A Dam in the Stream

If Clear Channel can't afford Internet radio, who can?

In a relatively short period of time, Internet audio streaming of traditional radio broadcasts has found a sizable audience. And why not? The technology allows folks who work in office buildings in which radio reception is iffy to keep up with their favorite signals on the job, even as it lets individuals who live elsewhere sample faraway sounds. Notes Scott Arbough, program director for Clear Channel-owned KBCO, "The majority of people listening to our audio stream are from out of state or out of the country. We have a worldwide listener base."

Sorry, world. KBCO and the other seven Denver-area stations under the Clear Channel umbrella have reluctantly discontinued their Web-streaming operations. "It's a shame," says Lee Larsen, regional vice president of Clear Channel's Rocky Mountain region properties, who ordered the end of streaming as we know it. "But it's something that, at least temporarily, we felt we had to do."

Larsen calls the causes behind this decision "extremely complicated," and he's right. But, as usual, expenses are the bottom line, and they're impacting every Internet-radio operator -- even Clear Channel, the nation's largest owner of radio outlets, with more than 1,200 properties. As of last year, about 200 of the conglomerate's stations offered real-time Internet streaming. But on January 1, this total instantly shrank to about fifty, and the numbers are expected to keep falling.

Immediately after its plug was pulled, KBCO posted the following message on its Web site, www.KBCO.com: "Due to various issues, including music and commercial rights issues, bandwidth costs and other factors, we have stopped the streaming rebroadcast of our stations on the Internet." This notice remains accessible on the sites of several other Clear Channel stations in Denver, such as talk purveyor KHOW (www.KHOW.com).

Granted, this isn't the first time Clear Channel stations have quit streaming. The flow was also squeezed off in April 2001, after the American Association of Advertising Agencies asked stations to stop simulcasting commercials over the Web in the wake of an agreement between the Screen Actors Guild and the American Federation of Television and Radio Artists. Dollars motivated this request: A provision of the pact required that AFTRA members be paid 300 percent of their session fees if the advertisements were streamed ("Radio Rumble," June 21, 2001). In an attempt to solve this problem, says Brian Parsons, vice president of technology for Clear Channel Radio Interactive, Clear Channel stations began "taking all the commercials out and replacing them with Internet-only commercials or commercials that had been cleared to use on the Internet."

But this fix brought with it a new set of difficulties. Not only was it laborious and time-consuming to sift through commercials in search of participants from AFTRA, but the sale of Internet-only ads seldom kept pace with those intended for standard airing. Because local spots created even more uncertainty, they were routinely blocked, leading to unwanted moments of silence.

Complicating things further were attempts to implement the Digital Millennium Copyright Act, a measure passed by Congress in 1998. Musicians have long resented the royalty structure that applies to traditional radio, and with good reason: Composers are paid each time one of their tunes is aired, but the non-writing instrumentalists and vocalists who appear on such recordings receive zip. That explains why the latter were cheered by the DMCA. Although the legislation didn't change the rules governing old-school radio, it cleared the way for performance royalties on material streamed over the Web, including simulcasts of standard radio broadcasts.

Internet-radio types were less than thrilled by this turn of events, especially when a Copyright Arbitration Royalty Panel, or CARP, recommended that Web radio types pay royalties on a per-song/per-listener basis. In an interview last year on this topic ("Digital Dilemma," May 2, 2002), Howard Michalski of radio.wazee (at www.wazee.org), a modern-rock Internet station based in Denver, said, "This is a fledgling industry. You would think the recording industry would want to help it grow, especially since we're all up for paying some kind of performance fee. But they're never going to get the fees the way they've set them up, because none of us will be left."

After Librarian of Congress James Billington set Internet-radio royalty rates that many deemed too high (despite their being lower in some respects than what the CARP recommended), Web-radio supporters like Michalski asked legislators for relief. Their efforts produced the Small Webcaster Settlement Act, which lowered the royalties further. But these additional expenditures remained substantial, particularly in an industry that was not yet profitable. This was the case even for Clear Channel, which, according to the Arbitron ratings service, streamed nearly six million hours of programming last November, more than any other network Webcaster during the same period. Clear Channel technology veep Parsons puts it simply: "At the national level, we were just not seeing enough revenue to make it a sound business."

Other provisions of the Small Webcasters Settlement Act promised to make matters worse. Pam Taylor, the spokesperson for Clear Channel Radio, makes particular note of "the reporting requirements that are part of the legislation. The regulations require us to report the number of times an artist is played, the time slot and a lot of other things. Somebody's got to sit down and figure all that out, which makes for a very labor-intensive situation."

Different prerequisites for different programs spur more headaches, says regional vice president Larsen. "For one thing, there are copyright issues with syndicated programming. To put a Major League Baseball game on the Internet, you have to pay Major League Baseball a monthly fee."

This combination of irritants ultimately convinced Clear Channel to change its entire approach to Webcasting. Previously, the company had covered costs related to bandwidth and assorted fees incurred by local stations in exchange for a slice of revenues. But toward the end of 2002, Clear Channel reps informed their stations that this direct monetary support would be ending, leaving individual outlets responsible for funding their Internet operations. Executives with Clear Channel stations in some of the nation's larger markets decided to stick with Webcasting, despite this switch: Chicago's WLIT, at www.WLIT.com, is churning out soft-rock classics right now. Most, though, shut down, with stations in Detroit, San Francisco, Philadelphia and Miami picking the option chosen in Denver.

