Sunday, July 12, 2009

Being Broke Is A Temporary Situation...What Will You Do With Just 10%

I was recently introduced to the name Mike Todd. A quote attributed to him really got my juices flowing: "I've never been poor, only broke. Being poor is a frame of mind. Being broke is only a temporary situation".

Mike Todd invented the film process we call 70mm. He did it in 1951 and in 1952, developed Cinerama. It was 65mm of picture with 5mm of sound, including effects and music. It gave the Silver Screen an advantage it needed over small-screen Black & White (Monaural) television.

In 1957, Mike Todd became the third husband of the most glamorous actress of her time, Elizabeth Taylor. Interesting lifetime.

Now, what does this have to do with Radio?

The hard-nosed reality is that many stations now have only morning shows (usually the PD) followed by a cacophony of “bumping songs” between jingles, imagers and commercials the rest of the day. Yes, Radio is apparently “broke”—in many ways, including financially. But it isn’t “Poor”. It has the creativity and energy of its remaining people.

The one thing we cannot afford to do is nothing.

When your radio station is predictable 90% of the time, you’ve set the stage for Predictable Unpredictability. What you do with that 10% that is not routine makes all the difference. Therein lies the opportunity.

If you think of your station’s normal format as your Reality Base, then even the most overworked PD’s—even those programming two or more stations—can create than little something that makes the station(s) very special. The “mundane” and the “routine”
become perfect opportunities for “predictable unpredictability”.

It is our Reality Base for injecting something into the mix that is so outrageous it gets attention and begs the listener to wonder “what next”? That “what next” attitude creates Time-Spent-
Listening and THAT creates Average Quarter Hour Audience or, in the PPM markets, “Listener Engagement”.

It’s the RULES that make the EXCEPTIONS possible.

Opportunities for “breaking the rules” are everywhere: perhaps that billboard on the main thoroughfare is something that could become a conversation piece. Sell it to a client—the billboard and your station talking about it. Make it outrageous! Make it fun! Create Street Talk!

How about a local happening or event? Or a local celebrity? Put ‘em together with a client or two and let ‘er rip!

Dare I suggest something as wacky as what Dick Orkin created at Chicago’s WCFL in 1966? Whenever The Adventures Of Chickenman came on the radio, Chicago literally stopped
to get the latest scoop on The Wonderful Weekend Warrior Who Combats Crime And/Or Evil. Click here to learn more.

Factor in Twitter, Facebook and other Social Networking sites and you have yet another shot at the outrageous.

Whatever you choose to do, Do Something!

Radio may be broke, but it’ll never be poor—as long as we hire and allow creative people the privilege of Free Thought…at least for 10% of the time.

And in the words of Mike Todd, being “broke is only a temporary situation.”

Sunday, June 21, 2009

Spots Before Our Ears?

Well, we’ve finally done it, haven’t we? Everybody is now convinced that Radio Commercials are bad. Even the RAB, who just last week decided that no commercial created and submitted this year by a Radio Station was good enough to receive a Radio Mercury Award.

Nobody seems to like Radio Commercials any more.

And why should they? For decades, Radio Stations have been touting “Fewer Commercials” and “Commercial Free Hours”. We heap the commercials into a pile of lasting up to 8-minutes bookended with a (highly produced) station promo at the beginning and some sort of (highly produced) imager or jingle at the end.

Commercials are bad. Twice an hour, we say, “Listener—you are dismissed for the next 5-minutes or so, but make sure you come back when we start playing the music again!”

Radio’s financial problems do not stem from its air personalities and program directors. But THEY are the ones who have been blamed for radio’s troubles and are being laid-off in record numbers.

Fewer personalities—more commercials. You’re kidding me, right?

I recall a conversation I had with a National Sales Manager in the 1980’s at a (not-Country) Denver radio station. She was concerned because all her national reps wanted “value added” schedules. Her concern was well-founded. The big-ticket national advertisers—as early as the 1980’s—didn’t think Radio was a very good vehicle for their commercials, but saw great value in Radio’s Promotional Power.

They’d buy the spots, but only with a promotion attached--or value-added.

And the commercials! These big national advertisers were simply using the audio from their television commercials! She knew these television-on-radio spots wouldn’t work, and so did her clients. But they didn’t care. It was the promotion they wanted from radio, so they just filled our air with garbage.

