Senate Approves Local Community Radio Act, Low Power FM Stations To Increase
-- The U.S. Senate passed the Local Community Radio Act on Friday. The House of Representatives had already passed the bill. It now awaits the president's approval.
The bill will expand the low power FM (LPFM) service created by the FCC in order to increase diversity in local markets they felt was missing due to consolidation in the radio industry. LPFM stations will be noncommercial entities and must be operated by local nonprofit, religious or public organizations. They are limited to 100 watts and must not cause "unacceptable interference" with existing radio stations.
The Future of Music Coalition voiced its pleasure with the bill's passage and predicted benefits ranging from greater civic engagement to increased support for local music and culture. "The need to expand and protect non-commercial radio was a key driver in the creation of the Future of Music Coalition over ten years ago," policy direct Michael Bracy said in a statement.
Congress is aiming to put community radio within greater reach of local organizations. According to the language in the bill, the cost of acquiring a radio station in 2003 was $2.5 million. Along with the value of LPFM stations during emergencies, the value of increased minority broadcast ownership was also a goal cited in the bill: "LPFM stations, while not a solution to the overall inequalities in minority and female broadcast ownership, provide an additional opportunity for underrepresented communities to operate a station and provide local communities with a greater diversity of viewpoints and culture."
Netflix CEO's Blog Post Rebuts Investor
-- Netflix CEO Reed Hastings' post at Seeking Alpha is notable for a couple reasons.
First, it's rare that a CEO of a massively popular, game-changing public company will publish a blog post that's a point-by-point rebuttal to a investor currently shorting his company's stock (that means the investor has bet Netflix's stock will drop in the future). Second, music services are in competition with Netflix. Actually, it's more accurate to say most music services are struggling to tread water in Netflix's wake.
Hastings addresses content costs (the subscriber base is growing fast enough that Netflix can pay for current content and get more in the future), the first-sale doctrine ("any potential change would not happen for several more years"), increasing bandwidth costs (the drop in Internet bandwidth is "roughly following Moore's Law") and market saturation in video streaming ("unlikely to hit in the short term").
Later, when Reed talks about Netflix's competition it's striking how the same could be said of Steve Jobs and iTunes' competitors. Check this out:
"The core competitive barrier for direct competitors is brand/subscriber-evangelism. Our large subscriber base is very happy with Netflix, and tells their friends about Netflix. That means that the cost of acquiring the incremental 1m subscribers is lower for us than for a competitor, and thus our net additions are higher. There are also lots of other smaller competitive barriers, but the happy subscriber base is the big one."
Other than iTunes, the only music services to have a strong "evangelical" base, so to speak, are Pandora and Spotify. Nothing else has got people talking. Online video has Netflix, but U.S. consumers don't have a must-have, killer streaming service other than Pandora (and possibly Sonos, although its price prevents mainstream adoption). That's why iTunes sits atop its perch, dominates the download market while Pandora owns the webcasting market. There's simply a lack of happy customers willing to evangelize about their competitors.
In fact, Netflix's popularity could be hurting digital music services. By offering unlimited video streaming for $7 a month, Netflix sets a very powerful reference price to which other streaming services are compared. A $10 a month price tag for an unlimited music service doesn't deliver the same value as Netflix's $7 streaming service. Drop a music service to $2 and it just might match Netflix's value.
1.5 Million Microsoft Windows Phone 7 Buyers In Six Weeks Can't Be Wrong
-- Mobile alert: Microsoft says it sold 1.5 million Windows Phone 7 devices in the first six weeks of release. Here's Achim Berg, VP of business and marketing for Windows Phones, on Microsoft's competition position in the mobile market: "We are on a path to begin releasing the first of several updates in the next couple of months, and several more mobile operators around the world will introduce Windows Phone 7 on their network in 2011 and we will have a broader portfolio of devices from phone manufacturers at different price points delivering on our commitment of providing customers choice."
To put that in context, in its earnings release last week Research in Motion revealed it shipped 14.2 million BlackBerry smartphones in the quarter ended November 27, a 40% increase over the same quarter in 2009. The company said it added 5.1 million new BlackBerry subscriber accounts in the quarter, bringing its total BlackBerry subscriber base to over 55 million.
Apple TV Hits 1 Million Mark
-- Apple announced on Tuesday that it has sold 1 million units of its Apple TV set top box. The company added that iTunes users are currently renting and buying more than 400,000 TV shows and more than 150,000 movies a day. That works out to over 12 million TV shows and over 4.5 million movies being bought or rented each month.
iTunes' TV and movie numbers are small compared to the amount of music tracks iTunes sells each month in the U.S. along. Assuming a 70% market share, iTunes currently sells about 29 million tracks each week, based on the most recent Nielsen SoundScan sales figures. But the sales figures for TV shows and movies aren't disappointing. They can cost more than music downloads, they're newer to the marketplace and have plenty of growth ahead and, unlike music tracks, they can be rented for limited periods of time.