Digital Nation at MCN - by Gary Dretzka

Digital Nation is on its way to the National Association of Broadcasters convention in Las Vegas, where many of the participants are waiting with bated breath for 1) the end of the war, and return of their airwaves for such crowd-pleasing features as police chases and Victoria's Secret fashion shows; 2) FCC rulings on the future of deregulation and further consolidation of the media; and 3) the government to agree that all expenses relating to the conversion to digital be passed along to taxpayers.

As Mike Ditka said about George Halas, these guys thrown nickels around like they're manhole covers. Still, as conventions go, the NAB is one of the better ones.

So, I don't have all that much to report on the digital front this week. Instead of pulling more stuff out of thin air, I thought I'd pass along some information sent to me by the folks who've just launched Internet Radio Newsletter. As you might recall, the federal government, station conglomerates and music publishers have been working feverishly to find ways to limit the public's access to streaming audio and non-licensed, thus "pirate" radio stations.

The publishers of the newsletter have aimed their message at the growing number of so-called "streamies." The army of consumers who enjoy listening to Internet broadcasts apparently has grown large enough in numbers to warrant coverage and categorization by Arbitron.

According to the newsletter, "The part that is most exciting to advertisers is that our numbers are growing. Arbitron released a study that shows that over 100 million Americans have listened to Internet streaming broadcast. That is nearly twice the amount of three years ago."

It goes on to point out:
.......... 125 million will have tried Internet radio by the end of the year
.......... 37 million are active users of Internet radio
.......... 43 percent have made web-based purchases
.......... 18 percent have household incomes $100K or above.
.......... 15 percent have attended graduate school
.......... 80 percent are likely to visit the website of a company that advertises on a
............. favorite station
.......... 60 percent have made purchases over the Internet
.......... 41 percent have made purchases over the Internet in the last month
..........The typical "streamie" spends over 80 percent more time online than web users
............ who don't listen/watch online.

The breakdown by age looks like this:
.......... 12-17, 18 percent
.......... 18-24, 15 percent
.......... 25-34, 19 percent
.......... 35-44, 20 percent
.......... 45-54, 19 percent
.......... 55-64, 6 percent
.......... 65+, 3 percent

By gender:
.......... Male, 50 percent
.......... Female, 50 percent

By employment status:
.......... Employed part/full time, 62 percent
.......... Retired, 5 percent
.......... Student, 20 percent
.......... Homemaker, 6 percent
.......... Unemployed, 6 percent

The publisher of Internet Radio Newsletter goes on to point out, "It costs money to provide an Internet Radio stream to your desktop, and the only way to offset that cost is to find someone to pay for it.

"Inserting Internet based advertisements into the live radio stream over the existing commercials allows Internet Radio to stay free."

That, of course, also defines the parameters of the battlefield. Advertisers don't want to have their messages zoned, and, in their minds, devalued; local broadcasters don't want to compete with webcasters for advertisers; and music publishers want to compound royalties, based on the number of markets reached, not stations.

Internet radio won't be Topic 1, 2 or 3 at NAB. In another year or two, though, it and satellite radio could be the only thing on the minds of broadcasters.

And on an entirely different digital front:

The Video Software Dealers Association announced Monday that combined VHS and DVD rentals during the first quarter of 2003 hit another high-water mark, with consumers spending $2.34 billion on VHS and DVD rentals. This spending eclipsed the previous record for the first quarter, which was $2.26 billion, set in 2001.The number represented 811 million turns, or units rented.

Consumers spent $1.19 billion renting 448 million VHS cassettes and $1.15 billion renting 363 million DVDs in the first quarter. DVD accounted for 49 percent of rental revenues in the quarter of 2003, compared with 26 percent for the first quarter of 2002.

Brad Hackley, director of research for VSDA, cited three factors for the jump in business.
"First and foremost, there was a strong slate of video releases in the first quarter," Hackley said. "Movies like Signs, My Big Fat Greek Wedding, Sweet Home Alabama, Barbershop, and The Bourne Identity brought people into video stores. Second, many people acquired DVD players over the holidays and when people acquire DVD players their movie-watching increases. Finally, the harsh weather that much of the country experienced this winter was perfect for staying indoors and watching a video."

The first quarter of 2003 also saw, for the first time, weekly DVD revenues exceeding those of VHS. This occurred twice, during the weeks ending March 16 and March 30, 2003.


