NEWSLETTER a N E N T E R T a I N M E N T I N D U S T R Y O R G a N I Z a T I O N
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November 2005 NEWSLETTER A n E n t e r t a i n m e n t I n d u s t r y O r g a n i z a t i o n The Podcasting Craze Richard Conlon, VP Business Development, BMI Podcasting is the latest craze According to forecasts from The President’s in the digital media. This past The Diffusion Group, a leading Corner week the medium hit the head- consumer technology research lines again with the announce- consultancy, demand for time- Dan Butler ment of new video capabilities for shifted digital audio files or "pod- Apple’s iPod player and a new casts" is expected to grow from Our last meeting, “Breaking Bands in time shifted offering of ABC off- less than 15% of portable digital Film TV and Games,” was truly a pleasure network programming made avail- music player owners in 2004 to to moderate. Panelists Alex Patsavas, Ju- able for sale through the iTunes 75% by 2010. TDG's new report, lia Michels, Dominic Griffin, Elena Byington service. Podcasting: Fact, Fiction and Op- and Jonathan Palmer all contributed to a A cousin of the blogging portunity , suggests that between rowdy and informative evening, which was craze, Podcasting uses RSS feeds 2004 and 2010, the use of podcas- to transmit prepackaged audio and ting among US consumers will en- enjoyed by a packed house. Thanks to all audio visual programming over joy a compound annual growth our panelists and audience in attendance! the Internet to users’ desktops to rate (CAGR) of 101%. Podcasting, barely a year old, is off to a portable media players (these can With Podcasts, you only re- fast start and shows every sign of explo- include all media players – not ceive those programs to which you ding in the near future. A Google search just iPods). Even prior to the have subscribed. Podcasting pro- for “podcast” at the time I write this yields iTunes announcement, podcasts grams cover every topic, can be 63 million hits. As iPods continue to sell at were capable of transmitting audio minutes or hours long, and offer a phenomenal pace, those white ear buds visual programming if the pro- production values ranging from no longer are just delivering music to lis- grams were distributed in a com- nationally syndicated radio pro- tener’s ears, they also deliver books on patible mp format. Podcasts are grams to your next-door neighbor tape, talk radio, and an amazingly diverse the audio or audio-visual equiva- in his garage. Podcasting is rein- group of programs. Yahoo!, the BBC, Vi- lent of blogs with the added bene- venting the way audio programs rgin Radio, KCRW and myriad amateur fit of automatic, direct push de- are created and distributed with livery to the subscriber’s desktop. original content on every topic, sources have all gotten into the act. Consumers find podcasts from every corner of the world Anyone with a microphone, computer through aggregator sites such as and high-speed Internet connection can Podcast Alley, iPodder or Yahoo’s Top Line Market Statistics now create their own programming and recently announced podcast direc- A review of the iTunes pod- pass it on to subscribers or casual users, tory. When they find a podcast cast directory in early September who can listen on their computers or take that interests them, they “sub- 2005 revealed more than 6,000 it with them in portable devices like iPods scribe” to have the RSS feed auto- active podcasts. Podcast Alley in- and cell phones. matically downloaded to their PC’s dexes nearly 8,400 podcast pro- Rather than being a threat to radio, now as new programs become avail- grams and 180,000 episodes in iPods allow users to carry their favorite able. their directory. Podcasts focus on radio programs with them whenever and Market analysts estimate that everything from electronic gadgets wherever they go. Podcasting allows time there are currently 35 million por- to movies and astronomy. TDG shifting in the same way that Tivo enables table media players deployed in Research (tdgresearch.com) pro- viewers of television programs to save the market and foresee the uni- jects that the audience for pod- verse reaching nearly 70 million casts will grow from about 4.5 (Continued, page 3) hard drive and flash portable me- million to 56.8 million consumers dia devices by 2010. by 2010. Sound Recordings The rights to use sound recor- dings are generally licensed by the record labels who own the master recordings. The activity of podcas- ting falls outside of DMCA compliant streaming online radio governed by DMCA statutory rates. Rates for in- teractive performances are set on a case by case basis by the labels. A podcast also generally includes a reproduction of a sound recording which would also require licensing by the copyright holder of the sound recording. Currently the lack of standar- dized, readily available licenses