Last.FM and CBS

CBS paid $280 million to buy the social networking site Last.FM.

Sites like Last.FM and Tim Westergren's founding effort -- Pandora -- represent "an" aspect of the future of radio because fans can in effect program their own music and these sites are social networking sites - very significant with the next generation.

The name Last.FM is a little creepy seeing as how a traditional media company is buying it. Maybe Next.FM would be a better name.

As RAIN Publisher Kurt Hanson told his readers yesterday, "Whereas Pandora operates by creating playlists based on songs' musical characteristics (tone, tempo, instrumentation, etc.), Last.FM creates playlists based on matching up the musical tastes of similar users."

Kurt also points out that the newly-acquired Last.FM will not be under Dan Mason's division. It will be part of Interactive.

One thing that troubles me is CBS' mention of potentially looking into synergies with their radio stations. I hope not.

The next generation hates radio. They love social networks.

I know I am paranoid about anything interactive that is purchased by a traditional media company like CBS. If they plan synergy with radio, radio better be involved in a major way.

I have never been a fan of interactive divisions and separate traditional divisions. It reminds me of six to ten years ago when the IT guy was in the back room while everyone else who had input into running a radio station was involved and visible. I still think that segregation was a factor in radio being late to the Internet space. Same still holds true about mobile.

You have to make Internet and mobile a part of the product, marketing and sales. In other words, they don't exist to which a company simple outsources problems. They be on an equal status with others to help create product and revenue.

Fortunately, CBS says it will keep the Last.FM staff in tact. CBS certainly doesn't have the skills to run that company.

All in all I like the CBS acquisition of Last.FM for its potential, but I'm on record as saying it isn't going to be easy to make it pay off.

You don't have to look any further than the CRB royalty dust up that threatens to put social networks like this either out of business or in harm's way. CBS has the money to pay insane royalty fees. Whether they want to or not is another issue.

And Pandora should not be threatened with extinction because the CRB standards are so grossly unfair.

Pandora invented this genre.

The entertainment business needs innovation.

The music industry's ultimate fate depends on it.

So before anyone gets too excited about the potential of the social networking niche occupied by CBS' Last.FM and Westergren's Pandora, they need to get more Congressmen to join the fairness love train that must leave the station with all aboard or this deal and others like it will go nowhere.

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Can Sony Make HD Radio A Winner?

This does it.

Now consumers are now going to rush out and buy new HD radios.

Sony just announced it is planning to sell a table-top radio. AM/FM/HD, clock with sleep timer and alarm, wireless remote and auxiliary input jack. Store 20 AM and 20 FM stations. Your low-low price: 200 bucks.

Question: when was the last time you spent $200 for a table-top clock radio? What locale will have to freeze over before you pay it now? Can you think of 20 AM and 20 FM stations you'd like to store in its memory? Or any memory? Your memory? Are there 20 AM and FM stations in the entire nation worth storing in memory. Hey, the input jack is neat.

But wait, there's more.

Sony is also planning to offer an HD car radio tuner that connects through the Sony head unit's bus interface. You can see the artist names and song titles along with the station just like satellite radio. Just $100.

Question: when was the last time you installed an after-market radio in your car? How about now -- did after-market suddenly get any better? Do you really want to see the artists and songs from HD stations when you can have the same thing on a satellite radio? Oh, the price, I forgot. Well, you get what you pay for, I guess.

I'd like to think Sony, the company that brought us Walkman and Trinitron knows what it is doing. Let's forget about the record business and their attempt to manufacture an MP3 player that the iPod destroyed.

Sony is crazy and the radio industry is crazier to think this is going to help their HD problem.

Hello! There's no good programming on HD. Hell, there's no programming -- forget good.

No one wants to own an HD radio let alone listen to one. They're not exactly flying off the shelf of Radio Shack or Best Buy. Wal-Mart is going to prove again why it has lost the Midas touch with its decision to sell HD radio. Now Sony is going to embarrass itself in front of everyone. Have they forgotten the legacy of the Walkman?

Hello! Not even old people want to own HD radios and I'm telling you -- don't put them in the school stores on college campuses unless you want to use them to teach the next generation how to dust (not a bad idea, by the way).

Let me see if I get this right.

The next generation doesn't listen to radio as much as it does their iPods, cellphones and Internet streams. Right? They laugh at the thought that anyone believes creating more radio stations is a good business decision (to target them).

Even radio lovers like Baby Boomers don't want to fork out the money for HD -- not even to hear the shell of a format previously known as WCBS-FM's oldies station relegated to HD2 status in New York. That's in New York City -- the nations biggest city.

Radio Shack can't sell them and they've been trying the longest.

Best Buy can't move them, either.

Wal-Mart, the company that just admitted that selling designer clothes was a mistake, is the next genius retailer to have this flash of brilliance. (They could have asked me -- or how about anyone if selling designer clothes in Wal-Mart would work, by the way).

Sony, the once mighty audio and video manufacturer, is now riding in on its horse and yelling, "Sony to the rescue".

Oh, and even the radio station owners don't believe in HD enough to spend any money on content. What's on HD is cheap and generally sounds cheap. Even the moniker "HD2" says second rate. Did you ever like being "number two"? If so, well ... I won't go there.

So, the old consumers don't want HD.

Young consumers think the concept is laughable.

Big retailers can't sell it.

And radio companies won't invest in it.

Sounds like a winner to me.

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RADIO: People Meter Gets The Last Laugh

The radio industry which has fought everything from AM stereo and high definition radio (back when it was really new technology) right up to the Arbitron People Meter ratings system is proving once again why radio has lost it.

The Portable People Meter (PPM), an imperfect but necessary update to the paper diary system in this digital age, is turning out to be -- well, not so bad after all.

PPM is live and working in Philadelphia, the original test market. And while there have been problems such as a station being left out of the totals, the People Meter is reporting lots more radio listening than the diary has ever produced. Perennial market leader WBEB (B-101) has suddenly gone from over 700,000 cume under the old system to over two million with the People Meter.

No format change. No extra promotion budget. Just entering the present and adopting a ratings system that is actually friendly to radio audience estimates.

True, quarter hour listening is down, but really -- any programmer on his or her second drink and speaking candidly -- would tell you that the diary system over-reported quarter hour listening. It was too easy for a diarykeeper to just write in their favorite station(s) from memory before returning the diary to Arbitron. Still, PPM fairly reports a station's heavy listeners.

I'm going to hear from detractors who missed my earlier description of PPM as "imperfect" and they'll counter with all the other things that are wrong with PPM. And, I'll likely agree. But hell, this is about getting into the 21st century -- the digital century and I'm sure we haven't seen the end of this debate nor the end of Arbitron's very patient crusade to get radio to take its bitter medicine and change.

Next to methodology concerns, Arbitron has been attacked for charging a premium for the new PPM service and broadcasters have been up in arms. That's strange. When ratings go up, it's customary for radio stations to reassess and adjust their rates for the same product. The radio industry gets hung up on issues like these while they put themselves in jeopardy of becoming even more irrelevant.

Beyond any individual station's improved cume audience, there are other compelling advantages to the People Meter that radio people love to fight, postpone and discourage -- namely, that it reports dramatically higher listening for radio. That's a good thing especially since the radio industry will be going it alone without the next generation -- the generation that's online, on the phone, texting or listening to their iPods.

The other day when Cox, the outstanding radio company run by Bob Neil, finally capitulated to the PPM and signed a five year contract you could almost forgive him for placing caveats all over the signing. He and his people have legitimate concerns about PPM, but as I always like to say, it's time to cooperate with the inevitable.

Radio is a big house. There's room for lots of differences. This is right and just.

And analyst Jim Boyle has aptly used the term "game over" for the further resistance to PPM. Let's just say it's "game over" for radio if it doesn't accelerate the move to digital ratings.

I never doubted that PPM would be adopted. I've been a proponent from my Inside Radio days.

Interestingly, Clear Channel is still dilly-dallying around withholding its support -- another reason why that company has earned its reputation for shirking the leadership expected of radio's biggest consolidator. But Clear Channel, too, whether public or private will have to eat crow. I guess they're taking the extra time to figure out how they would like it served.

The lesson: adopt new technology, don't fight it.

Cooperate with the inevitable -- don't spit in the wind.

Lead don't avoid.

Imagine if the radio industry could have done these things in real time -- not ten years late. It wouldn't be scratching its collective head and wondering why Internet usage is up (according to a media-screen survey Americans spend half their free time online).

It's not too late.

Let's just not make it another ten years on the next critical issue.