And we let them!

Now, half-way through 2009, we’ve “discovered” that our listeners and our clients now agree with us: Commercials are bad.

“Selling Radio is such a dog-eat-dog business…no wonder they call them spots!”

Our beloved medium is coming up on being a century old and still, the currency of modern radio continues to be the 30-second spot.

We all accept this.

Problem is: our clients now reject it. In fact, some of our largest national advertisers have been rejecting it for going on 3-decades! And yet, we keep pushing spots.

I listened to a demo of the original KHJ/Los Angeles yesterday on You should do that, too. L.A. Radio at the time was slow, tired and old-sounding. Too much talk—too many commercials. And so, Bill Drake instituted a format that not only put music and personality on the front burner, but the commercials, too.

In fact, the policy was a listener is “never more that 70-seconds from music”. That included commercials, news and talk—even in morning drive! Listening to those 60-second LIVE reads for Thrifty Drug and Discount Stores and right back into music made me think of “product placement”.

Product placement. Naming Rights. Endorsements. These are the things that get advertisers the results they now demand. It will cost much more than a 30-second spot, but it could be the key to getting consumers—and clients—back to an understanding that Radio Sells!

This should become Radio's Currency.

Somebody is going to try this. It’s just a matter of time. Who will it be? I don’t know, but I do know this: the person who perfects it will be spending a great deal of the rest of his life hitting golf balls.

Any takers?

Thursday, June 18, 2009

The Downfall of the Brand

We've now lived long enough to see General Motors go bankrupt. So, how important is that event to most Americans? Since the “brands” are GM’s products it’s Chevrolet, Pontiac, Oldsmobile, Buick, and GMC Trucks that will take the hit.

I got to thinking of the Merle Haggard line, “When a Ford and a Chevy would still last 10-years…like they should.” Then I realized: I’ve never heard a song about a Toyota or a BMW.

The Beach Boys: She’s real fine, my “Beemer” or “Fun, Fun, Fun, till her Daddy takes the Lexus Away” or “Hey little Hyundai, Don’cha know you’re gonna shut ‘em down”

Jan & Dean: “I was cruisin’ in my “Toyota” late one night when a “Mini Cooper” came up on the right” or “Little Nissan, you’re really lookin’ fine”
(See REAL lyrics at bottom of this page, if you don’t remember the songs.)

You get the picture. When GM began buying up car companies, it bought everything: manufacturing processes, inventories, Intellectual Property and most important, those brand names. How cool! To amass most of America’s favorite car brands under one roof.

Almost immediately, GM began looking for economies of scale. The found they could save millions by consolidating manufacturing and design functions. Then, they began “vertical integration”—that is, buying up companies and using them exclusively to produce the frames, bodies, steering columns, air conditioners, engines, transmissions and just about everything else.

Before too many years, GM was producing “name-plates”--almost identical car models with different brand “name-plates” on them. It all worked for many years because of American’s loyalty to their favorite brands.

This isn’t exactly a scientific survey, but everybody I’ve asked has said they’re rather have a Chevy or a Pontiac or Buick, but they own Toyotas, Nissans, BMW’s and Lexus’ because “they’re better cars”.

That all-important brand name has failed. Most people still love the idea of being surrounded by American Steel, but now it’s Japanese, German, Korean and Chinese steel wrapped around them during their commutes.

What does that possibly have to do with Radio? Well, compare GM to Clear Channel, Cumulus, CBS Radio, Regent and all the others. What have they done?

They bought brand-name radio stations. They bought companies that allowed vertical integration of programming and services, even music scheduling software and automation systems. Before long, one station sounded pretty much like the others.

Here’s the point: GM abandoned “content” and focused entirely on branding. We’re seeing this at Corporate Radio Groups, too. Content has been sacrificed—jocks replaced by out-of-market voice-tracks, syndicated shows or just an image voice. Corporate Radio Groups have abandoned “content” and focused entirely on “branding”.

And today, GM is bankrupt.

Here’s the big difference: there aren’t foreign manufactures competing with U.S. Radio Stations for their audiences they way they are for GM’s customers. But that’s changing, too. Internet Radio, mp3 players, cell phone apps and music downloads create competition for cume. MySpace, Facebook and Twitter create competition for Time-Spent-Listening.

