disposed to broadcasters in a proceeding in 2009‐2010 than
they were in the proceeding in 2006‐2007.
23. At the time that we were negotiating, we also did not have the
stomach to spend money to litigate over streaming. The country was suffering
through the Great Recession of 2008‐2009. That recession hit the radio industry
particularly hard. The industry was in the middle of the worst downturn it had
suffered in years. Radio revenues had declined dramatically during the period.
Streaming was not a high enough priority for broadcasters to spend millions of
dollars in litigation costs, particularly after the terrible outcome in the Webcasting II
case.
24. During the negotiations, SoundExchange told us that it had an average
rate that it needed to have for the period from 2009 through 2015. We were given
the opportunity to meet that average by allocating the fees over the period. This
was the only flexibility that SoundExchange showed on rates. We were unsuccessful
in attempts to reduce the average.
25. We concluded that it would be better to try to reduce the rates in 2009 and
2010, even if that led to higher rates in the later years. Our hope was that, if the reduced
rates kept stations from stopping their streams, it would help us to develop a more
cooperative relationship with SoundExchange that would enable us to re-negotiate the
rates for the later years. That hope proved to be misguided.
26. With little that we could do to negotiate the rates, we attempted to address
other concerns that we had. We thought it important to address specific problems with
the reporting requirements that smaller broadcasters were having. They often did not
‐ 8 ‐ have the resources in personnel or technology to provide census reports. Given that those
stations were paying only the minimum fees, our view was that it did not make sense to
impose further reporting or processing burdens either on the stations or on
SoundExchange. To address those problems, we negotiated an exemption from the
reporting requirements for very small broadcasters.
27. We also were concerned about the incompatibility between normal over-
the-air radio practices and certain conditions on the statutory streaming license. For example, radio station disc jockeys often announce songs that are about to be played.
Our understanding is that the record companies want us to do that so that listeners can identify recordings that they like and buy them. Radio stations also sometimes play a complete album side or sides or feature a particular group or artist with multiple consecutive songs. I am not a lawyer, but we felt strongly that we did not want broadcasters to be exposed to claims by record companies that they were committing copyright infringement by violating the terms of the statutory license simply for simulcasting the same type of programming that broadcasters had always provided over the air.
28. To address these issues, we negotiated a series of waivers of the statutory license conditions with the major record companies and with the
American Association of Independent Music on behalf of its indie members. We did not negotiate the waivers with SoundExchange. Its negotiators had informed us that it could not provide such waivers. These waivers were an important part of the overall package and had significant value to us. I attach a copy of the waiver agreements as NAB Ex. 1.
‐ 9 ‐ 29. We were also concerned about the incompatibility of certain
broadcast practices with the need to count specific numbers of listeners for each
song to determine the right royalty fee. It was our understanding that significant
amounts of syndicated and network programming broadcast by radio stations was
delivered to stations in ways that would not allow stations to count the number of
listeners to each song included in those programs. Thus, we sought, and were given,
the ability for broadcasters to pay SoundExchange for music used in a certain
percentages of their programming on the basis of Aggregate Tuning Hours
(assuming a certain number of songs played during each hour), rather than counting
the actual performances in that programming.
30. The question of whether the agreement should be precedential was
not something that we negotiated. As I recall, the language was included in a draft
provided in the final weekend of the process by SoundExchange, after the business
terms had been worked out. SoundExchange said that it needed the language for its
negotiations with webcasters and other parties that were happening at the same
time. I did not fully comprehend that SoundExchange would be able to use the
agreement against broadcasters in the future, or claim that the agreement
represented willing buyer/willing seller rates in future proceedings. I would have
fought harder to keep the language out if I had understood that it could be used in that way. The agreement certainly did not reflect free market license fees – it was a direct result of the rates set by the Judges in Webcasting II.
‐ 10 ‐ A Per-Performance Fee Should Be Applied with Caution as it Is Inconsistent with
the Way People Listen to Radio
31. Finally, I would like to add a few thoughts about the per‐performance basis on which broadcasters are required to pay for their streaming. From my experience, this approach is inconsistent with the way people use radio and may over‐state a reasonable royalty. Radio is a passive experience, not an active one. It is common for people to leave their radio on without thinking about it. The radio often stays on, even if there is nobody who can hear it. The stream is, for many people, just like radio.
32. Our audience typically does not think of leaving the radio on as wasteful. It is not the same as leaving the water running. Water has a cost, radio doesn’t. And our audience treats radio in this fashion no matter how it is delivered – whether over‐the‐air or through the Internet.
33. One flaw in the per‐performance fee is that it is charged in a way that assumes someone is listening. If no one is listening, the performance has no value.
With radio, it is often true that no one is listening. As a result, any per‐performance fee should be set conservatively to account for the fact that it likely will be charged for streams that nobody is listening to.
34. In addition, it doesn’t make sense to charge a fee for a song the listener demonstrates by his or her actions that he or she doesn’t want to hear. If the listener quickly shuts off the stream, the song has no value to either the listener or to the radio station. When a listener quickly stops the stream, it is clear that the listener was not interested in hearing the song.
‐ 11 ‐ COMMONWEALTHBROADCASTINGRADIOSTATIONS
CALLS AMorFM Format MarketsServed
1 WAVJ FM 70s&80s Princeton 2 WCDS AM Sports Glasgow 3WCKQ FM HotAC Campbellsville/Greensburg 4 WGRK FM Country Campbellsville/Greensburg 5 WHHT FM Country BowlingGreen/Glasgow 6 WIEL AM Sports Elizabethtown 7 WKLX FM 70s&80s BowlingGreen/Glasgow 8 WKMO FM Country Elizabethtown 9 WOVO AM AC BowlingGreen/Glasgow 10 WPKY AM Sports Princeton 11 WPTQ FM ClscRock BowlingGreen/Glasgow 12 WRZI FM ClscRock Elizabethtown 13 WTCO AM Sprts/Talk Campbellsville/Greensburg 14 WTHX FM Sports Elizabethtown 15 WTTL AM Talk/Sprts Madisonville 16 WTTL FM HotAC Madisonville 17 WWKN FM Oldies Morgantown 18 WWKU AM Sports BowlingGreen 19 WWKY FM Country Madisonville 20 WXAM AM Sports Hodgenville
APPENDIX A
Capital Reporting Company Day 18 In Re: Determination of Royalty Rates (Restricted) 05-20-2015
4787 Before the
UNITED STATES COPYRIGHT ROYALTY BOARD
Library of Congress
Washington, D.C.
------: In Re: : Docket No. : 15-CRB-0001-WR Determination of Royalty : (2016-2020) Rates and Terms for : Volume 18 Ephemeral Recording and : Pages 4787-5129 Digital Performance of : Sound Recordings (Web IV) : ------:
CONTAINS RESTRICTED MATERIAL PURSUANT TO PROTECTIVE ORDER
Washington, D.C.
Wednesday, May 20, 2015
The hearing in the above-entitled matter was convened at 9:09 a.m.
