Monday’s Blog

I consider myself to be a pretty creative person. Often though, I have ideas before their time, but for whatever reason, haven’t acted upon them.

In the early 90s, it struck me that with young, married couples both going to work and having dogs, that there would be a need for dog daycare. I came up with the idea for a business called “Daycare Doggy.” I even wrote a jingle to go with it. The words were:

“My mom and dad go to work all day. I go to daycare and play, play, play. I’m a daycare doggy. Woof. Woof. Woof.”

I tried to convince my brother that this would be a great business for him to go in to. He wanted to be a veterinarian, but didn’t want to spend the years and money it would have taken to be able to do it. I thought this was a great alternative. He never tried it, and just look now at the booming industry.

A couple years before that, it struck me that it was rather oxymoronic that one called 411 to obtain the phone number, but then had to hang up to dial it. It certainly would have been far more sensible for the phone company to offer to connect you at a modest charge. I actually even thought that it might make some sense to try to support it with advertising, but never did it, and a few years later they did.

Now, over the course of 33 years, I’ve been blessed with seeing many of my creative ideas come to fruition and profitably so. But often, thought, at the outset, people scoff and laugh. As a creator, you get used to it.

So, when I began swimming upstream against the current of streaming audio on the Internet for talk radio, I created webtalkradio.net nonetheless. It struck me that I would never want anyone in my office to listen to the radio during the workday, and knew full well that no one goes home to listen to the radio at night anymore. People would want to listen to what they wanted to listen to, when they wanted to listen to it, and how they wanted to listen to it.

Well, four years later, and lots of naysayers pushed to the side, the idea of podcasting has finally hit the mainstream – that is if you call USA Today mainstream.

The link below will take you to an article from the front page of the Money section in USA Today that details at length how podcasting has become all the rage.

http://www.usatoday.com/story/tech/columnist/talkingtech/2013/08/15/podcast-explosion/2647963/

Sometimes, vindication is a good thing.

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Monday’s Blog

The radio that I fell in love and grew up with is dead and gone, and it’s not coming back. I’m reminded of this in the most acute way, as I think back about how I started in the industry.

I was 13 years old, and appeared on Radio for Kids. The host of the program was the first person to bring classic radio broadcast back to terrestrial radio. His name is Chuck Schaden.

Chuck and I have an interesting shared path. I ended up being general manager of that radio station many years after he stopped broadcasting there. It was indeed a true honor to be able to give Chuck the opportunity to host When Radio Was, a nationally syndicated program of old time radio shows. It was the national platform that he so richly deserved.

Every year near the end of June, I reach out to Chuck. We share one other thing in common, the same birthday. He just happens to be a little bit older than me. No clues on the ages of either of us.

Thursday, we did our annual birthday celebratory lunch.

I will forever be grateful to Chuck, for whom without I would not be in this industry in the first place.

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Thursday’s Blog

It has been a couple of weeks since I last put up a post. In part, that has been because of a lack of news.

I have written endlessly about the challenges of Pandora and other pure play Internet radio stations to make money. There is finally some news to report.

First, see these posts from Inside Radio. To get the full story, you must be a paid subscriber.

Senate gets anti-royalty resolution.
With a blitz of in-person lobbying of Capitol Hill this week by broadcasters, Senators John Barrasso (R-WY) and Heidi Heitkamp (D-ND) today introduced the Local Radio Freedom Act. The bipartisan resolution is non-binding, but it shows opposition for a performance royalty on radio stations. A House version was introduced last month and now has 83 co-sponsors.

Clear Channel inks seventh royalty deal.
As NAB members lobby lawmakers today as part of their annual State Leadership Conference, they can point to another example of how the radio and recording industries are working together on the performance royalty issue without government intervention. Clear Channel has signed a revenue sharing agreement with the music division of film producer and distributor Entertainment One (eOne), home to such acts as DJ Drama, Faith Evans, Pop Evil and Black Label Society, among others.

This second post has far greater implications for the industry, than the first.

As I have noted in previous posts, Congress is unlikely to get involved in any regulation when marketplace forces can settle disputes themselves. In my opinion, this makes any legislation on behalf of the radio industry, or the passage of the Internet Radio Fairness Act, highly unlikely.