GM’s bankruptcy is something Radio should be watching very closely. GM’s time is probably up. Radio still has a ticking clock.

What will we do with the time we have remaining?

Beach Boys: “She’s real fine, my 409” (409cc Chevy Corvette engine); “Fun, Fun, Fun till her Daddy took the T-Bird (Ford) away”; “Hey Little Cobra (Shelby, then Ford Mustang), don’ cha know you’re gonna shut ‘em down”

Jan & Dean: “I was cruisin’ in my Sting Ray (Chevy Corvette) late one night, when an XKE (okay, that’s Jaguar—but the Corvette won) came up on the right; “Little GTO (Pontiac), you’re really lookin’ fine.”

Thursday, May 28, 2009


Every day, we’re bombarded with NUMB3RS. And every day, someone in the trade press tries to make “sense” of the NUMB3RS—depending upon what point is being made in the article or blog. But, what can WE take away from all this?

We can control the NUMB3RS about as much as we can control a pair of dice. Sure, there are formulas and theories on how many times per thousand throws 7 or 11 or “boxcars” or “snake eyes” will come up, but that's gambling and is that what we should be doing with our Radio stations?

For decades, Program Directors have been telling their jocks to “sound great every break and the numbers will take care of themselves”. Usually, they did. Jocks who made every break count seldom feared the next Arbitron book.

Ah, but that was a time when every muscle in the building was flexed in order to make that one station the dominant station in the market.

Then along came another kind of NUMB3RS: economies of scale. These original NUMB3RS had it that a company could operate two stations for the price of one-and-a-half. So, with 2-AM’s and 2-FM’s, 1-company could operate 4- stations for the price of 3.

At the time, that seemed like a license to print money by increasing your billing 200% for 75% the cost...laughable in the economies of scale utilized today’s world of broadcasting.

Now, these economies of scale aren’t limited to terrestrial radio. Sirius and XM are working on those economies of scale right now--and not doing so well, it seems, if you consider that 1.7-million subscribers dropped the newly combined service in the first 3-months of this year.

CBS Interactive Music was formed last month to try their economies of scale by combining everything under their control into one gigantic ad buy in the never-ending attempt to monetize Internet Radio.

How about MySpace, Facebook and Twitter...still looking for their first penny of profit. (And Radio talks about them incessantly!)

Seems there's no end to NUMB3RS: Clear Channel Radio has introduced a new kind of NUMB3R and this one is, to me, just a bit on the scary scary side: Metrics.

As I understand it, it's some sort of secret formula devised by the Harvard School of Business to determine the relative value of every staff member. And since it’s a “secret formula”, how does one go about “influencing” that very personal number?

You can be fired if the metrics aren’t on your side-- thousands already have.

Seems like a good time for a little reality check, don’t you think? We’ve known for decades that a morning show, in any given market, takes about 2-years to develop. We also know--again through decades of ratings and many types of research—that a morning show’s ability to deliver the highest ratings and the greatest revenues are directly proportional to the amount of time the show has been in the market. How's that for a metric you can hang your hat on?

But what are NUMB3RS really? They are people...or at least, they’re supposed to represent people...or at least their combined attitudes, thoughts and opinions. The imaginary listener is becoming more depersonalized with every new set of NUMB3RS we get and is now so homogenized as to be practically irrelevant.

The very notion that an effective, long-running morning show can be replaced with anybody--and with no loss of ratings or revenue is, if history is any indication, pure lunacy.

The notion that any long-running personality in any daypart can be replaced with a strange, detached voice--without some sort of audience fall-out--is dangerous at best. Combine the two, and Premium Choice could be a prescription for disaster on an industry-wide scale.

When a single company as big as Clear Channel Radio has been allowed to become begins setting industry standards--whether or not by intention, the rest of us must take notice.
And so, for the moment, the metrics have the floor and, for better or worse, the “largest radio group ever conceived by mankind” is committed to it.

Someone once told me the difference between being “involved” and being “committed” is pretty much like a breakfast of ham and eggs: The chicken was “involved”...the pig was "committed”. So, to the “pigs” who plunder great radio for the sake of NUMB3RS: May the Metrics Be With You.

Monday, April 6, 2009

New Country: An Idea Whose Time Has Come?

