Radio Free JoJo

One of the coolest apps on the web is in danger of extinction, and it is a story of patience and greed.

Pandora, the music site that allows you to create up to 100 custom personal radio stations, and suggests music based on songs you pick, was in the Washington Post Saturday, claiming that the music royalty rates the company is forced to pay are about to kill their business.

It was in Spring of 2007 when the Copyright Royalty Board ordered a doubling of royalties that internet radio stations would have to pay record labels for the privilege of airing a song. According to the article, those rates would force Pandora to hand over 70% of its gross revenue to SoundExchange, an arm of the RIAA record company association. Some in Congress have attempted to intervene, yet no agreement is close after months of talks. Pandora’s CEO is saying that unless something gives, they’ll have to pull the plug.

Meanwhile the labels are sniping back, saying that the web streamers are not doing enough to generate revenues for their business models. Talk about a “pot/kettle” scenario! It’s these same record companies who refused to change their models for years after the arrival of the internet, and now are scraping to stay relevant.

The lack of patience on the part of the record industry is shocking as well. The expansion of broadband internet has only reached the majority of the country in the last three to four years. It’s been only recently that the large radio companies have done anything to build their online streaming presence. Everybody is doing this at a loss…so I feel that the RIAA has gored their calf about three to five years before it will turn golden.

Of course, all of this back and forth does little to help music artists proliferate their music, and shows no recognition of the still important role that music on the radio plays in selling records. If radio airplay, terrestrial, satellite, or internet, has little bearing on record sales through CD’s or I-tunes, then why do the record companies spend millions on promotion departments and independent promoters?

I say that you’ve got to let the models and the ad market play out; we are still very early in the digital transition for the movement of money from the traditional media to the digital (Google Jeff Zucker from NBC Universal). Sure, go ahead compensate artists for their works, just make sure that there is a delivery system left over after the bill is paid.

The Erie paper has a front page article this morning analyzing the possible running mates for the two presumptive nominees. This comes after the hug-fest between former PA Governor Tom Ridge and Republican Senator John McCain early this week. The ETN suggests that current Pennsylvania Gov. Ed Rendell could make a good number two to Senator Barack Obama run, admitting though that Mr. Rendell has articulated his lack of interest multiple times.

All of this talk has the premise behind it that Pennsylvania is in play for the General Election. My take is that since you have to roll back twenty years to find the most recent Republican Presidential candidate to win the Commonwealth when Bush 41 took the state over a flawed Dukakis, this state is Obama’s to lose.

On the other side of the Commonwealth continuum, you have Virginia, which used to be a safe take for the GOP. But with the population growth in Northern Virginia turning the Old Dominion to the left, we could be enduring a Beltway-sized wait on election night to color the state red or blue.

However, the inclusion of governors from each state as the vice-president pick could be enough of a catalytic event to flip these battleground states. For PA, the popular Tom Ridge brings a national presence from being the original Homeland Security secretary. His biggest and perhaps insurmountable negative is his pro-choice abortion stance. Ridge’s inclusion on the ticket could turn the state red, yet have little impact on McCain’s likeability in the Midwest and South.

Likewise, if Obama were to pick Tim Kaine, the current Governor of Virginia, it would probably generate enough momentum to bring the state to the blue tipping point.

It really depends on the math: as the campaigns run their models if they find that the electoral votes of Pennsylvania and Virginia are so critical to the success of either campaign, you just might see this scenario play out. That’s if you believe that VP choices even matter to voters anyway.

The Scorched Earth has come to a newspaper near you.

The internet is filled with news about the news. It turns out that last week was a tragic one for newspaper employment, as 1000 newspaper-related layoffs were announced, probably to help prop up flagging stock prices. Timothy Egan in his NY Times blog makes the point that even though the reach of newspapers through their online divisions has their content consumed by more people than ever, the financial reality of steeply-declining ad sales in their “ink on paper” editions is ruining these once-great editorial machines.

The other big story in media this week is the gigantic $400 million contract that Rush Limbaugh received. It extends his deal through the 2016 presidential election year and perhaps is a good indicator of where that other old medium, radio is going.

