[BC] Question/Statement About The Cost of Streaming

[Craig Healy]

> >> On one stations "Friends Of" website at
> >> http://www.friendsofmvyradio.org/
> >> they say their streaming cost $500,00 a year.
> >> That's nearly $42,000 a month..
> >
> > That is the cost of running the whole operation, including the 92.7 FM
on
> > Martha's Vineyard.
>
> So, does the "streaming cost $500k per year"? Or is that the entire cost
> of the operation, including program creation?

That is the cost of running the whole station, I believe.  Just a guess,
though.  No access to the numbers.   Streaming cost - SoundExchange
norwithstanding - isn't that much.  For example, FiOS in this area is
available with a static IP for under $200/month for a 20mb upload speed.  My
guess is that stream bandwidth costs would be under $2,000/month and some of
this would be offset by ad insertion by the provider.  Most of the money is
to support day-to-day operation and things like the Merlefest and SXSW
trips.

As another side question..  Just how many listeners to a 24kbit Windows
Media stream would a FiOS of 20mbyte upload speed support?  I have been told
it's somewhere around 6,500.  Thoughts?

> I think it would be
> interesting to do a "per listener" or "per viewer" cost comparison between
> internet streaming and broadcast (over the air and cable). It seems that
> streaming is economical when you are covering a low density audience (few
> people over a large area), but above a certain density, broadcast
> technologies seem to have an economic advantage. Users may be willing to
> pay the extra cost to get on-demand programming. However, by moving some
> of the hardware to the user (digital video recorders, etc.), on demand
> becomes largely possible over a broadcast medium.

For today, perhaps.  Current news has a whole lot of stories about how
internet radio is increasing at an exponential rate.  New pocket iPhone-type
gadgets are being designed or released that will access mobile broadband.
Having an iPhone or Blackberry type box that does everything from web to GPS
to email to streaming content reception is literally around the corner.  My
personal feeling is that once mobile internet hits a certain availability,
it will start to seriously erode over the air radio listenership.  Those
places that are the exceptional content providers will prosper.  The
satellite mules will simply vanish.

> So... how many people are listening to the radio right now in your market?

Who knows?  It's only tangentally rated by Arbitron.  I do know that they
get a lot of requests by both phone and email from all over the world.  My
personal guess is that they have more people listening in the later evening
and overnight on the streams than on the 92.7 signal.  And, the summer
residents of Martha's Vineyard like to keep up with what's happening at
their getaway.  People who would never show in a rating book.  It's also one
of the few places where I frequently give advice to listeners as to what
radios and antennas give the best distant reception.  People far from the
station's rating books are listening.

> What is the transmission cost to reach them (equipment, energy, real
> estate, maintenance, spectrum use)? What would it cost to reach the same
> number of people using streaming?

Just subtract the cost of the electricity and maintenance costs from the
limiter outwards.  The costs to run it as stream-only wouldn't be that much
less than right now.  Given that advertisers simply aren't up to speed on
stream awareness, revenue would seriously drop - especially local ads.  The
content creation cost would be the same regardless of distribution method.
It's what makes that place unique.  Advertiser awareness of stream listener
importance will increase soon.  And, stream listener count doesn't need
Arbitron.  While the demographics may not be available, a very accurate
count is.  I do know some of the stream listener counts and they are *very*
impressive.  Numbers that I will not post, as it's not my info to release.

They have three slightly different stream contents.  First is a
pay-per-month Real stream with no advertising at all.  Second is a number of
variations between MP3, Windows Media and AAC+ that are close to public
radio content.  No ads, but a request for donations.  Third is a single
Windows Media stream with all the local ads, and only the AFTRA-restricted
ads overlaid.  They also have podcasts and specialty shows in non-real time
available, such as a Grateful Dead Hour and Beatles show, Blues and Jazz
shows as well.  Even the public radio-type stream is available in half hour
block Podcast form.  Quite a variety.

What will be interesting is to see how this goes longer-term.  My personal
feeling is that things like HD Radio will be bulldozered by internet streams
in the fairly near term.  Nobody wants a single-purpose and overpriced HD
receiver when a smaller and probably cheaper iPhone/Blackberry will give far
more versatility and fit in a pocket or purse.  Streams can have a better
sound due to data rate limits on HD.  I really think that's the direction,
and it's all driven by huge companies like Microsoft, Google and Apple.
Audio/video is just going along for the ride, and a what great ride it is!
All radio needs to do is make itself available to that group and it will
prosper.

So, the costs of streaming may be an issue, but it's money very well spent.
And overall it is very little different than supporting a smallish
transmitter.

Craig Healy
Providence, RI