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Digital Watch: Net Neutrality Is Here; Teens Prefer Streaming

Welcome to our new Wednesday feature, Digital Watch. Each week I’ll be tackling news and analysis about radio’s intersection with the digital world, online and off. This takes the place of Podcast Survivor, but it doesn’t mean podcasting coverage is going away. I’ll explain further at the end of this post.

The week’s biggest news dropped on Wednesday, when FCC Chairman Tom Wheeler publicly revealed details for his Open Internet proposal to be voted on by all five commissioners on February 26. Most proponents of strong network neutrality–including public interest groups and internet companies like Twitter and Netflix–are cheering what is known so far. The most significant part is the proposal that the FCC will regulate internet service as a utility, under so-called Title II provisions. The surprise is that Wheeler plans to cover mobile broadband, not just wired internet service.

The Verge has a rundown of many of the pro and anti Title II reactions that have been published.

Matthew examines the possibility that the new rules, if passed, would kill “sponsored data” plans where services pay for users’ wireless data or plans like T-Mobile’s Music Freedom in which the carrier doesn’t charge for the data consumed using selected streaming music platforms. I’ve already argued that Music Freedom is really an “internet fast-lane” dressed up as a gift for music lovers, since T-Mobile picks and chooses which services benefit. Such “fast-lanes” are what the Open Internet proposal aims to prohibit.

As for wired home and business internet, so far there has been less of a thread to internet radio and streaming music services, principally because they use less bandwidth than high definition video as provided by services like Netflix. However, the burgeoning trend towards streaming uncompressed CD quality audio from platforms like Deezer Elite and Tidal does push audio closer to video-scale bandwidth territory. Furthermore, if high resolution audio of the sort that Neil Young’s Pono player delivers takes off, it’s not hard to see even more data-intensive streaming music services on the horizon.

For internet audio and radio the latent threat has been more about paid prioritization rather than limiting bandwidth. For radio this would look something like T-Mobile’s Music Freedom but with your cable modem, where one or more partner services would be given priority, especially for customers on inexpensive low-bandwidth tiers. In reality most “unlimited” home internet plans have a data cap of some kind, which could be activated or lowered at any time, potentially impacting a heavy consumer of internet radio or streaming music. The FCC’s Open Internet proposal would likely place the indie community or college station on the same ground as iHeartRadio when it comes to equal access to the home internet user.

Of course, even if the proposal passes wholesale at February’s open meeting, the chapter will not be closed. Court challenges and Congressional intervention are still possible. At the same time, passage would still set a tone and effectively set a new baseline for future debates or negotiations on the matter.

In other news…

Teens Prefer Streaming Services

Edison research just released more results from its fall 2014 Share of Ear survey on American listening habits. While not surprising, they don’t look so good for terrestrial radio.

Edison found that teenagers 13 to 17 now spend more time with streaming audio services like Spotify or Pandora than terrestrial radio, by a margin of 64 minutes to 53 minutes a day, respectively. AM/FM radio still leads for all other age groups. But, of course, today’s 13 – 17 year-olds are tomorrow’s 25 – 34 year -olds.

It doesn’t take much insight to see that today’s teenagers are raised in an on-demand environment, and broadcast radio is the polar opposite. But it would be a mistake to leave it at that, since a service like Pandora is not on-demand, even if it is customized. I would argue that mainstream commercial music radio, with its surplus of heavy rotations and voice-tracked non-local talent, is a poor alternative to Pandora, commercials and all.

Choosing amongst 50 cookie cutter CHR stations on iHeartRadio is nothing like choosing a Pandora station, even if you’re craving the current top hits. But this is old news, right?

Internet Radio Pays Record Royalties

SoundExchange is the independent organization that collects performance royalties from digital radio services on behalf of music artists. The organization reports that $773 million was paid out to registered recording artists in 2014, a new record high.

Admittedly, most stations with internet streams have a mixed relationship with SoundExchange because it’s another bill to pay for something that they don’t have to pay for their terrestrial broadcast signal. Yet, this record pay out indicates that there is increased interest in internet radio. Also, this includes performance royalties paid by profit-making digital services like Pandora and SiriusXM, as well as commercial and noncommercial radio stations.

From Podcast Survivor to Digital Watch

As I mentioned above, this week marks a shift from the Podcast Survivor weekly feature to this new one, Digital Watch. I wrote Podcast Survivor every week from November 2013 to January 2015. While I’m retiring the weekly feature, Radio Survivor is not retiring podcast coverage. Podcasting will definitely be part of Digital Watch, but the segment has grown so much in just fifteen months that we’re going to make it more of our everyday coverage.

I also made to decision to end the weekly podcasting feature because it started to seem as though I was saving up lots of podcasting stories, and then couldn’t quite get to everything in just one post. Much of those stories tended to be meta-reporting–making note of coverage in other press outlets. While I see the use in that kind of aggregation, it’s also not really the kind of writing I most enjoy doing. For me, continuing in this vein was a recipe for burnout, which isn’t good for anybody.

Clearly, I could do more primary source reporting and analysis of podcasting instead. However, with a day job also working in and writing about podcasting, this has become a difficult needle to thread. It seemed to me the best solution is to broaden the scope each week so that I can better look at bigger trends in digital audio, which includes podcasting.

Importantly, Radio Survivor will continue to provide regular coverage of podcasting, just not only on Wednesdays, but more as relevant news happens. I also will continue to write the monthly Podcast Extra feature which appears exclusively in our free weekly email newsletter (you can sneak a peek at January’s edition).

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