BEFORE COPYRIGHT ROYALTY JUDGES:
SUZANNE M. BARNETT, CHIEF JUDGE
DAVID R. STRICKLER, JUDGE
JESSE FEDER, JUDGE
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1 MR. POMERANTZ: No, I don't. 1 may. 2 JUDGE STRICKLER: Okay. 2 MR. POMERANTZ: Thank you. 3 MR. RICH: Thank you very much. 3 RECROSS-EXAMINATION BY COUNSEL FOR 4 And all I'm attempting to do and I 4 SOUNDEXCHANGE 5 really did it to save Your Honors some of the math 5 BY MR. POMERANTZ: 6 yourselves, if you will have done this it to take 6 Q. Professor Shapiro, if we change the 7 the -- what was the original depiction of Professor 7 Apple numbers in your Table 1 for a -- like, for 8 Shapiro's Apple analysis in the left-hand column 8 example, as suggested in the change of skips from 9 and the only change we made based on the witness's 9 eight to six, that would affect all of your 10 testimony where he said possibly the number of 10 midpoint numbers, correct? 11 skips might be as low as eight, although he still 11 A. Yes, that's correct. 12 defended -- it might be as low as six, pardon me -- 12 MR. POMERANTZ: Thank you. 13 when we defended eight, we substituted six. We 13 CHIEF JUDGE BARNETT: Last call. 14 left all of the other numbers in place in the 14 Thank you, Professor Shapiro. 15 right-hand column and you see the bottom line 15 THE WITNESS: Thank you very much for 16 adjustment from .001107 to .001206, and then on the 16 your time. 17 succeeding page we simply adjusted the midpoint 17 CHIEF JUDGE BARNETT: The pleasure has 18 calculation. 18 been all yours. 19 I won't read the numbers any further. 19 Mr. Joseph. 20 You will see them in front of your eyes. 20 MR. JOSEPH: Your Honor, NAB calls 21 BY MR. RICH: 21 Steve Newberry. 22 Q. And I don't know, Professor Shapiro, 22 STEVE NEWBERRY, 23 you're very good at math. Have we made any 23 being first duly sworn, to tell the truth, the 24 mistakes as far as you can tell? 24 whole truth and nothing but the truth, testified as 25 A. It's nice for the witness to have a say 25 follows:
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1 in this here. I trust the math here is done 1 CHIEF JUDGE BARNETT: Mr. Joseph. 2 correctly. I would just add one thing, actually, 2 MR. JOSEPH: Thank, Your Honor. 3 to help the Court to further clarify. These are 3 DIRECT EXAMINATION BY COUNSEL FOR 4 the numbers with the lump sum. So we see it going NAB 5 up from 11 to 12. 4 BY MR. JOSEPH: 6 MR. POMERANTZ: The numbers. 5 Q. Good afternoon, Mr. Newberry. 7 JUDGE STRICKLER: The numbers. 6 A. Good afternoon. 8 THE WITNESS: I'm sorry. Well, we 7 Q. Would you please introduce yourself to 9 already read those, but okay. 8 the Court and spell your last name. 10 Thank you, Mr. Pomerantz. 9 A. My name is Steve Newberry. Spelling is 11 One could do the same thing with the -- 10 N-E-W-B-E-R-R-Y. 12 without the lump. So in Table 1 of my supplemental 11 Q. And where do you work? 13 written testimony with the Apple row, instead of 12 A. Commonwealth Broadcasting Corporation. 14 the lump sum entry that we've been talking about, 13 Q. Is that a radio broadcaster? 15 one could also take the without lump sum entry, 14 A. It is. 16 which is lower, and add -- I think it's going to be 15 Q. What's your title? 17 exactly the same. I'm not certain, but we could 16 A. I'm the president and CEO. 18 check the math. .01, basically to that number, as 17 Q. And where are you based? 19 well. So you could do this with or without the 18 A. Glasgow, Kentucky. 20 lump sum if you want. 19 Q. How many stations does Commonwealth 21 MR. RICH: Thank you. 20 have? 22 I have no further questions. 21 A. We have, at present, 17 radio stations. 23 MR. POMERANTZ: Can I just follow up on 22 Q. And when did you form Commonwealth? 24 that one last one? 23 A. Commonwealth Broadcasting was formed in 25 CHIEF JUDGE BARNETT: You certainly 24 1996. 25 Q. Before Commonwealth, when did you get
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1 your start in radio broadcasting? 1 primarily musically-formatted radio stations and 2 A. I started when I was 14 years old. 2 the one secondary terrestrial station. 3 That would have been 1977. 3 Q. Mr. Newberry, would you please turn to 4 Q. What does a 14-year-old do in radio? 4 the back of the exhibit marked NAB 4001? 5 A. Whatever the owner asks him to do, but 5 Is that your declaration and signature? 6 it's taking out the trash, it's Sunday morning 6 A. It is. 7 church programming, running ball games, and a 7 MR. JOSEPH: Your Honor, NAB offers NAB 8 limited amount of honorary work. 8 Exhibit 4001. 9 Q. And when did you buy your first radio 9 MR. CHOUDHURY: No objection. 10 station? 10 CHIEF JUDGE BARNETT: 4001 is admitted. 11 A. Bought my first station as a senior in 11 (NAB Exhibit No. 4001 was admitted into 12 college. That would have been 1984. 12 evidence.) 13 Q. Mr. Newberry, did you provide written 13 BY MR. JOSEPH: 14 direct testimony in this case? 14 Q. Now, I don't think you need for what 15 A. I did. 15 I'm about to do to look at it, but in Paragraph 28 16 Q. I would ask you to look at the direct 16 of your written direct testimony, you discuss 17 examination binder in front of you, and look -- 17 certain waiver agreements that were negotiated in 18 please turn to the document behind the first tab 18 conjunction with the NAB SoundExchange Webcaster 19 marked NAB Exhibit 4001. 19 Settlement Act agreement that we'll discuss later. 20 A. (Witness complies.) 20 Please look at the tab marked NAB Exhibit 4101 and 21 Q. Is that your written direct testimony? 21 please let us know if they are the waiver 22 A. It is. 22 agreements referenced in your written direct 23 Q. Have there been some changes since this 23 testimony. 24 testimony was prepared and submitted? 24 A. Yes, they are. 25 A. Yes, there have. 25 MR. JOSEPH: We offer NAB Exhibit 4101.
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1 Q. Could you please tell the Court what 1 MR. CHOUDHURY: No objection. 2 those changes are? 2 CHIEF JUDGE BARNETT: 4101 is admitted. 3 A. Since preparation, my preparation of 3 (NAB Exhibit No. 4101 was admitted into 4 the written testimony, I have sold three of the 4 evidence.) 5 stations that are listed on Appendix A. 5 BY MR. JOSEPH: 6 Q. And can you identify those three 6 Q. Now, Mr. Newberry, in your written 7 stations that you sold? 7 direct testimony you talk about the importance of 8 A. I can. I have sold Station Number 3, 8 your radio stations connections to their 9 WCKQ, Station Number 4, WGRK, and Station Number 9 communities. 10 13, WTCO. 10 Could you elaborate on why that 11 Q. Does that change Paragraph 7 of your 11 connection is important for the court? 12 testimony which describes where you had offices, or 12 A. We are licensed by the FCC to operate 13 I should say have offices? 13 in the public interest. Since it was 14, I've been 14 A. It does. We now have five locations. 14 used to that ethic, that responsibility. But it's 15 We sold the Campbellsville location, and in my 15 really about developing a connection with the 16 written testimony I counted 7 but Elizabethtown was 16 listeners through service, making sure that we are 17 included twice. 17 where they want us to be, we're giving them the 18 Q. So the current number is five? 18 information and the entertainment that they expect 19 A. Five, that is correct. 19 from us, providing a mix of programming and 20 Q. Is there also a change in the number of 20 services. But it's very important for us to 21 streaming stations that you discuss in Paragraph 21 differentiate ourselves by really being that 22 14? 22 locally-connected radio station. 23 A. Yes, it does change. We have sold two 23 Q. And you mentioned some of your stations 24 of the four stations that we were streaming. So we 24 have a music format. 25 now stream the broadcast of two of our ten 25 What role does music play in that
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1 overall mix of programming that I think you just 1 non-local listeners? 2 mentioned? 2 A. We don't. 3 A. It certainly plays a role. Obviously, 3 Q. Why not? 4 just the nature of them being musically formatted. 4 A. Two reasons. One is our advertisers. 5 The way that I would describe the role of the music 5 The advertisers that I'm dealing with and in 6 owner station, it's an ingredient. I have used 6 Glasgow and Bowling Green and Elizabethtown, 7 this analogy before. It's a lot like the flour in 7 Kentucky, they're not interested in trying to reach 8 a cake mix, but we add a lot of other ingredients 8 potential customers for their businesses that are 9 to that: Our personalities, our news programming, 9 outside the local market area. So there is no 10 our contesting, our remote broadcast, even our 10 value to me to try to have listeners that are in 11 commercials. So music plays a significant role, 11 Los Angeles or Idaho or anywhere else. 12 but we certainly add a lot more to it. And just as 12 The second thing is to maintain that 13 if a pound of the flower is one item, a cake that 13 connection. We really want to make sure that our 14 you might buy at the bakery, we think we add and 14 programing is unique to our local communities, and 15 create a product that uses it as an ingredient but 15 so I doubt very seriously someone that's in Los 16 enhances that significantly. 16 Angeles wants to hear about Western Kentucky 17 Q. And what differentiates your 17 University or what at the Corvette plants or other 18 programming from the programming of other streaming 18 local activities. We -- we really focus our 19 services, for example, on the Internet? 19 programming and our connection to the local office. 20 A. Well, I think persons that want to 20 Q. So you mention the Corvette plant, 21 listen to our product, they're listening to the 21 where is that? 22 entire product. I think that if they are listening 22 A. That's in Bowling Green, Kentucky. 23 to a radio station, they are wanting the 23 Q. Okay. Let's turn from your streaming 24 additional -- the additional programming that we 24 and your stations to the Webcasters Settlement Act 25 provide. If someone wants to just listen to purely 25 agreement that was negotiated between NAB and