The silence was broken locally on January 8, when Clear Channel's Denver outlets resumed streaming -- but a day later, the off switch was thrown again at Larsen's behest. "We knew we could only put streaming up for a short time, and then there was uncertainty past that," he says. "And I didn't think it was right to put our sites up, take them down, put them up, take them down, put them up. The next time we put them up, I wanted it to be when we found a solution that will keep them up -- that we can promote and people can count on. I didn't want to keep driving the people who listen to us nuts."

The end of streaming is especially unfortunate in the case of KBCO, whose online listenership got a boost from another of Clear Channel's failed Internet initiatives. Several years ago, the firm owned a station in Santa Monica, California, that was overseen by programmers at KBCO, whose format is known as "World Class Rock." The Santa Monica signal was sold in 2000, but Clear Channel retained the right to promote the station's concept on the Internet at www.WorldClassRock.com and paid a staff in Southern California to keep it running. The notion never made a profit, and it was abandoned around the beginning of 2002, but Clear Channel hung on to the Web address in order to direct fans to KBCO. While program director Arbough isn't sure how much KBCO's Web following grew after this move was made, he knows that it's broadened substantially in recent years. "People send Select-a-Sets from Japan," he says. "We even have listeners in the Antarctic who collect CDs of our Studio C sessions."

South Pole dwellers with Internet access aren't completely out of luck: A few Studio C sessions, by the likes of Tori Amos and Delbert McClinton, can still be accessed on the KBCO Web site. But for the time being, online streaming is only a memory -- and Larsen thinks that unless new answers are found, the people behind other Web radio stations may have to make the same tough choice he did. "It will take a while for all the unions, syndicators, radio stations and publishers to come to some conclusion on what's a fair way to divide the pie," he says. "In the meantime, streaming is only a very small part of what we do. We can only justify spending so much money or so much time on it."

Paved with good intentions: The tale of Oscar Hernandez, a five-year-old leukemia sufferer whose search for medical treatment was documented in this space last week, grows odder with each passing day. On January 31, the Denver Post published a report stating that the Denver District Attorney's Office is looking into a complaint that spotlights Children's Hospital of Denver, where Oscar is to receive a bone-marrow transplant, and the law firm of Moyes, Giles, O'Keefe, Vermeire and Gorrell, which represented the hospital as well as the child's family. The central question: Did a conflict of interest lead these parties to initially hush up and subsequently discredit an offer of a free transplant by the Children's Hospital and Research Center in Oakland, California, even as locals donated thousands upon thousands of dollars to pay for care Oscar could have received at no charge?

DA spokeswoman Lynn Kimbrough says a formal investigation is not yet under way -- a point she also made in the Post article. But that piece left out plenty of other intriguing details about the media's role in fueling the story and, on one occasion, took credit where it's not entirely due.

The first person to alert the populace about Oscar was Nancy Leal, a reporter with the Denver arm of Univision, a Spanish-language broadcaster. "The mom called me," Leal recalls, referring to Oscar's mother, Susana Nieto. "She told me she went to different media -- radio, [English-speaking] TV stations -- and nobody would listen to her needs. She needed to raise a lot of money to help her kid, and since I've done stories like this one in the past, I said I would try to help."

Leal more than kept her word. Following the original presentation, aired November 25, she contacted Tony Lopez, a reporter/anchor at Channel 4, which has a loose partnership with Univision; shortly thereafter, Lopez shared Oscar's circumstances with his station's viewers. Leal also reached out to Dan Spicer, an attorney known for doing pro bono work for members of the area's Latino community. (The Post identified him as a Univision producer, but he's not on staff. Instead, he's an independent who frequently contributes public-service announcements and news stories.) After agreeing to come aboard, Spicer asked attorney Ed Naylor, of Moyes, Giles, O'Keefe, Vermeire and Gorrell, to aid him by writing a trust agreement, thus ensuring that any past and future donations were handled in a responsible way. Naylor passed matters on to a colleague, Guadalupe Sisneros, who later became the Hernandezes' lawyer before passing the reins to Ralph Torres, their current attorney.

Sisneros brought in another player: Liz Giordano, who heads Garden of Hope, a nonprofit service that she says is devoted to "assisting individuals in need of lifesaving medical treatment." Because Oscar fit this bill, Giordano and her colleagues threw themselves into the chore of finding a hospital that would lend a hand without regard to cost. According to Leal, Children's Hospital of Denver wasn't even in the picture at that point. "They were not very helpful, either for interviews or for anything else," she notes. "They just said, 'You have to have the money, and if you don't have the money, we can't do anything.'" Contacted for last week's column, Children's Hospital spokeswoman Rachel Robinson referred all questions about Oscar to the Hernandez family. Torres, their attorney, has failed to return a bushel of phone calls from Westword.

