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Jon Healey: the Opinion L.A. chat

February 28, 2007
Moderator1: Hi everybody, this is Tim Cavanaugh. We’ve got Jon Healey for the hour.

Jon Healey: Hello

scareduck: yo

Jon Healey: Hey, Scareduck.

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Moderator1: Jon, let’s start out with a topic that people have been bombarding the newsroom about today. Did you see the Frontline show about the cancer at the L.A. Times yesterday?

Jon Healey: I only saw the parts about the hematoma

Moderator1: Any thoughts? Do you loathe Lowell Bergman as much as I do?

Jon Healey: Heh heh heh. I loved him as Al Pacino.

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Jon Healey: Or maybe it was the other way around....

Jon Healey: My main reaction was a mindless, instinctive rejection of the notion that we have to be all local, all the time.

scareduck: And here I was going to ask about Monday’s KCRW piece ...

Jon Healey: Please do.

scareduck: I didn’t get a sense from the article specifically what the economic issues of Internet streaming were. I have a rather vague idea ...

scareduck: ... and I suspect it comes from the cost per listener is much higher.

Jon Healey: True, although not as much as it used to be.

Jon Healey: The main thing from Ms. Seymour’s perspective is that online, folks seem to have less of a sense that they need to subscribe.

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Jon Healey: I’m not sure why that’s true, but it would be consistent with the Internet-is-free culture.

scareduck: If KCRW isn’t managing their own streaming, why not? Disintermediation for the sake of cutting costs seems, uh, kinda bad, no?

Jon Healey: Si. She thinks the costs are too great for KCRW to absorb....

Jon Healey: But the tradeoff is that they don’t have the direct relationship with the user....

Jon Healey: and so can’t do things with advertisers -- er, underwriters -- that they ought to be doing

Jon Healey: In my mind, the Internet is a far more attractive advertising medium than over-the-air broadcasting because of the potential for ad targeting.

scareduck: I have my own theories about this... without drowning the conversation in exotica, suffice to say that a general transition of the Internet IPv6 could cure a lot of these problems.

Jon Healey: The leap that radio has to make is to figure out how to remain relevant to local advertisers -- its bread and butter -- when the audience is coming in from all over creation.

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Jon Healey: Elaborate, please -- is this because IPv6 offers better geographic capabilities?

George Vreeland Hill: Hi. I’m George Vreeland Hill. It is great to be here.

Jon Healey: Hi, GVH.

scareduck: Ah, fooey. The leap that radio has to make is to figure out who is going to be interested in reaching their audience. That job used to be easier because of geography, but the Internet dispenses with these sorts of problems.

George Vreeland Hill: Hi Jon!

Jon Healey: Good point, scareduck. The “who” has been local businesses; I suspect it will remain so for some time.

Moderator1: Here’s one from the mail: What’s your take on George Vreeland Hill? * Why do you hate copyright holders so much? Isn’t some amount of copy protection necessary for Hollywood to stay in business?

George Vreeland Hill: The advertisers need to know that the local audience is still there. The only thing different is the total audience is bigger.

Jon Healey: True.

scareduck: IPv6 expressly allows multicasting. That is, all it takes for everyone on the IPv6 Internet to listen to the same stream is their own computer -- and on the server side, just one server, not phalanxes of machines as now under IPv4.

Jon Healey: Re: copyright holders -- I love copyright holders.

Jon Healey: I happen to be one myself.

Jon Healey: But not for the stuff I write -- I was in a bunch of bands years ago, and my songs are registered with BMI.

George Vreeland Hill: And local can only benefit from global.

scareduck: George, you have it exactly backwards. The audience is more disbursed and most likely smaller. Think of the difference between M*A*S*H and “Xena, Warrior Princess”

Jon Healey: Or think of it in terms of Internet bulletin boards.

Jon Healey: This goes back to the notion of ad targeting. Instead of targeting things by location, it will be by interest.

Jon Healey: And because the ads will more likely be for things the recipients are interested in, they’ll seem less intrusive.

Jon Healey: Plus pay higher CPMs.

George Vreeland Hill: But it should not be smaller if the local (core) audience is still there.

Jon Healey: That’s the theory, at least.

scareduck: Which of course brings me to one of my pet bugaboos: the accuracy of media ratings. As programming inevitably reaches smaller and smaller audiences, sampling techniques will have to catch up, and advertisers will start demanding error bands on “share” numbers.

Moderator1: scared duck, could you define error bands on “share” numbers?

scareduck: I still don’t see error bands published for Arbitron, Neilsen, Jupiter, etc.

Jon Healey: Complicating things further: people will be getting the programming in a variety of ways, some of them not tracked by traditional audience measurement techniques.