Besides, I certainly like to think that the leaders in both the Senate and House of Representatives are more focused on getting something done to resolve Sequestration, then mottling in something like this.

By the way, did anybody mention the number of people that are unemployed and are looking for jobs?

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Wednesday’s Blog

News, Notes, and Observations:

I was thinking back about the ads in this week’s Super Bowl and reading the reviews. As someone who has spent his professional life (since I was 13) in radio, the ad that stood out to me the most was the Dodge Ad that used a piece from a Paul Harvey commentary, “So, God made a farmer.” It was both the most memorable, and the only one to give me the chills.

In this digital age, where we talk about Internet radio, Podcasts, and music streaming, there will never be an opportunity for someone to become another icon like Paul Harvey. There was only, and only one, Paul Harvey. With no new talent coming into the industry, there is no talent pool from which to find new stars like Howard Stern, Rush Limbaugh, and Don Imus. People with unique talents, like Paul Harvey’s,are being drawn into other places and other spaces.

As I write this, I am surprised by the lack of network radio talent, or national names in the talk radio, or for that matter even in music radio who come to mind. The industry will thrive and survive, make no mistake. It is just not the radio that I grew up and fell in love with. That radio is dead and gone and never coming back. I must sound a little bit like my grandparents did when they were waxing with melancholy stories about radio’s Golden age. That was at the beginning, of course, of television.

Better finish this post quickly, as I need to grab for the Polident and Geritol :-)

Pandora appointed a new CFO yesterday. Let’s hope this one knows how to count better than his predecessor. Perhaps he will learn quickly that mounting losses can’t be turned into mounting profits when a business model is just plain broken, if not broke.

Finally, the couple of paragraphs below from Time Taylor Now, about the burgeoning growth in the insertion of FM chips into cell phones.

Keep this in mind. The average radio station pays about $40,000 per year to run
its transmitter. For a station in Los Angeles, that’s $40,000 to reach 2 million people. Now, for no additional cost to the industry, or for the consumer, you can reach 30 million users of cellular-phones. At the same time, hundreds of millions of dollars are being paid by Internet music radio stations to reach a much smaller audience. It is also an audience that can be targeted very specifically by age, demographic, and location. It can also be used for couponing. If you were an advertiser, which would you buy?

Now that radio’s got an FM chip revenue deal with Sprint – how is Sprint using radio?

Media Monitors runs a timely analysis of advertising buys comparing Sprint to T-Mobile. Turns out that T-Mobile ran about 2-1/2 times more ads on the radio than Sprint. (424,597 ads for T-Mobile, 170,337 for Sprint). The month where Sprint was most active, ad-wise, was December – it placed nearly 50,000. T-Mobile also out-ran Sprint on Cable (353,233 spots to 207,545) and broadcast TV (301,206 compared to 212,622). Check the Media Monitors pie charts and the history of the two wireless giants here.

NextRadio opens up to developers of a Sprint app at a February 27 live event.

This developer’s forum at Emmis-Indianapolis will feature “an overview of the agreement with Sprint, a demonstration of the NextRadio app, a presentation of the options available for content delivery to the app, and an overview of the tech requirements and setup process for TagStation.” That’s the “cloud-based engine that supplies data to NextRadio.” The app is developed by Emmis. There will be distance learning via webinar, plus a second event on March 6 that’s specifically designed as webinar-only. More info at NextRadioApp.

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Monday’s Blog

I am sure, just like me, you were glued to the television last night, watching the Super Bowl.

As soon as the lights went out in the Super Dome, the conspiracy theorists were out too. Everyone speculating that the NFL turned out the lights, to turn up the game.

Between bites of pizza, I found a little bit of time to put a post together for today.

I have not seen many surveys comparing the use of different kinds of media, old and new. When I ran across this one, I found it fascinating. The number of people participating was relatively small, about 1000. Also interesting, was the fact that the largest demo responding, were older adults.

Of special interest, were the number of adults using and listening to mobile media, along with the number of people using their smart phones for coupon redemption .

What’s the message?

If this small survey and older audience is any indication, FM chips in smart phones that allow for targeted and instant coupon redemption could be the savior of radio.

Radio has been in search of something to make it exciting again. This has the potential to reinvigorate both buyers and listeners.