On December 11, one day after the Post checked in with the first of its stories on the Hernandezes, most of the principals -- with the exception of Giordano, who was in Washington, D.C., working contacts on Oscar's behalf -- met at Univision to discuss the trust. At the time, Spicer and Leal were tabbed to serve as trustees, with Giordano named an alternate. But Leal eventually had to take herself out of the running for this post.

"I got too personal on the story, and I had to back up," Leal concedes. "As a reporter, you're not supposed to get too personal, and when I talked to my general manager about it, she told me not to get involved, because you never know how things are going to turn out. It wasn't just my name involved, but the whole station. And I didn't want to hurt the station if anything happened."

A few days later, Giordano was out, too, despite lining up a free-transplant deal with the Oakland hospital that was spelled out plainly in several e-mails to Children's in Denver. (This proposal was first publicized on Univision on December 19, a full six days before it appeared in the Post -- a fact that makes the boast in the January 31 article about the offer having been "leaked to the Denver Post" seem considerably less impressive.) Still, Giordano prefers to look ahead rather than back. "Our organization has identified several other individuals in need of bone-marrow transplants," she says, adding her hope that some or all of them will be able to take advantage of the same free treatment in Oakland that the Hernandezes ultimately turned down.

As for Spicer, he found out he wouldn't be a trustee after returning from a brief Christmas vacation. He continued to do what he could to help, offering to fly a family member to Oakland for a tour of the hospital and even lining up a promised job for Oscar's father, Pedro Hernandez, an unemployed carpenter. In the end, neither of these gifts was accepted.

"It's truly a shame that the facts were distorted time and time again," Spicer says about the events as a whole. "This was a purely humanitarian effort by the people in this city and the people closest to this case, including Nancy Leal and Liz Giordano. What they did was unique and miraculous -- so to have this distorted in the many ways it's been is most unfortunate for everyone, including all Mexican-Americans living in Colorado."

And Leal? Although she hasn't been in touch with the Hernandezes for well over a month, she's pleased that Oscar is set to receive a transplant. But she feels unsettled by much of went on. "Think about the people who gave jewelry, who gave fur coats, to help pay for something another hospital was offering to do for free," she says. "I ask myself, 'How did that happen?' And I think anybody would be asking the same things I am."

Challenger redux: The explosion of the space shuttle Columbia on Saturday, February 1, prompted the sort of unremitting TV coverage to which members of this catastrophe-obsessed age have sadly grown accustomed -- the possible exception to this group being CBS anchor Dan Rather, who spent countless hours seemingly on the brink of cracking once and for all. It also provided cable-news junkies a temporary respite from "Target: Iraq" drumbeating, which has already gone on for months more than even war-happy network executives might have predicted.

By its very nature, print media couldn't be as immediate -- particularly the Rocky Mountain News, which, because of its joint-operating agreement with the Denver Post, has no Sunday paper. Nonetheless, shuttle reporting dominated its Monday edition, as if tragedy had struck one, rather than two, days earlier. Turnabout was fair play in this case, because the previous weekend, a midair collision over Denver that took place on Friday, January 24, meant that the Post -- which, thanks to the JOA, has no Saturday paper -- was in precisely the same situation and reacted identically. The paper blew out its crash coverage on Sunday without much acknowledgment that the accident was no longer breaking news.

Part of the Post's Columbia package was a column by sports scribe Woody Paige recalling that he and his daughter had been in Florida on January 28, 1986, when the Challenger space shuttle went up in smoke. This reference set off knowing chuckles among journalism-community veterans, because, according to lore, Paige had been assigned to write about the Challenger's launch, but missed the story of the year when he chose to take his daughter to Disney World instead. A version of this tale ran in Westword in February 1986 and was alluded to, without the mention of Paige's name, in a February 3 News article by Charlie Brennan, who was present when the Challenger shattered. The Post itself joined the chorus in March 1998, when reporter Jack Cox wrote, "After the launch had been scrubbed three or four days in a row, [Paige] had decided to follow it on TV" -- a decision that made him infamous, "to his everlasting chagrin."

But Paige insists that this infamy is misdirected. The way he tells it, he'd been asked to go to Florida by KNUS radio, where he was also on staff at the time, to helm a broadcast from Disney World. He planned to take his daughter to the shuttle liftoff while there, and since University of Colorado grad Ellison Onizuka was among the astronauts in the crew, Paige says he asked then-editor Tony Campbell if he'd be interested in a piece about the launch. As Paige remembers it, Campbell responded to this offer "by saying 'Fuck, no. Nobody cares anymore.... We don't want any fucking thing on the space shuttle." Paige didn't have a problem with that, so he headed to Florida sans a Post assignment. He and his daughter waited through one launch that didn't happen; then, on January 28, "I phoned the Cape and was told there would be a two- or three-hour delay. So I went to do my radio show." After the calamity, Paige got a call from Campbell asking for a column after all, and he came through with one about the reaction of folks at the Happiest Place on Earth that stoked more than a decade's worth of misunderstandings.

"I'm chagrined, all right," Paige says. "I'm chagrined that this thing has become an urban legend. And I'm chagrined that I did what the paper asked me -- which is a mistake I've made too many times in my life."

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