Wednesday, December 22, 2010

Net Partiality

Net neutrality is a hoax.

The American public is about to be fleeced once again by their elected officials, government appointees (The FCC) and big business.

Passage of net neutrality rules by the FCC yesterday paves the way for years of legal battles and uncertainty as technology again leads the way for new media and the public gets shut out.

In a nutshell net neutrality would guarantee that Internet providers would be prevented from interfering with web traffic.

But the proposed rules might accomplish that goal for some forms of Internet access but not others. And all of a sudden free speech has given way to something more important to Internet service providers as it appears the FCC has sold out to AT&T and Verizon.

For the first time these giant providers would be able to charge more to companies and individuals that want faster service or more capability for delivery of video, games and other services prompting Senator Al Franken to comment, "grassroots supporters of net neutrality are beginning to wonder if we've been had". Franken wondered aloud whether the proposal adopted by the FCC was "worse than nothing."

There are concerns that building in pricing capability for Internet service providers to charge more for better service will create an unfair advantage to others. The analogy I heard recently is that if power companies dictated what appliances consumers could use by charging more for using some things and less for others, it would be an awful way to manage capacity and demand.

Yet that is precisely what is happening as The Obama Administration appears ready to renege on a promise the president made in 2008 with regard to making the Internet equally accessible to all.

While this argument takes place, more and more consumers will be using the mobile Internet and the devices that they love so much and yet the guarantees of neutrality may only apply in some ways to wired broadband and not mobile Internet.

Translation: your iPad may look like it is in your hands, but it will really be in the hands of Internet providers.

AT&T and Verizon have already introduced tiered pricing for the mobile Internet and Comcast is getting ready to jump in once they get federal approval to buy 51% of NBC Universal.

So you can see what a mess this is for consumers, new media content providers, advocates of free speech and those concerned with not creating a hierarchy of Internet access for only those able to pay.

But wait.

There are major repercussions for – of all things – terrestrial radio, the medium left in the dust by iPhones, iPads, Androids and the entire mobile Internet.

Radio is free.

Anyone can access it relatively inexpensively, but consumers are turning away from radio for mobile Internet devices.

I’ve got an early look at a scenario where the greed of ISPs could actually help revive simple, terrestrial radio if it follows this game plan.

Tuesday, December 21, 2010

EMI is DOA

If you think that only the radio industry is dysfunctional, think again.

There are four majors remaining in what’s left of the record business and EMI could lose control to Citigroup very soon – the bank that propped the label up with billions of dollars during hard times.

And it all could happen before the New Year.

The private equity firm of Terra Firma under the management of Guy Hands is already whispering that they may have to turn the label over to the bankers.

Horrors!

That sounds like radio and no good can come from it.

You almost can’t blame a bank for wanting its money back when you’re talking about billions. I get that. What they don’t get is that bankers don’t know how to operate anything.

I refer you back to radio.

Terra Firma lost a court battle not long ago with Citigroup where it basically said that they were lured into buying EMI – that’s fraud except that the courts didn’t buy it.

$6.7 billion later, Terra Firma is in quicksand despite cost cutting almost certainly guaranteeing that one of the big four labels will be up for grabs when the bank takes over.

It would be as if Citadel filed for bankruptcy and then Cumulus wanted to steal it as it emerged.

Hey, wait a minute! Didn’t that already happen?

There are serious repercussions for the music industry if Citigroup takes back EMI and eventually sells off the small parts.

Monday, December 20, 2010

Cumudel — What Happens When You Cross a Cumulus with a Citadel

You've heard of the banking concept called too big to fail?

The proposed merger of Cumulus with Citadel is too failed to be big.

Everyone thinks Cumulus CEO Lew Dickey is forcing a merger with the recently bankrupt Citadel to grow his media empire.

Well, don’t fall for it.

Dickey is trying to save his own neck as I will go on to explain. The last two radio groups anyone would put together is the red ink drenched Cumulus with the fresh from having screwed their investors Citadel.

Two radio groups behaving badly – only a desperate radio CEO could come up with this idea.

And make no mistake about it, Lew Dickey is desperate.

Cumulus has failed to turn around local sales even with the Atlanta-based national sales system that even a dummy can follow. Unfortunately for Cumulus, their salespeople are not dummies – at least not all of them. And those poor suckers hired from other industries with no experience are probably more naïve than stupid.

Face it.

The best part of watching Lew Dickey try to engineer an unfriendly takeover of Citadel is seeing Citadel CEO Farid “Fagreed” Suleman sweat and “Tricky” Dickey beg – in public.

Go ahead, admit it!

But the prospect of Cumudel is a not-ready-for-primetime maneuver born more of necessity on the part of Cumulus than the need of Citadel to sell out for $31 a share.

This battle is a Christmas present to all the screwed employees of radio. It has everything a drama could ask for – greed, jealousy, power and sex. Okay, three out of four ain’t bad.

I feel like I know these two pretenders like the back of my hand and believe it or not I know how the desired merger of Cumulus with Citadel is going to end and what it is going to mean.

Thursday, December 16, 2010

Radio Royalty Revolt

This piece is about real alternatives to the damaging music performance tax that is ready to be imposed on radio stations either by law or by concession.

There are real alternatives but you wouldn't know it from what's being discussed.

Just yesterday, there was some last minute maneuvering in Congress to get the performance rights tax for radio ready for House passage with an eye toward later Senate approval. Sooner or later, the music tax is coming to radio. I’m betting sooner.

There is a discussion in this article about the snowball effect on radio’s capitulation to the music industry even if it is initially at 1% of a station’s revenue. This piece outlines the latest behind the scenes machinations and the threat to music in new media.

Today’s piece also reveals new options going forward for radio stations and individuals who want to negotiate their own deals instead of having the NAB do it for them. There is precedent. A little known action as recently as a few weeks ago. I’ll fill you in.

Then, the “plan”.

Four steps that are completely legal and in your hands that can lead you to a livable deal with record labels.

The stakes are high.

The return of terrestrial music radio to a healthy place is on the line and without this approach, you can pretty much forget about harnessing those 40 million iPads that analysts say will be in the hands of consumers by next year at this time.

If you’d like to access this story, check out the options under “read more”.

Have a great day! -- Jerry

Net PartialityJerry Del Colliano

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Monthly Archives: December 2010