The only continuous survey of radio’s online audience… in progress since 2002.
1,014 online radio listeners responded to
Survey 56. Completed: January 13, 2013

Survey 56 Topics: Redeeming Mobile Coupons
Trusted Information Sources
Most Effective Advertising

Respondents are 78.30% male and 20.70% female.

37.08% – 18-44
61.93% – 45-55+

Survey 56 asked:
Have you ever redeemed a coupon that you received via your cellphone?

Another question was
“Considering sources of information available to you, which one of these do you trust the most?”

Have your station serve this Audio Graphics/Borrell Associates survey.

Survey-serving stations share the data, and help internet radio establish a baseline for comparing its value to other media.

We ask 3 questions; after receiving 1,000+ responses, 3 new questions are displayed.

Each survey is branded to the serving station.
(See how the Prog Palace Radio and Girls Rock Radio surveys are branded.)

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Thursday’s Blog

Just a couple of items of interest today.

First, this brief post regarding Arbitron suing a local Cleveland television station were using Internet radio data In its sales kits:

ARBITRON SUES CLEVELAND TV STATION

1-28-2013
Arbitron has filed a lawsuit against WKYC-TV in Cleveland alleging copyright infringement after getting a copy of the TV station’s media kit. Arbitron says in the lawsuit, “WKYC-TV has willfully and intentionally infringed Arbitron’s copyrights by copying and distributing copyrighted audience estimates obtained from the Arbitron Reports and Databases without authorization from Arbitron. Moreover, WKYC-TV has infringed Arbitron’s trademarks by willfully and intentionally using the Arbitron Marks in its promotional activities.”
Read the entire Arbitron complaint HERE
Arbitron says it obtained a copy of a media kit, calling it “a collection of promotional materials and PowerPoint slides used in sales presentations–distributed by WKYC-TV entitled “Bringing Local Internet Radio Advertising to Cleveland. Upon information and belief, the Media Kit is part of an effort by WKYC-TV to sell advertising time on its station together with time on Pandora (“Pandora”), an Internet radio service. WKYC has falsely represented that certain audience estimates were produced by Arbitron when, in fact, those audience estimates were not produced by Arbitron, causing confusion in the minds of the public.

They say it must be true if the Old Gray Lady said it. In article from the New York Times, the link for which is below, there is a real question as to whether music artists are actually going to survive in the new era of Internet radio. Take special note of one band, Metallica exclusively signing with Spotify. It was equal notable that a leader from the world of Internet radio is predicting just one major music service on the Internet will survive, and it is not Pandora.

++++
Streaming Shakes Up Music Industry’s Model for Royalties
Published: Wed, 30 Jan 2013 19:47:21 GMT

Companies like Spotify and Pandora are catching fire, but the money paid to artists is often tiny, which has the music industry on edge.

Full Story: http://www.nytimes.com/2013/01/29/business/media/streaming-shakes-up-music-industrys-model-for-royalties.html?partner=rss&emc=rss

And finally, the Cleveland Indians have renewed their 11 year relationship with Clear channel radio in Cleveland. Part of the deal requires the broadcast of 144 games on an alternative music FM station there. The full article can be found at TomTaylornow.com, Goes on to say that MLB has decided that all of the 30 teams in the league must have FM radio station flagships within the next five years.

I guess they are watching what is happening inside cell phones too.

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Wednesday Blog

For those of you that are still wondering whether Internet radio is the future of our industry, take a look at an excerpt from a recent blog post by Tom Taylor, one of the most respected radio journalists in the business:

Now, just because Pandora is putting feet on the street, that doesn’t mean that they are going to be successful, or for that matter profitable. The fact of the matter is that as long as Pandora, or any other pure play Internet radio station, has to pay out $.60 of every dollar earned for music licensing and performance fees, they can’t make money.

I recognize that after a while this must sound like a broken record. But even if Internet radio were able to take 10% of all local radio sales, approximately $1.5 Billion per year, they still could not make money. Mind you, that is for the entire Internet radio space. Last year, Internet radio finished with approximately $1.2 Billion in sales. Projections from most pundits put it in the neighborhood $1.8 Billion. There can’t, and won’t be a viable business model until/unless they negotiate a better deal with Sound Exchange in 2014. That seems increasingly unlikely, given the pressure the recording industry is feeling from writers, performers, and the recording industry.