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1 music, they have ample other opportunities to do 1 SoundExchange. 2 that through a variety of other sources. And I 2 Were you personally involved -- and 3 think what differentiates us is the personality, 3 this was back in 2009, I believe, but you'll tell 4 the information, the news, the mix that we provide 4 me if I'm wrong. 5 to our listeners. 5 Were you personally involved in those 6 Q. And I think you mentioned how many of 6 negotiations? 7 your music formatted stations are you now 7 A. I was. 8 streaming? 8 Q. What role did you play? 9 A. Two of those. Two out of ten. 9 A. At the time, I was the radio board 10 Q. Two out of ten? 10 chairman of the National Association of 11 A. Correct. 11 Broadcasters, and as a result of that, I led those 12 Q. Let's talk about those stations you do 12 negotiations. 13 stream. 13 Q. Can you briefly describe the 14 Why do you stream? 14 circumstances leading up to the negotiations? 15 A. If our listeners are sitting in their 15 A. The Webcaster II rules for the 16 workplace, and in the broadcasting business my 16 broadcasting industry were pretty shocking. It was 17 stations have made a significant investment on 17 not just surprising. It was -- it was shocking. 18 reaching listeners while they're at work wherever 18 And as a result of that, our industry was kind of 19 they work, wherever they play. And if they're 19 taken aback. We were -- we found that those rates 20 wanting to listen to a computer as opposed to 20 were much higher than what we had expected the 21 listening to a radio, we want to make sure that 21 results to be. 22 they have that opportunity to do that. We want to 22 Congress provided a window. I think 23 maintain those connections that I was talking 23 that legislation was passed sometime in the fall of 24 about. 24 2008, that enabled those affected by the results of 25 Q. Now, do you target out-of-market or 25 Web II to enter into discussions. We did not have
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1 a particularly boat full of options at that point 1 '9, '10 was really the most difficult economic 2 in time, and we wanted to enter those discussions 2 period. We were right in the throws, and shortly 3 hopeful that we would be able to find some type of 3 after, the stock market collapsed, and we were 4 accommodations that would provide some relief from 4 right in the throws of that. 5 those rates. 5 Our industry did not -- we were 6 Q. When did the negotiations take place? 6 fighting to save our core business, the terrestrial 7 A. We began just after the beginning of 7 business. There wasn't an appetite to spend the 8 the year in 2009, so right around first week in 8 large amount of monies for litigation, and, as I 9 January. 9 said, earlier we did not necessarily believe that 10 Q. And when did they have to be finished? 10 we would find a meaningful difference in the 11 A. The deadline by statute was February 11 results. And, actually, we thought it could be 12 15th of 2009. So we had about six weeks to 12 even worse because we knew SoundExchange would 13 complete all of the negotiations. 13 prosecute or advocate for a much higher rate than 14 Q. How did you view the relative positions 14 Webcaster III, so we thought we better participate 15 of NAB and SoundExchange entering those 15 in that settlement agreement as best we could. 16 negotiations? 16 Q. Mr. Huppe, who filed a rebuttal to your 17 A. We knew we had a long tough uphill 17 testimony says that you made a not so subtle 18 climb. We felt that SoundExchange was certainly in 18 suggestion in your testimony that the judges were 19 the strongest position there. They had the results 19 biased against broadcasters. 20 of Webcaster II. 20 Is that what you were saying? 21 We found that we were wanting to try to 21 A. No, that's not what I'm saying. I 22 develop some type of collaboration during these 22 can't predict what the judges would do and was not 23 discussions, but Webcaster III had already begun 23 making any intent to create that, but based on what 24 and we felt that the opportunities that we might 24 we sad seen from Webcaster II and that the -- 25 have in Webcaster III would be limited. We felt 25 again, there had not been a significant period of
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1 that with the recent history of what had come from 1 time with the industry developing, we just did not 2 that body and that there had not been a significant 2 think that it was going to bring about meaningful 3 amount of change and we didn't have a big history 3 difference. 4 of the streaming industry at that point, we weren't 4 Q. While we're talking about Mr. Huppe, in 5 overly optimistic about what our options would be 5 his rebuttal, he claimed that NAB had retained 6 there. We wanted to, as best as we could, try to 6 legal counsel to participate in Web III and he 7 make those results from Webcaster II a bit more 7 cited a petition to participate filed on behalf of 8 palatable to the broadcasters. 8 NAB by a Suzanne Head. 9 Q. Did you believe you had a meaningful 9 Do you know Ms. Head? 10 opportunity to renegotiate the rates that had been 10 A. I do. 11 set in Webcaster II? 11 Q. By whom is she employed? 12 A. We were hopeful. It did not prove to 12 A. National Association of Broadcasters. 13 be as meaningful as what we had hoped. When we got 13 Q. So she's in-house counsel? 14 in those discussions, the SoundExchange was dealing 14 A. She is. 15 from a position of strength. They had the rates 15 Q. Was she considered litigation counsel? 16 that had been established from Webcaster II, and 16 A. Not at all. 17 they didn't have a great deal of motivation to come 17 Q. Now, why did NAB file a petition to 18 off of those -- off of those rates and we found 18 participate in Web III given what you said? 19 that they weren't willing to do that in a 19 A. Well, Web III was already underway when 20 significant manner. 20 we had -- or in the early stages when we had the 21 Q. Did you consider participating in Web 21 opportunity to negotiate with SoundExchange, and we 22 III to be a realistic alternative for 2011 to 2015? 22 did not think it would be -- we didn't have much 23 A. No, we did not for a couple of reasons. 23 leverage in the discussions with SoundExchange and 24 One was that my industry at that point in time was 24 we certainly didn't want to remove that possibility 25 coming right out of the great recession. So 2008, 25 that we would participate to the appearance of
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1 SoundExchange and we wanted to make sure that we -- 1 were facing the industry and that was -- that was 2 we did not preclude that option. 2 an important part of what we tried to gain from the 3 Q. Now, apart from fees, were you able to 3 discussions, as well. 4 negotiate some benefits in your discussions? 4 Q. Now, just a couple more points Mr. 5 A. We were. 5 Huppe made in his rebuttal to your testimony. He 6 Q. And what were the benefits you were 6 said that NAB could have elected to negotiate 7 able to negotiate? 7 license fees directly with the record companies. 8 A. One of the uncertainties that the 8 Did you view that as a realistic 9 broadcast industry faced in the early days of 9 alternative? 10 streaming were some copyright performance 10 A. I did not. 15,000 broadcasters, four 11 complements that would have -- that were not clear 11 major record labels, we had a six-week window to 12 that broadcasters could have the ability to put on 12 try to get this adjusted, and certainly when we sat 13 the air simulcast product of what our radio 13 down, my impression that -- pretty clearly made us 14 stations were. Radio stations generally just 14 to was that SoundExchange and that group of 15 wanted to take what we were doing over the air and 15 negotiators were the persons that we needed to 16 provide that on the stream so that we could reach 16 address the rate issues with. 17 our listeners as I described earlier. 17 Q. Mr. Huppe also said that broadcasters 18 There was a -- there was an uncertainty 18 could simply stop streaming instead of making the 19 about whether we were able to do that because, for 19 deal. 20 instance, one that I clearly remember, we could not 20 Was that an alternative to the deal? 21 preannounce the name of a song or an artist of the 21 A. No. 22 song before it was played. That's a very common 22 Broadcasters really had two choices at 23 practice on the radio, but on the streaming 23 that point, or, at least, in my opinion 24 performance complement, that was something that we 24 broadcasters did, and I had that responsibility. 25 had to clarify and adjust, and we were able to 25 We could either A, accept Webcasting II and find
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1 reach the conclusion of that. We also got with 1 ourselves dependent upon Webcasting III would 2 SoundExchange some small market reporting 2 bring, or we could try to take the results of the 3 relaxation of the requirements for the smaller 3 negotiations and make it less devastating, less 4 broadcasters. 4 horrible. It wasn't good, but it was better than 5 Q. Now, when you were talking about the 5 what the circumstances had given us. And as we got 6 complement and the preannouncement, were those 6 into the discussions with SoundExchange, one of the 7 negotiations with SoundExchange or with other 7 benefits that I think broadcasters tried to look at 8 parties? 8 was that the combination of the performance 9 A. They were not with SoundExchange. 9 complement, it was not -- it was not a question 10 SoundExchange said -- as we were negotiating the 10 that we could just not stream. I have two of my 11 rates, they said if you want to address the 11 radio stations that are streaming and ten that are 12 performance complement you have to do that 12 not. Or, excuse me, eight of the ten that are not. 13 individually with each of the four major record 13 But of the two, I was trying to weigh out what the 14 labels. So we did that. And then we also had a 14 best opportunity, what the best advantage was going 15 meeting and negotiated that with the association. 15 to be and not streaming was just not an opportunity 16 I don't remember the exact name, but the 16 for us. 17 independent label association. 17 Q. Mr. Huppe -- 18 Q. And those were the agreements that 18 A. May I clarify? 19 resulted from those discussions that were NAB 19 Q. Yes. 20 Exhibit 4101? 20 A. As a negotiator, not streaming for the 21 A. That is correct, yes, sir. 21 entire industry was not something we should have 22 Q. Now, were the accommodations that you 22 taken a look at. We needed to make the decision of 23 were able to reach valuable to NAB? 23 try and improve Webcaster III as best we could 24 A. They were. They -- as I said, they 24 because of the perils that potentially lay ahead 25 removed a lot of the uncertainties that we felt 25 with Webcaster III.