My College Professor, Dr Paull Shinn (now a Washington State Legislator), taught me more about East Asian History than I ever thought I’d ever want to know—and I had just returned from a year in combat in Vietnam! When I asked him how he stirred up such an interest from me, he quoted Victor Hugo:

“Nothing is as powerful as an idea whose time has come”.

Sunday night’s 44th Annual Academy Of Country Music Awards might have been one of those moments—an entertainment idea whose time has come.

We all watched as the Stars of Country Music, who normally dominate these awards, sat politely and watched the Youth of Country Music literally take over.

For the first time in memory, an artist who has never had a hit song won the Top New Female Vocalist Award. Now, that’s a departure from the norm!

Here’s another anomaly: Brad Paisley and Trace Adkins were the only “Hat Acts” to win…well, if you don’t include that strange hat Sugarland’s Kristian Bush was wearing. The rest of the “hat acts”—George Strait, Alan Jackson, Toby Keith, Kix Brooks, Eddie Montgomery, and Kenny Chesney occupied their front-section seats all night long.

Brad Paisley and Rascal Flatts are the longest-running acts to receive ACM Awards this year. That, too, is a major sea-change.

There are dozens more examples to make the point, but there’s one thing for sure: the idea of New Country was exhibited in force in every way imaginable—from the over-the-top production to the winners, the audience surrounding the performance stages and even the performers, who included Hannah Montana.

The Award of the Artist of the Decade to George Strait will be in a separate show taped the day after (4/6) and set for a May 27th slot on CBS-TV. Is this being done to separate Country music's history from its present, or is it truly a special honor to George? That’s something further to ponder.

Word leaked out of the closed rehearsals that Tim McGraw walked out of the rehearsal and refused to do the show. His wife, Faith Hill, apparently departed Las Vegas with him prior to showtime. Such a move has been career-enders for artists in the past. Will it end Tim (and Faith's) careers?

The overriding question of any great idea is this: will the audience “get it”? Will they find it compelling? Will it be a sea-change, or will it be a one-night-stand?

If the time has come for the “idea” of New Country, then the Academy of Country Music, dick clark productions and CBS-TV bet the farm on it Sunday night in Las Vegas.

Will Radio do the same?