Improving the content.

Internet Radio: Copyright Cowards

SoundExchange is feeling Internet radio's pain.

How miraculous.

Goes to show you what a little pressure from your elected officials can do. So this is what's called a good faith offer to take the heat off -- excuse me -- resolve the unfair treatment of Internet streamers as it relates to music royalties.

Pardon my cynicism here, but just as a new generation adopts the Internet and mobile devices as the new delivery systems for entertainment, information and social networking; traditional media hunkers down and tries to make up for their lack of vision -- all this on the backs of Internet broadcasters.

Until Internet broadcasters marshaled their efforts to lobby Congress (with some encouraging success).

Until the Copyright Royalty Board (CRB) realized it went too far in raising rates that could put small and large streamers out of business before they can grow their business.

Until the National Association of Broadcasters (NAB) said, "hey wait a minute, we could be next". That's why the NAB is fighting them there (on the Internet) so they don't have to fight them here (on terrestrial radio).

So SoundExchange's offer to help the "little guy" still may not help Pandora. It begs question: is Pandora (the customizable, programmable radio station) a big company or a "little guy"?

SoundExchange is just looking to take the heat off and to avoid the potential of Congress passing a bill that is fair and equitable to all parties -- the real fear of the music establishment.

I don't care how many times they argue that royalties benefit the hard-working musicians -- I just don't care. There won't be any hard-working musicians left if their music doesn't get exposure. It used to be that this exposure occurred on radio and later through music videos. But in the future music will find its audience on the Internet, on mobile devices, and through social networks -- the same conduits the present copyright laws would inhibit.

No wonder the NAB is siding with Internet radio. They're next.

David Oxenford, representing the interests of the small Internet broadcasters, was diplomatic in saying that SoundExchange's idea is a first step.

I say, a cowardly step.

One meant to slow the streamers current movement to rouse Congress to take action. If SoundExchange and the CRB evil doers can manage to get Internet radio operators to take the temporary compromise they will buy time. Worse yet it will leave the Internet streaming business which is in its infancy in an unstable position for the period of the proposed concession.

It's no solution.Just a band-aid. A stop gap measure that serves the music industry' convoluted vision of their future. Only a fair and equitable resolution of copyright issues now can create the atmosphere for Internet streaming to grow later.

And, perhaps set a standard for terrestrial broadcasters at the same time.

The music business through SoundExchange is acting in a cowardly way turning their backs on the real issues.

And, should Internet streamers eventually settle for a compromise that does not resolve the issue for the long term then they too would be cowards.

Let's hope this doesn't happen because try as we may, radio and Internet radio must not be impeded from its mission -- saving the music industry from itself.

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Vanishing Fast: Radio Careers

We have had consolidation in radio for over ten years now and even after a flirtation with virtual voice tracking, the industry is fast becoming a nonstarter for serious careers.

In television, the increasing side effects of running public companies for every penny that can be eeked out of them and the collateral damage to local newsrooms is devastating. Local news, once the profit machine of local television, is not immune from taking a hit.

I am well aware that the radio industry wasn't the poster child for a "normal" career. I've got a lot of radio friends in the business and each one can tell you another indignity they went through to be in radio.

However...

There were always jobs worth aspiring to. There was always a payoff if you could be good enough. Start by working weekends on the all-night show and you could be doing middays in another market before too long.

Work in a city and become part of the community (I'm scaring you now, aren't I?), and you could live to raise your kids in that market or maybe even -- if you're lucky -- buy a house and find a "home" there.

My radio and television career was in Philadelphia and I could name almost an endless stream of talent on and off the air who had the best part of their careers in one market -- hell, in some cases, at one station.

To say those days are over is nothing new. We've had a lot of time since consolidation began in 1996 to know that radio was soon to become a commodity -- a profit machine with lots of free cash flow. A business, if you will.

One of my first jobs in radio was at WIBG in Philadelphia (I actually worked there twice, once on-air and a second time after returning from another station in Philly to be PD). The first time I walked into the building I saw a painting of George Storer (WIBG was owned by Storer Broadcasting) hanging over the reception desk. Imagine Lowry or Mark Mays' mug in a painting at any Clear Channel station -- maybe they have them, but I've never heard of it.

George Storer was the boss. He was the man. He was referred to as Mr. Storer. Not George. Okay, it was another time.

The owners during the glory days of music radio owned radio because they wanted to own radio. Cecil Heftel, the Congressman from Hawaii, is legendary for being a wild man but he owned radio and liked it. Even the conglomerates like ABC, CBS and NBC weren't that dominant even though they had a presence in the major markets because they could only own 7 AMs, 7 FMs and 7 TV stations (later 14 of each). The ownership rules were a natural force that prevented the wrong companies from having the wrong intentions.

What followed was years of great radio -- and profits for some owners. Just as impressive would be the owners who lost money. That's my gold standard for love of radio. They saw it as a public service. What a concept. (Okay, now I'm getting nostalgic, I admit it).

I'm back.

So you could start as a weekender, go full-time, move to another station and get a better shift. You could stay in the market for years or a career.

And another watershed moment -- getting fired!

When I went to Temple University, Lew Klein the outstanding television broadcaster at channel six and producer of American Bandstand was one of my professors. I almost died when he started a class with "if you haven't been fired a couple of times in your career then you're not in broadcasting". He was right then and right now.

Except now, when you get fired it isn't always for being a bad employee. Maybe just an unlucky one who happens to be at the wrong station when it is fulfilling its mandate to corporate to cut expenses for the next quarterly investors promise.

And, you could always get another job -- even in the same market -- because two monopolies didn't own most of the radio stations.

Enough about my problems. Now onto yours.

Radio cannot be a destination career while it is pimping out its sales to Google, force-feeding capable executives to run more stations than their time and/or abilities will allow.

And when the programming goes jockless -- as Jack and a wide variety of other music intensive formats now do -- you're not creating jobs, you're saving money. You're also not creating any additional reason for a listener to listen that your competitor might already have.

If you can't offer careers in broadcasting, you can't attract the best and brightest.

If you don't have a management training program that also includes jobs and the promise of longevity, you don't have jack. (Or should I say, you do have Jack -- stations without well-paid air staffs).

If you're into virtual voice tracking, you're out of the talent development business.

If you don't have a "minor league" to develop your next big radio star, you're CBS. Really. David Lee Roth? Opie & Anthony? Adam Corolla? I mean, who followed Howard Stern? Who was as big a franchise? Where is the next franchise without a minor league to develop talent? And how do you have a minor league in smaller markets when you're piping in voiced tracked announcers?

If you're cutting costs, you're also getting by on less (re-read this line).

If you're wondering why radio and now television has seen a better day, don't look to YouTube, the Internet, Apple, TiVo or any other distraction.

Broadcasting executives, look squarely in the mirror and repeat after me "if you haven't been fired a couple of times in your career then you're not in broadcasting?" No -- sorry, I got carried away.

Look into the mirror and ask yourself how do you expect to be any more than a utility if you took the "show" and "business" out of show business.

You're left with nothing.

Unless and until radio and television becomes a destination for long careers, you have what consolidation has wrought -- the fast food business, the airline industry -- quick, name another "beneficiary" of consolidation.

Everyone gets screwed.

The NAB screwed its members when it helped get the Telecommunications Act of 1996 (enabling consolidation) passed.

Congress screwed the public and robbed them of broadcasters who should have put them ahead of Wall Street.

Thousands of dedicated and talented people lost their jobs as a result of consolidation.

Wall Street screwed the radio industry when it pressured for economies of scale over programming innovation.

And most ironically, radio screwed Wall Street because in the end the consolidators couldn't run all those stations -- even as a monopoly (Clear Channel has sold almost 500 stations and is going private, CBS previously sold stations gained through consolidation).

Wall Street screwed its investors who were lead to believe that radio was a growth industry when being an investment bank is the only known investment industry that pays dividends. Investors don't need to be reminded of what they paid for radio stocks. They are painfully aware of what these stocks are not worth today.

The Internet reminds me of radio and television in the best of times. No monopolies to keep you from opening up shop (just unfair royalty fees -- but we'll win that battle). Access to a large audience. The hope of return on investment. The promise of a long and more stable career. Maybe even a financial payoff for successful entrepreneurs. And even Google, acting like Clear Channel in terms of size and domination, can't scare anyone.

The next generation has it right. They may not breakdown the history of employment in the media business but they sure know a good thing when they see, hear and click on it.

Radio and TV -- it's over if you can't attract top talent.

It's over if you can't retain the cream of the crop.

