Radio & Records Generation Ex

You should see the email I get every time I mention the needs and desires of the next generation.

Really.

Stuff like "you can't go by what the students of the University of Spoiled Children say" or "wait until they have to get a job, they'll see" or some other dismissive phrase that only supports why the radio and record industries are currently without a future.

It's easy for radio and record executives to blame the iPod or the Internet or those thieving kids who pirate music. But the real answer is closer to home.

What we have is generational ignorance.

All of us who have children think our kids are representative of the next generation. They don't steal music. They still listen to radio and they even buy CDs with their parent's money.

This would be wrong.

I am more convinced than ever that the decline of the radio and record industries is based on the inability of baby boomer managers to understand the 18-24 year old demographic.

You want ignorance, I'll show you ignorance (maybe I should say that another way):

1. If you sue them they will quit stealing. This generation doesn't see file sharing as stealing. They have the ability to share music for the purpose of sampling it. They just don't like listening to new music on the radio. Can you blame them? There hasn't been a lot of new music on the radio for 20 years. Baby boomer managers at the labels are doing what they -- and read this slowly -- would do to a baby boomer who tried to steal their product out of a store. Punish them. It won't work. Isn't working. Will never work. They should fold the RIAA's legal efforts and accept that file sharing actually sells music, it doesn't hurt. What hurts the labels is consolidating, cutting back, thinking today's consumer is just like they were.

2. Top radio executives think radio is a public business. Look at stock prices for radio over the past ten years. Mostly down and almost out. Radio isn't a public business -- hate to tell you. The investment banks have figured it out after making tons of money off willing radio companies going to the public trough to raise money for buying stations after consolidation. The next generation -- the one that will have more people in it than baby boomers -- know radio is irrelevant. They don't crave radio, they mostly listen in when it's available. No young person is a radio freak. Please consider this -- radio is a public trust. As my longtime friend Bill O'Shaughnessy has said for a lifetime -- their owners are fiduciaries for the public trust. Laugh. Deny. But he's right. Radio doesn't do Wall Street as well as it had hoped. Now we can see it in their "ratings" -- the stock quotes.

3. Baby boomers don't understand the importance of social networking to Gen Y. Social networking is bigger than the Internet itself. More important than email. More pervasive than text messaging. This generation defines itself by making friendships and associations with each other. Radio is not their friend. Record labels are not their friends. Indie artists might be their friends and they discover them through social networks. The boomers who grew up at the record store are doing all the wrong things to understand the mindset of the next generation who grew up online.

4. Boomers might be startled to hear 18-24 year olds say, "we don't care if Facebook screws up by revealing our buying habits to potential advertisers, we'll just find something else". I had a class of students say just that a few days ago. As a generation they are uniformly fickle -- I've been telling you that. They'll just pick up and go someplace else. Many of us who presided over the hey day of radio and records knew that our market was always there -- we just had to compete to get our share. Now, you can't be sure they are even available.

5. Cool and sexy impresses them which is precisely why HD radio will never cut it. They don't care about fidelity -- hell, they listen to severely compressed music on crummy little iPod ear buds or on their computers. It's hard to find one who doesn't lust after a cool and sexy iPhone. Not a satellite radio. Not an HD radio. Not even an Internet tabletop radio. These devices are very uncool.

6. Boomers running TV businesses are in for a real comeuppance. The 18-24 year olds increasingly watch television on their laptops or desktop monitors. The better those screens get, the easier it will be to keep watching on their computers. Of course, most of them turn the sound off or ignore the pre-roll commercials. HD TV? Not for them. Seems like anything with an HD in it is doomed. Boomers are impressed with HD but Gen Y is not. Their world is the laptop -- they want what they want when they want it. Some of those new MacBook Pro laptop screens are getting nice.

So, when you're looking for reasons why traditional media fell down and can't seem to get up, you need to look no further than the baby boomers who run the outlets.

Don't get me wrong. I'm one of them. Baby boomer media execs are talented people. They've had lots of accomplishments. Its not about their ability or lack of it. It's more about their ability to understand a generation so opposite themselves that the instincts they've depended on to have a successful career don't apply any more.

The willing can get down and learn about these generational wars -- a good first step.

They must believe it is possible to be born of an older generation and sell to a younger one.

Apple's Steve Jobs does it -- and does it better than anyone. After all, he's a boomer right down to his jeans and turtleneck but he knows his young market better than they do.

So there is always hope.

Otherwise today's baby boomer media execs will become part of an even bigger generational group we may someday being referring to as Generation Ex.

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The Record Industry’s Nuclear Option

With Yahoo and Time Warner considering shutting down their web radio services due to the potential of a 38% increase in royalties, how does that bode for Internet radio?

Will Internet radio be at a disadvantage vis-à-vis terrestrial radio if streamers can’t afford to operate?

Hell, if big mega companies like Yahoo and Time Warner can’t afford to operate, how does paying high royalties for music work for the tens of thousands of small Internet streamers?

For that matter, will terrestrial radio be able to keep broadcasting music if the record industry gets its way and imposes further performance taxes on over-the-air stations?

Not that HD radio matters with so few stations offering programming and so few sets being sold, but you can kiss that pipe dream goodbye as well.

Don’t worry. The record industry isn’t going to win draconian royalties imposed on terrestrial stations.

It’s far worse than that.

They're going to get a small fee -- a precedent setting levy -- that mean instability and unpredictability which will be far worse. That's the SoundExchange strategy with Internet streamers. You don't hear of any progress being made between SoundExchange and the streamers who were supposed to be negotiating a more reasonable royalty rate, do you? Thus dragging your feet appears to be a good strategy when you're out for another pound of flesh.

Radio doesn’t need to pay royalties as high as the ones imposed on Internet streams to harm their stations because any performance tax – no matter how modest at first – will be too high.

What the record industry is doing is impeding the growth of Internet streamers and at the same time jockeying to get something more out of terrestrial radio. That something more will kill the radio industry before Internet streaming does.

Retail establishments, restaurants and bars are in the sights of the dying record business that can only levy fines against people intent on promoting their music -- for free!

Radio doesn’t need friends like the record industry.

You know the drill. Radio sells CDs and the record companies keep all the profits. Radio stations get little in ad dollars from record labels in terms of spots radio buys -- never did, really. Stations get what amounts to promotional consideration – the privilege of playing the labels’ music over and over again while the cash register rings for the record business.

Only the myopic record industry could bite the hand that feeds it at the same time that it is performing premeditated murder on the burgeoning Internet streaming business.

This is all bad enough but there is more.

Most radio execs think that Internet radio is 24-hour streaming. They could be right, but from what I have observed from my work with the next generation it is a false assumption.

Watch anyone from Gen Y consume their music.

Their iPods are shuffled, reshuffled, prematurely advanced to the end or to another tune. This generation is not like the generation running radio stations. They don’t want someone to entertain them. They want to entertain themselves.

So let’s do the math.

One assault on Internet streamers with blatantly unfair music royalties (even in comparison to their radio brethren).

Plus...

One sneak attack on the best friend the record business ever had (terrestrial radio) for burdensome taxes for selling the labels’ CDs.

Plus...

One misconception that Internet radio will be like terrestrial radio except on a computer or handheld device.

My fuzzy math has one plus one plus one equaling -- one!

One giant disaster.

It's the record industry's version of the nuclear option -- pushing the panic button and unleashing a devastating attack on everything and everyone in sight.

If you want a vibrant music business you need a vibrant delivery system to expose your product. You don’t tax and penalize the people who are working on your behalf.

No wonder Steve Jobs doesn’t put radio on an iPod.

His iTunes consumers pay 99 cents per song (to cover the rights) or they just steal the music.

They can then enjoy it again and again on several devices without being taxed further.

How can radio or Internet radio compete with that?

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You Know Radio Is In Big Trouble When...

The big box stores are supposed to be selling HD radios and breathing new life into a declining industry -- if you believe the hype.

Nope -- not flying off the shelves.

Instead, Wal-Mart is selling new George Foreman grills that come equipped with speakers that allow you to hook up your iPods while cooking -- God forbid you have to be away from an iPod for a few minutes.

Here's the pitch on Wal-Mart's site:

"Whether you're grilling indoors or outdoors, you'll love the convenience of listening to your iPod or other MP3 player while cooking. This electric grill has all of the features you've come to expect from the George Foreman line, along with a built-in amplifier and speaker".

Isn't that what radio used to do? Entertain at the old barbie -- and everywhere else.

Radio is losing its place to the changing lifestyles of its listeners. You don't need the George Foreman grill to tell you that -- just look around at all the people using MP3 devices instead of radio. But the Foreman grill, already? Geez, what a low blow.