April 4, 2003 March 31, 2003 Interview: S. James March 23, 2003 March 18, 2003 March 11, 2003 ShoWest Wrapup Interview ShoWest 2003 March 4, 2003 February 25, 2003 February 18, 2003 February 11, 2003 February 4, 2003 January 28, 2003 January 21, 2003 January 14, 2003 January 8, 2003 January 1, 2003 ..News ..Oscar Race Charts ..15 Weeks to Oscar ..The Top 10 Chart ..The Top 20 ..The Critics List ..Gary Dretzka ..Leonard Klady ..David Poland ..Ray Pride ..Patricia Vidal	April 8, 2003 Digital Nation is on its way to the National Association of Broadcasters convention in Las Vegas, where many of the participants are waiting with bated breath for 1) the end of the war, and return of their airwaves for such crowd-pleasing features as police chases and Victoria's Secret fashion shows; 2) FCC rulings on the future of deregulation and further consolidation of the media; and 3) the government to agree that all expenses relating to the conversion to digital be passed along to taxpayers. As Mike Ditka said about George Halas, these guys thrown nickels around like they're manhole covers. Still, as conventions go, the NAB is one of the better ones. So, I don't have all that much to report on the digital front this week. Instead of pulling more stuff out of thin air, I thought I'd pass along some information sent to me by the folks who've just launched Internet Radio Newsletter. As you might recall, the federal government, station conglomerates and music publishers have been working feverishly to find ways to limit the public's access to streaming audio and non-licensed, thus "pirate" radio stations. The publishers of the newsletter have aimed their message at the growing number of so-called "streamies." The army of consumers who enjoy listening to Internet broadcasts apparently has grown large enough in numbers to warrant coverage and categorization by Arbitron. According to the newsletter, "The part that is most exciting to advertisers is that our numbers are growing. Arbitron released a study that shows that over 100 million Americans have listened to Internet streaming broadcast. That is nearly twice the amount of three years ago." It goes on to point out: .......... 125 million will have tried Internet radio by the end of the year .......... 37 million are active users of Internet radio .......... 43 percent have made web-based purchases .......... 18 percent have household incomes $100K or above. .......... 15 percent have attended graduate school .......... 80 percent are likely to visit the website of a company that advertises on a ............. favorite station .......... 60 percent have made purchases over the Internet .......... 41 percent have made purchases over the Internet in the last month ..........The typical "streamie" spends over 80 percent more time online than web users ............ who don't listen/watch online. The breakdown by age looks like this: .......... 12-17, 18 percent .......... 18-24, 15 percent .......... 25-34, 19 percent .......... 35-44, 20 percent .......... 45-54, 19 percent .......... 55-64, 6 percent .......... 65+, 3 percent By gender: .......... Male, 50 percent .......... Female, 50 percent By employment status: .......... Employed part/full time, 62 percent .......... Retired, 5 percent .......... Student, 20 percent .......... Homemaker, 6 percent .......... Unemployed, 6 percent The publisher of Internet Radio Newsletter goes on to point out, "It costs money to provide an Internet Radio stream to your desktop, and the only way to offset that cost is to find someone to pay for it. "Inserting Internet based advertisements into the live radio stream over the existing commercials allows Internet Radio to stay free." That, of course, also defines the parameters of the battlefield. Advertisers don't want to have their messages zoned, and, in their minds, devalued; local broadcasters don't want to compete with webcasters for advertisers; and music publishers want to compound royalties, based on the number of markets reached, not stations. Internet radio won't be Topic 1, 2 or 3 at NAB. In another year or two, though, it and satellite radio could be the only thing on the minds of broadcasters. And on an entirely different digital front: The Video Software Dealers Association announced Monday that combined VHS and DVD rentals during the first quarter of 2003 hit another high-water mark, with consumers spending $2.34 billion on VHS and DVD rentals. This spending eclipsed the previous record for the first quarter, which was $2.26 billion, set in 2001.The number represented 811 million turns, or units rented. Consumers spent $1.19 billion renting 448 million VHS cassettes and $1.15 billion renting 363 million DVDs in the first quarter. DVD accounted for 49 percent of rental revenues in the quarter of 2003, compared with 26 percent for the first quarter of 2002. Brad Hackley, director of research for VSDA, cited three factors for the jump in business. "First and foremost, there was a strong slate of video releases in the first quarter," Hackley said. "Movies like Signs, My Big Fat Greek Wedding, Sweet Home Alabama, Barbershop, and The Bourne Identity brought people into video stores. Second, many people acquired DVD players over the holidays and when people acquire DVD players their movie-watching increases. Finally, the harsh weather that much of the country experienced this winter was perfect for staying indoors and watching a video." The first quarter of 2003 also saw, for the first time, weekly DVD revenues exceeding those of VHS. This occurred twice, during the weeks ending March 16 and March 30, 2003. Email Gary Dretzka .
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