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1 Q. And then have each broadcaster make a 1 JUDGE STRICKLER: And the individual or 2 decision to stream or not stream? 2 individuals from SoundExchange who told you that, 3 A. Correct. 3 did I understand you to say one of them was Mr. 4 Q. Mr. Huppe criticizes you for not 4 Huppe? 5 speaking out against the terms of the deal before 5 THE WITNESS: Mr. Huppe was part of the 6 your testimony here. 6 -- I -- my statement that I made to Mr. Joseph a 7 Is his criticism valid? 7 minute ago was that I had expressed my frustration 8 A. It is not. We wanted to make sure that 8 to Mr. Huppe and others personally. Steve Marks, 9 -- we made every effort that we could in these 9 who was part of the negotiating team was the person 10 negotiations to improve the situation. Just 10 that actually presented that concept to us. 11 because it was improved did not mean that it was 11 JUDGE STRICKLER: So he presented it to 12 good. It was less bad, was the best way I could 12 you and others personally? 13 describe it. I said that to my board. We were 13 THE WITNESS: Yes. 14 dealing from a weakened position. SoundExchange 14 JUDGE STRICKLER: Now, did Mr. Marks 15 certainly had the strongest position in the 15 state why they -- that it had -- it had a need for 16 negotiations. I said that at the time. 16 an average rate in the period 2009 through 2015? 17 The performance complement did cause me 17 THE WITNESS: Well, I think the answer 18 to encourage broadcasters to say there is an 18 is that they -- I'm sorry. 19 adjustment in the rates. And when we got into the 19 JUDGE STRICKLER: Cutting you off. I 20 discussions with the rates, one of the things that 20 don't know what you think why it would have been. 21 was a bit frustrating, and I expressed this to Mr. 21 I'm asking you if he told you why. 22 Huppe and others at the time and I expressed it to 22 THE WITNESS: I want to give you a very 23 the board, it was very clear that SoundExchange 23 precise answer, so I believe he did and I believe 24 said, if you want a reduction in these years, 24 it was from the fact that they were looking at the 25 you've got to edit on the latter years. 25 results that they had from Webcaster II and what
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1 So if we wanted to reduce by a percent 1 motivation would they have to come off of a sum 2 in the first or the second year of the rates, we 2 number. They were willing to look at the agility 3 had to raise it at the end. They had one sum 3 in the beginning years and the end years, but it 4 number that they wanted to deal with and we were 4 was no question that they were in a very strong 5 just trying to make it as palatable as possible. I 5 position and it was -- it was -- I don't think his 6 raised that objection with him at the time. I 6 exact words were take it or leave it, but it was 7 talked about the concerns about the rates. I 7 here's our position and that's where we're going to 8 talked about it within the industry. And even 8 negotiate from. 9 since that time, there have been several efforts to 9 JUDGE STRICKLER: Thank you. 10 reach out to SoundExchange, to the recording 10 BY MR. JOSEPH: 11 industry and say can we look at this and revisit 11 Q. Finally, Mr. Newberry, Mr. Huppe claims 12 this so that we might be able to come to a 12 that the number of broadcasters who have signed up 13 conclusion before we enter Web III. 13 for the Webcaster Settlement Act agreement rates 14 JUDGE STRICKLER: Excuse me. 14 show that they are reasonable. I think he says, 15 Mr. Newberry, good afternoon. 15 for example, at 1.380 have signed up. 16 THE WITNESS: Good afternoon. 16 Do you agree with his position? 17 JUDGE STRICKLER: Your testimony you 17 A. I do not. The 380 is a number that was 18 just gave is based on Paragraph 24, I believe, of 18 triggered because after the results of the 19 your written direct testimony of the negotiations 19 negotiations were reached and after it was 20 with SoundExchange where you say, "they told us 20 published, it was a 30-day window that broadcasters 21 that it had an average rate that it needed to have 21 either had to opt in or opt out. So if they did 22 for the period of 2009 through 2015." 22 not make the election by early -- the first week in 23 That's what you were referring to, 23 April of 2009, they would not be eligible for the 24 right? 24 benefits from this, and that included the 25 THE WITNESS: That's correct, yes, sir. 25 performance complement. The number of songs you
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1 could play back to back, all of those issues. 1 that I want to be able to do. 2 So while broadcasters looked at it and 2 JUDGE STRICKLER: Thank you. 3 said the rates are somewhat better in the early 3 MR. JOSEPH: Thank you, Mr. Newberry. 4 years, we have answered a lot of the uncertainties 4 I have no further questions, Your 5 about the complement -- performance complement. We 5 Honor. 6 think that the risk may be much worse if we go into 6 CHIEF JUDGE BARNETT: Mr. Choudhury. 7 Web III. The choice was do you want to take this 7 JUDGE STRICKLER: Real quick. 8 agreement, or do you want to run the risk of not 8 Paragraph 30 of your written direct testimony, tell 9 having those clarifications and moving ahead to Web 9 me when you're there, sir. 10 III? 10 THE WITNESS: Yes, sir. 11 So the broadcasters did it. I'm one of 11 JUDGE STRICKLER: The first that deals 12 the companies that -- I'm one of the 380, but I'm 12 with the question of whether or not the agreement 13 still only able to stream two of my ten radio 13 should be -- with NAB should be presidential or 14 stations. So I did this as a business decision 14 not, you say it was not something that was 15 because it was the lesser of the two evils. But it 15 negotiated and it was provided in the final weekend 16 was not that there was an overwhelming support for 16 by SoundExchange. 17 the agreement and that the industry thought it was 17 What, if anything, did SoundExchange 18 a great deal. 18 say about why it wanted that rate to be 19 Q. Are you saying that you're able to 19 presidential? 20 stream only two of your radio stations because the 20 THE WITNESS: I remember this very 21 rates that exist make it prohibitive to stream 21 vividly. There were ongoing negotiations that 22 more? 22 SoundExchange had with other entities. We were 23 A. Yes, sir. 23 representing the broadcasters. The comment came 24 I would love to stream more of my 24 back as the attorneys were preparing the documents, 25 stations so that I could expend that connection 25 literally on a Sunday afternoon, "This language has
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1 with the radio stations. The two stations that I 1 to be included because for us to be able to get the 2 sold were mildly profitable in terms of what we 2 agreements reached with the others we have to have 3 were able to do, and I'm talking less than $1,000 3 this language in this document." 4 for each of the stations a year. The two that I 4 JUDGE STRICKLER: There was a deadline 5 retained are mildly losing money and that same 5 -- you say you learned of that on a Sunday 6 thing, but we see it as a service to the listeners. 6 afternoon, correct? 7 We see it as maintaining that connection that we 7 THE WITNESS: Before a midnight 8 had with our existing audience. And I have ten -- 8 deadline. 9 eight other music-formatted stations that are in 9 JUDGE STRICKLER: Midnight Sunday into 10 market and it's just not -- it's not practical for 10 Monday? 11 me to take on the expenses of those. 11 THE WITNESS: 12 midnight on Sunday, 12 And we deal in a fixed-cost business. 12 February 15th was when the statutory window for 13 I think that's something that probably is not known 13 these negotiations -- they either had to be 14 about broadcasting. The electric bill that I have 14 completed by then or we could not continue. 15 in Glasgow, Kentucky for my power station is very 15 JUDGE STRICKLER: Were all the other 16 comparable to the electric bill that you would have 16 terms of the agreement agreed to in principal 17 for the same power station in Washington, D.C. -- 17 before you learned of the request by SoundExchange 18 but the economics. And we have to really watch our 18 to make the rates presidential? 19 fixed costs. And the lack of predictability and 19 THE WITNESS: Yes. I'm not an 20 the rates, the raising of the fixed cost is 20 attorney, and so at that point it's down to the 21 really -- if you start running the numbers, 21 attorneys trying to work the form and get the -- 22 broadcasters -- let me address myself. If I start 22 get the terms of the agreement into -- into 23 running the numbers, I'm afraid of what those 23 standard legal form, and that's where this issue 24 ongoing costs might be. And starting that service 24 came up. 25 and not being able to pay for it is not something 25 So I remember the conversations very