It's done when no one worthy wants to work for you.

The iPhone Tipping Point

Apple's much awaited iPhone cellular device will be available to consumers in about one month.

The svengali Steve Jobs has written the script and executed it with the precision of a skilled surgeon. His announcement was long enough ago to give a heads-up to cellular customers who had contracts expiring soon.

Jobs even created the theater behind the introduction of the iPhone. Just go to the Apple web site and see if you can't get excited about it.

Mobile experts are touting this phone as the killer app -- the first intuitive mobile device that integrates everything the next generation is hooked on and more. It's going to be tough going for competitors -- the ones who used to give us the RAZRs and Sidekicks and other promises of an integrated mobile life.

The record business is a bystander here but they should be a player. Jobs holds all the cards so if they want to play now, he deals.

The iPhone will spell disaster for the radio industry -- not so much with Gen X and aging boomers, but with Gen Y and younger demos. Their world now consists of texting, talking, playing games, listening to music, taking pictures and hopefully watching video. Now they can do it all in one place.

Radio can't do this even if the industry woke up and got back to the programming business with a vengeance. They've let it slip away as their brothers and sisters at the record labels have done.

I may be wrong but I see the advent of the first iPhone as the tipping point for radio and records. What they haven't been able to kill off by their own inability to cooperate with the future, the iPhone will kill off now.

It's not all hopeless. There's a lot of business and money to be made by programming music radio to the older generations who are still happy with it. And there's always going to be a ton of cars and unless or until automakers replace terrestrial radios with Internet radios someday, radio can manage, but it's big growth days are gone.

To be a major player again, the radio industry needs to develop the next technology (preferably without the letters H and D in it). Radio let a second-tiered computer company (Apple) design a device (iPod) that eventually led to the iPhone.

When the end of June arrives, mark the meaning -- radio and the record industry has reached the tipping point -- the point beyond which only decline can come without a radical new approach to content and programming.

Time For The Clear Channel Kumbaya

A lot of you are in no mood to help Clear Channel do anything. You're not very forgiving right now.

Some of you had careers ruined by them.

Some of you had unfavorable outcomes to lawsuits they had with you back in the day when Clear Channel was radio's answer to Law & Order SVU. And some of you are just like me -- still lamenting the damage consolidators like Clear Channel (but not limited to them) wrought on a radio industry that could only have been killed off by greed.

Some of you think it's personal with me but it isn't. The Mays are three of the few people I never met in my former life. I don't dislike them personally -- hell, I don't even know them. And I certainly was one of the lucky ones -- I came out fine when we went head-to-head.

But enough already.

It's time for an industry-wide Kumbaya.

I have a lot of friends at Clear Channel -- although admittedly not the four letter kind beginning with "M" and ending in "S". If you think we've had it bad, how about their handcuffed employees.

Clear Channel was at first run like Jacor on steroids.

Then, the lawyers took over.

Then, John Hogan and the suits gave added meaning to the phrase "less is more".

And finally the cleansing phase or "wrap up and get the lights on the way out the door".

It's in exiting that this company needs our help and forgiveness.

Little did they think that being a Texas company would hurt them -- ever. But in Texas when you move to take a company private all shareholders must be counted in the votes including the ones that don't vote (don't get any ideas, Florida!). And the non-voters are counted as no votes.

So Clear Channel has been having a tough time slamming the door and getting the lights on the way out. Shareholders smelled a less-than-generous deal, that's why Clear Channel has put off its privatization vote several times now.

This poor company has been asked to sweeten what some consider a low-ball bid to get out and go private and now there are signs that the shareholders might just approve the exit plan.

Of course, as in real life, Clear Channel still has total control. They can still just cancel the voting at any time. You can't blame them. They didn't make the rules. They are just living and dying by them.

It's time for all of us to help our great consolidator out in their time of need.

If you own stock or know someone who does, urge them to vote "yes". You can't put a price on your Clear Channel stock -- it's not worth anywhere what it used to be anyway.

It's time to let Clear Channel have its way one more time -- win one for the Gipper, if you will.

See, they've actually brainwashed me into believing less is really more.

Fewer stations. A little old small company of a mere 600 plus stations or son surviving for now. How could that be the Evil Empire incarnate? Let them get rich one more time -- it won't hurt.

I believe they will hold the stations for a number of years and even sell off some of them reducing their total holdings while making continued profits. After all, that's how Wall Street does it. Hey, if a money group could buy Chrysler at the bottom of its game, do you think they are really in it to run the automaker or just fix it and sell off the parts for a -- you guessed it -- profit?

No matter what your feelings may be about Clear Channel join me in celebrating the one victory their hard-working employees, their competitors and their enemies can relish.

In the end Clear Channel couldn't run the stations they were privileged to own.

No further ill-will is required. That's vindication enough.

The number one consolidator failed to listen to their managers, programmers and sales people at the height of their power. They listened to Wall Street instead.

The number one consolidator failed to invest rather than cut costs.

The number one consolidator failed to see the Internet, the next generation, mobile media or the mistakes of the record industry.

They failed.

And how do we reward failure in today's media business?

Let them sell for a huge profit.

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HD Radio -- It's The Programming, Stupid!

You've seen me write about my lack of enthusiasm for HD radio (misnamed "High Definition" radio which is neither high definition nor the best radio has to offer).

In the tradition of KISS (Keep it Simple, Stupid) and the Bill Clinton campaigns election motto "It's The Economy, Stupid", when it comes to HD radio I'd like to add "It's the programming, stupid".

Take WCBS-FM's HD 2 oldies stream in New York. Please.

It is a shell of the former great Joe McCoy oldies station that has been shoved to the Siberian outpost we in radio now call HD radio. You can hear it over the Internet and the fidelity is, of course, as good as the equipment you're listening on (or translated that means -- the laptop you're listening on). So fidelity is not the banished station's strong suit.

Listeners can listen on HD enabled radios in New York City. Good luck. Find a few.

Meanwhile on the terrestrial band you've got Jack FM -- the interloper on the 101.1 frequency -- neither having earned the right to be there nor an improvement over the oldies channel that was already there. The Jack debacle was one of the many mistakes made by former CBS Radio President Joel Hollander. Dan Mason is mopping up as we speak.

Back to HD.

It's one issue to augment the sound benefits and the sub-channels that can now be created. The equipment industry mostly argues that case while terrestrial radio begins what may be its long farewell -- especially if it doesn't get back to its programming roots.

So take WCBS-FM.

Same jingles. No personalities. How could there be? CBS is not nuts. They can't pay all that money for an HD station no one can hear and that only has public service announcements running. No revenue.

It's a stripped down terrestrial radio station that even a fan can't listen to that long. It's absent the many intangibles that McCoy knew he had to include when it was the lead station on 1o1.1. And WCBS-FM is only one example -- I use it because I'll never forgive Hollander for blowing up the station. Update it, yes. Modify it, yes. Reposition it, you get the point.

Listen around (if you have an HD radio). Name the compelling programming. In fact, listen to terrestrial radio and name the compelling programming.

Radio is mostly music, mostly automated, mostly without personalities except in morning drive -- if you can call these personalities personalities!

Same hot clocks.

Same sweepers.

Still programming to the diary even where the People Meter exists.

Where are our brains?

So, if I couldn't get excited about HD radio based on the engineers' arguments of improved fidelity and more sub-channels, you can imagine how thrilled I am at the prospect of the vast wasteland of radio programming either banished to HD or created on the cheap.

You live and die by your own rules.

The radio industry became an affiliate of Wall Street after consolidation and it was forced to adopt their standard that profits drive share price.

Now, radio is trying to grow a new segment called HD but it must live by the golden rule it accepted when it became a small group of monopolistic, consolidated companies -- profits drive share price.

As long as profits trump investment in product, terrestrial radio will not be able to compete with interactive and mobile media and as far as HD radio goes -- which won't be very far -- forget about it.

When it comes to building audience it's the programming, stupid! When it comes to making shareholders happy, it's the cost cutting -- which is the stupidest.

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Radio's "Tom Terrific"

The longtime Inside Radio editor Tom Taylor is leaving at the end of the day today to take an executive editor position at Radio-info.com.

I am proud to say I hired Tom to help us develop the original Inside Radio fax in 1990. It's hard to believe that we had to pioneer our way through thermal fax paper, non-standardized sizes and the hope that we could make a radio publication a daily thing when everyone else was a weekly. All this well before the Internet became available.

Tom and our Inside Radio President Steve Butler (now a programming exec at CBS'
KYW Newsradio in Philadelphia) worked with what we called our "dream team" that included Kyle Ruffin and Christine Burke to revolutionize the radio trades.