Moderator1: Actually, I think I know what you mean, but if you’re talking about a 2 share, what can the error on that be?

scareduck: If I want to find out who’s watching what at some given time, I rely on a statistical sampling rather than polling every individual. This will introduce some uncertainty into the process.

Jon Healey: This is very illuminating, but can we get back to bashing copyright holders?

Moderator1: Who is the worst copyright pig out there?

Jon Healey: Well, Universal Music Group is quickest on the lawsuit draw, if that’s what you mean.

scareduck: Tim (I assume this is Tim Cavanaugh moderating), it depends on what’s being measured. The error bands shrink as the share size gets larger. I’m not conversant with the current sample sizes used by Nielsen, etc., so I don’t have much of a clue, but at the lower end it can be larger than the purported share numbers being generated. And that is all I have to say about that.

Moderator1: Gotcha.

Jon Healey: GVH, did you happen to see the RIAA’s announcement this morning about filing more lawsuits against college students?

scareduck: They’re all pretty awful. What we have now is a copyright regime that fails to take into consideration social reality. Laws that do so generally end up poorly- or unenforced.

Jon Healey: I’m wondering how this move could possibly prompt more students to sign up for legal music services, as opposed to going deeper underground to share files.

George Vreeland Hill: No I did not. I know the music industry has been following what students have been doing.

Moderator1: You mean you can’t sue your way to profits?

Jon Healey: “Profit” and “music industry” are terms that are becoming less frequently seen in the same sentence.

Moderator1: That brings us to another one from the mail:

Moderator1: Name one legacy entertainment giant that has figured out how to Monetize the Database.

Jon Healey: Good question. Gimme a second....

scareduck: “Monetize the Database”? Is this a test?

Jon Healey: I like what Warner Music is doing with YouTube

Jon Healey: It’s getting a share of the ad revenues that will be generated any time someone posts a video that uses Warner Music tracks.

Jon Healey: So it’s not just Warner’s music videos that generate money; it’s any videos with the company’s music (e.g., lip-synching vids)

Jon Healey: I also like what DMGI is doing with its collection of “Gumby” and “I Spy” videos.

Jon Healey: They’re going to post them on YouTube and generate ad revenue.

Jon Healey: There’s probably not much of a market left for those things on syndicated TV....

Moderator1: When is the United Lutheran Council or whoever it was going to start posting original Davey and Goliaths? All you can find on YouTube is the Mountain Dew parody ad?

George Vreeland Hill: YouTube has learned from Napster. Network rather than go it alone and fight.

scareduck: But as with all such “hey, I know, we’ll put together a website and show ads!” sorta Mickey Rooney business model, this is rather iffy as a moneymaker.

Jon Healey: They’re off to a decent start -- 100 milion plus streams a day translates into a pretty attractive audience for advertisers.

Jon Healey: And unlike Napster, they’re maintaining the “free” aspect of the programming, rather than trying to get any of their viewers to pay

George Vreeland Hill: Very true.

Jon Healey: There are plenty of copyright lawyers, though, who would argue that YouTube isn’t much different from the original napster in terms of liability....

scareduck: The target audience by definition is unpredictable, and the traffic volume ultimately very low on a per-page basis. I don’t think the 100M streams per day means much if you’re Viacom (say).

Jon Healey: Viacom would clearly agree with that assessment.

Jon Healey: But I also think that the viral nature of YouTube popularity creates the potential for a huge hit.

Jon Healey: (that is, huge relative to YouTube)

Jon Healey: Just look at LonelyGirl

Moderator1: Has lonelygirl actually been spun out into any other medium?

Moderator1: That is, where’s this fall’s Lonely Girl tv show?

Jon Healey: She moved to a different platform

Moderator1: That platform being the unemployment line?

Jon Healey: No, another online video site that pays better.

George Vreeland Hill: lonelygirl would have been even bigger if she were not found out so early.

Moderator1: I think that’s true of all of us.

Jon Healey: I was hoping to be discovered later in life.

Jon Healey: Like, next week or so.

Jon Healey: Anybody want to weigh in on the XM-Sirius merger?

Jon Healey: Would it be a monopoly?

Jon Healey: A monopoly on something that didn’t even exist a few years ago?

Moderator1: I was struck by a letter to the editor we got after opposing the FCC’s interference:

Moderator1: People act like satellite radio is some resource that naturally should support multiple players, rather than a completely unproven market that may not even support one.

Jon Healey: BTW, the actress from Lonelygirl got her big hollywood break: she’s going to be in a Lindsay Lohan movie.

Jon Healey: Re: satellite radio --

Jon Healey: Totally agreed. The market isn’t radio delivered from space; it’s radio programming from anywhere.

Jon Healey: Especially if you can get it in your car.

George Vreeland Hill: It will result in lower costs. The merger cost I think, 13 billion.

Jon Healey: Which would include over the air analog and digital stations, podcasts and, to a very limited degree, online stations. GVH, I’m not sure it will result in lower costs, but I don’t think that’s a consideration.