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1 well, and, as I say in the written testimony, if we 1 My name is Anjan Choudhury, and I 2 had had a recognition of the fact that it might be 2 represent SoundExchange in this. 3 -- we certainly weren't conceding that it would be 3 Thank you for being patient with us. I 4 presidential in hearing six years later. And it 4 know you've been waiting for a while. 5 was just a point that came in at the last minute 5 A. Thank you. 6 and, you know, it was -- it was not one that had 6 Q. I wanted to start at the beginning of 7 been negotiated among our two teams. 7 your testimony where you discussed the role of 8 JUDGE STRICKLER: So even though it was 8 radio in serving the community. 9 being negotiated among the attorneys -- and I don't 9 Let me just ask you, if you can 10 want to get into an attorney-client privilege. 10 clarify, when you say "radio," when you're 11 But although it was being negotiated by 11 referring to "radio," what kinds of services are 12 the attorneys on that Sunday, you became aware of 12 you discussing there? 13 that proposal that Sunday as well before midnight. 13 A. I am discussing broadcasters, radio 14 THE WITNESS: I did. 14 stations, in the most traditional way, represented 15 JUDGE STRICKLER: And among you and any 15 by the National Association of Broadcasters. I am 16 of the other negotiators -- not the attorneys 16 talking about what have generally been AM/FM 17 now -- you and any of the other negotiators, was 17 broadcasters in the country. 18 there any pushback, resistance to agreeing to make 18 Q. And you're including the simulcasts -- 19 it precedential? 19 or, you know, you're including radio broadcasters 20 A. There was concern about it. I think 20 who simulcast in that, correct? 21 the discussion that we arrived to was that, if it 21 A. Yes. 22 was going do be precedential in the Web III -- 22 Q. And so -- if you want to refer to 23 which this document would be jointly submitted to 23 Paragraph 11 of your testimony, do you see there at 24 Web III because that's what we were superseding. 24 the bottom of the page you make the statement 25 Okay. We're acknowledging that, but 25 "Other services may call themselves radio, but they
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1 we're not -- and we didn't acknowledge the 1 do not do what broadcasters do," and so forth? 2 weighting of that, the significance of that. And 2 A. Yes. 3 certainly, as time has passed, the circumstances 3 Q. Who are those other services you're 4 have changed so much that I can tell you that, when 4 referring to? 5 counsel -- we -- that afternoon we recognized that 5 A. There have been a plethora of them. 6 it was an issue. We felt like it had to be 6 You know, it's everything from Yahoo Radio to 7 included. The other side said it had to be 7 Pandora to -- you know, I've even seen some local 8 included, or the deal was off. 8 persons that just take a computer and hook it up to 9 And we had a discussion. And the 9 the Internet and call themselves a radio station, 10 language that was included in there was fairly 10 but they're not operating -- I'm referring to 11 broad and certainly didn't recommend weighting and 11 anyone that doesn't have the same FCC obligations. 12 consideration for panel s like yours in the future. 12 Q. So you're including customized 13 JUDGE STRICKLER: Thank you. 13 webcasters in that group. 14 MR. JOSEPH: Thank you, Mr. Newberry. 14 A. I am. 15 MR. CHOUDHURY: No binders. 15 Q. So is it your testimony then that 16 CHIEF JUDGE BARNETT: Mr. Choudhury, 16 Pandora and other customized webcasters don't serve 17 are you going to be able to get through this, I 17 their communities the way that broadcasters do? 18 mean without a binder? 18 A. My testimony is that broadcasters have 19 MR. CHOUDHURY: I will try. I'm 19 a unique connection in their communities. I can't 20 trying. I have a couple of folders, but we might 20 -- I'm not an expert on what the others do. I can 21 not need to use them. 21 just tell you what we do. 22 CHIEF JUDGE BARNETT: Okay. 22 And they're not under the same 23 CROSS-EXAMINATION BY COUNSEL FOR 23 obligations, nor do they have the same license SOUNDEXCHANGE 24 responsibilities that we do. 24 BY MR. CHOUDHURY: 25 Q. Well, let me ask you, based on your 25 Q. Good afternoon, Mr. Newberry.
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1 experience, do you believe that customized 1 Q. Now -- 2 webcasters like Pandora serve their communities the 2 A. So do I need a -- 3 way that broadcasters do? 3 Q. Mr. Newberry, that's not my question. 4 A. I don't. 4 We can look very specifically at your 5 Q. Why is that? 5 testimony. You described activities you do to 6 A. They're predominantly a music format 6 serve the community. 7 that's -- a music service that is developed to 7 My question is which of those 8 attract their audiences by providing music. We 8 activities requires you to stream music? 9 have personalities and newscasts, all the things 9 A. If I am doing a remote broadcast from a 10 that I described in my previous testimony. 10 business that wants to have people dancing to raise 11 Q. Now, you testified that your stations 11 money for the American Cancer Society at the Relay 12 serve the local communities in a number of ways. I 12 For Life, and they ask if we can broadcast our 13 think there was covering community events, annual 13 radio stations to provide music for that, that 14 Christmas parades, local news, free air time for 14 would be very difficult to do without music. 15 charities. 15 Q. I'm sorry. Let me clarify. Maybe 16 A number of activities, right? 16 that's the confusion. 17 A. Yes, sir. 17 Without streaming music over the 18 Q. And it's true that you could do all of 18 Internet. 19 those activities without streaming music content, 19 A. Same thing. It depends on what they're 20 correct? 20 using to receive the signal of the station or the 21 A. It's part of the ingredient of the cake 21 sound of the station. 22 mix. So you take the flour out of the cake, I 22 I understand the point you're trying to 23 don't know what a cake you would have, but I guess 23 make. Music is part of the ingredient, but it's 24 you could serve someone baking soda. 24 not -- it is not the only ingredient in our recipe. 25 Q. Well, let me ask you. 25 Q. Well, then let me ask you, since it's
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1 I mean you could help support the 1 part of the ingredient, do you believe that music 2 annual Christmas parade without streaming music, 2 is a way that you attract an audience in your local 3 right? 3 community? 4 A. And we do that on our nonmusic 4 A. It's certainly one of the ingredients, 5 streaming services. 5 yes. 6 Q. Right. 6 Q. And it's one of the ways you 7 And you could cover community news and 7 differentiate your brand on the station. For 8 events without streaming music, correct? 8 example, you know, WTCP, The Point, right, you 9 A. Yes. 9 advertise what kind of music they play, correct? 10 Q. So you don't need to stream music to do 10 A. WPTQ? 11 the activities you're describing here, correct? 11 Q. PTQ. 12 A. That's incorrect. The -- what I'm 12 A. Yes. 13 describing here is talking about our radio 13 Q. You got it. 14 stations, the products in total, not the sum of the 14 A. We do. 15 ingredients, not the individual ingredients. I'm 15 Q. And so you use music to differentiate 16 talking about the cake, not the ingredients in it. 16 your product from other stations, correct? 17 Q. So then let me ask you. 17 A. We do. 18 In your testimony, when you discuss the 18 Q. And you use that product 19 way that you serve the community, which of the 19 differentiation to attract advertising, correct? 20 activities in your testimony would you need to 20 A. That's one of the differentiations, not 21 stream music to be able to do? 21 the only one. 22 And please feel free -- 22 Q. So music helps you attracted an 23 A. In presenting the radio stations that 23 audience and differentiate your product to 24 the listeners in our community hear, music is a 24 advertisers, correct? 25 part of the ingredients for that. 25 A. That's correct.