Inside Radio became the first daily radio publication and whether you agreed with the editorial content or not it was a must read. Tom Taylor and the team of dedicated editors made it one of the best known brands in the industry.

Tom was with us until late 1997 when he joined his friend Robert Unmacht to eventually start M Street Daily. I hated to compete against Tom.

Tom returned to become editor of Inside Radio when I sold it to Clear Channel as we settled our lawsuits against each other and Tom distinguished himself and the publication under very difficult circumstances. Under the guidance of the talented Inside Radio General Manager Gene McKay, Tom did some of his best work.

He kept Inside Radio credible when it was owned by the company many in the industry called The Evil Empire. I couldn't have done it and I doubt very few others would have the respect of their powerful new employer and the readership at the same time.

I was always proud to see Inside Radio every day and I knew it was in good hands.

Tom's nature is to be fair. He's a hard worker and he's a certified radio junkie. It always amazed me as to how he could handle the responsibilities of putting out a daily radio news publication -- almost singlehandedly -- every day. Outside of his passion for antiquing along with his wife Sharan, he loved the industry and its people.

I'm proud of his accomplishments -- not just the ones I mentioned -- but the pioneering we did to make Inside Radio the brand name that it has become.

Radio-info.com will be better because Tom is working there and the radio industry could take a lesson from Tom's style.

We're all competitors.

But we're all family.

In spite of our differences, changes in our industry or competitive pressures, we're all in this thing together. Good times and bad. Consolidation or not.

As Tom will tell you, I am a great hockey fan -- or more specifically -- a great Philadelphia Flyers fan. I love the team and the sport. I now live in Arizona and Southern California but I still have my Flyers' season tickets. One reason the sport is compelling to me is that hockey players must be smart, physically strong, graceful and play as a team.

Even when hockey players rough up competitors they will line up at the end of a playoff series and shake hands with everyone on the team they played hard against -- win or lose.

Kinda like radio, eh?

I'm proud of Tom and wish the best of luck as he turns to his next challenge.

My highest compliment is that Tom Taylor is the only person I ever trusted Inside Radio to -- and I did it twice!

Thanks for your service and your excellent example to the family we call radio people.

Texting's Effect on Media

I read recently that text messaging has increased a whopping 95% over the past few years. That is, young people (mainly) are going nuts text messaging friends. This is not just a casual addiction, it's compulsion and it can detract from traditional media's presence in their lives because of one significant and undeniable reason.

Gen Y reluctantly gives up their phones and mobile devices to a charger at night and the rest of the time their phones are with them, on them, turned on and being used. No Walkman could ever make that claim of dominance or loyalty. It's an unfair comparison in a way, but it underscores just how much time the present generation devotes to phone-related activities.

Right after spring break this year I was returning from Phoenix to Los Angeles to resume classes at USC when I saw a young girl at the USAirways gate lying flat on her back on a couple of seats sleeping with her cell phone resting in her hand on her chest.

It got a message.

She awoke. Glanced at the text message she received, punched in an answer, put her head down and went back to sleep with the phone on her chest.

Until.

Until, she got another text message. And this went on and on. What a miserable nap.

Texting is driving people to distraction. New Jersey is the latest state to seriously consider DWT legislation (Driving While Texting). It's scary out there. My wife and I were hit by a young cell phone user in her car one Sunday in Phoenix (three-car crash, totaled my SUV) and when I crawled out of my vehicle to see if she was alright, the injured driver had blood dripping down her face with her cell phone planted firmly to her ear. She bravely (perhaps foolishly) volunteered she was on the phone at the time she went through a red light -- a light that was red for 30 seconds. She didn't see it because she was distracted by the phone.

I have long held that the future of music media is in mobile devices. I believe everyone's life will eventually be centered around a mobile device that has everything near and dear to them built right in. (Don't we already have that with Crackberry addicts?). In the future, pictures, songs, music, info, schedules and talking capability will make the mobile device a necessity of our modern age if it isn't already.

Apple's iPhone available in late June may help us take another quantum leap toward the mobile future as almost everything about the new iPhone is exciting except the slow AT&T (Cingular) network it's on.

I also see screens being put in public places and on planes and trains that would allow users to bluetooth their content to such larger screens and when these screens not in use, advertising will be playing on them.

Even airplanes flying to LA from Phoenix operated by USAirways will eventually have screens that will allow me to play my own video content but with the sorry state of the airline industry right now its not likely to happen on that airline anytime soon.

This is an admittedly long-winded way of saying if I owned a traditional media company I'd be scared. That's the first stage in dealing with grief due to the onset of competition from interactive media (after denial, anger, more denial, more anger and then acquisition of companies they can't run, don't know why they bought and so on).

More to the point -- if a radio is no longer required equipment for the next generation, will that be the end of radio as we know it? Probably not -- as long as you get radio for free when you buy a car. The key word is free -- or more accurately, standard equipment. And you'll note that few consumers actually buy a mobile device for its radio these days.

Still, with more time committed to mobile devices such as telephones and iPods, what kind of future can it be for radio?

If YouTube continues its domination over this attention deprived generation, can you think of a better "television" than a mobile device for those short video clips? This begs the same question -- what of television in the future? Same answer, actually. As long as the consumer needs a larger screen the TV will be around, but less and less of network and cable programming will be required to make owning that screen worth the investment to purchase it. But a mobile device will be required equipment in the not-too-distant future.

If universal WiFi becomes available and these mobile devices allow for seamless streaming of the Internet everywhere, does traditional broadcasting have a chance? Probably a better chance if its content is available on the Internet.

If young people don't read printed newspapers now, can you imagine a future where they would do so tomorrow? If the news is delivered on a mobile device, then you have the modern newspaper as long as its mobile and current.

The unprecedented changes happening to traditional media are being driven by -- let's face it -- an enhanced telephone of which texting has already made us take pause and reflect on the big changes yet to come to mobile music media.

If I'm in traditional media, I'm all about adapting and creating content for mobile and Internet-based devices.

The Shock Jock Is Dead

I think we've finally reached the tipping point on shock jocks who compromise radio's prized and precious right to free speech and disgrace a consolidated industry that has been compromising itself since 1996.

And we may have Dan Mason, CBS' new president, to thank for kick starting the end of our long national nightmare.

Barely on the job in his new position, Mason has spoken with a firm voice that he's not going to tolerate boneheads on-the-air at CBS. And he's going to take it in the shorts for a while by upsetting the fragile billing at CBS stations but he's sending a message loud and clear.

Mason fired "The Dog House with JV and Elvis," hosted by Jeff Vandergrift and Dan Lay heard over WFNY, New York for racial slurs against Asians. This no-brainer by JV and Elvis -- and I mean no brainer -- was even more odious because it happened post-Don Imus. Mason, a no-nonsense former programmer was hired to turn CBS radio around has made it unmistakable -- he's going to turn CBS around the old fashioned way -- on solid programming, cost controls and sales.

The industry may owe Mason for taking a positive step to eliminate the almost daily barrage of outrages against listeners caused by so-called shock jocks.

Putting aside how people may feel about Al Sharpton, Jesse Jackson, special interest groups and the importance of getting ratings, this could be very good for everyone else.

And don't mistake freedom of speech for freedom to scream "fire" in a packed theater (or as I call it shock radio).

Fire one or two more shock jocks and the rest will soon get the message that there will be consequences for going too far. Can we agree that calling a Chinese restaurant, recording it, insulting the victims with racial insults and threatening behavior is not radio worth fighting for. Their right to be a bonehead is protected in our constitution, but not guaranteed over the citizens airwaves.

There's still a long way to go.

CBS is ready to reinstate Opie & Anthony on the air just as XM has furloughed them for the next 30 days. CBS has lost a lot of its prime talent so perhaps its trying to weather the storm with O&A. But XM did the right thing -- not just for its own situation before Congress over the merger with Sirius -- but for the audience. Hell, one of the problems with satellite radio out of the box was that its claim to fame was to be radio without commercials when it should have aimed to be 125 channels you can't get on terrestrial radio.

And you still have Rush Limbaugh, Randi Rhodes and other big mouths from right to left trying to shock their listeners out of their sensibilities.

Maybe we're beginning to see signs that radio coming to its senses.

I've been chiding the radio industry for not taking responsibility.

Well, it looks like that may be beginning to change.

Apple Negotiating The Record Industry's Future

It always impresses me that Apple CEO Steve Jobs has taken control over the record label moguls.