You know radio is in big trouble when...

QVC does a big sales push on home shopping network and they can't sell any radios. They can't even sell enough to put the number remaining to be sold on the screen -- too embarrassing. And QVC likely had to eat the radios it couldn't sell. (Maybe they could put them on the George Foreman grill).

Now I have heard people say it doesn't matter -- that QVC sells to older women anyway but if that's true they are certainly smarter old women. They understand what radio operators don't -- that HD radio (whatever that is) is not desirable. It's the Custer's Last Stand of radio and the carnage is everywhere. Imagine, all those digital channels with nothing to listen to. And no digital radios to listen on.

You know radio is in big trouble when...

Group owners attack the ratings technology that it will eventually have to embrace causing everyone including agencies and buyers to question its viability. I see several radio groups taking credit for derailing the Arbitron People Meter (PPM) rollout in many of the top markets. I've said it before and I'll say it again, they have some legitimate methodology and response concerns. But once you've destroyed the very instrument that you're asking advertisers to rely upon -- what kind of victory is that? It's stupid -- like a lot of other strategical blunders in radio.

And you really know radio is in big trouble when...

The industry is a monopoly that can do just about anything it wants and the most it can accomplish is drive its stock down to near worthless prices. How bad is that?

Maybe cutbacks, firings, voice tracking, "Less is More", proliferation of nationally syndicated shows on a local medium and HD radio didn't work.

Ya think?

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Radio: Home of the Hits (and Misses)

Radio used to be called "Home of the Hits". But not so today as young listeners turn elsewhere for music.

A longtime friend of mine -- a well respected radio figure -- wrote to me the other day that he put the big question to a group of young people 19-24 at the family Thanksgiving celebration. He wanted to know -- where do you get new music?

One young person replied, "...from iTunes, of course". But my friend persisted, "that wasn't my question. My question was where she heard the music that she then purchased from iTunes?"

He reports the answer was radio -- good, old fashioned terrestrial radio. He added that she professed to be a huge fan of radio. The other young people joined in and agreed that radio was a primary source of hearing the product that they wanted to buy.

This got me to thinking.

I emailed him back -- this is not my experience at USC, but I could be wrong. God knows, I have been wrong enough to not jump to conclusions.

So, I took it to my classes yesterday. Asked them point blank, "is it the water out here in LA or am I misreading your relationship with terrestrial radio?"

Here's a sampling of what I heard -- and keep in mind that this means nothing statistically although I believe the answers to be honest and somewhat representative:

1. A student from Iowa -- Iowa -- said radio is her last resort for music.

2. "There's no new music on radio".

3. "Internet radio is radio and when I say I listen to radio I mean Internet radio".

4. "I learn of new music from watching TV".

5. "Pandora" (the online radio that learns what you like and suggests more of the same).

Not one person said terrestrial radio was their source for music let alone new music.

My own view is that radio's problem with the next generation reflects their defection from the FM dial. While I respect my friend -- and he may well be reading it right -- I have a less optimistic view of music radio and Gen Y from my experience.

They steal music.

They share music directly and through social networks.

They buy music (usually from iTunes).

They even buy an occasional CD (occasional).

But they don't get their music from radio and definitely don't get their new music from radio.

I know it may seem hard to believe from me here on a university campus, but I can tell you that as bad as I say it is -- it's actually worse.

While iPod fatigue seems to be setting in, radio is not in line for a comeback with this generation.

The reason?

Radio broadcasters don't understand this generation. It's a generation that wants control. They are used to getting control. They want what they want when they want it. Baby boomer parents gave it to them that way. The same parents, by the way, who still run America's radio stations. Ironic.

Now baby boomer managers who failed to get a handle on this new dynamic are on the outside looking in.

If you're up for a "Hail Mary" then look to new content, large playlists (against your better judgment), no traditional djs and local origination.

Or, you could attend the next radio convention and wax eloquent about the good old days because that's all you will have left with this demographic.

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User Generated Radio

I’ve have wanted to write about this topic for a long time, but something that happened the other day has propelled me into action right after the Thanksgiving holiday.

I heard Morley Winograd, the director of USC Marshall’s Center for Telecom Management who is publishing a book this Spring on millennials remind my students that baby boomers are running traditional media companies and the majority of them do not understand Generation Y. In fact, they are making every mistake in the book if they want to reach this demographic.

Why care?

Generation Y (generally those folks born between 1984 and 2004) will constitute an even larger group than the expansive baby boom generation.

Lots of radio people get upset when I write so passionately about how to reach the next generation. In many cases they are angry. They don’t care. To be blunt, they don’t understand them.

Take my brethren in radio.

They have neglected the needs of Gen Y while they were tending to their short-term needs (i.e., to make a bundle of money consolidating and going public). It’s not all their fault. New technology, changing sociological trends and economic considerations made the next generation potent agents of change. It was hard to keep up.

See, baby boomer managers think they can control radio stations by devising formats that different demographics will listen to. It’s always been that way so why not follow the logical conclusion.

But the next generation is different – very different.

They want to be the program director.

They want to be involved in their lives every step along the way. They turn to YouTube and are happy enjoying content created by other people --- even other people who are not their age. User generated content.

They have their own social website pages – Facebook, MySpace and increasingly smaller niche sites. They want to discover their own music, share it and enjoy the music of others even it isn’t number 12 with a bullet in Billboard.

Radio folks think they can still lead these Gen Y listeners to their predetermined formats, but they’d be wiser not trying in my opinion.

The age of user generated radio is upon us, but the owners, managers and programmers of terrestrial radio have not yet arrived.

They haven’t arrived because they can barely let go of radio’s classic formatics let alone understand a radically different approach.

If they took the time to understand this next generation they might still be constrained by a terminal death sentence of their medium that rewards companies for consolidating their assets, cutting costs and producing non-local programs.

But the potential of user generated radio is exciting. Here are the whys and wherefores:

1. User generated radio can only be done by a new generation of radio executive – not well-traveled consultants or radio people steeped in tradition. Tradition is nice for nostalgic get togethers and radio conventions. It has absolutely no place in the future of user generated radio. So, it's back to school for all of us if we want to be relevant to the next generation.

2. User generated radio is programming inspired by and in some cases provided by the audience itself. This will stick in the craw of most of us who are used to being in charge, but the next generation says it's their turn to be the PD. By the way, look no further than the popularity of Al Gore’s Current TV with this generation and you’ll get freaked out. User generated TV – not for boomers.

3. Radio will probably fail if it attempts to do user generated radio because it takes a change in mindset – a major change – which takes time, willingness and money to move valued radio professionals to the promised land.

4. User generated radio is good for radio – it may even be radio’s salvation. So close (so possible) yet so out of reach. Radio was once all things to all people until television came along. Then radio was America’s jukebox and soapbox for talk stations and seems unwilling and unable to reinvent itself -- user generated content is the next thing.

I’m waiting for my phone to ring. Don’t get me wrong. I’m, not soliciting. I’ve spent the last four years studying the demise of traditional media and the potential for interactive and mobile media. I don’t need the money (thanks Randy and Lowry) and I won’t offer easy answers but radio can afford to take some steps and can’t afford not to. Still I write constantly about the many, many opportunities radio has in the new media world and yet too many radio people are still interested in fighting satellite radio!

Here’s some free advice (and it may be worth what you're paying for it -- nothing -- still):

1. Set up a 12 month “course” and educate yourself and your valued employees on the conditions that are causing the demise of traditional media and the circumstances that have evolved at the hands of the next generation.

2. Find a mentor – a corporate mentor – who knows what she or he must do to enable your people and get them excited about the next generation and the potential for user generated content. Consulting was the thing in the past. Mentoring your staff – letting them make the decisions – is the future. In other words use your wise mentor to help your people think differently and create the future. (Steve Jobs does it at Apple which is why you see me mention his age-defying tactics often in this space).

3. Sit down before you read this next one. Commit to a five or seven year plan to do the above. Okay, I lost you. I took that chance. Was it when I said commitment? You can’t transform your company in three months – that would be called preparing to advise Wall Street on quarterly profits and you’re doing so well on that lately if stock prices are any indication (and apparently they are everything in your world).

Yes, fund it it.

Hire your mentor.

Enable their efforts.

Let your people be trained to make all the decisions not the mentor.

Prepare to be experimental and daring. Ted Williams hit over .400 one season – a remarkable statistic. What’s more remarkable is that he didn’t get a hit sixty percent of the time!