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1 Q. And there are some differences between 1 transmission you pay for on simulcast is an 2 Internet streaming and over-the-air broadcasts, 2 individual transmission to an individual machine. 3 correct? 3 A. That's what the rates are based on, 4 A. Not in my case. 4 yes. 5 Pardon me. May I clarify that? 5 Q. And, Mr. Newberry, you are aware that 6 Q. Sure. 6 some broadcasters do stream outside of their local 7 A. Sure. There are some copyright laws 7 audience, correct? 8 that prohibit some commercials from being able to 8 A. Yes. 9 be aired on the Internet. When we're aware of 9 Q. And they try to reach listeners outside 10 those, we exempt those commercials out. 10 of their local audience, right? 11 Otherwise, we stream a hundred percent. 11 A. Yes. 12 We don't differentiate our programing. 12 Q. But you make the choice not to, right? 13 Q. Thank you. That's a helpful 13 A. That's correct. 14 clarification. Let me ask a more precise question. 14 Q. That's not why you stream? 15 When you are streaming over the 15 A. That's correct. 16 Internet, that's a digital transmission to a 16 Q. Because that's your business decision, 17 particular listener versus when you broadcast and 17 correct? 18 it is to all of your audience over the air, 18 A. That is correct. 19 correct? 19 Q. Now, you're aware, in fact, that some 20 A. It is a digital broadcast or a 20 broadcasters use Internet platforms like TuneIn, 21 transmission to a particular location. I can't 21 correct, for their streaming? 22 judge how many people are listening at that 22 A. That's correct. 23 particular location. 23 Q. And, in fact, some of your station are 24 Q. Right. 24 on TuneIn, right? 25 And so, for example, just to clarify, 25 A. They are.
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1 if we had and over-the-air broadcast, it could go 1 Q. So I think one that we talked about 2 to this entire room through one transmission, 2 that you just sold, WGRK? 3 correct? 3 A. Yes. 4 A. Yes. 4 Q. That's on TuneIn? 5 Q. But if everyone in this room wanted to 5 A. Yes. 6 hear simulcasts of our proceeding, you would have 6 Q. And that reach listeners outside your 7 to send different transmissions over the Internet 7 local audience? 8 to each of these users, correct? 8 A. It does. 9 A. No. I would assume you could put a 9 Q. Okay. And WPTQ, The Point, that's 10 speaker on a computer, and they could all hear from 10 another one, correct? 11 the same source. 11 A. That's correct. 12 Q. Okay. So if we were all huddled around 12 Q. And you would agree with me that 13 one computer speaker, we can agree that'd be one 13 digital distribution is providing innovative ways 14 transmission. 14 for broadcasters to use Internet streaming, right? 15 A. Or the PA system. 15 MR. JOSEPH: Object to the form, Your 16 Q. Right. 16 Honor. 17 A. And I'm not trying to be argumentative, 17 CHIEF JUDGE BARNETT: Overruled. 18 but many people listen to the radio station, 18 THE WITNESS: Could you repeat the 19 picking it up off the standard tuner. They pipe it 19 question. 20 through the PA system. And that's how they listen 20 BY MR. CHOUDHURY: 21 to it. 21 Q. Sure. And let me ask it a little more 22 So my point is that people can listen 22 precisely. 23 to a stream the same way that they listen to the 23 You would agree that digital 24 radio. 24 distribution is providing innovative ways for 25 Q. Okay. But we would agree that each 25 broadcasters to reach and serve listeners, correct?
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1 A. I don't -- in different ways. I don't 1 a lot of that opportunity for innovation. 2 know -- in my particular application, I don't know 2 Q. Well, do you think that the rate 3 if it's particularly innovative. But it's 3 structure has anything to do with streaming, 4 certainly a different way of distribution. 4 podcasting, HD radio, mobile devices and other new 5 Q. Do you recall testifying to Congress in 5 platforms that have entered the market? 6 2012? 6 A. It has nothing to do with some of 7 A. I certainly do. 7 those. 8 Q. Let me show you -- well, let me ask. 8 Q. And so, if we look back to -- we can 9 When you testified to Congress, do you 9 look back to your testimony in front of congress. 10 recall whether you testified about digital 10 A. Okay. 11 distribution providing innovative ways to reach 11 Q. That's what you're referring to when 12 listeners? 12 you're discussing innovation, correct? 13 A. I do not recall that. 13 A. Do you have a particular reference? 14 Q. Now, Mr. Newberry, I'm going to ask you 14 Q. Sure. If you look at the sentence 15 if you could just turn to -- I think it's Page 2. 15 right before the sentence we were discussing. This 16 Do you see there -- well, first of all, 16 is on Page 2. 17 let me ask you. 17 A. Yes. 18 You recall this document, right? 18 Q. So what you're discussing there is 19 A. I do. 19 innovation in terms of technological platforms, 20 Q. This is your testimony? 20 correct? 21 A. It is. 21 A. Yes. 22 Q. If you -- 22 Q. Not rate structures. 23 A. I might add I haven't seen it for three 23 A. In this particular statement, I was not 24 years, but I do recall it. 24 addressing rate structure. 25 Q. Well, that gets to my next question. 25 Q. And so when we're discussing
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1 If you could look at Page 2. 1 innovation, I'm asking you if this statement is 2 Does this refresh your recollection on 2 still correct. I just want to make sure we're 3 whether you testified to congress about how digital 3 clear for the record. 4 distribution is affecting the way broadcasters 4 Do you believe that there's going to be 5 reach and serve their listeners? 5 continued technological innovation in terms of 6 A. It does. And in this testimony I was 6 platforms? 7 representing the National Association of 7 A. And my answer again is that there is, 8 Broadcasters. And as I said earlier, in my 8 but it's being crippled by the rate structure. 9 particular case, I can't say it's particularly 9 Q. At the end of your testimony you 10 innovative. But I stand by the statement that's in 10 discuss I think what you call some flaws in the 11 this. 11 performance V structure in your written testimony. 12 Q. And you think that statement is still 12 MR. JOSEPH: Objection. I think that 13 true today. 13 mischaracterizes the testimony. 14 A. For some broadcasters. Sure. 14 MR. CHOUDHURY: Well, I can withdraw. 15 Q. And that statement, to be clear, is 15 BY MR. CHOUDHURY: 16 that: "Digital distribution is still only a small 16 Q. If we can look at Paragraph 31 on Page 17 part of overall audio consumption, but it's 17 11 of your testimony. 18 providing innovative ways for us," meaning 18 A. I'm there. 19 broadcasters, "to reach and serve our listeners," 19 Q. Now, you're aware that the National 20 correct? 20 Association of Broadcasters is only proposing a 21 A. Yes. 21 per-performance fee, correct? 22 Q. Do you expect that innovation to 22 A. I am. 23 continue into the next five years? 23 Q. And you're also -- are you aware that 24 A. I would like to see it continued. But 24 the NAB has presented testimony that a percentage 25 unfortunately, the rate structure now is crippling 25 of revenue structure would be unworkable as applied