Jon Healey: Whether it costs more or less depends on how much people value the service.

Jon Healey: Today, how much XM charges isn’t really limited by how much Sirius charges.

Jon Healey: It’s limited more by the free alternatives.

Jon Healey: And the general sense that folks won’t pay more than $10 a month for a music service.

George Vreeland Hill: Will the government approve this?

Jon Healey: My guess is no.

Jon Healey: Kevin Martin of the FCC staked out a pretty clear position against it, although he didn’t come out and say it can’t be approved.

Jon Healey: The FCC will say that the spectrum was granted on the condition that two competing companies used it.

Jon Healey: Insert your favorite cliche here about consistency and mental capacity.

Moderator1: Isn’t the FCC interest in this market getting harder to justify, since you’re not exactly talking about a scarce public resource that needs to be maintained.

George Vreeland Hill: The competition will go into over-drive.

Jon Healey: Actually, the FCC’s existence is perpetuated by the federal government’s unwillingness to put more spectrum up for public use, with or without licenses.

Jon Healey: So the airwaves remain scarce, and it’s not really the FCC’s fault.

scareduck: I guess your definition of “scarce public resource” should be flexible enough to consider UWB and some of the more exotic proposed broadcast tech out there...

Jon Healey: UWB holds a lot of promise, but more as a short-range, unlicensed technology, no? I’m looking forward to seeing whether any mesh WiFi networks take off.

scareduck: I personally would like to see something like that opened up, but there are a lot of people afraid of ultrawideband.

Moderator1: What about the FCC’s hinted interest at regulating cable content. Is there any legal basis on which that would fly?

Jon Healey: I don’t see one, but then IANAL.

scareduck: Can you imagine taking a first amendment challenge to the Supreme Court? Given its current constituency, it would be a total crapshoot...

Jon Healey: It’s odd -- there’s a legal basis for the FCC to regulate broadcasters, but the fact that it regulates broadcasters but not cable operators makes the whole system absurd.

Jon Healey: Re: first amendment case -- agreed. This court is REALLY hard to predict on free-speech issues.

George Vreeland Hill: That could be a tactic to see what happens.

Jon Healey: And who’d be the moving party? Fox or CBS, challenging an indecency ruling?

George Vreeland Hill: FCC tactic that is.

scareduck: On the legal basis for cable regulation, I don’t see why... the spectrum usage for cable wasn’t set up as public broadcast.

Jon Healey: Right. There are no public airwaves involved.

scareduck: Heh, good point -- I was thinking Viacom (for the Daily Show?)...

Moderator1: Another one from the mail:

Moderator1: Will anyone ever sell 15 million records again?

George Vreeland Hill: I have to go. Business. I would love to chat about this again. georgevreelandhill@msn.com

Moderator1: You’re the man who keeps it all together, George.

Jon Healey: Thanks for stopping in!

Jon Healey: Re: 15 million records ....

Jon Healey: My vote is yes.

scareduck: Yes. He will be Chinese.

Jon Healey: Chinese boy band?

George Vreeland Hill: I don’t know about that, but thanks. Nice chat.

Jon Healey: Or maybe a Chinese version of Josh Groban....

david p: what are “records” again?

scareduck: Wang Chung.

Jon Healey: “Records” are what’s in your police file.

Jon Healey: And, for the sake of this discussion, collections of songs.

Jon Healey: rather than singles, ‘cause a 15-million-selling single seems inevitable.

Moderator1: Do we lose anything culturally with the album becoming history?

Jon Healey: I don’t think that’s happening, personally.

scareduck: Maybe a more interesting question is will we ever see a scheduled TV drama with a 40 share again.

Deborah: Doesn’t this assume that there will be fixed collections, rather than ad-hoc ones that people create themselves?

jo robertson: interesting album art

Moderator1: We already lost that with the advent of the CD, imho

Jon Healey: The major labels’ ability to sell albums has been undermined by their own business practices

Jon Healey: Re: fixed collections -- it’s a pricing issue.

Moderator1: THis is the old Napster koan: If $18 is too much for a cd, at what price does stealing the music become defensible?

scareduck: I think there is something to the labels’ complaints about file sharing, just not as much as they make it out to be.

Jon Healey: If the labels could agree on a way for people to get compilations at a discount, then there will be a perfect substitute

Jon Healey: Ooops, multiple crossing conversations

Moderator1: Bad moderation

Jon Healey: Agreed on scareduck’s point.

Jon Healey: But back to the album’s survival ...

Jon Healey: The music coming out today is every bit as good as it was 20 or 30 years ago, I think.

Jon Healey: It’s just coming from different places.