I have grown to admire CBS Radio under Dan Mason because he knows that to keep traditional radio listeners – the ones available to a radio (Gen X and baby boomers) you have to do programming that resonates with them. And to his credit and the credit of his capable CBS staff they are getting better every day and will generate more profits soon (take that Wall Street!).

Who is going to be the CBS Radio for the next generation?

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The Radio Station of the Future

I have seen the future.

It's happening now and the changes that are taking place in real time will proliferate during the year ahead.

And, as always, our consolidated leader, Clear Channel is leading the way once again. One of my readers confirmed the further degradation of America's radio stations and I thought I'd share it with you. (For those of you who know all too well what I'm going to say, I'll understand if you hold your nose while reading).

Here's the radio station of the future:

1. One program director who must by necessity juggle many balls while having none himself (or herself). A PD without the authority to run the station. The executioner (and I chose that word carefully) for present and future fiscal cutbacks. Notice I didn't say, caretaker of the public trust or trendsetter for the target audience. Good people -- all -- but neutered by corporate.

2. One syndicated morning show. No need to spend money on local talent when the company has these tremendous assets (I'm being sarcastic) who can do the same thing in lots of cities at a time -- what economies of scale! Isn't this what consolidation was all about. Since radio works best when it is local, let's save money and make it national. Makes sense to the bean counters who run the big groups.

3. Voice tracked programming middays -- even if it is New York! Why spend the money on local talent when we can find one very vanilla sounding voice to eliminate a line item across the board in as many markets as possible.

4. The PD does PM drive. Why not? He or she has no real other duties under consolidation. If they throw a jock meeting, no one will come. For those radio people who have crossed over to the dark side, you're probably salivating right now at the genius of hiring a PD without balls, who also does afternoon drive. (Hey, look, PDs working an airshift is nothing new -- now you're going to see it in markets you never imagined. For any of us who have ever held both jobs, tell me how great it is to be on the air and doing the PDs job between songs. Bet the audience will love it).

5. Syndicated shows at night. Hell, we're consolidators. We own lots of programs. Now America's radio stations are increasingly going to have no option but to air packaged goods in the evenings (nobody listens then anyway, right?). It all makes sense -- especially to the consolidators.

6. Liberal use of syndication and/or voice tracking overnight and on weekends.

Voila!

You have a radio station only a consolidator can love.

Clear Channel isn't the only fat cat that will implement this strategy system-wide. The other lemmings will follow them. As Gerry Blum, the onetime general manager of WQXI in Atlanta used to remind me, "the speed of the leader determines the speed of the pack".

This leader -- Clear Channel -- is hell bent to suck the humanity out of radio (as it has done to its talented and dedicated employees). It's all about money (and by the way, they're so good at being a public company that their stock price yesterday was $33.80 -- significantly lower than their buyout price).

Radio can't be saved from its masters -- the consolidators who set the trends and force the other weaklings into following suit.

Open your eyes and you'll see that public broadcasters showed a 3% increase in the Spring survey, and now reach 27,963,300 persons in an average week -- their biggest 12+ cume ever. According to Inside Radio, "public radio accounted for a 5% share of listening nationally in the Spring, just a fraction below the Spring 2003 share peak. The Radio Research Consortium says AQH also grew 3% since Spring 2006, after three straight years of decline".

Open your eyes and you'll see the next generation -- Generation Y is going to be larger than the baby boomers in numbers and radio has already lost them.

Look at missed opportunities: iPod fatigue is setting in. Listeners -- even young ones are becoming more available to listen to great content elsewhere.

The consolidators' formula above is not about great content. It's about great savings.

So don't choke on a turkey bone -- have a great Thanksgiving. While I am not optimistic about the future of terrestrial radio I am thrilled with the potential audience that is coming of age in the next generation. In the year ahead I am going to share more information with you on why I find this market so attractive. I'm getting back in -- I don't want to miss out.

And, please keep this in mind:

We need to be more like Steve Jobs.

He's in his 50's and yet he understands Gen Y better than they do.

It can be done.

Steve Jobs wouldn't run a business that ignores the largest potential population since the post World War II baby boom.

Steve Jobs wouldn't cut costs and make his product ugly. He'd make it sleek and cool (with great packaging).

Steve Jobs wouldn't drive his stock down by devaluing his core business.

My friends, if you're with me, get ready to start your engines!

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It's Time for Radio To Stop Being an iPod

In a way radio was an iPod long before Apple invented iPods.

After all, radios were portable analog music devices that allowed baby boomers to carry their music around with them 24 hours a day.

The iPod of today gives the listener total choice -- the music they want, when they want it and in whatever (or no) special order.

Back then, the predecessor to the Apple iPod was a transistor radio and an entire generation grew up with their radios to their ears -- just as today, ear plugs and all.

The forerunner to the "iPod" lacked the level of choice that today's Apple device has, but it had something even more valuable to young baby boomers -- air talent.

DJs were personalities and, arguably, even after Bill Drake cut the clutter from the top 40 format they were still personalities -- just the kind that didn't run at the mouth so much. My friend Jack Taddeo, the consultant, describes format radio as a merging of science with art. Transistor radios may not have allowed the listener to program the device but it entertained in a way that Apple's iPod can't.

Of course, today's iPod doesn't have to entertain other than play music.

That's because the radio industry has been asleep at the mike for a long, long time. Hey, I've been in this business for a while and I take my share of the blame, too. Long before consolidation in 1996 radio stations began what I think led to its demise.

Before I get to it, keep in mind that radio has always been adaptable. Before television was available to the general population in the fifties radio was television without pictures. When the new medium took off and consumers could afford sets, radio found that it could no longer thrive in the same way with just the audio.

So, radio reinvented itself.

It became a jukebox. Then a talk and information source. Later a sports station. Radio saw its finest day when its owners and talent knew their main mission.

But I believe in the late 1980s radio programming began to go stale. The digital, Internet and mobile revolution was only a gleam in the eyes of Bill Gates, Steve Jobs and Al Gore (didn't he invent the Internet?). Radio stations simply stopped developing new formats. I've said it before but it deserves repeating that if Westinghouse didn't stubbornly stick with 24 hour all news the money format wouldn't be available as a radio staple today.

Can you imagine a consolidator today making that commitment and losing money for as long as Westinghouse did in the 60's?

The kinds of formats that radio developed were niches of niches. For example, the offshoot of top 40 was Superstars classic rock which gave birth to classic hits and classic just about anything else. It was as if radio ran out of ideas and just kept fine tuning the handful of formats that worked -- with the help (I think) of researchers and consultants looking to deliver big ratings on small budgets with less risk.

I have never been a fan of consolidation which ultimately sealed radio's fate but radio's problems today started before greedy owners, Wall Street money people and Steve Jobs.

Now, radio is in its twilight -- as are its most ardent fans, the baby boomers.

The iPod was inevitable because once technology paved the way, radio had already become an iPod -- a portable jukebox with a lot of baggage.

Music with little personality.

Too many commercials, promos and clutter.

Before I switched formats at one of the Philly stations I worked for right out of college, it was automated -- Shafer automation. We were trying to kill radio off that early but our memories have become clouded. Yes, the radio industry was not satisfied dodging the bullet of a new medium -- television -- it wanted to be an iPod long before it was possible.

Radio news got stashed on the all-night show. Then less news and finally no news.

The all-night show went. First on weekends. Then to network syndication. The cost cutters were at work decades ago.

Local radio became less local -- more national syndication and eventually voice tracking.

The last hurrah was the morning "Zoo" personality programs and Howard Stern. Radio's legacy may be that Howard Stern was its last great personality who ironically defected to its arch enemy satellite radio.

I get into all this because 2008 is going to be another year of change and great disappointment for radio.

Radio will not recover its listeners or advertisers. In fact, it is going to lose more of both. How do I know? Clear Channel which goes private in a few months is already taking more and more stations away from live personalities and implementing voice tracking. The formula Clear Channel station is being developed for these geniuses at Lee and Bain.

Clear Channel has done a lot of things to help bury the radio industry and they are not through. Major dayparts in small cities like New York are going with voice tracked personalities.

And you can't even use the word personalities and voice tracking in the same sentence because voice tracking is boring radio. Just what you need when the next generation is leaving you.
Brilliant!

Many remind me that radio survived television so it will survive the digital revolution, too. I imagine anything is possible, but don't bet on it.

For radio to find a place on the entertainment spectrum it needs to not be a poor imitation of an iPod. An iPod is better. Your own library. You control it or don't control it. And it's no worse than voice tracking. As I said, it's better.

Radio must challenge itself to be something very non-iPod. One of the things I do for radio companies is to help their people brainstorm new formats. You know what happens? They can't seem to come up with any?