Then, there is the issue of return on investment. Will advertising on Pandora or other Internet radio stations justify the costs that they need to charge to be able to justify those expenditures? To this point,
the answer is no. With FM chips rolling out into cell phones, the mobile space becomes even more tricky
for Internet radio stations to succeed, given the high costs of license fees.

Don’t misunderstand. I am not for a minute backing off on the fact that Internet radio is the future of our industry. It is, but its success will come from existing broadcasters and existing broadcast groups. Remember, iHeartradio grew to 20 million registered users faster than even Facebook.

Arbitron sues a Cleveland TV station for using its data – to do a joint sell with Pandora.
It claims Gannett’s WKYC television infringed on its copyrighted work by using seven months worth of 2011 PPM data in its media kit titled “Bringing Local Internet Radio Advertising to Cleveland!” Guess who that service is? Pandora. The suit claims the kit “is part of an effort by WKYC-TV to sell advertising time on its station together with time” on the Internet radio service. Arbitron’s Delaware-filed suit has details – “a page titled ‘Pandora in Cleveland – Demo comparison’ reproduces a list of Arbitron’s average quarter hour estimates for nine radio stations in the Cleveland market.” It sources “Edison/Arbitron research.” The suit says the media kit “also contains a table that depicts what purports to be the AQH rating and cume rating for Pandora in Cleveland among two demographics,” and says that might be mistaken by some readers as being Arbitron data. Arbitron says at least 42 of these media kits were distributed, and it’s not happy. It says “WKYC has falsely claimed that certain audience estimates were produced by Arbitron when in fact, they were not.” It asks the court for a permanent injunction and statutory damages “no less than $150,000 per incident,” plus legal fees and costs. It also wants to “recover all profits realized” by WKYC. At a guess, this will wind up being settled before it reaches the courthouse.
Here’s what the Cleveland TV station said about Pandora –
From the media kit that Arbitron submitted along with its lawsuit – Pandora offers “No clutter! Pandora serves only ads every 20 minutes in-between songs. Only one ad per screen – 100% share of screen. Audience is guaranteed, not estimated [Arbitron probably didn’t like that]. No wasted impressions!” And this – “we are the only way to buy Pandora locally, in Northeast Ohio.” There are plenty of questions here – NBC affiliate WKYC TV is owned by Gannett. Is that large group owner possibly working with Pandora elsewhere? Is this going to be a national Pandora strategy – connecting up with TV stations which have an existing sales staff? Where did the Arbitron stats come from? Finally – if that’s the kind of attack that radio will be facing in local markets, do broadcast radio salespeople have the information and training to handle the objections? They’d better.

More about Pandora’s local sales efforts, this time from Houston.
Media Results LLC principal Kim Hillman dashes off an energetic note to her distribution list, after getting a LinkedIn request from a “disgruntled ex-Clear Channel guy” now with Pandora. His followup said (in Hillman’s words) “they’re launching a huge push in Houston to sell all the local advertisers ads on Pandora,” detailing the various classes of spots – “banner, rollovers, pre-roll, expandable, etc.” He says they’ll be getting rates comparable to broadcast radio and eventually TV. Hillman colorfully says “well, you know us old radio/TV agency people – we didn’t just fall off the turnip truck.” She cautions folks on her list about “the pie” – there will be a Houston office for Pandora and “you’ll be sharing yet another piece of your pie, looks like.” Kim says “I get it, there is a place for it, but not at broadcast rates, and you are not going to convince me that ‘there is not waste on Pandora.’” Her own personal opinion – “the ads on those platforms really annoy me.” She signs off saying “be ready for them…they are coming in strong.”

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Tuesday Blog

I get asked a lot why webtalkradio.net does not stream programming.

There are several reasons for this.

First, if I caught anyone in my office listening to talk radio at their desks during the course of the day, I’d fire them.

Second, when is the last time someone said to you, “I’m going home to listen to the radio tonight?”

There are myriad other reasons, including that everyone who downloads a Podcast has to do something pro-active to get the content. They weren’t listening passively, so from an advertiser perspective that makes them a qualified lead.