Monday, March 9, 2009

Diary From Another Radio Road Trip

I wonder how many Consultants, Market Managers, Program Directors and Sales Managers take “Radio Road Trips”. Living as I do now in Northwest Montana, I find myself driving more than flying— or driving to catch a flight somewhere else. And being on the road is a great way to experience our products the way our listeners do. I always find it an enriching—although lately—an exasperating experience.
This time out, I drove from my home in Kalispell, Montana to Seattle to burn some frequent-flyer miles—which for some reason, I couldn't’ do from Spokane or our own Glacier Park International Airport. I drove through Spokane (Market Rank 92) to Seattle (Market Rank 13), taking I-90 (a major east-west Interstate highway) across Montana, Idaho and Washington State my on journey to CRS-40 in Nashville.
The first thing I noticed is that I couldn’t find any LIVE programming on the weekends. And outside of morning shows, it was very difficult to tell if the person on the air was live or voice- tracked. You might think that’s a good thing…that I couldn’t tell. Except that, in several instances, I KNEW the station had a live mid- day and/or PM drive show! Not so good now, right?
I found myself scanning both the AM & FM bands continuously, trying to find music that satisfied me for more than just one song. I couldn’t! As I looked at my fellow drivers along the roadways, I saw them furiously punching their radio buttons, too…so please don’t tell me it’s “because I’m in the business”.
Along the way, when I stopped, I’d ask people—both fellow travelers and locals—what they listened to. The frequent travelers, such as truckers, told me they’d “given up on local radio years ago!” Too frustrating! Too repetitive! Too boring! Most of them were now inexorably hooked on XM or Sirius—most of them still don’t know the companies have merged, by the way. They tell me they’d “never give up their XM [or Sirius].”
My trip west was uneventful. My trip back home—eastbound— was something very different. My son, who works for the Washington State Department of Transportation (WSDOT), called me while I was transferring flights in Dallas to tell me that I-90 over Snoqualmie Pass was getting hit with “a lot of snow”. (By the way, my son also works in radio—weekends and fill-in…for the fun of it.) So, when I landed at SeaTac, I knew I was in for it on the drive back home. He checked online and told me they were going to shut down the pass for “avalanche abatement” at 10PM and that WSDOT had no idea how long the pass might be closed—it depended on where all the snow would go once the blasting was finished.
It was clear that I needed to get over this pass quickly, or wait and take the long way around—through Portland—the next day. I gave into my affliction of “get-home-itis” and headed for I-90. You know what’s coming next, don’t you?
It’s Saturday night in Seattle and I’m scanning the dial— both bands—looking for updated pass reports. None! In fact, all I could find were syndicated shows! Not one local weather report, pass report or even current temperature! And this is Market #13!
I stopped at a Convenience Store near Issaquah, Washington and, using a pay phone, called the WSDOT information line (#511) and learned nothing I didn’t already know! (Oh yes, my cell phone- -Verizon--wouldn't connect me with #511.) By then, snow was collecting on the roadway and traffic was slowing, so I stopped at a truck stop and tried to access some information online. Again, nothing I didn’t already know! I asked a few truckers and they said it was tough, but passable and that I should get over quickly before the pass closed.
Well, it was the worst 4 hours of driving I’ve had in my entire life! White-out conditions, high winds and slick surfaces. My trusty Jeep Wrangler handled it well. I checked the WSDOT radio updates (1610AM) and they confirmed what I was experiencing: high winds, white-out conditions and slick road surfaces. BIG HELP!!!
Once I got to the east side, things got progressively better until I reached the Spokane Valley. The snow began (again) and I began scanning both dials for any information. By now, it’s Sunday morning (2AM) and there’s not one live show on the radio! I navigated 4th of July and Lookout Passes through Idaho and into Montana battling the same difficulties I’d experienced on Snoqualmie.
Perhaps you already know where I’m going with this: for the better part of 48-hours on the road, I couldn’t get a single updated pass report—in areas where major Interstate Passes exist! Radio provided me with no weather updates—in a rapidly-changing environment! I couldn’t even get a current temperature!
In fact, I had a difficult time even finding [clearly] local programming after 9AM!
At the Country Radio Seminar, most of the talk—in and out of sessions--surrounded the Big Picture items: music, research, imaging, promotions. Are these the only “service items” we now present to our audiences after 9AM each day? If so, we’re just begging our listeners (our product!) to find another place to get their info. My experience shows that, at the present time, no such “service” exist anywhere—online included. [Anybody smell an opportunity here?]
And it isn’t just radio! Why did my airline—one which I was a big enough customer (with enough frequent-flyer miles) to be “awarded” a “free” trip (one that required me to pay $30 to check my luggage, by the way)--wouldn’t accept my reservation at anything but a “major airport”? Some “reward”, huh?
We’ve been hearing about the loss of customer service in American businesses for decades now. Could Radio be the first to reinstate that practice?
Oh yeah, I know that I’m not P-1 to any station anywhere between Seattle, Spokane and NW Montana. But if, as a listener, my needs don’t count—then we’ve reached a place where we’re excluding some of the potential listeners are advertisers are paying us to reach!
Radio built its business on customer service: people-to- people relationships. And this extended to listeners and clients. Have we forgotten or are we just to busy--and stressed--to notice?
We should always remember that P-1’s aren’t the only ones with money to spend.

Friday, February 27, 2009

The FCC’s 5 Greatest Regulatory Mistakes Of the Past 3 Decades

Note: This is a re-print of an article I wrote just a year ago. In light of what has happened in the past weeks to the Broadcast Industry, I offer it again--as originally written--for your consideration. --John

Historically, the FCC has regulated the Broadcast Industry—and radio in general—with the understanding that Broadcasters held themselves to a higher standard than the Communications Act of 1934 (as Amended). Professional and Amateur Radio Licensees voluntarily exceeded FCC Regulations—up until those Regulations were gone. Then, things changed.

Here are, what I believe, the 5 Greatest Regulatory Mistakes the FCC has made in the past 30-years.