Surprised?

I'm not.

But Gen Y students -- the next generation --- have no problem. It's just that you won't like what they come up with.

Because it isn't radio.

Radio stations want to be in charge of programming but the next generation also wants to make user-generated content (i.e., YouTube, mashups, etc). These two things are in conflict.

Radio stills works with boomers and Gen X, but there's no growth without the digital generation.

To put it in perspective there are approximately as many Gen Yers as there are baby boomers. That's how important the next generation is.

Which leads me to my point.

For radio to have even a small chance -- it can no longer be radio.

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Hy Lit, Radio Star

Legendary Philadelphia radio personality Hy Lit died Saturday at 73. He had come down with Parkinson’s disease ten years ago but cause of death was complications from knee surgery.

What follows is an appreciation of this larger than life radio star but it is also an understanding of why today’s radio is on the decline and what needs to be done to turn it around.

I’m not saying return to the past. I never say that. I know too well from my experience working with the next generation. But Hy Lit had what the iPod generation still wants in an ironic sort of way.

I first met Hy Lit when I was a teenager barely legal and barely able to drive. He worked for my favorite station growing up – WIBG – known then as “Wibbage” Radio 99. I guess I was always too ambitious for my own skin. I wanted to be in radio. I called him and asked if I could visit him at the station. His answer. Yes.

When I graduated from Temple University I had the good fortune of getting a job at WIBG and being on the same staff with Lit and Joe Niagara, the other radio legend who died a few years ago. Later, I returned as program director.

I remember Hy Lit was every bit the gentleman. A handsome man, the women fell all over him and he was touted as the most handsome dj in the world. Imagine that, my radio friends! He was also connected to the fabric of the city – it’s r&b and soul roots. And when progressive rock came along, he wound up in the middle of that as well.

Hy never met a hot clock he liked. Never really could hit the post in the talk up to the records. Hated the Drake format. He was a personality not a dj like many of the aspiring young djs of my generation. He was famous for his memorable phrases.

“You know Hy, he don’t lie (except now and then between six and ten)”. Personalities in all markets had radio stars like this. Hy Lit was Philly's.

“Choice not chance, go to a Hy Lit dance”. That’s a phrase I found myself using with my USC students recently who must have wondered what the hell I was saying. Choose the best.

Hy made a fortune doing record hops – some nights commuting between two high school gyms (often Catholic High Schools) the way I now commute between Phoenix and LA – except he got rich making his trips. “One dollar for Hyski, one dollar for the Monsignor” as we used to joke.

Hy had his ups and downs. A lot of them. On top. Out of luck. Personal tragedies. An unfortunate lawsuit against CBS' WOGL where he was a fixture for many years. He worked for numerous Philly stations and the CBS PD Scott Walker seemed to coach the best work out of Lit in his later years.

Yes, I was there the day Hyski met Paul Drew at WIBG. Oh my God! You knew that wasn’t going to last. The old school meets the control freak. Lit disappeared again. It was a mercy killing because I worked for Paul Drew and I love him to this day but Hy couldn't do it. He couldn't take the bat phone calls between records and the strict format of the Big 99.

Here’s what I thought immediately after I learned of Lit’s death from my dear friend Joe Benson (listen up, consolidators):

1. He was the first man I ever met who had an entourage. Not like Vincent Chase on HBO’s show “Entourage”. Hy’s entourage included people who loved and served him (and he them). Loretta, the larger than life Italian woman who traveled with him to the studio to make sure he had homemade veal scaloppine. (And all of us ate well). His record hop posse. And unlike today, no one got hurt. No one was shot.

2. Hy loved record people. I have seen too many radio types not like their brethren – we all have a kinship whether we like to admit it or not. He hung with promoters, helped them, loved being around them. Period. We could use a little more of loving the business we're in these days -- and that business, by the way, is still radio and records.

3. Lit loved the artists and knew everyone who was anybody. Proof? When the Beatles made their first U.S. tour they stayed at Hy’s house because they couldn’t find a hotel that would provide them the security they needed. The Beatles and Hyski – what a night that must have been. Today, the stars travel in their circles. The label’s “suits” travel in theirs. And never the twain shall meet. It struck me upon learning of Hy’s death that the radio industry was the record industry for better or worse (and we had plenty of both). Label execs: keep this in mind when you turn on your radio brothers and sisters and try to win a performance tax.

4. Hy Lit loved his audience and they loved him. It was genuine. He knew them. They knew him. Today radio is so sanitized that radio people often forget that their audience consists of real people. It's okay to talk to them and know their names -- as Hy Lit did.

5. The djs of Hy Lit’s day had knowledge of the music they played and an intimacy with the artists that made them credible. It’s the single most important thing the next generation tells me that they miss on radio. And it’s the single most important thing that distinguishes a radio from an iPod. We forget. Today I am reminded.

So, Hy Lit goes to that big “record hop in the sky” as Joe Benson says. He joins legendary ABC/Paramount promotion man Matty “Humdinger” Singer who is no doubt still working Jim Croce and Steely Dan records in heaven --- perhaps he toned down his language up there (perhaps not).

I’m not ready for rock ‘n roll heaven yet (hear me, Lord!) but when that day comes I hope that the consolidators don't get there first and do a merger of heaven with hell to cut expenses. That’s one deal that won’t be accretive to “shareholders”.

I hope guys like Hy Lit, Joe Niagara and your favorite radio “stars” from other eras and other markets are there glad-handing, entertaining and loving everyone.

Isn’t that why they call it heaven?

We could have a little more of heaven on earth if consolidators would let their PDs do radio right.

Again, I am not a proponent for returning to the past. Just a fan of learning from it. A few of my readers protest that I am not realistic when it comes to consolidation. That it’s here to stay and deal with it! Okay, let’s say I accept it.

But if the consolidators ever have a hope of their radio investments meaning as much to the audience as it did in the past, take listen to this advice from my lips to their ears:

1. Love the music and the people who make it (and vice versa to the people who play it). We’re one. We’re brethren. We have the same interests.

2. Hire knowledgeable jocks who know the music and know the artists not blathering gnomes who are unlistenable.

3. Proceed with voice tracking at your own peril. You’ll never be as good as an iPod for pure hit music and you’ll never be as good as personality radio by cutting digital voice tracks on the cheap.

Radio is show business.

Notice the word show comes first. And just as in real life, the business follows.

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Don't Tase Me, RIAA

Warner Music Group CEO Edgar Bronfman, Jr. has apparently changed his tune.

He is quoted as telling a GSMA Mobile Asia Conference "We used to think our content was perfect just exactly as it was. We expected our business would remain blissfully unaffected even as the world of interactivity, constant connection and filesharing was exploding. And of course we were wrong".

Is Warner Records wising up?

It's apparent that Bronfman who went on to praise Apple and its iPhone is smart enough to understand that his industry is in deep trouble and he already knows how bad off Warner is. Don't look any further than losing Madonna to Live Nation, the concert promoter.

I want to believe that Bronfman is beginning to get it. That he's rehabbing from the mistakes of the past -- which of course, he helped make.

But.

When Warner finally wakes up enough to tell the RIAA his label is against suing young filesharers, only then am I'm going to know that Bronfman really gets it. Better late than never.

In the words of the South Florida student who mouthed off at a John Kerry speech and was brought down by tasers -- Tell the RIAA "Don't tase me, bro".

Heavy-handed lawsuits are the equivalent of tasing their own customers. The labels need to stop it and get on with figuring out an effective strategy for the future. Suing young people, their parents and the dead is not an effective strategy.

We are all brothers and sisters in this.

The radio industry is connected to the record business. There wouldn't be an iPod without the major labels (and, to be frank, their stupidity).

Radiohead, Trent Reznor and Saul Williams offering fans the chance to pay what they want (even nothing) for free downloads is certainly not a business model. It's more frustration with the lack of progress from the labels. At least it's something -- an idea.

They want the labels to lead.

The labels don't know how to lead.

The big four operate as if they're still living in a vinyl world. As if they can bully radio stations into paying for the music it plays when its tantamount to free advertising after which the labels keep all the profits.

It's refreshing to hear Bronfman saying something intelligent about the sorry state of the industry in which he operates.

But it would have real meaning to his young customers and his own managers who need to come up with something better if Bronfman simply told them to put down the RIAA tasers and deal with the piracy issue in a more humane way -- as if filesharing is actually selling CDs -- which it is.

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Sick Radio

Firing people when they are sick is sick.

The radio industry is sick these days.

Wonder if there is any connection?

