Why 2007 Will Be Another Bad Year For Radio

I love the radio business. I truly do. Radio people are like an extended family. They are with you in good times and Clear Channel times. It pained me to have to write repeatedly in Inside Radio after consolidation that it would kill the medium. Many of my long time and new friends were redeployed as a result of all the station mergers and some of them took it personally. Others didn't. They just hoped and prayed I was wrong. Ten years later the record on radio consolidation speaks for itself.

Well, I'm about to do it again.

The radio industry just doesn't get it. You can't grow a business that doesn't have a strong, new generation listening. Generation Y has turned to the Internet, their iPods and mobile devices. YouTube, MySpace and social networks. It can't afford satellite radio and doesn't much like what it's hearing on terrestrial radio.

Ad agencies buy 25-54 year old demographics. That's why you see fewer standards stations and formats skewing older. Radio gets this part. So they overreact with too many of the same genres, too many of the same formats and a hot clock that should have been retired when digital time became popular. Tom Taylor in Inside Radio reports that the country format has turned around in 2006 with an increase from 2,019 to 2,033 stations. Classic hits is up to 442 stations from 237 three years ago.

There's nothing wrong with programming to what the market desires. That's smart business. But skipping the next generation -- Gen Y -- that's risky business. That's why radio has no future. When the current passionate radio listeners are gone, can this industry really, truly expect to grow when the next generation does like radio. And I side with Gen Y on this. In the past radio always appealed to teens. They were the next money demo in waiting. But consolidation has killed radio more than anything. More than the iPod. More than music downloading. More that the Internet. Few young people want a radio on their cell phones. They don't even want a radio in their cars. They'd much prefer an iPod hookup.

When I joined USC a few years ago I got my eyes opened rather quickly. Save the sweepers. Forget about pairing down large commercial loads. This generation wanted substantive change. Commercial radio does not speak to them. You can't win over a generation that has access to everything online by saying fewer commercials, more music and the most variety when in reality that claim remains unbelievable.

I am encouraged by the fact that this demo -- at least the many I have come in contact with -- wishes radio would change its ways. They don't understand why radio owners are so clueless. For the first time in the history of modern radio, there's nothing on the dial to appeal to the generation in waiting. Part of the reason is that broadcasters are panicking. That sounds harsh but it's true. They're blaming iPods and satellite radio when iPods are just a personal oldies station and satellite radio is not even on this generation's radar screens right now.

When the fire sale of Clear Channel stations is the biggest news in the industry, you know we've all taken our eye off the prize. The reasons we don't have 12-24 year old formats are many. We don't understand this generation. We feel the pressure from advertisers to deliver the older 25-54s. And even though Clear Channel is on the way down a couple of pegs, they still own a lot of radio -- and well, they're still Clear Channel. We don't innovate because we've fired a lot of our innovators.

Could legendary programmer Buzz Bennett be employed at a radio station today? The likes of Buzzy should be. He was never the model executive. He was quirky, out there and on another planet. Wasn't it great? Radio listeners thought so. I fantasize about Buzz Bennett working for Clear Channel down in San Antonio or CBS in New York. The new consolidators have taken the odd ball out of radio and you hear the results. Timid programming. No understanding of the next generation or their toys. The button down world of consolidation has sapped the life out of radio programming.

If I'm the radio industry, I find the likes of Bennett, John Rook, Bill Drake, Lee Abrams, send an emissary to Georgia to see Paul Drew, bring in Joe McCoy -- do I need to go on? Don't do this at a convention. That's tacky. Do it in a boardroom. Teach this once creative industry to find its inner creative soul. Okay, I'm sounding like Shirley MacLaine now, but you get the idea.

The iPod didn't kill radio, failure to understand that listeners want to hear their favorites not what consolidated programmers picked for them. The iPod enabled them to do that. Understand this.

Peer-to-peer file sharing didn't kill radio. Adding one or two new songs a week did. When the technology came along, who could blame the next generation for making good use of it. Their interests are broader than gutless radio stations afraid to add music for fear of attracting too much attention from Eliot Spitzer.

The Internet didn't kill radio. Internet Radio is awful right now. That's why terrestrial radio stations get so much online listening. Understand how radio couldn't be in a pickle because of the Internet when the Internet offers no real programming competition.

Video didn't kill the radio star. MTV has its own problems right now. YouTube wouldn't be anything without music. Music is a big part of social networks like MySpace. If you worried about MTV, you were not worrying about your own stations.

Mobile phones and devices aren't killing radio. They are utilities. We all have them -- every generation. They are no excuse for radio stations failing to program to the generation that text messages each other to death. Understand that we took our eyes off the ball on this, too.

So, 2007 approaches. Clear Channel may finally be paired down -- smaller, but still larger than it ought to be -- probably waiting for a few more years to pass before selling off more of its inventory. They are not likely to fill the role of leaders even though they will own more stations than anyone else. CBS is not likely to swallow a creative pill. They are dancing a dangerous dance -- flirting with new technology without really understanding its ramifications to the business they're in. And so goes your second biggest radio consolidator.

Some of the lesser consolidators are just trying to find ways to get bigger because if you don't grow on Wall Street you don't make more dough on Wall Street.

That leaves us with the smaller groups and whatever independent operators emerge over the next 12 months. We must count on them to break the famine of boring radio. We must count on them to innovate. Take risks. Spend time training people and learning about the next generation. My bottom line: radio's future is only in the hands of the operator who can run a station independently as "mom and pop" operators once did -- for the love of their craft more than the love of money.

At USC we're building programs such as The Music Media Solutions Lab which are available to such companies that want to navigate the future. And those of you who know me know that I will help in whatever way I can in the months ahead to assist you in applying what I have learned from the next generation -- a challenging, but critical market. Just contact me if I can be of help.

2007 will be a stinker for radio. But if even only some stations and or small group wakes up and comes alive, it will also be known as the year that we shook off Clear Channel and the consolidation that it represents and discovered our inner soul.

It's not a boom. But it's not a small thing. It's more than a small thing.

It would be a new beginning.