from record labels and others are a roadblock for podcasters who want to use mainstream commercially re- corded music in their podcasts. This may explain why only 7% of pod- casts on the iTunes directory are music focused. Then again, pod- casting as it is currently configured may just lend itself more to spoken word genres of programming. Business Models / Revenue Music Copyrights Streams The current rights picture has not yet What’s Next? Most podcasts are offered free of been fully developed. Performing Rights Podcasting may be just the charge and are hobbyist activities. Organizations BMI and ASCAP have of- start of a new broadcasting revolu- Where revenues are generated they fered standard licenses for the category tion. As wireless networks become are usually through advertising, spon- on a percentage of gross revenue basis. more robust, the potential for sorships, tip jars including PayPal and The PRO licenses are only part of the pic- streaming podcasts that are distri- subscriptions. As the medium grows It ture however. Additional permissions buted more like over-the-air radio is anticipated that traditional and non need to be secured from the owner of the and television becomes a reality. traditional forms of advertising, spon- sound recording as well as the underlying Pod2Mob (http://www.pod2mob. sorship and promotion revenue will musical work. com), a streaming podcast service emerge. Podcasting requires clearance of that retranslates podcasts for over The podcast for sale phenome- publishing and master recording rights. the air wireless distribution via cel- non was highlighted by the recent in- Publishing rights include mechanicals, lular networks, was launched in Au- troduction of audio-visual podcasts for performances and synchronization when gust 2005 with the mission of “cut- a fee from the ABC television network audio visual works are made available. ting the white cord.” Pod2mob where consumers can buy a podcast Sound Recording rights include the inter- wants to make it easier for any cel- version of “Desperate Housewives,” active digital performance of the sound lular phone subscriber to access “Lost,” and “Night Stalker” for $ 1.99. recording and the distribution / reproduc- podcasts on demand and eliminate On the advertising front, techno- tion of the sound recording. the tie between the portable device logy provider CastFire recently created and the computer. a service to network podcasters into a Musical Works Christine Iglesias of BMI assis- package to be sold to advertisers on a Performance rights organizations ted with research for this article. cumulative impression basis. Some (ASCAP, BMI and SESAC) provide licenses sponsorships have also been sold. In for the performance of musical works, in- New York radio station Z100 signed cluding their performance in a podcast. TOP 10 PODCASTS Virgin Mobile as a sponsor for its pod- Separate licenses are necessary from October 2005 casts of comedy bits from its morning each performance rights organization be- Podcastalley.com show. cause each agency represents different Others use the medium as a ve- MuggleCast – Harry Potter musical works, and the songwriters and hicle to promote their over the air SoccerGirl – Web exploits and music publishers associated with them. more broadcast or offline entertainment bu- Additionally, licenses for the mechanical MacCast – about Macs sinesses. Mainstream media compa- rights which are triggered when copies of PotterCast – Harry Potter news nies such as Showtime, Fox Televi- an underlying musical work are made are Keith and the Girl – talk show sion, and Simon and Schuster and Dawn and Drew - talk show required as well as synchronization licen- Bravo have turned to podcasts to help Free Talk Live – Libertarian talk ses for audio visual works are required. promote their core businesses. Ancestor PodBook – sci–fi serial These licenses would be issued by music Distorted View –uncensored news publishers or through the Harry Fox Agen- This Week in Tech cy, an industry clearinghouse. Presidents Corner (continued) their favorite programs and watch them at their conve- nience. Music and copyright law obviously impacts the content of podcasting at the present time. So far, most mainstream music is not readily available, but pod- casting presents a great vehicle for independent labels and ar- tists to put their music in the ears of consumers. Tonight’s meeting, “Attack of the Pod People: A Look at the Short History and Rapidly Evol- ving Future of Podcasting” is mo- derated by CCC Board Member and entertainment attorney Ke- vin Koloff. Panelists Antony Bru- no from Billboard, Columnist Bob Lefsetz and entertainment attor- ney Josh Wattles will enlighten us as to what podcasting is, how to experience it, and perhaps how to profit from it. By the way, one attendee of to- night’s meeting will go home with a new iPod Nano, courtesy of the CCC.