I admit I'm not naive about corporate management and I acknowledge that big companies often have no heart. I worked for one of them and I have been an agent of pain.

When I worked for General Cinema, the movie chain that ran some radio stations in major markets, I was forced to tell a widow of one of my young jocks who died of cancer that the company had no death benefits to pay her.

She said, ”I don’t even have money to bury Andy”. I was unconvincing as a radio grim reaper and she lit into me – rightfully so. I was only PD of the station for a few months when I found myself in this position and I was very young. I was also lucky to have the chance to be a program director in the fourth largest market at my age.

Yet all these years I have wished that I had stood up to the pompous asses that were making the decisions and fought for some money to bury Andy.

This is one of the reasons I got into so much trouble with the consolidators when I owned Inside Radio. I reported these kinds of stories.

Most of them seemed to come from Clear Channel, the corporation the press dubbed The Evil Empire. Of course, it wasn’t limited to Clear Channel. Clear Channel was bad enough, in my opinion, in handling its great resources – their employees, but the other radio companies were not much better.

Clear Channel just owned more stations.

During the post-consolidation days I reported on a cancer patient fired when he needed his job most. I also wrote about sick employees who were shown the door when they had health problems. God knows plenty of healthy employees were mistreated on the way out the door.

And, it still goes on although, arguably, not as drastic as it was in the early days of consolidation.

Vince Toscano, operations manager of Clear Channel’s WSUS-FM, Franklin, NJ is being treated for a rare form of cancer when his employer put him on “protected leave”.

That’s no salary but a job waiting when he returns.

Of course, when one has cancer he or she needs money to not only pay the bills but the hospital bills as well. Disability can only take you so far.

I know Vince’s boss and he, along with others, have raised some $10,000 in his name. That's the right thing to do. It's more than we did for Andy.

Vince Roscano is appreciative as he wrote on his web site:

“And now, please let me dispell (sic) some rumors regarding my future on WSUS. Because of how involved this (sic) infection is, I have to go back on disability. I am not sure how long that will take, but we all need to be certain that I am 100% before returning to work - which I can do whenever I am ready. So no, I have not been fired or terminated. But I do want to thank Clear Channel for making it all happen and for all my listeners, co-workers and friends for showing your support. THANK YOU!”

Remarkably, this loyal employee is happy to have a job even if he isn’t being paid while he is fighting cancer.

My dear friend Joe Benson was fired from his job over a year ago after he had a massive heart attack and eventually a six way bypass. His listeners raised in excess of $10,000 for him. His radio job? Poof!

Radio’s willingness to be The Grim Reaper is a black mark on all of us who are involved with radio. It is unnecessary and unproductive.

When you fire a person who is ill, you fire the entire staff. You say to them, this can happen to you, too.

When you devalue a talented employee who is sent packing for whatever reason, you broadcast to others that they, too, may not be valued.

But when you show compassion, you’re also telling your entire staff that you care and value them as well.

I’m not preaching. God knows, I’d like to have some of my mistakes back.

I’m asking.

At a time when radio is starting to decline in listeners and ad revenue, shouldn’t you invest in the assets that got you there?

The radio industry's unwillingness to take care of its own is its cancer.

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SoundExchange Is Right

John Simson, the executive director of SoundExchange, an industry organization that collects royalties for record labels and artists is right.

He wrote in a recent Inside Radio commentary "People should be fairly paid for the work they do".

I think what Simson means is that record labels and artists should be fairly paid for the work they do.

But radio stations should be fairly paid for the work they do -- sell the record labels' product.

In other words, while Simson is trying to put the squeeze on radio stations for additional performance fees, radio stations should be charging the labels and artists for all the free exposure and, dare I say, repetition that radio has always given recorded music.

It's getting dirty out there.

At the Senate hearings yesterday Senators Specter, Hatch and Leahy -- two Republicans and one Democrat -- were described by the MusicFIRST Coalition to be friendly to the labels' cause. In other words, they're being "credited" with admitting that the performance rights issue is important and that something needs to be done.

Here's Alice Peacock's disingenuous and overly cute rationale against the NAB argument in favor of all the free promotion radio is giving the music industry:

"Frankly, the promotion argument sounds a little silly. Last week I bought a pair of Nike shoes. I wear them everywhere—well, except to Senate hearings. With the Nike logo on my feet, I am probably promoting their brand wherever I go. Can you imagine if I decided not to pay for the shoes on the grounds that my promoting Nike should excuse me from payment? My refusal to pay would be called "shoplifting." But radio's refusal to pay artists is called "business as usual."

You see, Nike and other manufacturers get away with putting their logos on almost everything these days and instead of enjoying their free ride I guess they expect it. If consumers refused to wear shoes with a Nike logo adorned on them, maybe Nike would have to actually pay for more advertising to accomplish the same thing.

I always worry when your elected officials say a problem exists and something needs to be done about it.

My answer would be: kick them out of office. (Anyone paying attention here?).

SoundExchange is right that "people should be paid fairly for the work they do".

By the way, Simson's argument that former Supreme's singer Mary Wilson would be able to retire today from the success of songs like "Stop In The Name of Love" which played regularly on the radio is misleading to say the least.

It wasn't the radio industry that screwed Wilson out of her money. It was her record label.

Nice try.

(This guy Simson is playing the terror card better than George Bush. If radio doesn't pay more, poor artists are going to have their incomes attacked. It's the "pay them there so we don't have to earn the money here" argument).

Radio stations have promoted, played, replayed, featured, exposed and nurtured American music for as long as radios have existed.

I remind my USC students that the record industry was hell bent on stopping the free exposure of music back when phonograph records were first played on the air. Many people don't know or remember that the music industry then was also against radio playing their records. The labels thought it was tantamount to giving their music away for free -- not unlike their present paranoia about digital downloading as a curse instead of a promotional tool.

We should have listened to the labels way back then and saved them all that profit!

Should have said, "you're right, we won't play your artists anymore" unless you pay us first. No problem, we'll put a sponsorship announcement on the air and make it all legal.

Over the decades, radio stations have arguably made record labels and artists 100% of the profits they retained from sale of their vinyl and CDs. Radio just got the residue promotional value -- worth something, but not worth watching the labels walk off with all the profits.

Radio let the labels get away with this hijacking of profits that could not have existed without radio airplay.

There are a lot of things wrong in radio these days, but one thing that never varies is that radio stations exist to promote music and artists -- and they receive not one penny for it.

Hell, the labels aren't even good radio advertisers.

So before the geniuses Specter, Hatch and Leahy put their thinking caps on -- a dangerous site to conjure up in anyone's mind -- the radio industry should talk tough and mean it this time.

If the radio industry lets the labels get away with imposing even one percentage point of performance taxes, it deserves to preside over its own demise.

Stand unified.

Don't bluff.

It's high noon.

If the labels somehow win this battle, radio should show them that they in turn lost the war.

Stop playing all music until the tax is rescinded.

Then send the labels a bill for all the music stations have played over the decades -- retroactively.

The record business is out of business the day radio stops playing its records.

And if any wimpy radio people are worried that the labels will turn to the Internet, well, forgive me for laughing so hard. Record labels don't know what to do with the Internet now -- even while radio is playing their music for free.

I have the same piece of advice for each of the warring parties.

Labels, be careful what you wish for, if you get it you'll help kill off the free promotion machine known as terrestrial radio.

Radio, be careful what you wish for, if you get only a small tax on the music you play, the next inevitable step is a tax increase.

The only way to resolve this crisis is to get your "concerned" senators to go back to work on judges, attorneys general, ending the war, universal health care -- you know, minor issues.

Then put both sides in a room with Steve Jobs and he'll tell them how bad it is really going to be for both of them since they will be, in effect, fighting over the carcass of the old music distribution system.

Then, maybe they'll sober up.

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Wal-Mart Records

Is the next generation with their iPods and piracy killing the record labels or are the record labels and their artists killing the record business?

You could make arguments on both sides, but something is killing the business of selling music.

Wal-Mart sold 710,000 of the Eagles new album “Long Road Out of Eden” in the first week. Putting aside lead singer Don Henley’s environmentalism and Wal-Mart’s – well, less than environmentally-conscious policies -- it is the only place you can buy the Eagles’ new album.

And, there’s no major record label involved. It's tantamount to Wal-Mart Records.

Wal-Mart is no Sun or no Chess, because the people there know nothing about music but Wal-Mart knows a lot about retailing.

It’s a pretty huge indictment of the icons running the four major labels that their artists are rebelling, going directly to the consumer (successfully and unsuccessfully) and shaking up the future of recorded music.

Will the day come when a future Britney Spears’ CD will be sold only at Carl’s, Jr?