Jobs knows what the next generation wants. He has the sales to prove it.

Record execs have no idea what the next generation wants and if they do, they have no idea how to give it to them. They are reduced to suing their customers and making demands of radio stations to pay for using music over the airwaves.

Jobs wears jeans and a turtleneck shirt and looks like a geek. The record industry crowd is a fashion statement on the entertainment business. Unfortunately for them, the geek is cleaning their clocks.

Now, while Apple negotiates with the labels over the next generation of iTunes, he's in the driver's seat and the labels are in no position to stand up to Jobs.

Business is good -- great -- for Apple.

Business sucks for the labels.

It's always hard to predict Steve Jobs, but there are some hints that allow us to speculate at what the next iTunes standard will be.

Jobs could finally give in on variable pricing (some iTunes could cost 99 cents, others more or less). He's set the precedent for DRM-free music from EMI's catalog. The labels really want this. The youth market, in my opinion, does not. They want to pay less not more for downloaded music and I'm talking about the Gen Yers who are willing to pay for music.

It is conceivable that Jobs trades some variable pricing for DRM-free music. The labels know they are going to lose on protecting digital rights management and maybe getting variable pricing makes the bitter medicine go down better.

I believe that the winning ticket is to reduce the price of some digital downloads but never increase them above 99 cents. In fact, I don't think even Apple will be able to hold the 99 cent standard download price for more than a few more years.

And on DRM, the labels know they are going to have to relent so why trade variable pricing for DRM-free music. Hopefully, Jobs is more brilliant than I am giving him credit for here.

Oh, and Jobs is not at all going to consider giving up iTunes DRM-protection called Fairplay nor is Apple going to share it with competitors any time soon. Take that to the bank.

On higher fidelity, Jobs won concessions from EMI in return for variable pricing of better sounding songs but I am not convinced the next generation cares much about fidelity. The iPod is a convenience. The ear buds are usually horrible and yet the convenience has trumped better fidelity. Jobs should deliver a better sound (and what he's promising with the EMI catalog is really not much better), but he won't get away with charging more for it.

Don't be surprised if you see some breakthroughs on bundling of video and audio products. Apple has been toying with this strategy and the labels are very interested in new marketing schemes and formats. It's not a forgone conclusion but increased digital bundling is a real possibility.

Of course, Apple knows that legal downloads on its iTunes platform have peaked -- it happened last year. They are also aware that piracy is still rampant.

Never forget that Apple -- the elephant in the music industry's room -- has a hot stock because it sells devices not music. The music is there to help sell devices.

The labels, on the other hand -- the tortoise in the room -- are losing money because CD sales are down, digital downloads still contribute to a small part of their income and they've lost control of their business to a computer company run by a stubborn, brilliant and unpredictable guy named Steve Jobs who could care less about the record business.

Do You Really Want to Defend Free Speech Over Shock Jocks?

I count myself as a staunch proponent of free speech even when it offends and even when it challenges society's tolerance for it.

I don't want the FCC, Congress, religious leaders or school teachers having an unusually influential say as to what can be said, shown or written. The FCC is a flawed group of political appointees. Congress is a flawed group of men and women who answer to a higher power -- special interest groups. Religious leaders are nice people, but they have fallen off their pedestals in the past decade more frequently than ordinary sinners -- sex scandals, power struggles, misguided organizing campaigns.

No, I don't want these folks deciding what I can broadcast, write or show.

I say this because I am increasingly concerned that the more-than-desperate radio industry is on its way to forcing a showdown over shock jocks and their right to be ignorant fools.

Observe this video chronicling one family's fight against Mikey -- the offensive Clear Channel shock jock who enjoys a free pass from the FCC and also from the biggest consolidator. It's rather long so sample as much or as little as you can, and I'll come back and tell you why I am really concerned as to how our precious freedoms are in jeopardy as never before.



Society has had its fill of shock jocks from all sides and all angles and I sense the average person is looking for some "censorship". This would be awful -- almost as bad as having to put up with such ignorance on the air.

The right to free speech is always hard fought and always precarious. It is the balance of a benchmark of a free society and the sensibilities of our various communities in which we reside.

So, I suggest the following resolutions:

Fight for free speech and tolerate more than you can handle because the alternative is no solution and eventually leads to rebellion. In the age of the Internet it is almost impossible to censor anything so be cognizant of that.

Radio owners, show some responsibility.

You can't hire people like Don Imus and actually put in the employment contract the kind of language that will inspire them to make trouble. CBS egged Imus on. Imus went over the line. But he's not alone. Rush Limbaugh gets away with it as does Michael Savage and countless other shock jocks.

Radio, stop being pathetic.

I know some of you don't like it when I talk about the next generation, but they are laughing at your desperate attempts to get ratings. You've lost them and even if you can somehow manage to keep your older listeners, you are in jeopardy of having to fight for your freedom of expression.

If we have to most of us would fight for the right to say almost anything not obscene on the air. But do you really want to defend free speech over Michael Savage or Opie & Anthony?

Radio execs, stop going into damage control mode every time you screw up.

Epiphanies that allow you to fire your shock jocks in the name of decency is indecent in and of itself. It's a free pass you don't deserve. It's, well, it's like going to rehab with Britney Spears for a few weeks and making everything better.

Everything is not better. You look like fools and you are fools to program such garbage and call it radio -- especially when you are losing audience.

In the end it will take courage to fight for freedom of expression while exercising good judgement over what's worth fighting for.

Shock jocks are a disgrace to radio and we can all do better.

Let's start.

Dan Mason has.

He fired "The Dog House with JV and Elvis," hosted by Jeff Vandergrift and Dan Lay for prank phone calls packed with Asian stereotypes and insults.

They're not worth the fight when their only goal was to insult, incite and offend. They still live in a country where they can feel free to rant if they like.

They just can't do it on CBS' license at WFNY, New York.

Mel Karmazin fought for his investment in Howard Stern during his Infinity days paying lots of legal bills to defend Stern's right to push the envelope.

Stern took his act to satellite radio where it belongs.

The balance between freedom of expression and censorship is responsibility. Hopefully, broadcasters can learn this lesson before the interest groups, political leaders and clergy hit a nerve for increased censorship -- something free broadcasting has managed to avoid during its long history.

The Suicide Attack By Record Labels

If we didn't already know how self-destructive the record industry can be using their past actions as a guide, you need only consider what they are trying to do right now that will really do them in.

In the bluntest language I can use (forgive me), the record labels are preparing a suicide attack on their good friends, the radio stations of this country. I call it a suicide attack because what they want to do -- if successful -- will not only hurt or maim the radio industry, still critical to their record selling ability, but kill will themselves off as well. Thus, a suicide attack.

Radio stations have for the past 75 years had free use of music. They have never paid record labels. They have never paid artists.

Satellite operators and Internet streamers are not so fortunate. The satellite networks pay for the use of music and so does the fledgling Internet radio industry.

The NAB is all over Congress now because it is their ox that may get gored.

And Congress, you may remember, brought you the Copyright Arbitration Royalty Panel (CARP) which later gave way to the Copyright Royalty Board (CRB) that is terrorizing the Internet streaming business with rates that could put all but the largest streaming companies out of business. In other words, Congress has a way of making matters worse. (Yes, I know what I just said. Of course they do.).

Excuse me, but shouldn't this be the other way around?

Radio stations should be charging record labels for exposing music on their airwaves and the high rotation it gives new and established artists. See, the way I look at it, the labels are the ones getting the free ride. It's true that radio gets to provide programming to its listeners when it plays music, but the labels profit directly (and have made huge profits over the years) thanks to terrestrial radio.

At the very least, the labels should leave well enough alone, because they are the ones who have the most to lose.

They are so busy turning their business over to lawyers that they can't see that they are making yet another blunder.

And, oh yes, if I'm losing money hand over fist as they say they are, I am looking to Internet streamers and satellite radio to help me do what radio did all those many years -- make money for the record business.

I can see the day -- and some of you may disagree with me -- when music will be driven by Internet exposure and social networks (it's already happening). Streamers may have no choice but to play music that is not protected by copyright to gain exposure.

If the radio industry had the brass to stand up to the ingrates at the record labels, they could shut them down faster than Steve Jobs will.

Can you imagine radio stations only playing non-copyrighted music submitted and approved by artists? Well, I can and it's going to happen.

Someone wake up the record execs and tell them that they haven't made a smart decision since they re-sold their catalog to a new generation of CD users.

The labels are the folks who have brilliantly brought you the RIAA -- and the concept of suing their customers.

