Chapter 2 History of Streaming: a New Model of Radio

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Chapter 2 History of Streaming: a New Model of Radio INTERNET AUDIO STREAMING AND THE EMERGING MODEL OF RADIO By Benjamin D. Rickert A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of MASTER OF ARTS Telecommunication, Information Studies and Media 2011 ABSTRACT INTERNET AUDIO STREAMING AND THE EMERGING MODEL OF RADIO By Benjamin D. Rickert Internet audio streaming is enabling a new model of radio and expanding the medium‟s definition by challenging the conventions of the broadcasting industry. As broadband access approaches ubiquity, consumer and audience habits are shifting, markets are consolidating, copyright laws are evolving and advertisers are experimenting. It is in the midst of these interacting forces that the radio broadcaster must succeed online while adapting to the up-side down, emerging business model of Internet radio - where technology and licensing costs have a direct relationship with the size of the audience and the one-to-many broadcasting strategy may be irrelevant. The objective of this thesis is to contrast the emerging and traditional radio models according to their technologies, operations, laws and business practices by analyzing the perceptions of industry experts in the context of historical and contemporary issues. To this end, experts were recruited from the audio/music production, radio broadcasting and music education/performance fields to share their perceptions and insights with the industry through an anonymous online survey, yielding a set of recommendations regarding the application, usability and sound quality of current streaming technologies. The position of this thesis is that the practice of simulcasting is logical in the short-term; though short-sighted in the long-term, as the online amalgamation of markets will progressively require a narrowcasting approach. Copyright by BENJAMIN DANIEL RICKERT 2011 ACKNOWLEDGEMENTS I would like to extend my deep gratitude to my advisor, mentor and thesis chair, Professor Gary Reid, as well as the others on this thesis committee, Dr. Carrie Heeter and Dr. Cliff Lampe. I would also like thank another instructor who has greatly influenced me in my studies and as an artist, Professor Robert Albers. It has been an immense privilege to work with all of you and I am grateful for your invaluable guidance and consistent support throughout my graduate work at Michigan State University. iv TABLE OF CONTENTS LIST OF TABLES ........................................................................................................................ vii LIST OF FIGURES ....................................................................................................................... xi LIST OF ABBREVIATIONS ....................................................................................................... xii CHAPTER 1 HISTORY OF RADIO BROADCASTING ................................................................................... 1 Early Scientific Research .................................................................................................... 2 The First Radio Broadcasts ................................................................................................. 4 FM Technology ................................................................................................................... 5 Commercial Radio and Audience Research ....................................................................... 6 Regulating Radio ................................................................................................................ 8 Deregulation ...................................................................................................................... 11 Consolidation and the Telecommunications Act of 1996 ................................................. 12 Safe Harbor ....................................................................................................................... 13 CHAPTER 2 HISTORY OF STREAMING: A NEW MODEL OF RADIO .................................................... 16 Regulating Online Radio................................................................................................... 19 Network Neutrality ........................................................................................................... 21 National Broadband Plan .................................................................................................. 23 CHAPTER 3 MODERN AUDIENCE RESEARCH .......................................................................................... 26 Arbitron & Edison Research ............................................................................................. 26 Coleman Insights .............................................................................................................. 28 CHAPTER 4 STREAMING AND THE LAW ................................................................................................... 31 Digital Copyright Law ...................................................................................................... 32 CHAPTER 5 STREAMING OPERATIONS ..................................................................................................... 36 Programming Strategy ...................................................................................................... 36 Advertising and National Labor Unions ........................................................................... 40 Royalties ........................................................................................................................... 42 Stream Hosting.................................................................................................................. 45 The Question of Quality.................................................................................................... 45 Multiple Streaming Venues .............................................................................................. 46 v TABLE OF CONTENTS (CONTINUED) CHAPTER 6 THE BUSINESS OF STREAMING ............................................................................................ 49 The Traditional Business Model ....................................................................................... 50 Audience and the Online Market ...................................................................................... 51 Internet Radio Ratings ...................................................................................................... 52 The Emerging Model ........................................................................................................ 54 Streaming Radio Profiles .................................................................................................. 56 CHAPTER 7 TECHNICAL ISSUES.................................................................................................................. 61 Digital Audio Reproduction .............................................................................................. 61 Streaming Technology ...................................................................................................... 62 Commercial Bit Rates ....................................................................................................... 63 CHAPTER 8 RESEARCH METHODOLOGY.................................................................................................. 66 Sample............................................................................................................................... 67 Method .............................................................................................................................. 68 Technical Details .............................................................................................................. 71 CHAPTER 9 SURVEY ANALYSIS AND RESULTS ...................................................................................... 74 Part A - Questionnaire ...................................................................................................... 74 Part B – Media Player Evaluation ..................................................................................... 87 Part C – Sound Quality Evaluation ................................................................................... 95 CHAPTER 10 CONCLUSIONS AND RECOMMENDATIONS ..................................................................... 108 APPENDIX A: ONLINE SURVEY CONTENT ....................................................................... 114 APPENDIX B: LISTENING EXERCISES EXPERIMENT KEY ............................................ 122 APPENDIX C: SURVEY DATA ............................................................................................... 124 NOTES ........................................................................................................................................ 140 vi LIST OF TABLES Table 1. Standard “Per Performance” Rate History ...................................................................... 44 Table 2. Broadcaster/Small Broadcaster “Per Performance” Rate ............................................... 45 Table 3. Examples of Streaming Radio “Tuner” Sites ................................................................. 48 Table 4. Internet-Only Streaming Audio Sources ......................................................................... 57 Table 5. Media Player Heuristics and Evaluated Statements ....................................................... 71 Table 6. In what ways can you envision
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