Don't tempt her.

We already know that Madonna -- in a big money deal with Live Nation -- is not worried about getting future CDs into the hands of her fans. She’s focusing on the company that can help her reap large amounts from touring and merchandising.

Shouldn’t the labels be doing this?

They should. I know. I know. They're not concert promoters. Maybe they should learn. But the major record labels are content to ring up ringtone sales and concentrate on publishing rights while pissing and moaning about digital piracy and variable pricing.

My students often say, “who needs a record company?”.

Well?

Let’s see.

1. Labels aren’t the aggregators of new talent like they used to be (call it cutbacks and consolidation and maybe they've lost their golden gut).

2. They don’t have the influence with listeners who still listen to radio. In fact, the labels are pushing an effort to get their former allies to pay additional performance fees to make up the shortfall for all their bad decisions. This is really going to help, isn't it? Alienate the stations that play your music for free while the labels make the profit.

3. Their big artists are rebelling. Madonna? Big, right? Outta here. Prince – the Clive Davis wannabe – is stuffing free CDs into British tabloids to sell his lucrative concert business.

4. Radiohead fails to renew with a major label and takes it to the digital street with marginal success. Still, all this was unthinkable a few short years ago.

5. The Eagles – a group that knows how to sell CDs – turns to a big box store exclusively because it knows how to sell CDs, too. Where’s the labels?

None of what I am describing is the future of the music business – at least, in my view.

But the reality is music has been devalued by the Internet and digital transport as well as the new age desire of young people to carry one’s music with them at all times. The cell phone and iPod thus become more indispensable than, say, a radio.

The majors have contributed to the devaluation of music (i.e., what a single song or single album can get on the market). They’ve done little to hold up their end. And they have virtually no vision of the future (i.e., digital downloading).

We all know the value of a CD is currently under $10 – a far cry from the heist record labels pulled on their fans for decades.

The standard for a single is 99 cents – set by Apple iTunes store.

But as I view the college campus these days I am getting the feeling that $9.99 is not the true number any more and that even 99 cents per tune is too much.

Perhaps you can see why I firmly believe that the business value of music will continue to decline until it rivals the expense of a single text message. And why I believe that volume will make up for the present higher prices.

Nothing has convinced me the price of music will go up.

Or stay the same.

Not even Wal-Mart and its discounting of the Eagles’ “Long Road”.

CDs are loss leaders for big box stores – to get their consumers in to spend on other more profitable items.

Unfortunately, CDs are also loss leaders for record labels who are hell bent to go down with the ship that won’t take the life raft it needs – the Internet -- and dive in to uncharted waters.

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The Radio Fire Sale

It’s getting desperate out there.

KWLI in Denver reportedly heard its local Sales Manager go on the air and beg for new advertisers. Listen here.

It’s not the first time that radio stations have done ads to attract local retailers as advertisers – just an inappropriate way, in my opinion. The intentions were no doubt good. You can't blame the station for trying.

Even Sirius Satellite Radio is running ads (on it’s so-called “non-commercial” music stations) aimed at shareholders trying to convince them of the importance of returning their proxies to approve the merger with XM. Maybe you should call it a promo. Radio people see a distinction between promos and commercials. Listeners don't.

I can remember doing the Drake Top 40 format under legendary PD Paul Drew in Philly. Two curious elements of the format deserve some discussion.

One, that the word radio never be uttered on-the-air.

Second, that pitching for advertising on-air was not allowed.

First, the word radio.

Drew reminded the jocks that we were “The Big 99” not a radio station. Anyone could be a radio station, but only we could be “The Big 99”. The same was true of other very successful Drake-formatted stations – the solution for clutter 40 years ago.

I would never mess with the “chief”. If Paul Drew said don’t say radio, I’m there. And I had no problem with not pitching retailers on-air for business. In fact, I was proud not to be a salesman while I am trying to entertain and inform. Nothing personal but sales people sell and talent entertains. If someone on the air is going to sell, the sponsor should pay them to do it.

Years later as a PD I followed the same rules often getting into verbal fist fights with sleazy sales managers (we had them then in those days -- one I worked with earned the nickname "The Snake" -- guess why?). Sales people are pros today -- and they should be. But pitching spots as entertainment is an act of desperation.

Radio is an industry that is dying from self-inflicted wounds. It's true a new generation has left for the digital frontier but radio stations obsessed with consolidation made it awfully easy for them to leave.

As I reported recently when my students reminded me that NPR was not “radio” (meaning it was far and away better), it reminded me that the radio spectrum is a delivery system. We seem to confuse the delivery system for content today.

In TV, the networks want to be YouTube so badly. They want to deliver content and collect fees. They’d be better off being HBO and concentrate on content.

Radio is holding a fire sale.

Buy ads. We’ll prostitute our prices. Just buy.

Make the programming better (i.e., invest in it -- don't just cut back) and cut the spot load to a lower number -- whatever number makes you money and gets you a reasonable rate.

As in real life, the consumer wants to make the choice to buy. They don't like to be sold.

Radio would be wiser to give listeners and advertisers something they choose to buy rather than something that is constantly being sold to them.

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Radio's New Litmus Test

There has been such a big stink in the radio industry over adopting the new Arbitron Portable People Meter ratings system that it is easy for the real issues to get lost in the controversy.

There is no doubt radio needs to adopt, support and, yes, improve the PPM methodology. The potential is there for curing the under reporting of radio stations and at the same time the risk exists of inaccurately reporting certain formats that are popular with specific demographics. Still, the PPM is the future.

But I have a litmus test, if you will, for a radio station's real popularity that has nothing to do with Arbitron diaries or new technology.

Imagine for a moment that your station had to support itself like a non-commercial public station does -- by soliciting donations from happy listeners and willing corporations and sponsors. Not just spots.

Don't lose that thought.

So, if your station turned to its listeners tomorrow and said support us because we're your lifeline to -- blank (whatever you do so well that they would give donations to you), would your listeners do it?

I'm guessing no.

Public radio has no other choice.

It has to have high (approval) ratings from its listeners because the stations ask their listeners to help fund operations. These stations have to be seen as critical to the community because they have to go to sponsors and corporations and seek grant money for local shows. (I'm not talking about the national beg-a-thons here, just the local ones).

It's remarkable that public stations -- available to everyone for free -- can attract donors who will support them nonetheless. This means they are filling an important need in their communities, in their niches, in the lives of their audiences.

Could commercial stations say that?

Of course they could say it, but I doubt that they could even begin to get donations because most commercial stations are either glorified iPods with inane djs or outlets for national programming that makes little sense to the successful radio mantra -- local, local, local.

In the months ahead, watch the radio industry commit suicide.

The consolidators inspired by the folks at Clear Channel are cutting expenses and reducing their staffs in anticipation of more trouble ahead. The outlook for radio in 2008 is bleak. Seven years of erosion and poor prognostications for the year ahead in audience and billing. That's not me talking -- it's your few remaining Wall Street analysts who cover radio.

Still, these operators are heading for the hemlock at record speed.

You see Citadel's Farid Suleman getting ready to offer up Don Imus for syndication early next year. Just what a hurting local radio needs -- more national programming aimed at old people. The lunatic fringe talk show host Glenn Beck has been offered something like $25 million including incentives to spew his venom all over radio for the next few years.

Smart. Really smart.

Radio continues to be a safe haven for blow-hards who mindlessly shout from the right and shout from the left. They have one thing in common -- they shout. Just what a dying radio industry needs. So what do we do? Sign on for more of the same losing formulas that got us into trouble in the first place.

Back to the litmus test.

What is so great about the public radio approach is that it keeps operators in tune with the audience. If they can't attract listeners willing to support them, they cannot operate. In commercial radio, Wall Street props up many losing ideas and formats in the hope that they will return a profit. These stations are out of touch with reality, but then Wall Street was never reality, was it?

I'm not suggesting that commercial radio stations stop carrying commercials.

Okay, maybe I'm saying they should carry four an hour and charge a lot for them (don't kill me, it would work -- ask Peter Smyth of Greater Media, a proponent for tightening inventory and raising prices).

What I am saying is that commercial radio doesn't have to become public radio, but it should think like public radio.

Would enough of your listeners and sponsors support your station even though everyone can hear it for free over the air?

Well, would they?

Then, my friends, you have the best ratings you could ever wish for -- a franchise where you are valued not devalued as is fast becoming the current trend in radio.

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The Idiot Prince

I'm loath to call people names so let me apologize for calling one of the music industry's true icons an idiot.

But when you threaten to sue thousands of fans over trivia such as using pictures of their Prince tattoos, what else could you call him?

