Wednesday, April 30, 2008

T Dog's Think Tank: Oh, stop your crying

XM and AOL have ended their partnership as advertised, effective today. AOL signed a deal with CBS Radio a few months ago, and is scheduled to go into effect tomorrow, but you likely won't see any CBS Radio content on AOL Radio for another month or so.

But in AOL Radio's blog, they claim the reason they broke up with XM is because AOL is moving to an advertising-based model (which means commercials), and XM is sticking with its subscription-based model (some XM channels streamed for free on AOL), and also claim the RIAA and SoundExchange's increase in royalty rates forced them to go to CBS.

Not only that, according to XMfan.com, AOL tried to insert ads into XM's Internet streams, as the two shared the royalty rates to stream on AOL, and it was part of the reason why the two broke up and AOL sought a deal with CBS.

Hold it. Didn't AOL and other large webcasters make a deal last August? So why is AOL complaining about it? They make a very bad deal on Internet streaming rates and now they are whining? Please spare me. They let SoundExchange and the RIAA rip them off and now, AOL is playing the victim. Now, I am definitely not a fan of the greedy twin terrors, but AOL and other large webcasters should have known what they were getting into before making such a bad deal like this. Now, they look like total fools.

And the end result? AOL is now an advertising-based format rather than a subscription one. In other words, it's no different than terrestrial. Why bother listening when you can tune in to regular radio to hear the same songs and commercials? Some alternative.

While yours truly said this is the AOL-CBS deal is a bet worth taking and could help Internet radio, I don't like the arrogant stance AOL has taken on this, saying they had to go to CBS to keep its streams alive, when they could have made a better deal with the greedy twin towers to keep XM at reasonable rates. Instead, AOL comes off as a bunch of stupid hypocrites, claiming poverty on this issue while they have been nickeling and diming people for years. Big Media will never learn, will it? No wonder they screw up everything they get their hands on... network television, local news, cable, the television syndication business, terrestrial radio, and now Internet radio. You name it, they manage to screw it up.

AOL Radio is nothing but a bunch of crybabies. Yours truly doesn't feel sorry for them at all. Congratulations on selling out to terrestrial radio. Both of you, the RIAA, and SoundExchange all deserve each other. Good riddance.

3 comments:

Anonymous said...

Not sure where you are getting your info but these two statements are incorrect....

1> AOL tried to insert ads into XM's Internet streams....

--completely false

2> Hold it. Didn't AOL and other large webcasters make a deal last August?

-- AOL and the other internet radio companies did not make a deal with Soundexchange. They are still TRYING to get the rates lowered so they can stay in business

You need to get your info right

TDog said...

I don't think you clicked on one of the links I posted on this story... From August 23, 2007 edition of Billboard.biz:

"Major Labels, Large Webcasters Reach Agreement":

http://www.billboard.biz/bbbiz/content_display/industry/e3ic3c981a927197a173438aa2df3d7a518

And the opening paragraph read:

"Major record labels and SoundExchange have just reached a deal with the large webcasting services over crucial terms covering royalty rates that webcasters must pay to stream sound recordings through 2010, Billboard.biz has learned."

AOL, as well as other webcasters, were mentioned in the Billboard story. If they didn't make a deal, then why was this story even reported?

As for AOL and XM, AOL did in fact asked XM to insert ads into their streams to offset the royalty costs, and that came from XM themselves, according to a site administrator at XMfan.com. (perhaps I should've clarified that a little better.)

I'm sorry, but I stand by my story.

Anonymous said...

XM fan is wrong about the instream ads but believe what you want.

In terms of the Soundexchange royalty situation, you can get the current status of the talks between SX and the online braodcasters from John Potter, at the Digital Media Association (202) 639-9509. He will confirm there has been no agreement.