And, burying their heads in the sand.

And, blaming Steve Jobs for outsmarting them (How many Apple executives does it take to outsmart a record label?).

Lawyers instead of strategists.

Hacks instead of entrepreneurs.

Consolidation instead of expansion.

Cutbacks instead of investing in the digital future.

No wonder the record labels want to make up for their mistakes by taking it out of the profits of their radio partners.

They are running out of people to screw.

And to borrow a phrase from a song one label made a lot of money off of thanks to radio airplay -- it's the end of the world as labels know it.

Sadly, this latest winner-take-all ploy to charge radio for airplay is just more evidence that the demise of the record label is right on schedule.

"The Fad With MySpace Right Now Is To Reject (It)"

That's what Samantha Skey, senior vice president of youth marketing at Alloy Media + Marketing says about the prime college age users of the popular social networking site.

I share this with you in case you haven't heard it, but it does not surprise me. My students at USC -- very much a part of the next generation -- take great pride in being fickle. They almost resent being counted on as consumers.

Skey describes their evolving MySpace mindset as "I'm deleting my page; I'm over it; it's too big; it's owned by Rupert Murdoch" who, you remember shelled out $580 million to buy it a few years back.

In my view, MySpace will be just fine for the near future, but there is definitely a desire to see smaller, niche social networking sites. Big isn't big. Small is big. College students use Facebook, Craig's List for localized searches, LiveJournal, Bolt and others. They use social networking sites like we use Yahoo -- as a portal.

This is an early warning sign.

Some media companies have barely dragged themselves into the Internet era and they find things changing rapidly. This is worth watching and being expert at because whatever you plan for the next generation, they have plans of their own. Just when you think you've nailed them down, you risk losing them again.

It also amazes me how they know who owns what. They know a lot about Clear Channel. They obviously know who Rupert Murdoch is. I can never remember knowing the owners of media outlets I liked at the same age let alone what they paid to buy things.

I sense a lot of uneasiness with News Corp's desire to monetize their $580 million acquisition price. Young people seem wary of their efforts. They expect MySpace to get too commercial and they won't like it. The same is true of YouTube. Google has to get a return on its $1.6 billion investment and it isn't a foregone conclusion that they'll be able to pull it off with pre-roll commercials.

Traditional media seems to know so little about this next generation.

Some examples:

At least once in my day someone from the radio industry dismisses the next generation as not relevant to radio's current woes.

TV execs know a lot about suing but a lot less about viewing. The big ones are suing Google over YouTube and challenging the Millennium Copyright Act interpretation that allows content on Google without permission (until it is requested to be removed). If they win, they really lose. Think about it.

TV networks are also big into selling viewer on demand video -- it's almost an obsession. Cox has a deal with ESPN to allow free viewing of NFL games but the games can't be fast forwarded so commercials must be watched.

Radio execs think too many commercials is a big problem, but it is only part of their problem. Too many bad commercials that don't rouse the next generation will not be tolerated now as it was in past generations when listeners had little choice.

Satellite radio programs some excellent music channels aimed at the audience of which it has the fewest subscribers -- young people. But there is only one Sinatra-type channel on each network and those older folks are paying their satellite dues each month.

Lessons abound.

Without the next generation, you have no growth business. Period.

Once traditional media "gets it" (and I am being generous here), the next generation moves on.

To operate a media business aimed at the next generation it will take more than acquiring their favorite web sites. It will take a keen understanding of who these people are and what they really crave.

They don't crave radio.

They don't have time for TV.

YouTube is not TV (can you hear that, TV networks?). It's a website for short video clips -- homemade, professional, stolen. It's a commodity. No emotional relationship. Not marriage.

Now, we see the first signs that this generation doesn't hold their social networking sites as sacred. They want smaller ones -- more niched communities.

What does all of this mean?

That content is the only thing that can make a new age or traditional media company thrive and it's the one thing everyone is spending less time and money on these days.

People ask me, "what is the answer?"

I always respond by saying "content". Spend on programming, music, entertainment. Be nimble and flow with new technology and never assume -- no matter how big you are -- that money will buy you a lasting franchise.

Radio used to get teens and sales managers everywhere said, "I can't sell them". Wouldn't they love that problem today?

Then the teens became 18-24 year olds who grew into 18-34 year olds. Meanwhile stations made few adjustments to grow older with their listeners. They expected the return on their investment.

The payoff for radio came when they captured the lion's share of 25-54 year olds and when the audience aged, radio programmers just turned the format into an oldies type station. After 25-54 declines, you get "Jack" -- in more ways than one.

No media company can expect this loyalty in the future.

So, when you hear college aged users are beginning to reject MySpace this early, welcome to the new world of interactive media.

From now on the only thing that remains permanent is change at the speed of "click".

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Randy Michaels' "Surprise Attack"

Randy Michaels, the former Jacor and Clear Channel executive is coming back.

Not just running a bunch of second tier TV stations (from the New York Times Company) but something even bigger. Who believes Michaels wants to run only TV stations when it seems like he used to run the entire world at Clear Channel.

It pains Michaels when I write about him.

Some of you may remember that he launched a holy jihad against me for not playing nice when I owned Inside Radio. And you know how that worked out --- for him.

Clear Channel unceremoniously removed Michaels from his position of power running their radio stations a few weeks before they announced their acquisition of Inside Radio from me and the mutual dismissal of lawsuits we had filed against each other. I guess Clear Channel thought they were sending Michaels to Siberia to handle Internet initiatives. That's where they sent him -- to the Internet -- little did they know that radio was going to be Siberia not the Internet. Well, Michaels got quieter and quieter as the years went on -- I assume he was being paid to do almost nothing and to remain quiet.

His motto at Jacor was "the noise you can't ignore" and suddenly that noise became a silence -- a silence I believe you should never ignore.

Because, in my judgment, Michaels had a lot of time -- perhaps as many as three or four years to ruminate about Clear Channel, radio and what he wants to do when he grows up.

I mention all of this because it sets the stage for what I'm thinking. I could be wrong. I've been wrong before, but I've also been right especially when I follow my instincts and my instincts tell me Randy is ready to resume making noise with a vengeance.

Randy, like all of us who have enjoyed successful careers in radio, is about validation, invalidation and mostly revalidation. Given the humiliating way in which Michaels went out, it is unlikely his reentry from his perspective can be anything but stunning and I believe it will include payback to Clear Channel. There's no payback in buying a handful of TV stations.

Sam Zell, his mentor from the Jacor days and a man Michaels made even richer, has plenty of money to do it again. Zell sold his real estate holdings for record prices and then reentered broadcasting to buy overpriced TV stations.

I guess I'm believing that Zell, who wouldn't probably know a waiver from a wafer, has Michaels whispering in his ear. "Randyspeak" is back.

I believe that there is no love lost between the Mays' and Michaels. Randy was brought down and silenced. You don't do that to Randy Michaels. He usually does that to you.

So, here's what I'm thinking -- again with the caveat that I am speculating here, but willing to let time tell if I know Randy Michaels well.

After all, it was Michaels who on the first day of my honeymoon back in September of 1998 set fax machines at almost every radio station in the country buzzing with his version of Inside Radio he called "Inside Inside Radio". He didn't care much for my reporting or my independence. The timing of his attack version of my publication is classic Michaels. It's one of many reasons why I'll never marry again (the main one being my wonderful wife). Hell, who wants to get this guy mad.

Then, as head of Clear Channel Radio he really went for the kill suing me and Inside Radio for $100 million. Hey, this doesn't sound like the passive guy we've witnessed the last five years. I counter sued Clear Channel for $125 million. I knew my adversary. In the end Michaels made me rich, even more independent (stay tuned) and gave me the gift of time for a sabbatical to teach the wonderful next generation of college students at USC -- something the daily rigors of publishing would never have allowed.

Hell, I love Randy Michaels now.

That said, he got the shaft from Clear Channel and he didn't deserve it.

I also have great admiration for this man who singlehandedly put together the Clear Channel radio group in spite of his stupid program director tricks. He's an engineer. He knew which stations to buy and where they would fit in for Clear Channel. He didn't buy anything that didn't fit into the plan. And the Mays' did not put Clear Channel Radio together. Michaels did.

I've shared with you personal experiences and insights as a ramp up to what I think Michaels may do.

Let's look.

Remember Randy's "hub and spoke" system of advertising revenue -- the one he tried to install at Clear Channel before his demise? I think he still likes and believes in it. A system of radio, television (ah ha, see where these TV stations may come in) and print -- maybe even Internet to form a marketing platform as powerful as any.