The RIAA must be salivating.

Suing fans -- cool.

Prince's lawyers have the nerve to demand removal of all pictures, images, lyrics, album covers and anything linked to Prince's likeness. These flunk outs from Dale Carnegie's human relations course are also demanding details on how these criminals are going to compensate his royal arrogance.

The unpronounceable love symbol has committed an unthinkable act against the consumers who buy his products, attend his concerts and make him rich.

So you think we don't have problems in the music business?

And you think record labels have a monopoly on stupidity?

Think again.

This is a talented artist who recently sold out 21 venues in the U.K. and who gave away his latest CD to concertgoers and to readers of the London tabloid The Daily Mail.

It's uglier yet.

His fans -- the ones he's threatening to sue -- are threatening to fight back.

A coalition was formed called Prince Fans United (I'm not making this up) representing three of his biggest Internet fan sites. They vow to contest the Prince legal action on the basis that it is an attempt to "stifle all critical commentary about Prince".

Now it's going to end up as a smackdown.

I can't blame the major labels directly for Prince's ridiculous behavior, but it sure looks like the little guy who fought the majors so publicly has become the majors he fought so publicly.

So, let me negotiate a settlement right here in Inside Music Media:

1. Prince -- you need a time out. Go to the corner and start counting your money. (You can give some of it away to help prevent the genocide in Darfur or back global warming initiatives -- research shows the record buying public likes artists that have causes -- other than themselves).

2. To Prince's lawyers -- go work for the RIAA. They are the main suer-in-chief for consumers. Don't waste your time with a lightweight legal wannabe like Prince. Step up to the big time.

3. Prince -- check in to Promises out here in Malibu. Nice place. They help cure addictions so maybe you can take a 12-step program to cure your addiction to ingratitude.

4. Housequake.com, Princefams.com and Prince.org -- I'm printing your names here -- you go fans! Fight the ingrate in court if necessary. Teach the master of symbols what a "$" really is and how he got his -- and hold him up to public ridicule deservedly for his selfish, needless acts. Then, merge with Britney Spears' fan club and fix his ass. Even with all the stuff surrounding Britney, to her credit, she never spits in her fans faces.

And remember this.

It's 2007 not 1999.

Music has been devalued to 99 cents a song -- at best -- when it is not worth zero through piracy.

The music loving public doesn't have to pay for your music and doesn't have to attend your concerts.

Be careful or else the next generation will turn you into an Alexander Haig avatar and spank you until you realize that they are in control now -- not you. (You remember Haig -- the ex-general/Secretary State who said he was in charge after President Reagan was shot -- without consulting the constitution).

The torch has been passed.

Prince -- we love your music -- but we don't need to buy your music.

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Radiohead's Tip Jar Is Empty

The election is over and the results are in.

No, Hillary didn't beat Rudy and Rudy didn't beat Hillary.

Radiohead beat itself.

Nice try. Radiohead deserves credit for doing what the labels refuse to do -- innovate. They are still very cool for trying.

The British band let fans decide how much to pay for a digital copy of their new release "In Rainbows" and most of their loyal, loyal friends decided to pay...

Nothing.

That's right. 62% downloaded the music free during a four-week period last month proving once again that the electorate has given the music industry a mandate -- lower your prices.

On the positive side -- if you could call it that -- 38% elected to pay an average of $6 according to results from comScore Inc.

Radiohead released its seventh studio album to the public in a controversial and creative move because it's major label contract expired and they chose not to sign a new one.

About 1.2 million people visited Radiohead's web site. Some 40% of US residents reportedly paid for the music -- averaging $8.05 per album (outside the US -- 36% of the fans paid an average of $4.64).

What does this mean?

1. The majority of downloaders are freeloaders. Who don't know this -- as we say back in Philly. Now there's more evidence.

2. Fans are fans if they get the music for free as opposed to fans in past eras who voted with their wallets at the record store. Times have changed. Music is a commodity like -- well, like text messages.

3. Radiohead will probably sign a contract with another major record label. Why? Well, you can't live in the lifestyle that you have become accustomed to unless you generate revenue. How good is Madonna looking now, by the way, now that she sold herself to Live Nation.

4. Steve Jobs is right. A cut is worth 99 cents for the convenience factor alone. An album is worth $9.99 online if you must own it and the majority of people must not own it. But 99 cents is an absolute highest price point. A tune in the days ahead must be cheaper or piracy will explode.

5. Britney Spears may be smarter than Radiohead as it turns out. She just had the number one single. Now, a #2 album (which had been designated number one before Billboard revised its chart policy). The Spears album isn't half bad. The popular press is ridiculing her constantly and the wheels are coming off of her so-called life. But Britney has a record label paying her support bills.

Some 62% of Radiohead's fans stiffed them at the tip jar.

100% of AT&T's cell phone customers pay them every time they text message someone.

Is it getting any easier to see the solution?

Music is priced too high. The marketplace is speaking and no one is listening.

Music for the price of a text message -- addictive, compulsive and easy to collect.

Now that's money in the bank.

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The CBS Radio Turnaround

Last week CBS CEO Les Moonves revealed his company’s latest financial numbers. The radio industry has been declining, but Moonves was still optimistic about his radio division in spite of continued losses.

I think this is one of those times when you can believe the CEO.

I must mention that I like the people at CBS Radio and I have many friends there. I’ve known Radio President Dan Mason forever. Always liked him. He’s the real deal. So you may want to take some of this into consideration when you read why I’m bullish on CBS Radio. On the other hand, former CBS Radio President Joel Hollander was always very nice to me, but I didn't think the direction he took the company was right. I sure haven’t been afraid to speak out on some of the detrimental moves he made during his tenure at CBS Radio.

When it comes to pure terrestrial radio, here’s why I like what I have been seeing at CBS:

1. Mason is targeting listeners who are available for terrestrial radio formats – Gen X and baby boomers. It would be nice to start youth formats on, but the youth market is not available to terrestrial radio. Online, yes. On mobile devices, yes. Not radio.

2. CBS Radio is methodically restoring proven music formats to its FM stations – some ravished by Free FM talk. Free FM was the brainstorm of the Hollander team. It neither resonated with the available listeners nor advertisers.

3. The return of WCBS-FM was not just righting a wrong, it was a statement. Mason was saying, in effect, CBS made a mistake to write off an oldies station that was so beloved in New York City and that he wasn't afraid to admit it. The old regime thought the oldies format was long in the tooth and switched to Jack (“We play what we want”). Mason knew from his programming experience that WCBS-FM which still had a large, faithful audience wanted to hear what they wanted. He gave it to them and CBS-FM started regaining its former listeners according to Arbitron.

4. The turnaround is not based as much on the past as it might seem. Note that CBS-FM plays 80’s music with its 60’s and 70’s library and the ratings show they are getting away with it. Translation: the audience was indeed open to freshening up the sound as long as the station they loved survived basically in tact.

5. Long overdue structural changes have been made to management resulting in a trim line of command with Mason taking the most responsibility for the largest markets. Yet, CBS Radio didn’t fire everyone who was removed from corporate responsibility. Many were reassigned – comforting in an age when consolidation has made people expendable.

6. The People Meter bodes well for the format changes. Imagine the ratings on CBS-FM once the first PPM ratings are release in the next few months. PPM is about the future and the formats that Mason is slowly revitalizing on the air will likely benefit greatly with larger cume listening numbers.

7. Changes in selling CBS Radio are also underway. Check out the recent moves by Mason to get that element of his plan ready to take advantage of increased ratings. A good programmer knows that great ratings mean nothing without great billing.

Challenges remain.

I would caution not to assume that the next generation will listen to terrestrial streams on the Internet. The next generation I have come to know wants shorter forms of programming it can toggle back and forth to. No one I know in the terrestrial world understands the Gen Y “listener”. So once terrestrial radio is fixed and audiences have been restored, the move to Internet content will not mean simply streaming the stations.

I am convinced from the work I have been doing with the next generation at USC that there are about ten caveats that must be heeded.

HD radio is also a white elephant. It is a flawed concept – too little, too late. Wasting time putting streams on a radio that is not likely to be available to listeners unwilling to buy an Hd radio is a waste of time and revenue. HD would be better turned off or at the very least ignored by terrestrial stations. That’s what listeners have chosen to do with it.

The mobile future must be addressed now. Changes are underway that will soon captivate a generation – the one radio lost while consolidating. The iPhone, Sidekick, Blackberry Pearls are already fascinating Gen Y as they sign up for smart phones. Google is planning a 2008 release of its version of the iPhone and anything Google does cannot be ignored.