Jon Healey: Once we get music-discovery mechanisms as efficient and effective as major-label markeing

Jon Healey: marketing, sorry

Jon Healey: then we’ll see a great indie band selling 15 million copies over, say, 6 years.

Jon Healey: Because the music is still great

scareduck: The big problem with compilations is all the legal BS needed to get the job done. HOW long did it take for the Heavy Metal soundtrack to make it to CD? Wasn’t it in the mid-90’s?

Jon Healey: True. The music industry HAS to come up with a better way to license music for other purposes.

scareduck: But... what if an indie band doesn’t *need* the services of a label to get noticed? IIRC there was a band that cracked the British top 40 recently that was unsigned.

Jon Healey: Totally agreed. The question is, how do you get to *mass* popularity without *mass marketing* techniques. That’s something that we’ve yet to see.

Jon Healey: Particularly in the US, with, what, 10x the population of the UK?

Moderator1: New topic: Will the FCC be even worse now that the Dems have the upper hand in Washington? What should we be worried about in the near term?

scareduck: Rollback of the ownership quotas?

Jon Healey: Funny, but the only issue that the FCC handles that seems to be partisan is media consolidation.

Jon Healey: So yeah, ownership limits are in play.

Moderator1: But wouldn’t the Dems be more hawkish on that than the Reps?

scareduck: Well, that and George Carlin words.

Jon Healey: Right. Republicans and Democrats these days seem equally interested in content regulation (particularly violent content)

Jon Healey: They also seem equally divided on content protection.

Jon Healey: That is, whether tech companies should be forced to do certain things to protect against piracy.

Jon Healey: So look for John Dingell and John Conyers to put more pressure on Kevin Martin when it comes to how many radio and TV stations a company can own in a market, but everything else will likely continue as before.

scareduck: You sure about that, Jon? Because last time I looked, Feinstein was all lovey-dovey with Disney and all the other copyright extremists.

Jon Healey: Right. There are plenty of Democrats AND Republicans who love content protection. But there folks from both parties who don’t.

Jon Healey: The Feinsteins and Bermans on the Democratic side are joined by the Smiths and Stevenses on the Republican side.

Jon Healey: They probably outnumber the folks who don’t want to see more content protection, such as Sununu from New Hampshire and Boucher from Virginia (Republican and Democrat, respectively)

Moderator1: Few more minutes left. Last call.

scareduck: On a related subject, let me throw out a question to the audience. How long should copyrights last?

Moderator1: 35 years from date of creation

Jon Healey: Personally, I’d make the limit the same as patents -- so put me in the moderator’s camp, and possibly a little shorter.

Deborah: Author’s life, plus 5

scareduck: 17 years? Wow!

Jon Healey: Why the plus 5?

Deborah: So the family can try for a few bucks out of the deal...

Moderator1: Yeah, I toy with that notion now that I have kids

Jon Healey: Assuming there is a family....

david p: The lifetime of the creator. I like the plus 5 though.

Jon Healey: I’d vote for a shorter limit because of the potential for additional bursts of creativity based on the original item go down, IMHO, as time passes.

Moderator1: But the potential for bursts of creation from other people (cough, wind done gone, cough) goes up

Jon Healey: So the faster copyrights expire, the more value that there is in the public domain.

david p: Just to understand, then, you’re saying that the Beatles’

david p: sorry... “Help” would be public domain now?

Jon Healey: Oh yeah.

Moderator1: Yeah, yeah yeah.

Moderator1: It’s stunning that it’s NOT in the public domain, really.

jo robertson: lifetime isn’t in the consumers interest though - some competition would lower that drug price...

scareduck: Why would it be in the public domain? Was John Lennon the only author?

david p: McCartney too.

Moderator1: McCartney’s alive?

Jon Healey: We were assuming that the copyright term was more like 20 years, just for the sake of argument.

jo robertson: you all type and think too fast for me

Moderator1: One more question before we go, to infuriate the Apple Rainbow Coalition:

Moderator1: Is Apple better at technology or marketing?

jo robertson: both

scareduck: Yes.

Jon Healey: Way better at figuring out how real people use stuff. That’s technology, I think.

Jon Healey: Their marketing genius is more a function of their willingness to spend.

Jon Healey: The iPod has all sorts of usability advantages that are quickly apparent to anyone who fondles one.

scareduck: Disagree. Microsoft’s mediocrity isn’t for want of capital.

david p: Their marketing caught up with their technology. I

Jon Healey: Microsoft’s mediocrity is a technology problem that marketing can’t solve.

Jon Healey: Apple’s technological advantage is easier to sell.

scareduck: Two decades of user-friendliness over security will make anything hard to solve.

Moderator1: OK, thanks everybody for participating. See you next week, when we’ll have Jonah Goldberg ON THE SPOT!

Jon Healey: Apologies for the geek-speak, and thanks for coming!

scareduck: that should be fun

david p: ouch.


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