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1 to statutory licensees? 1 activity that's occurring. 2 A. I am. 2 A. There's no way to measure that. 3 Q. So this testimony takes issue with 3 Q. So you still make revenue even if 4 applying a per-performance fee, correct? 4 someone isn't listening when the ad gets played. 5 A. No. It advices that, as you're looking 5 A. And then I have to give it back in the 6 and examining a per-performance fee, to take 6 future if we didn't deliver the projected audience. 7 certain matters into consideration. But it does 7 Q. And it's possible for you to, for 8 not advise against it. 8 example, create a pop-up to say "Are you still 9 Q. And those matters are assuming that 9 listening?" in your service, correct? 10 someone is listening; that's one example, right? 10 A. I would assume it's possible. That's 11 A. That's correct. 11 not something that I'd experimented with. 12 Q. Let me ask you, when you negotiate with 12 Q. Let's discuss the -- if I call it the 13 on-air personalities for their contracts, do you 13 WSA settlement, will that be familiar to you that 14 include deductions in their contracts for the 14 we're talking about a 2009 NAB agreement? 15 minutes when no one is listening? 15 A. Uh-huh. 16 A. No. But I base their compensation in 16 Q. Now, I believe one of the reasons you 17 large part many times by the ratings that 17 claim that the NAB lacked leverage was because of 18 demonstrate how many people are indeed listening. 18 the great recession that was occurring at the time. 19 Q. And do you tell them, "We're not going 19 A. No. Well, that affected our ability to 20 to pay you if we find out that a listener turned to 20 pursue litigation. 21 another station while you were listening"? 21 Q. Well, and you would agree with me that 22 A. For some of our stations, if they have 22 the record companies were also experiencing a very 23 a diminishment of their time spent listening on 23 difficult time; all industries were, right? 24 their sow, they lose bonus, and they lose 24 A. Certainly. 25 incentives, yes. 25 Q. And that would have affected their
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1 Q. All right. But you don't tell them 1 ability to negotiate or choose to litigate as well, 2 "You know, if we find out that, while someone was 2 correct? 3 listening to you, they turned the station, we're 3 A. I can't address that. 4 going to deduct from what we agreed to in your 4 Q. And in this time, do you have any sense 5 contract"? 5 of what broadcaster revenues were as compared to 6 A. If -- quite fairly, if that happened on 6 the record industry revenues? 7 a repeated basis, I would ether terminate the 7 A. I do not. 8 employee or move them to a different shift. 8 Q. What were broadcaster revenues at this 9 Q. Do you think that that happens? 9 time, industry-wide? 10 Do you think that people switch 10 A. Approximately we were operating in the 11 stations while they're listening to nonmusic 11 17- to $18 billion range in 2006 and '7. And it 12 content? 12 fell to the $13 billion range -- 12- to $13 billion 13 A. With a people meter, you can absolutely 13 range. And that, by the way, includes music and 14 see when people are moving away from your radio 14 nonmusic stations. 15 stations. 15 Q. Right. 16 Q. And when you negotiated with your 16 A. Fell to that during that time period. 17 advertisers, do you tell them, "If we find out no 17 Q. And with respect to Webcasting III, and 18 one was listening when we played your ad, we'll 18 the Copyright Royalty Board, your testimony there, 19 refund that ad"? 19 now, you wrote in Paragraph 22, specifically, you 20 A. No. But many times we will provide a 20 wrote: "We did not expect the same judges to be 21 guarantee of ratings performance. 21 more favorably disposed to broadcasters in a 22 Q. And that's based on past performance, 22 proceeding in 2009 and '10 than they were in a 23 right? 23 proceeding 2006 and '7." 24 A. That's correct. 24 A. Yes. 25 Q. That's not based on the current 25 Q. And, of course, as you testified, you
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1 didn't mean to say that the judges were biased, 1 Q. And so, when you say that you didn't 2 right; what you meant to say is that the 2 expect a different outcome, what you mean there is 3 marketplace hadn't changed much, correct? 3 that the evidence had not changed large enough for 4 A. What I meant to say was that the 4 you to believe that there would be a different 5 composition of the judges and the amount of 5 outcome in Webcaster III. 6 evidence that the broadcasters could produce at 6 A. In Webcaster III, that's the case. I 7 that limited amount of streaming that had occurred, 7 think Webcaster IV we're going to have a much 8 taking into account the fact that SoundExchange 8 stronger body of evidence. 9 would prosecute more aggressively their case, we 9 CHIEF JUDGE BARNETT: I think what the 10 did not expect to have a reasonably different 10 witness is saying is, if the panel is going to be 11 outcome. 11 wrong, it's going to be consistently wrong. 12 Q. Well, so let's unpack that. 12 THE WITNESS: With all respect. 13 Why would the composition of judges 13 BY MR. CHOUDHURY: 14 mean that you would expect not to receive, you 14 Q. Now, you talked about reasons why the 15 know, a different outcome in Web III? 15 NAB did not believe that it -- litigating 16 A. Come from a small town where you have a 16 Webcasting III was, you know, a meaningful option, 17 small circuit judge that's -- and he's going to be 17 correct? 18 on the bench for many, many years. That person is 18 A. Would you repeat that again, please. 19 elected because of their integrity and because of 19 Q. You testified that you believed -- and 20 their ability to interpret the laws. 20 to use your words -- did not have the stomach to 21 But you also know that, if you say the 21 spend money over litigating webcasting. 22 same thing in front of the same judge repeatedly, 22 A. Right. 23 you're probably going to get approximately the same 23 Q. That was in part because you didn't 24 answer each time. 24 view streaming at the time as a high enough 25 If you have interesting, different or 25 priority for broadcasters, right?
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1 legally fact-based evidence to introduce that 1 A. That's not my view. But it was 2 changes that, then you go before the judge, and you 2 certainly at a time when we were fighting to 3 make a case. 3 maintain our foothold in our core business. 4 But going back to the same 4 Q. Well, if we can take a look at your 5 personality -- not saying anything about bias. 5 testimony -- 6 Just going back to the same individual and 6 CHIEF JUDGE BARNETT: Is this 7 presenting similar evidence over and over, there's 7 congressional or CRB? 8 a high likelihood you're going to get a similar 8 MR. CHOUDHURY: His CRB in this matter. 9 result. 9 BY MR. CHOUDHURY: 10 Q. And the reason you would present 10 Q. In Paragraph 23 when you write 11 similar evidence is because you had similar 11 "Streaming was not a high enough priority for 12 evidence between the time period Webcasting II was 12 broadcasters to spend millions of dollars in 13 decided and Webcasting III would have been 13 litigation costs," are we to understand that as you 14 litigated, correct? 14 believing streaming was not a high enough priority 15 A. The time we were entering the WSA, 15 for broadcasters to litigate the Webcasting III 16 Webcaster III was already underway. There just -- 16 proceeding? 17 Q. Mr. Newberry -- 17 A. I'll stand by my written testimony. 18 A. -- was not enough body of information 18 And the difference that I would make is there was a 19 to present a different case. 19 sense of importance with it, but we were really 20 Q. So, Mr. Newberry, my question is do you 20 working through the WSA. 21 believe that the marketplace evidence had changed 21 At the time that we were considering 22 between Webcaster II and the time you'd be 22 litigation, we had hoped that the opportunity for 23 litigating Webcaster III? 23 the settlement agreement for those negotiations 24 A. Slightly but not enough for the -- for 24 would be more productive. 25 us to make a case that we wanted to pursue. 25 Q. Right.