Terrestrial radio is still a good cash flow business if it is directed at the available audience.

But radio will be a relic if it simultaneously fails to fully understand and keep up with the radio of the future – the smart phone.

CBS is putting on a clinic in terrestrial radio.

Will it lead in tomorrow’s radio as well?

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EMI: Crackdown or On Crack

The new owner of EMI is talking tough.

He is threatening to drop artists EMI believes are not working hard enough.

Come again.

Not working hard enough. Since when do talented artists have to work hard? Don't they just have to exhibit their talent? Like, in the form of an album. Maybe even a hit album.

Of course, the new owners are also threatening to overhaul the pay packages of their own executives. I'll bet they're really afraid.

In most other industries where a segment has lost market share for the best part of seven straight years, they would have been outta there by now.

But let's get back to the scary notion that to make a better record company, you don't have to make better records. You just have to have the talent work harder. That presumably helps the label make more money.

These new suits are threatening to withdraw their stars big contract advances if record sales disappoint. Now that will really turn the new EMI into a powerhouse. Go tell it to Coldplay, Kylie Minogue or the Stones.

Terra Firma CEO Guy Hands is quoted by AP as saying EMI would be "more selective in who we choose to work with " in the future.

Right back at ya!

Hands claims, "While many spend huge amounts of time working with their label to promote, perfect and endorse their music, some unfortunately simply focus on negotiating the maximum advance...advances which are often never repaid."

Whose fault is that?

Just when you think the music industry has finally bottomed out, it hits a new low for not getting it. Then, this -- a cockamamie plan to make artists work harder.

While artists today are becoming marketers and getting more involved in their branding, most need to make good music. In the hey day of the music business, talent not a corporate work ethic made for good recordings.

This attempt at work ethic is just a poor excuse for bad judgment.

It used to be that the artists were smoking something when they recorded music. Now it's the other way around. The folks who run the record labels are on something serious.

1. The labels are losing CD sales and haven't come up with a strategy to succeed in the digital world.

2. The majors still have not fostered the "next trend" after rap and hip-hop. Why? In part because they have lost touch with their customers.

3. Suing your customers to deter illegal downloading -- now that's a smart move. It hasn't worked and if they climbed out of their bunkers long enough to see that illegal downloading is growing faster than ever, maybe they'd get back to recording music people want to buy.

The record business is dying.

There is no new trend in pop music.

Top label execs are so insulated from their problems that they continue to receive insane compensation packages and what is the best the new owners of EMI can come up with.

A crackdown on their own poor management.

Do you still think it was Apple that destroyed the music business?

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The Wall Street Bullies

The Philadelphia Flyers hockey team has been and still is known as the Broad Street Bullies -- named after the street where their hockey rink is located and for their rough style of play.

In radio, it's the Wall Street Bullies. The investment banks and radio CEOs who have sold their radio privileges for riches beyond their level of talent.

The Broad Street Bullies fight with their fists.

The Wall Street Bullies fight with their knives -- the ones that slash station budgets to the bone.

Need a recent example?

Here's how not to rebuild radio into a competitor for increased audiences and more advertising:

"CLEAR CHANNEL/LOS ANGELES Market President GREG ASHLOCK has announced that CC/L.A. VP/Programming MICHAEL MARTIN will add the PD duties at Modern AC KYSR (STAR 98.7), and will maintain his current responsibilities as VP/Programming for the LOS ANGELES cluster of radio stations. He's replacing current STAR 98.7 PD CHARESE FRUGE. Concurrently, MARTIN announced that sister Top 40 KIIS-FM APD/MD JULIE PILAT will add those same duties at STAR 98.7". (From Joel Denver's All Access)

More cutbacks.

More dual responsibilities.

More pandering to the bottom line.

The big and outrageous difference is that the Wall Street Bullies are not roughing up their competitors -- in fact, they are doing a poor job competing with both traditional and new media.

There is one major problem. The Wall Street Bullies are beating up their own teams!

Brilliant! The radio industry is not likely to recover from its long decline any time soon. In fact analyst Jim Boyle says it's been seven years of little to no growth for this sector with an eighth year likely in 2008.

If you're an investor, lots of luck.

If you're an investment bank you know you've got more paydays coming from selling off some or all of the assets in the future once you cut them down to the bone.

If you're a radio executive, talent or sales person, it's another wake-up call that you may want to reinvent yourself in another industry.

Or, you can fight back.

For all the money that has been invested, cutback or wasted, radio never seems to learn how to rebuild its teams into a modern day contender. The little iPod, the kids' Internet, the record labels' greed, the cell phone manufacturers' good luck are killing radio.

Let me direct you to one of my favorite topics -- ice hockey.

The Philadelphia Flyers are my team. I now live in both Arizona and California and yet I still have four season tickets to every game back at the Wachovia Center in Philly -- including playoffs which the Flyers didn't make last year. In fact, they went from an elite team to the worst in pro hockey all in one God-awful season.

Kinda reminds me of radio. From first on the way to worst year after year with no game plan, no strategy -- not even the right players or coaches (so to speak).

Not so this year for the Flyers. They have rebuilt the team and so far at least sit on top of the standings in their division.

That's with a salary cap that caused the loss of an entire season several years ago. (It didn't work really, but it's in place).

Everyone has to work with budget restrictions. Okay, maybe not Google. But almost everybody. So what? That's not the problem.

The problem is beating up your own players.

I bleed orange and black (the Flyers' colors). I've raised two children teaching them the lessons of ice hockey (and there are many). It has occurred to me that maybe these lessons -- and really, the lessons of any well run sports franchise -- might apply to the radio industry.

1. Cut extraneous salary (whoa! Don't get excited. I haven't crossed over to the other side). Rebuilding takes deciding who and what you want to spend your money on and if a person does not fit into your plans let them go, but reinvest that (and more) when you re-stock your team with star players.

2. Look for role players. The Flyers this year had to improve their defense and scoring. Last year they fixed their goaltending. Isolate the players you need. Are you spending too much on your morning show for the ratings and income return on investment? Not enough? Isolate what you are looking for and redeploy the funds. Try to fill as many of the key positions you need with an impact player or a player with growth potential. All this applies to radio.

3. Reward loyalty. The Flyers organIzation (as it is pronounced in Canada) is as loyal to its former stars as many of their players were loyal to them. When present coach John Stevens was hit in the eye with a puck and suffered severe vision loss as a player, he was immediately told by then GM Bob Clarke that he would have a job with the organization from then on. Contrast this to radio where operators fire employees who have cancer or other problems. (I'll tell you more about the latest cancer victim fired while undergoing treatment in a future piece). Loyalty breeds winners.

4. Choose a leader who fits your players. Nothing is worse than assembling a group of talented people and then injecting a GM or PD or GSM who doesn't hold the keys to unlock the talent. This happens all the time in radio. In fact, during the rampant cost cutting created by consolidation, mismatching management with talent has become commonplace. The Flyers now have a less authoritarian coach then Ken Hitchcock -- a Stanley Cup championship coach who they fired last year -- because their young players couldn't relate to his "my way or the highway style".

5. Work ethic is both inherited and taught. I used to tell my kids when the Flyers were losing that "Flyers never give up". Of course, I have some of the same traits. So do they. My son has built the number one AV publication (AVRev.com) through brains and hard work. Hanging in when things get tough is something money can't buy. I used to wonder how all the 4.0 graduates of my college never amounted to anything -- they are so smart. Fortune Magazine did a survey a number of years ago and found that the average grade point average of a Fortune 500 CEO was C+! When I owned Inside Radio and worked into the evening on Friday nights, I used to joke that while my competitors in LA are having cocktails I am outworking them in Cherry Hill, New Jersey. Obviously, it paid off.

6. Crave competition. In radio these past few years, people sound like they are defeated. Just because their bosses have gotten them into this fine mess doesn't mean that they can't fight on. Okay, here it comes. The hockey and fighting analogies. Hockey teams -- especially the Flyers -- can also play rough (playing dirty is another thing and it isn't good). In radio take on the competition (which is not satellite, but the digital world in which radio has a weak presence). Hockey is a great example. Play hard. Defend your turf and your team. Play smart. Don't allow anyone or anything to push you around. And for goodness sakes stop talking about hanging on for a few more years until your kids are out of college or you can retire. Playing tough does not make you a poor sport. In fact, it's the opposite. After each playoff series -- usually hard fought and physical -- hockey players line up and shake the hands of their competitors. They respect them.

In hockey you need skill, finesse, instincts, good conditioning and a work ethic.

In radio this would be the definition of a come from behind victory and we're in the final period.

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