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?

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.

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.

#3--Deregulation
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.

#1--Consolidation
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.

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.

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

is.

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.

Radio's Audience: Ours To Lose

Radio is running scared! Let’s admit it! With its cousins, the Recording Industry, Radio has forgotten that it is King of the Hill and has all but abdicated its throne without a whimper, let alone a fight!

The reality is that every high-tech new media outlet would love to have 10% of radio’s audience—an audience that radio appears to be ready to just give away!

With the onslaught of hi-tech goodies, radio stations are sounding desperate to link themselves with the Internet, iPods, Satellite Radio and every other hi-tech toy that comes out, including HD Radio. Let’s put all this in perspective.

Internet Radio is at least 5 years for any kind of portability. The “pipe” (amount of data that can be transmitted) needs to double in size and processors need to increase in speed several times before any wireless internet will be of any kind of a threat to radio. At the present time, the best wireless is just slightly faster than a dial-up telephone line. And the second band needed for any kind of internet connectivity will have to expand far beyond America’s largest metro areas.

iPods are expensive! And at 99-cents a (legal) song download, a thousand songs costs $1000! At that rate, keeping up with the new music gets downright expensive. And Jammie Thompson’s “test case” has proven that illegal downloads and file sharing can be very expensive and dangerous! What’s more, we’re beginning to see “iPod Fatigue”. What we perceived as a trend could, in fact, be only a fad.

Satellite Radio has been a reality for over half a decade and their audience is only a fraction of Terrestrial Radio’s...a fraction! While nobody is entirely sure why this is, one thing is certain: even if they double their audience in the next half-decade, they’ll still have only a fraction of radio’s default audience.

On-Demand technology is still another half-decade from being anything but slow and clunky. America’s cable systems have invested heavily in fiber-optic wiring, but customers aren’t stampeding to subscribe to digital cable…and without digital cable, On-Demand never reaches the cosumer. The software development continues to be difficult and runs slowly while the systems are confusing to most users.

Cell Phones, as a music delivery system, are more of a threat to iPods than to radio. High-speed connectivity issues will keep internet radio off cell phones for at least another half-decade.
While HD Radio technology presents many wonderful opportunities for radio, it is still very much in the future—probably a decade before enough receivers will be in consumers’ hands to compete with our current audience levels. Radio sounds desperate to convert listeners to their HD1 Channels.

Yes, radio’s audience is deteriorating and record sales, outside of the superstar projects, have declined to levels that threaten the entire industry. But an effective case can be made showing that the damage is more self-inflected than the product of technology. Please consider the following:

1. For the first time in its history, radio—especially FM—is aimed at less than half the population. For its first half-century, radio aimed its programming at the largest segment of the US population. Now, it seems that every station on the FM dial is aimed at the younger, highly fragmented demos. Persons over 50—over half the US population are literally disenfranchised from FM radio. And this is the audience that made FM radio the success it has became. The Records Industry hasn’t created any hit music for persons over 50 for decades.

2. Radio, like all media, is sorely lacking in content. Open a mainstream magazine and count the number of pages that don’t have some sort of marketing message. When you watch your favorite sports team broadcast on television, how many advertising/marketing messages are you bombarded with per minute? Don’t forget the scoreboard, stats and other overlays. Then, listen to your station. Outside of the morning show, how many times per hours do your air personalities say anything NOT related to a marketing/positioning message? Between image voices, jingles and positioning/marketing statements and or course, commercials, there’s shockingly little content on most radio stations.

3. Air Personalities aren’t allowed to be personalities. There’s precious little time for them to say anything that isn’t scripted marketing statements. And they’re not accessible to their audiences. With voice tracking, studio lines are busied out—for obvious reasons. Street teams have replaced air personalities’ interaction with the public. After all, we want “beautiful people” on the streets representing our stations, don’t we? What does that say to our efforts to be “real”?

4. Radio stations appear desperate to attach themselves to the internet. While a station’s website presents a whole new way to add non-traditional revenue, we should be careful that our message isn’t perceived as an endorsement of other media—Internet Radio.

5. Just about every station’s presentation sounds like “CHR-something”. Air personalities don’t talk without a drum machine or beat mix playing underneath them. And the push for more “energy” has levels bordering on yelling instead of communicating. Where’s the uniqueness in any particular station presentation?

Between image voices, jingles, music-tonnage statements, drum machines/beat mix and artist/song migration from format to format, the listener can be downright confused…if not completely bored!

Radio has at least 5 years to reverse this trend before the hi-tech toys are even ready to become a serious threat. This is no time for sameness and decades-old formulas. It’s time for creativity, research and development and risk-taking. Once the new media takes over, it’ll be too late.