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1 So, Mr. Newberry, you had -- at the 1 Q. That was another option you had. 2 time when you were negotiating, you had the option 2 A. As I said, not a good option, but that 3 of negotiating the settlement or litigating. 3 could have been an option. 4 And compared between the two, you chose 4 Q. So let's talk about the option you 5 to pursue the negotiation option, correct? 5 chose, the negotiating agreement. 6 A. That is correct. 6 Now, in the agreement, as you 7 Q. You also had other options, right? 7 testified, you were, I think you said earlier, 8 You could have not proceeded in the 8 fighting a long, uphill climb, correct? 9 proceedings at all and accepted the Webcasting III 9 A. Yes. 10 rate even if it was favorable or unfavorable to 10 Q. You still were able to obtain reduced 11 you, right? 11 rates in the first two years, correct? 12 A. Not a good option but an option. 12 A. In return for higher rates in the 13 Q. And you could have negotiated direct 13 latter years. 14 deals with the record labels, you could have 14 Q. And to be clear, those two years were 15 attempted to, just as you did attempt to negotiate 15 the only two years where a rate had already been 16 performance complement waivers, correct? 16 set by the Copyright Royalty Board, correct? 17 A. Frankly, we didn't know -- we were not 17 A. That is correct. 18 made aware that that was an option because 18 Q. So the other years were speculative as 19 SoundExchange said, "We're the body you need to 19 to what the rate would be. 20 discuss the rates with." 20 A. That is correct. 21 Q. Well, but you did approach the record 21 Q. And you received a reduction in the 22 companies directly and negotiate the performance 22 rates you knew were going to apply in the absence 23 complement waivers, didn't you? 23 of an agreement, correct? 24 A. Because SoundExchange told us to. 24 A. Yes. 25 Q. And you were able to negotiate those 25 Q. And you received -- you received relief
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1 before you filed the settlement with the Copyright 1 on reporting requirements. 2 Royalty Board, right? 2 That's both with respect to small 3 A. Simultaneous. 3 webcasters, correct? 4 Q. Right. 4 A. It was only regarding small webcasters. 5 And we see -- if we look at NAB Exhibit 5 Q. But you also received the ability to 6 4101, see February 13, 2009. 6 report some broadcasters on programming on an ATH 7 That's the date of just the first of 7 basis, correct? 8 these agreements, correct? 8 A. Yes. 9 A. That is the date on the agreement, yes. 9 Q. And that's valuable to broadcasters, 10 Q. And so, at the time you were engaging 10 right? 11 in direct negotiations at least with respect to 11 A. That is of value. 12 performance complement waivers, correct? 12 Q. And I think we already discussed that 13 A. We were. 13 the performance complement waivers were valuable to 14 Q. And again, you say, as a negotiator, 14 broadcasters, right? 15 you could have chosen not to -- you couldn't have 15 A. Yes. 16 chosen not to stream, correct? 16 Q. So these were all benefits you received 17 A. That was not an option for the 17 despite the long, uphill climb, correct? 18 broadcasters -- for the National Association of 18 A. Yes. 19 Broadcasters to make that decision unilaterally for 19 Q. And at the time of the settlement -- 20 all the broadcasters. 20 MR. CHOUDHURY: And I'm going to finish 21 Q. But you could have allowed the 21 up in the next five minutes. 22 Webcasting II rates to take hold and then have 22 CHIEF JUDGE BARNETT: Or two. 23 broadcasters make their own individual decisions 23 MR. CHOUDHURY: Or two. 24 not to stream or to stream, correct? 24 BY MR. CHOUDHURY: 25 A. Correct. That was not -- 25 Q. At the time of the WSA settlement, as
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1 you mentioned, there was a group of about 380 1 settlement, you would agree with me that an 2 broadcasters who opted in before you presented the 2 increasing number of broadcasters have opted into 3 settlement to the Copyright Royalty Board, correct? 3 those rates, correct? 4 A. I can't answer the timing of those. I 4 A. I don't believe so. Because I think 5 don't remember. I remember the timing of the 380 5 April 3rd was the deadline for that -- April 3rd, 6 opt-in. 6 2009, was the deadline to opt in. 7 Q. Right. 7 Q. So you don't know whether any 8 A. But I don't know how it relates to 8 broadcasters have opted into the NAB settlement 9 Webcaster III. 9 rate on a year-by-year basis since then? 10 Q. Well, you are aware that the National 10 A. There was a deadline of April 3rd, 11 Association of Broadcasters filed a joint motion to 11 2009, that they had to opt in. I'm not aware of 12 adopt the settlement with the Copyright Royalty 12 any other options at that -- 13 Board, correct? 13 Q. Okay. So you're not aware of any other 14 A. I was not aware -- had not seen that 14 opt-in options. 15 document until Mr. Huppe's comments. 15 A. I'm not. 16 Q. Okay. So you aren't aware what the 16 Q. And until this proceeding -- 17 National Association of Broadcasters said to the 17 MR. CHOUDHURY: Well, no further 18 Copyright Royalty Board about that settlement, 18 questions, Your Honor. 19 correct? 19 CHIEF JUDGE BARNETT: Thank you, 20 A. I had not seen it at the time. I have 20 Mr. Choudhury. 21 seen it since then, yes. 21 Mr. Joseph, you don't have any 22 Q. And if they had said that this was a 22 redirect, do you? 23 settlement the Copyright Royalty Board should 23 MR. JOSEPH: When the court says that, 24 adopt, would that change your view about this 24 I usually should say yes. But may I have the 25 settlement? 25 indulgence of two or three minutes?
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1 A. I'm not an attorney, and I can't 1 CHIEF JUDGE BARNETT: Two or three or 2 address what language was required to execute the 2 two. 3 agreement. 3 MR. JOSEPH: Okay. Thank you, Your 4 I know it was jointly filed by 4 Honor. 5 SoundExchange and NAB as an outshoot of the 5 REDIRECT EXAMINATION BY COUNSEL FOR 6 agreement, but I can't address the language that's NAB 7 in the agreement. 6 BY MR. JOSEPH: 8 Q. Well, so let's discuss that. The 7 Q. Mr. Newberry, Mr. Choudhury asked you 9 last -- the -- Judge Strickler asked you questions 8 about negotiating directly with the record 10 about the nonprecedential clause. 9 companies over fees. 11 Now, you learned about that from the 10 Did you understand the record companies 12 attorneys for NAB at the time, correct? 11 to be willing to negotiate fees at the time of this 13 A. Correct. 12 discussion? 14 Q. And that -- you didn't have any direct 13 A. I did not. They made it very clear 15 conversations with SoundExchange about that 14 that we deal with SoundExchange. 16 provision, correct? 15 Q. Mr. Choudhury was talking about single 17 A. Correct. 16 transmissions to single people. 18 Q. So those conversations only happened 17 Is the content of those transmissions 19 between the attorneys, right? 18 when you simulcast to two different people the same 20 A. It may have been a -- I will clarify. 19 or different? 21 I hadn't thought about this. But on that Sunday 20 A. It's the same. 22 afternoon, I know that representatives of the 21 Q. And he also -- 23 SoundExchange team said, "This has to be included, 22 A. It is not customized in any way. 24 or we can't move forward on this agreement." 23 Q. He also talked about using music to 25 Q. Okay. And in the time since that 24 differentiate your programming. 25 How else do you differentiate your
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1 programming? 2 A. Our branding, our personalities, our 3 contesting, our remote broadcast visibility in the 4 community. 5 Q. Is music -- what would you consider the 6 primary ways you differentiate your programming? 7 A. Personalities and promotion and music 8 are the three primary ways. 9 MR. JOSEPH: All right. I have no 10 further questions, Your Honor. 11 Did I make it two minutes? 12 CHIEF JUDGE BARNETT: You did very 13 well. Thank you, Mr. Joseph. 14 And thank you, Mr. Newberry. You may 15 be excused. 16 We will reconvene at 9:00 in the 17 morning. 18 (Whereupon, the proceeding was 19 adjourned at 4:50 p.m.) 20 21 22 23 24 25
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1 CERTIFICATE OF COURT REPORTER 2 3 I, Bonnie L. Russo, do hereby certify that the 4 foregoing transcript is a true record of the 5 proceedings to the best of my ability, that I am 6 not related to or employed by any of the parties 7 involved in these proceedings, and, further, that I 8 am not a relative or employee of any attorney or 9 counsel employed by the parties hereto, or 10 financially interested in the proceedings. 11 12 ______Bonnie Russo 13 Notary Public in and for the District of Columbia 14 15 My Commission Expires: 16 May 16, 2016 17 18 19 20 21 22 23 24 25
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TAB J RESTRICTED IN ITS ENTIRETY - NO REDACTED VERSION AVAILABLE SUBJECT TO PROTECTIVE ORDER IN DOCKET NO. 19-CRB-0005-WR (2012-25) Proof of Delivery
I hereby certify that on Thursday, September 26, 2019, I provided a true and correct copy of the Written Direct Statement of the National Association of Broadcasters (Public Volume 2 of 3) to the following:
Sony Music Entertainment, represented by David A. Handzo, served via Electronic Service at [email protected]
Jagjaguwar Inc., represented by David A. Handzo, served via Electronic Service at [email protected]
Warner Music Group Corp., represented by David A. Handzo, served via Electronic Service at [email protected]
UMG Recordings, Inc., represented by David A. Handzo, served via Electronic Service at [email protected]
circle god network inc d/b/a david powell, represented by david powell, served via Electronic Service at [email protected]
SAG-AFTRA, represented by David A. Handzo, served via Electronic Service at [email protected]
SoundExchange, Inc., represented by David A. Handzo, served via Electronic Service at [email protected]
Sirius XM Radio Inc., represented by Todd Larson, served via Electronic Service at [email protected]
National Religious Broadcasters Noncommercial Music License Committee, represented by Karyn K Ablin, served via Electronic Service at [email protected]
College Broadcasters, Inc., represented by David D Golden, served via Electronic Service at [email protected]
Educational Media Foundation, represented by David Oxenford, served via Electronic Service at [email protected] Google Inc., represented by Kenneth L Steinthal, served via Electronic Service at [email protected]
American Federation of Musicians of the United States and Canada, The, represented by David A. Handzo, served via Electronic Service at [email protected]
American Association of Independent Music ("A2IM"), The, represented by David A. Handzo, served via Electronic Service at [email protected]
Pandora Media, LLC, represented by Todd Larson, served via Electronic Service at [email protected]
Radio Paradise Inc., represented by David Oxenford, served via Electronic Service at [email protected]
iHeartMedia, Inc., represented by John Thorne, served via Electronic Service at [email protected]
National Public Radio, Inc., represented by Gregory A Lewis, served via Electronic Service at [email protected]
Corporation for Public Broadcasting, represented by Kenneth L Steinthal, served via Electronic Service at [email protected]
Signed: /s/ Sarang V Damle