So let’s do a little hand-wringing. Read the rest of this entry »

It’s a bizarro world out there. Seemingly on every front, whether geo-political, economic, or environmental, it is looking bleak. At least that’s what the Associated Press said on Sunday. The AP “right direction/wrong direction” question for the country is at a fifteen-year low. It seems that every casual conversation you have goes back to the price of gasoline, or food. Yes, right now this stuff hurts.

However, we are not officially in a recession, and you really don’t have to go back too far to remember record highs in the Dow and lots of people getting rich and feeling good. In fact it was Oct. 11, 2007 when the 30 industrials closed at 14,280, the highest level ever.

The markets have totally gone “Ravine Flyer” ever since. We’ve had the toxic punch of foreclosures, Bear Stearns bailout, the credit crunch with major bankers selling off parts of their companies to foreign royals, and the crazy run-up on oil. It has been a painful eight months.

It occurs to me that it didn’t have to be this way. Instead of fundamental conservative economics dictating our mortgage system, for example, we had greed and sloppy controls rule the day.

Right now, perhaps up to half of the stated price of oil is coming from the commodities investing that your and my pension managers are doing in an attempt to make money in a market that is all over the map. The scary part is that they have created a bubble and are convincing themselves that there is fundamental oil demand to back it up. I’m sorry, but I don’t see $140 a barrel sustainable, which means that your pension and mine might be the victims (?) of a crash.

The biggest shame is the dismal dollar. Back in the early aught’s, when the dollar was strong, U.S. manufacturers were complaining about the trade deficit due to our strong dollar making US goods cost more. Now that the dollar is weak, are we really seeing a windfall of exports correcting the trade imbalance, or are we in much of the same boat, due to the much higher cost of raw materials and the unfair money practices of China, et al?

Something else about all of this makes me feel queasy. I get this sense that part of this crisis of confidence has a lot to do with the 24-hour news cycle and the fact that we are in this much contested presidential race. Come on guys, are we really living 1929 or 1979 again? Aren’t we smarter than that?

In this bizarro world, we need some Men of Steel to cut through the noise and provide some real direction, focus, and sanity. And it needs to come “faster than a speeding bullet.”

I got the news about Tim Russert dying of a heart attack while at work at NBC in Washington later than most. It wasn’t until I picked up the newspaper on my porch Saturday morning that I found out that this favorite of journalists had passed away at 58.

Ever since I’ve been captured by the coverage and moved by the memories and sheer sense of loss that the media community and the NBC family is expressing. I must say that I too have been mourning his loss.

It’s hard to explain my feelings toward a fellow I didn’t know, or didn’t know me. Perhaps it is the sheer proximity of those of us who live in Erie, a mere 90 miles from Tim’s beloved South Buffalo (there’s a Tim Russert park in West Seneca, NY, where they have been holding a nightly vigil since Friday). Or perhaps it is his faith in God as a strong Catholic; being able to hold onto his faith in the context of a very cynical capitol city environment.

What definitely comes in play is Tim’s profound love and respect for his dad, Big Russ, which he articulated in a best selling book four years ago. His description of Big Russ resonates deeply with me, with Tim’s father from the same generation as my father. When Tim says that “I stand on my dad’s shoulders,” I totally get that. It is only through the grace of God, and the sheer sacrifice and foundation I received from my parents that I am who I am today.

Tim’s sudden death has also brought to the surface some of the fears I have stuffed away about my health, my weight, and the fleeting nature of life. Still have to sort through all that.

It is really ironic that Tim’s passing comes just a week or so after the final primaries of this historical election year. For millions of Americans, he was the speaker whose words we hung on in understanding election results. My imagination still can’t conjure what the remainder of this election will look like without the even-keeled, enthusiastic analysis by Tim Russert. He will be sorely missed by both his colleagues and viewers, including this news junkie from Erie, PA.