#5--AM Stereo
Five systems were developed by private industry to produce AM Stereo: Motorola’s CQAM, Harris, Magnavox, Delco and Kahn’s systems all produced a stereo signal—with greatly improved audio-- on AM. Once the FCC chose a standard, receiver manufactures would build receivers. But, the FCC chose not to set a standard, leaving broadcasters and receiver manufactures in a quandary as to what to build—so they built nothing.
Eventually, FM took over completely and there was no reason to continue to invest in Stereo on AM. Bottom line: AM Stereo worked—HD on AM Radio still doesn’t.
The result: AM is the only commercial service in the 21st Century still broadcasting in Monaural—which puts AM right up there with two-way radios, telephones and walkie-talkies.

#4--The Suburban Question
AM and FM Stations licensed to suburbs wanted to increase their reach into the metros they surrounded. The FCC had strict rules about City of License, studio location and programming to the city of license. Some licensees were able to cover much of their neighboring metros and built offices and remote studios in those metro cities…but still had to maintain offices and a main studio in their City Of License.
Again, the FCC failed to make a decision. Eventually, a deregulated marketplace allowed what we now call “Move-Ins” and “Rim Shots”. The result: these stations completely abandoned the suburban markets they were originally licensed to serve.
And now, the FCC is considering reinstating those rules. Congress is considering legislation reinstating those rules. Any reinstatement of those rules will now result in chaos in the Broadcast Industry.

Broadcasters had to renew their licenses every three years. The Renewal Application was usually anywhere from one to three inches thick and represented nearly a year’s worth of work for the Station, which included a process called “Ascertainment”…or more correctly, “Ascertainment Of The Problems And Needs Of The City Of License” the station served. It required interviews with community leaders and citizens conducted by station management. From Ascertainment, the station published a “Problems & Needs” list and had to develop Public Affairs Programming to meet those Problems & Needs.
The NAB and State Broadcast Associations pushed for a reduction in this process and, under the Reagan Administration, got it. For budgetary reasons, we’re told, the FCC eliminated most of the renewal process requiring only a postcard renewal application completed every 7-years. At the same time, the FCC removed itself from regulating programming of radio stations.
The result: a great deal of confusion still exists today on programming and decency standards.

#2--Docket 80-90
The FCC, under intense pressure for greater diversity in station ownership, determined the best method of doing that was to create more radio stations. To accomplish this, they decided to open up the FM band to development. Docket 80-90 literally gave away FM licenses to anybody who would build, maintain and operate the station. Applications from Minorities were given preferential treatment in issuing these licenses. The net result: thousands of radio station licenses were created.
FCC Chairman Charles Ferris, in a speech before the NAB in the early 1980’s, infuriated broadcasters by saying that the Commission would continue to issue licenses until the “last station went broke”.
The result: see Mistake #1.

The FCC, faced with thousands of radio stations—FM’s with limited audiences and AM’s that couldn’t compete in a Stereo world—were on the brink of going out of business and going dark, thus leaving communities without broadcast service.. The idea was to allow successful operators to “adopt” underperforming stations, thereby keeping them on the air.
What happened was truly remarkable. A Buyer’s Market ensued and the first regulatory limitations on the number of stations owned by one company were quickly reached. Further deregulation—with an eye to controlling only “Concentration Of Media” in local markets—lifted controls on the number of station a company could own nationally. The result: another buying frenzy, mergers and the creation of mega-companies.
In truth, the FCC got Consolidation partly right: giving local broadcasters the ability to become program aggregators in local markets was—and this writer believes—still is a sound business model. When the Commission lifted all limitations on how many markets a company could own, the mega companies attempted to program locally from a national source—mostly as a money-saving venture.

Radio has always been the medium of the local market.
Local communities have kept radio stations profitable with audiences and advertisers in order to keep a vital local service. Once radio became—in the eyes of the local community—simply a Profit Center, that loyalty began to deteriorate.

The one common thread in these 5 Regulatory Mistakes is simply that.

Friday, February 20, 2009

Just A Darn Minute...

It’s now official: The Radio Advertising Bureau says Radio’s Ad Revenues were down 10% last year.

So, what’s the big deal? 10%!

What kind of industry can’t take a 10% hit? What kind of industry can’t take a 10% hit after nearly a decade of 20% increases!

What is going on here? The way everybody’s acting, you’d think the end of civilization as we know it is here and Armageddon is at hand!