Clear Channel should have listened to him.

I think Michaels will do "hub and spoke" revalidated.

The New York Times TV stations are now called Local TV under Zell/Michaels. And did Michaels hire his long time sidekick Bobby Lawrence -- another radio guy -- just to do TV? And Pam Taylor, yet another trusted Michaels cohort from radio. Was she hired to do TV? Is that the end game?

Hell no.

Look at what Mike Anderson in STL.media wrote:

"It's a new day, a new culture and a new company," says CEO Michaels. "It is always difficult to change a culture, especially one so fundamentally different from ours. But the only way to win in this changing business is to lead the change. There's no question that 'business as usual' has no place at LOCAL. We are the vision you can't ignore."

What!

Michaels doesn't even come up with a new motto -- he just adapts the old one from the noise to the vision you can't ignore.

He doesn't change. He's predictable.

I know I may be challenging your belief system right now -- or maybe you're planning a honeymoon and you're frightened, but stay with me.

You need radio stations to do "hub and spoke", right?

Clear Channel isn't about to sell radio stations directly to Michaels. The key word here is directly.

But what about another group buying stations that eventually may wind up in the hands of Michaels and Zell?

Now I have no evidence that this is the case but something like that group of Dean Goodman, Larry Patrick, Eddie Fritts has me wondering. Allow me to speculate further. If you called central casting for a benign bunch to sell things to, wouldn't that be this group. They may well remain operators or spin some stations to others or if my fantasy becomes reality -- sell some or all of them to Michaels and Zell. If not this group, maybe another. You get the picture.

Now all of a sudden that "hub and spoke" is starting to turn once again. And remember, Michaels originally bought the small market stations for Clear Channel, the ones they are now getting rid of. He knows their value and can run them even though Clear Channel can't.

I wouldn't be surprised to see Michaels/Zell buy some print. Good for the "hub and spoke".

I wouldn't even be surprised to see Michaels buy his own radio trade publication as he did at Jacor or start a new one -- after all, the "noise you can't ignore" needs a platform from which to shout. And he's no fool. He'll probably hire a respected industry editor to give him credibility as it documents his emerging empire.

And did I mention that Westwood One is for sale?

And that Sam Zell had been increasing his stake in the company and that rumors have it that Michaels might like to attract a Sean Hannity or even Rush Limbaugh (from his former Premiere Radio Network) to give him a big start to a new radio network.

If I'm half right, this is starting to shape up like Clear Channel 2.0. Better.

Some, if not all of this may be connected, but collectively it has the makings of a perfect surprise attack and you know how much radio's biggest star (next to Mel Karmazin) savors this kind of action.

Welcome back, Randy.

Now get into Internet radio fast before some brash, loudmouth young college kid like you eventually kicks your butt, takes names and lives to brag about it.

The Few, The Proud, The Mean Media Machines

After some anxious moments the other day, the business world learned that Microsoft and Yahoo have not been able to complete merger talks.

Microsoft needs Yahoo.

The software business is not what it used to be now that the Internet and mobile spaces have made computing non-essential for an increasing number of consumers. Cell phones and mobile devices are essential, computers less so. Microsoft has not exactly had the Midas touch in growing beyond software and, in my opinion, has been late to the Internet race.

Yahoo was a pioneer but it is being bested by Google -- America's latest out of control conglomerate. Google more than any other company owns the Internet space. These are smart people (okay, the jury's out on the $1.6 billion YouTube purchase) and they are in a Clear Channel kind of mood (not the wimpy Clear Channel of today, the brazen and brash "Evil Empire" of six or eight years ago).

Microsoft is hungry for acquisitions and therefore can be expected to expend its plentiful cash reserves on buying its way into the Internet space.

That's what big companies do -- acquire other companies -- and more often than not the acquired company is better off not the buyer. That never stops them, however.

Even Google knows what I mean.

It could have never invented YouTube. Only a group of college kids screwing around in a garage could have had the brass to put together a business that pushes the fine line between stealing and right to carry based on the Millennium Copyright Act. Even if the Google skunk works had developed the YouTube concept, you've got to believe that their attorneys would have scotched the idea from the start.

Why do you think they spent the $1.6 billion.

Microsoft was a pioneer in software and then it became the establishment. Establishment businesses don't do innovation very well.

Yahoo lost its edge and got outmaneuvered by Google and Yahoo is a new age company so to speak. So it doesn't matter whether a huge company is traditional or new, it's size that matters.

We see this in radio and television as well. Consolidation did in radio because the company that owned all the radio stations was in it for a pay day on Wall Street (they are all assembled at Lowry Mays' house right now praying that the latest two week delay announced yesterday on the shareholders vote to go private passes -- stay on your knees).

That's what big companies do -- they live, thrive, hurt their sectors and eventually die -- by their sheer bigness and greed.

Google is next.

Google is just not ready to become the next Clear Channel -- yet. But we see the signs. They get bigger. Get a larger appetite for everyone elses business. Use their ample cash to stay a player in all the subsets that they want to play in.

The little guy is the innovator.

Internet radio is an industry filled with little guys. They are not well organized and they are not very powerful.

Great.

That's what makes them have to be very smart, daring and innovative.

Someday, too, Internet radio will grow, thrive, hurt its own sector and eventually consolidate.

That's the American way.

But its the wrong way. We're not a nation of innovators and operators. We're either an innovator or operator, but rarely both.

Unless and until that ever changes, you can predict the life cycle of every big media company out of necessity.

The innovators need the operators and the operators become the consolidators when they find out they can't operate. Think Clear Channel here.

Those rare companies that can be innovative and relatively large are the few, the proud and the mean media machines.

COMING THIS WEEK

The Return of Randy Michaels -- what I think the real Benjamin Homel is up to (and if I'm right, look out it's going to get interesting). Sign up below.

What Would Mel Do?

There is little doubt in my mind that if Mel Karmazin was still running CBS, he would not have caved to the various interests that wanted Don Imus' head after he insulted the Rutgers women's basketball team on his WFAN, New York morning show.

Of course there is no way to know for sure, but I can't imagine Mel letting his revenue rich morning show get away. Putting aside his strong feelings for Don Imus, Karmazin would fight even if he had to withstand the worst possible repercussions for him -- losing advertisers. Mel would in effect tell the advertisers to go to hell and he'd wait until they came back.

Then, he'd raise the rates on them.

Mel fought the FCC for Howard Stern and incurred huge legal bills to defend Stern's right to free speech -- a different issue in my opinion than the Imus situation. Without Karmazin there would be no Stern or Imus and without Stern or Imus radio has no second act. Listen around. One shock jock is more moronic than the other -- even after the Imus firing!

How can I say this delicately.

Talk radio is awful. It's got one act -- shock jocks -- and the few other talkers who dispense money tips or advice certainly take a back seat publicity-wise. It happened again Sunday in The New York Times. Another shock radio story. The media loves this almost as much as it loves Paris Hilton and like Paris Hilton the crop of radio talkers these days have no talent.

The dust up over Imus produced no changes. There, I said it.

Nothing is different in rap music lyrics. BET is still showing lots of booty. FM hip-hop stations are no more friendly to women and their self-images than they were before Imus.

The reason?

Imus wasn't the problem. He was offensive, but CBS paid him to be. A lawsuit between the parties will likely settle this debate -- probably with the usual outcome -- an out of court settlement in time.

Imus was the victim of activists who were more interested in getting him fired then trying to clean up their own house. Nothing has changed other than Imus is out, CBS lost its morning show, Imus and CBS are suing each other and rap music is still damn insulting to women.

I've been grading final exams for my music industry students at USC and many have chosen to write about Imus, rap music and objectification of women. Excellent papers. Smart students. Now, you can tell me I've been in academia too long, that these are only kids and what do they know or any other excuse that you have but you do so at your own peril.

Rap music's free ride is over -- for a lot of reasons other than its treatment of women -- but objectification isn't helping. This next generation wants to move on. The record labels don't want that so they are encouraging and promoting even more insulting behavior to save the genre.

Radio has been over for a long time with the next generation. They have already moved on and radio stations answer by ignoring them and putting out more vitriol the press calls shock radio. Radio thinks it needs to do this because it doesn't have a second idea of how to do talk radio without shock jocks.

Mel knows it's over so he goes to satellite where he desperately tries to attract subscribers by hiring shock jock Howard Stern.

Can you see the trend here?

So let's keep it real.

Imus was an idiot but firing him has changed nothing.

Activist groups got what they wanted and did nothing else -- after all, before Imus they had a shameful record on objectification of women.