The wife and I celebrated a major anniversary milestone in our marriage not with a trip to the islands but with two days of getting in touch with our urban inner selves, spending a couple days on a getaway to beautiful, downtown Pittsburgh. Some people would instantly mock at the romance of the Steel City, but we both absolutely loved it. For history aficionados like us, Pittsburgh has strong formal and informal celebrations of its past. What’s apparently murkier is its vision of the future. Some random observations:

• What a walkable city! There is so much to see in a very small area. From our hotel in the Strip District we were able to hit restaurants, see the skyscrapers, have some Starbucks, view the amazing architecture, and even see a show.
• I can’t speak for today, but there has been some amazing wealth generated in Pittsburgh, and it shows in its buildings. From the mansions of the Fricks and the Heinz’s, to the investments at Pitt (Cathedral of Learning, Heinz Chapel), to the gifts of Andrew Carnegie, to the more modern buildings erected by Mellon Bank and US Steel, the vision and attention to detail is remarkable. I became very thankful for the foresight of even those robber barons that at least left an architectural and cultural legacy for us to enjoy.
• The riverside downtown is dominated by the Lawrence Convention Center, with its 1.5 million square feet of exhibition and meeting space. In the past I’ve read in the Post-Gazette about the income shortfalls and subsidies the CC needs to operate. It’s frustrating that five years after this major investment, it is not in a cash positive scenario. I hope that its situation is not prescriptive for the Bayfront Convention Center.
• Food is a big deal in Pittsburgh; I guess it is anywhere, but I don’t remember too many distinctive Nashville dishes when I lived there. In Pittsburgh, the region is defined by the Primanti Brothers sandwich, the turkey Devonshire at the Union Grill, or the amazing meals at only one of two Lidia’s Italian restaurants outside of the NY metro.
• My wife and I spent many hours at the Heinz History Center, which is six floors of exhibits on Western PA history (didn’t see much about NORTHwestern PA). The center is 12 years old and really well done. You get the sense of how important Pittsburgh has been to the rest of the nation, with it’s industry fueling the nations growth. That is until the early 1980’s, with the collapse of the steel industry. There’s a sense that the city and region must find a new way of revitalization and prominence.
• Which leads me to the feeling I have that Erie and Pittsburgh are linked in that kind of defeatist, “best times are behind us” attitude. Certainly it has got to hurt to lose 90% of the industry jobs that defined your city for nearly a century. But we need to embrace the new opportunities in knowledge industries and services that depend on the skills our kids are coming out of the exceptional universities that this region is also known for.

What can we glean from the past of this great city and region that can be a guide for its future?

My nagging suspicion that Obama perhaps has written off Erie County in the presidential primary tomorrow has been validated. A very revealing graphic on nytimes.com this morning shows that even with the very low TV ad rates in the Erie market, out of the nearly 12,000 television spots he has run in Pennsylvania, only 9% have run in Erie. Compare that to the most expensive market, Philadelphia, where nearly one out of every four PA spots ran.
If you are just shrugging your shoulders, saying”so what, Philly is bigger than Erie,” you need to remember that we are talking about frequency as opposed to pairs of eyes reached. Let’s say that it costs $500 to reach 40,000 people in Erie, and $5,000 to reach 400,000 people in Philly. What this statistic is saying that Barack was willing to spend about $12,500 to talk to those same 400,000 people 2.5 times more often than his $500 that spoke to the 40,000 in Erie once. According to the Times, he ran over 1,050 spots in Erie through last Thursday, which is no slouch of a buy, mind you. Meanwhile he ran over 2,700 spots in Philly. Can you say saturation?
For her part, Mrs. Clinton ran nearly one-third of her commercials in Philadelphia. But since she’s nearly broke, that translates into only under 1,600 spots through Thursday. Erie got to see Hillary’s “3 am” ad and others just under 550 times.
He also saturated the Philadelphia area with appearances. I think the local Obama camp was getting nervous as they waited for an Erie appearance date. He certainly was taking his time, finally getting here on Friday morning with a visit to Erie Bolt and then a townhall meeting at Penn State Behrend. For a candidate with such rock star status, I do not get why he didn’t go to the Tullio Arena, or Bayfront Convention Center, where he could have satisfied the high demand for tickets to the event. Either they didn’t have the manpower to process a 5000 person crowd, or didn’t want to pay the Convention Center Authority, or both.
Anyway the lateness of the visit, and the fact that his next closest appearance was in Beaver County seems to show that he is not hoping for much out of NWPA. Tomorrow night we’ll know if his Philadelphia-centric strategy works.