So what’s next? Is there a danger of the transmitter being repossessed? Perhaps the electric company is going to shut off the power at the transmitter site or the studio. Maybe the rent checks on the palaces we now call “studios” will be late and the landlord will throw everybody left working out on the street—and the computers, too.

Or…maybe we’re all being hosed.

We’re seeing companies of all sizes cut budgets like their going out of business. Besides Travel & Entertainment—which went bye-bye eons ago anyway, salaries seem to be the only thing that will keep the wolf from the door.

Why is that? Between Clear Channel, Citadel, Cumulus, CBS Radio and the other smaller companies, nearly 10,000 broadcast professionals are no longer toiling at their craft. That’s crisis management…the kind of thing that is usually held-back for catastrophes, depressions or World Wars.

Why is the Radio industry collapsing in on itself with only a 10% decrease in revenues?

Debt? That can be restructured. Just ask Mel.

Stock Prices? There's an uncomfortable, but reasonable explanation...after all, shareholders have been enjoyed strong profits during most of the past decade.

Wall Street? This isn’t the first “down” market these investors have ever encountered. They know the business cycles.

New Media? They’d love to have 10% of what radio has—and their at least half a decade away from getting even close.

Television? It’s been around for over 50 years now and it hasn’t killed radio.

Internet? YouTube, MySpace, Facebook—they take some TSL, but not much cume.

What’s the big deal? 10%

Come on Clear Channel, Citadel, CBS Radio, Cumulus and the rest of you. Suck it up! You can live without a profit for a year or two, can’t you? You know you’ll get it back.

Radio and Retail have always been joined at the hip. What ails Retail ails Radio because the majority of ad revenues come from retail—either locally or nationally. So, when retail sneezes, radio gets a cold.
Retail thrives when people have money to spend. Lay-offs, cut-backs, RIF’s and position eliminations kill retail—and it’s killing radio. With every job-loss, there’s a lost customer at retail and at radio. It all adds up!

The worst thing radio stations can do is put people on the streets! It’s a sign to our clients (retail) that it’s okay. We will never climb out of this recession as long as millions of people remain unemployed.
And radio will never enjoy another profitable quarter without the people who make our business what it is: a people-to-people business.

Remember: our product is our audience—and each member of that audience is a person who appreciates contact with other persons. That’s why radio has always been an effective advertising medium. Computers, jingles, image voices and “familiar” music don’t sell cars, gar, groceries, iPods and clothes. People do.

So, what the big deal? 10% is ONLY 10%. It’s not the end of the world, unless you take away the one thing that makes radio radio—people. Then, it is the end of the world.

Monday, February 9, 2009

Putting The Toothpaste Back Into The Tube

You know, I’m really going to be disappointed if there isn’t more to all these cut-backs in our beloved Broadcast and Music Industries than just “budget-cuts”. While most sectors of the economy are using lay-offs in order to keep pace with the worsening economy, the Broadcast Industry is eliminating positions by the hundreds!

A “lay-off” is when people are temporarily furloughed—and when business begins to return, people are called back and/or re-hired. That’s not what is happening in the Radio and Music Industries: these are permanent position eliminations.

So, what happens when the advertising revenues return? You know they will—just as soon as the retail sector begins showing signs of returning to health. And that will come when, whatever the Stimulus package will eventually be, begins to put people back to work and consumers begin spending money again.

What is Radio’s plan for that? Will the Industry begin re-hiring the pros they put on the street? Or is the downsized version of radio the way of the future?

In last week’s M-Street Journal, it was noted that there are 1,249 construction permits outstanding—that means we’re still adding stations to this already crowded market place. And these construction permits are bought at auction! Apparently somebody thinks we need more radio stations, not less.

Then there’s the story about the FM Station originally licensed to the Portland metro that they want to move to Tiger Mountain, where most of the Seattle FM stations are located, effectively making the station another Seattle station. Next time you’re in the Seattle area, hit the scan button on your radio and see how far it gets—probably only one-step up the band and you’re on another station. Does anybody think Seattle needs another radio station?

Some say Internet Radio is the next big thing. Anybody with a computer can have his or her own station. So, with no regulation whatsoever, we could easily see 250,000 stations broadcasting over the internet. Wouldn’t you love to be in the room when somebody tries to sell advertising on one of those stations: “Well, we have 5 AQH Persons 25-54, if you include my wife, my cousin and my pet gerbil.” Can you imagine pitching that cost-per-point? I’d call that “More Is Less”.

