So which is the better strategy to monetize online radio?
Featuring targeted spots built for the context and platform of online radio and the consumers who expect something relevant there?
Or simulcasting the same spots you run on-air online?
Well we can argue about which is better from a strategic standpoint (I certainly have made my opinion known), but we can no longer argue that there aren’t extra, unanticipated costs to simulcasting. Contrary to the wishful thinking among some broadcasters, it is not free to move spots over from on-air to online.
And not only is there a cost, but the cost is rising.
Witness this clause from the 2013 SAG-AFTRA Radio Recorded Commercials Contract, referencing simulcast or “move-over” fees:
From Section 8: Internet:
c. Move-over Internet use rates increase as follows:
8-Week Use Cycle Increase from 133% to 150% of applicable session fee
1-Year Use Cycle Increase from 350% to 400% of applicable session fee
So not only is a real cost assessed, but that cost is going up, not down. And certainly not away. I don’t know who’s supposed to pay that – you or your agency. But the obvious answer is: One of you, not neither of you.
So broadcasters who choose to simulcast their spots might want to check with legal counsel, because my fear would be that simulcasting spots without paying these (rising) rates would subject the broadcaster to retroactive penalties.
Hoping not to be caught is not a business strategy.
But providing consumers with messages that are relevant for them certainly is.