I recently ran across a blog post from someone named Alison. A blogger and Podcaster herself, she lists the following 10 reasons why bloggers should also be Podcasters

And, just in case you haven’t noticed, I’m one myself: –).

1. Podcasts can help you attract a new type of follower, expanding your audience beyond your current community.
2. Podcasting often helps you improve your speaking skills, which allows you to get more speaking gigs and opens other opportunities to you.
3. You can build loyalty with your voice that you don’t get with text, as it makes it easier for people to connect to you and trust you.
4. Podcasting is not as hard as you think!
5. With a podcast, you get the opportunity to talk to others in your niche, which helps you become a master of your subject.
6. Podcasts are easy to consume, since you can listen in the car, at the gym, etc.
7. You can recycle some of your best written content ideas by recording a podcast about these same topics.
8. Podcasts allow you to tap into a new community.
9. Having a regular podcast helps you improve perceived credibility.
10. You can make money with a podcast.

And this final note:

I have preached for the longest time that Podcasts can’t run commercials that are traditional in length. The typical 30-second and 60-second spots would be skipped, just like they are on TiVo. Commercials need to be embedded in content. In the world of Podcasting, I call them “talking spots”.

It seems that our cousins in the terrestrial radio space have begun to figure that out too. Here’s a brief post from this morning’s Inside Radio:

More radio ads meld into content.

More than ever advertisers are looking to radio look to integrate their message directly into station content. The traditional spot isn’t in danger of going away of course, but more national marketers say they like radio’s wide array of assets and how they can use them. It’s a trend that radio has begun to leverage to get into the ad planning process earlier.

What a concept: –).

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Monday’s Blog

Well, I said I would have the answer to the question, ” Which Internet site was the fastest to reach 20 million registered users?”

In my last blog post, I promised the answer on Monday. I just did not say which Monday : –)

I took last week off from blogging, as it just was an exceptionally crazy week. But, as they say, “I’m back.”

Not wanting to be in the business of promises that I cannot keep, I won’t necessarily promise to post every day, but I will commit to never letting a whole week go by again without a new post.

Now, back to the question about which site has reached 20 million registered users: It’s iHeartRadio. Yep, it got there faster than even Facebook or Pandora.

So, the next question is, what does that mean? Clear Channel, owner of iHeartRadio, also owns more commercial terrestrial radio stations than any other group broadcaster in the country. They aggressively use those stations, and the brand names they have created for them – brands that their listeners recognize immediately and have emotional ties to, to push people over to iHeartRadio. Does that mean they will be bigger than Facebook? Absolutely not. Does it mean they will be bigger than Pandora? In all probability, with 50 million registered users, Pandora will be threatened by it.

Remember, 243 million people spend an hour or more a week with terrestrial radio. Just as once upon a time relationships with radio stations moved from AM to FM, moving that relationship to the Internet is well underway.

Later this year, when Arbitron, the source used most of radio ratings and Nielsen ratings (know mostly for TV ratings) merge and combine internet radio and terrestrial radio ratings, for advertisers, the playing field will be even. Pandora claims to have 7% of all radio listening. At the moment there’s no way to prove that they do or they don’t. Common sense and intuition certainly suggest not, but the numbers, later this year, will prove it one way or the other.

And, speaking of being back, the new Congress is now seated. And, while preoccupied with important issues such as trying to agree on what time it is, much less the federal deficit, and employment, quietly last week the Internet Radio Fairness Act was reintroduced and assigned to committee. With Sprint rolling out FM chips into all of their new smart phones this spring, and other carriers shortly soon to follow, governmental action looks more and more unlikely.

There may also be cracks in the wall in the recording industry. As you may recall, in an earlier post, I noted that Clear Channel and Entercom have made deals directly with labels. Now, comes this post, from FCC and communications attorney David Oxenford;

“Industry attorney and rights/royalties authority David Oxenford is suggesting the system of simple, one-stop music licensing that has enabled services to easily pay for the use of copyright music, and rights-holders to earn on their creations, may be breaking down.