Then there’s the whole Wall Street debacle. Anybody priced Broadcast stocks lately? They’re down now, but will they stay down? What if they come back? What will we do then?

A lot of blood has been spilled in the past year in the Radio and Music Industries. And we’re told to prepare for more. Sure, the projections are scary…but what happens when things improve? How do we get the toothpaste back into the tube?

Perhaps the larger question is this: where’s the “Radio Revitalization Plan”? We do have one, don’t we?

Like I said, I’m going to be really disappointed if that’s all there

Thursday, February 5, 2009

The Next Demo—Radio’s Gateway To Greatness

Here’s a scenario that plays out millions of times each day in America: Mary’s alarm clock goes off at 5AM (instantly turning on a radio station). She’ll complete a strenuous exercise regime 6 days a week listening to her iPod. She plays golf (full 18-holes) 3 or 4 times a week and eats in restaurants—for business and personal enjoyment, several times a week. Even though her business, Real Estate, has fallen on tough times, she’s still her company’s top producer.

She and her husband, Jim, share a beautiful home in an upscale subdivision. They travel extensively. Jim owns a computer consulting company, which because of his iPhone and notebook computer, he can operate from just about anywhere in the world. He enjoys skydiving, is a private pilot who owns his own plane and spends a great deal of his week on a golf course with his wife and their business associates. Their social calendar keeps them keeps active 7-days a week. Their children are grown making them “empty nesters”. Together, they earn over $350,000 a year with a net worth of nearly $2.5 Million.

Oh yes, Mary is 56 and Jim is 58.

They represent the fastest-growing segment of the US population. And they’re solidly a part of the growing influential 35-64 demo. Their lives are well-ordered; they are healthy, happy and active. They are not inclined to consider retiring anytime soon.
And this trend is only just beginning! Every single day since Y2K, 10,000 Americans have celebrated their 50th birthdays. That’s every day for past 8-years!
Run the math: in the past 48-months, over 14.5-million Americans have become the center of the 35-64 demographic group. They are The Next Demo.

They are the best-educated group in U.S. history—consisting of more college graduates that any generation since the U.S. Census began. Unlike any generation before them, they have had access to the best healthcare in the history of mankind. They’ve invested in regular exercise and enjoyed lifelong sports. They’re going to live—on the average—30 or 40 more years. And they have the financial resources to live and live well.

They’ll continue to buy sporty cars, high-tech gadgets, food and all the necessities of life. They have grandchildren who want Nintendo’s, skateboards and Wii’s. And what’s more, they can afford these things.

Now, here’s what we should all know about these people: they listen to radio. But that is changing, too. Because radio is not listening to them!
Radio continues to do everything in its power to disenfranchise people over 35. Why? Because marketers (and their advertising agencies) just don’t “get” these highly-influential, well-informed and affluent people, so radio doesn’t either.

Somewhere in America, there is a radio station that will step up to the plate and go after 35-64 year olds. That station will assemble a staff of broadcast professionals who will do what no other radio station will do: entertain these mature, savvy and connected listeners. Many of these broadcast professionals have been “consolidated out”, but they still know how to reach and entertain an audience. Some are the sales super-stars of the 90’s, who made a name for themselves selling great radio advertising to local businesses. These pros saw their perceived value (and their commissions) drop when big-ticket national advertisers scooped all the station’s avails.

Many of the broadcast pros who can bring it all together are sitting on the beach just looking for a way to get back into the game they made famous.

Make no mistake about it: these pros are available and they want to work. But they’ll need a leader who can lead, not just manage; leaders who understand how to motivate rather than dictate. And finally—Programmers whose GM’s will have enough confidence in them to allow their air personalities to entertain people rather than market the station.

And that radio station will instantly become a ratings monster—sold by a group of Account Executives (as opposed to Sales Reps) who will educate their clients and show them how to reach this important group of potential customers.

It will happen. It must happen. Radio cannot withstand another 2008. Cutting expenses further just won’t cut it.

Radio needs innovation to create new audiences and new clients using better tactics to nimbly go where radio must go. That’s Radio’s bright future and it begins the moment one CEO of one Broadcast Group says so.