Radio is hard up since it can't count on the next generation so it becomes even more outrageous to attract attention.

So what would I have done if I had been Les Moonves faced with the Imus flap?

I'd call Sumner and ask him if he thought I would do the right thing. No, I'm lying.

I'd suspend Imus for six months -- no pay.

Send him for all the usual sensitivity classes.

Pray that nobody knew about the wording in the employment contract I had with Imus stipulating the edgy content for which I was paying him.

Call Mel Karmazin and ask if I could borrow his balls.

Then, I would have offered to establish and then contribute to a fund for Dignity of Women in the Arts. I'd invite Reverend Al Sharpton and other activists to be 5o-50 partners and I'd tell them -- "I'll clean up my house (Imus) and I'll pay to help you clean up yours (rap lyrics)".

In other words, Moonves was had. The activists made CBS the problem when in reality CBS had the problem -- and they could have solved it themselves. In a way, the activists made their inability to raise the standard of rap lyrics and music videos second to the Imus gaff taking the attention away from their own failed efforts.

Moonves caved but if it were Mel he would have fixed the problem, turned the focus on helping activists get started fixing theirs and waited for the lemmings we call advertisers to return with their Imus budget after his lengthy suspension.

I've been saying all along -- it's a responsibility issue not a First Amendment issue.

Radio needs to take responsibility for what is suitable on the air, in their communities and as public trustees of the airwaves.

Concerned activist groups need to take responsibility for leading and encouraging dignity for women in music and video and not try to make it a First Amendment issue or become vigilantes of the airwaves when it can't even get traction on the issue of rap lyrics and objectification of women.

Oh, and sticking with the thought that I am still Les Moonves here, I'd find Act 2 for radio which I call Internet Radio. Get into Internet radio -- fast. It is the future and it will save the next generation from the johnny one-note we call radio.

I love this job. I get to second guess everybody and take no responsibility -- oops.

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HD DOA

Best Buy is going to carry HD radios in all of its U.S. stores.

Wal-Mart has already agreed to do the same.

Radio Shack was the first major coast-to-coast retailer that sold HD radios and yet the shameless promotion of this useless technology continues with no progress in changing the world of radio.

I think of all the topics I cover the issue of HD radio is the most amazing to me. Surely the proponents know that adopting HD technology and forcing consumers to buy new sets is going down in flames. Terrestrial radio is not even a hot item right now -- on a car radio!

It’s not even worth making bold predictions over — Best Buy or not — no one wants HD radio.

It's dead on arrival (DOA).

The radio industry got caught in its own greed over the issue. After all, they coveted having more channels on which to program more formats. The only problem is that radio owners don’t want to spend the money to launch new formats the right way. In fact, most owners — and especially the public companies — are on a tight leash for cutting expenses over existing formats.

The improved digital sound quality was always the elephant in the room. These broadcasters were not about to invest in new equipment only to give their listeners better fidelity.

So radio has been snagged — caught in the act of trying to co-opt itself into more stations.

But a funny thing happened on the way to creating more stations — the ones they already owned in the analog world were losing listeners. So you’d think that the industry would stop trying to make a big deal out of Best Buy, Wal-Mart and all the other big box stores agreeing to stock HD radios.

Big box retailers have learned that stocking CDs didn’t mean a profit — they were loss leaders to get customers into their stores. Big box retailers get to return the CDs they can’t sell to the record labels.

In the case of HD, who gets the unsold radios back?

Just as satellite radio technology seemed to be the wave of the future in the early 90’s when it was adopted, HD technology’s time has also come and gone.

The future is WiFi enabled mobile devices that allow consumers to carry around Internet streams everywhere they go.

The future is not a handful of stations in a given city, but an almost endless stream of program choices from almost everywhere in the world.

In the past radio owners like their brethren record labels controlled the delivery system for their services and products.

That’s the part that they just don’t seem to get.

Now the consumer controls the delivery system and it's the people’s Internet — the one innovation that has changed our world more than anything else.

HD radio, by comparison, is too small, too late and too, well, 90’s.

When HD proponents take a few more black eyes they may be forced to realize that HD is not the future. It’s simple a technical way to make existing audio sound better and allow for the creation of more sidebands that they would be wise NOT TO use.

This is one time that I think the phrase "less is more" is apt.

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What Would YOU Pay Mark & Randall?

I know chief executives make a lot of money and I'm not a complainer who is going to nit pick executive compensation decisions. These folks are responsible for everything that happens in a company so why shouldn't they be paid well.

However, when I read that Clear Channel CEO Mark Mays made $9.31 million in 2006 and his brother, President & CFO Randall made $9.28 million I had more than a couple of questions.

My first question?

Why does Mark get to make a little more? Did Lowry love him more?

I guess you can just chalk it up to sibling rivalry.

But what's really got me lit is what the hell did Mark and Randall Mays do to earn over $9 million each last year!

Not much if you look at CCU's share price.

Not much if you look at all the time they are spending trying to take their baby private.

Certainly Mark and Randall are not the only radio execs whose compensation doesn't match their performance. In satellite radio, Mel Karmazin stands to make $30 million if all goes well with the merger and after all, it's Mel. He's our industry superstar. Why shouldn't he make $30 million, right? At least he merges and touts Howard Stern and avoids screaming "less is more" to the ad community. In fact, maybe Mel earns the premium because Wall Street actually still loves him.

But I want to return to my premise that these top guns are responsible for everything that happens in their companies so they deserve to be paid well -- that is, of course, when their companies perform well.

So, I'm going to take it upon myself to take matters into my own hands.

I am willing to start with $9.2 million for, say, Mark Mays and kind of adjust his pay downward if he kind of misses the mark -- kinda!

Let's start with the $9.2 million.

Take off about six million for presiding over a company that has hurt shareholder value -- the holy grail of public companies. I mean, can we really let Mark Mays make $9.2 million when for whatever reason his company tanked again in 2006?

Then reduce it further, say another million, for deciding to take Clear Channel private. Even if he's not successful -- and that's an increasingly good bet at least this time around -- he's going to make obscene amounts of compensation upon closing and so are the banks and investment companies. Give the $1 million to the janitors who clean up Clear Channel facilities. You know I am a bleeding heart liberal, but doesn't that idea sound good.

How about another $1 million off Mark's salary for all the needless litigation he allows Clear Channel to get into (my special area of interest, I might add). Certainly it's not much of a stretch to assume that Clear Channel has wasted at least $1 million in lawsuits. Okay, probably a lot more, so Mark's got to take the hit.

Oh, and deduct another million each year he has John Hogan making decisions his hands on operators could make better -- maybe that will "learn him" as they used to say. I'm going to assume again -- and it's only an assumption -- that Clear Channel lost at least $1 million in poor business decisions. Ya Think? Firings, hirings, format changes, missed business opportunities -- all on his watch -- so I'm going to dock him again. What do you say?

Then, another million for every year a big company like his does the minimum amount to dominate the Internet radio and mobile space -- the future frontier of broadcasting. Hey, isn't that what the stock market is all about -- futures? Streaming your already existing formats does not an Internet radio strategy make. So I'm going to have to attribute another $1 million in lost salary to share price losses due to not being prepared for the future. It really should be more, but Mark's got to eat, too.

And, two cents off for each time he doesn't let his top programmers give their two cents on programming decisions. The biggest consolidator with near monopolistic powers emanating from the Telecommunications Act of 1996 should be number one in more markets. I'd dock him for that. Two cents can add up. Don't laugh.

And another $1 million off for allowing a brain drain of Clear Channel executives almost on a constant basis with reorganizations and firings. Certainly it's not a stretch to see $1 million lost by bad decisions here. Bet it's much more. Let's be kind and only deduct the million.

Wait.

Something is wrong.

Mark Mays has given back all his compensation under my plan and I've hardly gotten started. And if I invite you, my readers, to suggest take backs by clicking on "comment" below, he might owe Clear Channel even more money. (Be careful, you might want to remain anonymous -- after all it was once called The Evil Empire).

What a concept.

You perform, you get rich.

You under-perform, you're lucky to get paid.

What's wrong with that?

Well, apparently some shareholders are currently looking to acquire the power to vote on an advisory resolution to ratify compensation of the top executive officers of Clear Channel each year.

Clear Channel's board is recommending that shareholders vote against the proposal.

The company has a good chance of prevailing because shareholders were dumb enough to buy and hold Clear Channel stock and it's been in the dumpster for quite a while.

What's an extra $9.2 million to them?

I mean $18.59 million -- don't forget brother Randall.
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