Last week news broke (here) that webcaster Pandora’s bill to perform compositions held by Sony/ATV will go up 25%. Pandora’s agreement with ASCAP and BMI no longer covers Sony/ATV work, and they must settle separately — without the oversight of a rate court. Some fear this is just the first domino falling, soon to be followed by other publishing groups breaking away from the Performance Rights Organizations (PROs) ASCAP and BMI, which aggregate rights and rightsholders (making the licensing of music simpler for both copyright owners and users). See our followup to the Sony/ATV and Pandora news here.

Oxenford joins those warning that if more large publishing groups withdraw from the PROs, the process gets harder for music users — with no rate court oversight (to regulate rates).

Keep in mind some owners of sound recording copyrights have peeled away from the collective — in this case, SoundExchange. In those cases, labels or label groups like Big Machine have made separate deals with broadcasters that decrease webcasting royalties.
But, if this fragmenting of rightsholders continues and accelerates, life could become more complex and expensive for smaller players –both smaller services and smaller rightsholders. As Oxenford points out, smaller services don’t have the manpower to negotiate all the agreements necessary for a comprehensive service; smaller publishers may be left relying on the PROs, and with fewer members, admin costs as a percentage of earnings will rise.

“Note, in some cases, any advantages of the larger players may fade away, as marketplace agreements can often be the best evidence of what the royalties set by a rate court or the CRB should be, in which case these directly licensed rates will end up being extended to all players in the industry,” Oxenford writes.

Given the direct deals for sound recording and publishing rates so far, ‘we might see higher rates for music publishing, but lower rates for sound recordings over time.'”

 Read his entire blog post at Broadcast Law Blog here.

And, finally, I could not help but take notice of this entry from a recent Google News Alert. I would love to hear your comments. I find it pretty incredible that not one talkradio portal is listed.

100+ Best Apps for Internet Radio » iphone,ipad – AppCrawlr
Best Internet Radio App I’ve found for the iPhone…I have tried several of the internet radio apps … Best Internet Radio App I’ve found for the iPhone …
appcrawlr.com/ios-apps/best-apps-internet-radio

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Friday’s Blog

“I don’t Know what country he’s talking about, but I would sure like to live there.”

It was comedian and satirist Aaron Freeman who came up with that in the mid-1980s. He was using it to describe his thoughts about what Ronald Reagan, at the time, was promoting as the America with white picket fences and houses on rolling hills.

That’s sort of the feeling I get every time someone at Pandora talks about their company reaching profitability. John Trimble, Chief Revenue Officer of the company made remarks last week at the Consumer Electronics Show. His comments were based more or less on the notion that as Pandora adds more subscribers in your shoes, it will sell more advertising. The latter part of that statement might be true, but their costs go up the longer people stand listening to this service.

He went on to say that at some point revenues and time spent listening will somehow catch up with each other, and they will attain profitability. The math just doesn’t hold up. It was just like what President Obama said to Mitt Romney during the Presidential debates: there is no way it can happen.

The one and only way, that at least I can see, that will allow them to achieve their goal, is finding a way to reduce both performance and license fees paid to record companies and artists. By the time they get around to renegotiating those agreements in late 2014, it is likely, in my opinion, that Pandora will be over and out.

In what can only be called a nod toward radio’s digital future, Erica Farber, President of the Radio Advertising Bureau, will address the RAIN west coast Summit, on April 7, just ahead of the NAB Convention in Las Vegas. Erica is one of the most respected names in radio broadcasting. She spent years as the publisher of the now deceased Radio and Records magazine, is on the Board of Directors of the Broadcasters Foundation of America and on the Board of the nonprofit I founded 14 years ago, the Radio Center for People with Disabilities. We train and place people with disabilities in off air radio jobs.

When Erica heard about the project, she immediately contacted me and volunteered to join the Board. She’s one of the smartest minds (and nicest) in the industry. She’s a thought leader. Last year, she took the reigns at RAB. As ambassador for the industry, she’s been incredible. She’s fostered relationships with advertisers, and recognized from the moment she stepped into the job, that the Internet is the future of the industry. She’s gone from one coast to the other singing that hymn.

To give the key note speech at the Radio and the Internet Summit, just ahead of the NAB, is an acknowledgement to broadcasters and webcasters alike of the convergence of radio and Internet radio. It also underscores the message that we are one industry.

Here’s a question to ponder over the weekend. What Internet entity was the fastest to register 20M users?

The answer on Monday.

Have a great weekend.

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