Taking Seth Godin's Advice on Radio

I've always liked Mark Ramsey. He's uncommonly bright and is one of the go-to people for helping you figure out how to live in the future.

Mark's Hear2.0 has an interview with Seth Godin, best selling author of Permission Marketing and now The Dip.

Godin describes The Dip like this "most of the things we set out to do in our lives are controlled by one of two curves. Most things are dead ends or cul-de-sacs. They are flat paths. They’re hamsters on a wheel - somebody who is doing the same thing every day pushing along, pushing along, but never breaking through. But a few things are controlled by “the dip,” and the dip is the screen, the filter, the thing that separates those who are scarce, the professionals, the superstars, from the masses, from the amateurs."

What Ramsey did -- and this is worth going to his site and reading it all -- is asking Godin about radio vis-a-vis "The Dip". Godin agrees that radio is on the decline. Taste a little of his reasoning:

"If you are running a radio station with the consultants and the conventional wisdom and trying as hard as you can, you need to ask yourself an honest question, which is: Is it likely to ever be any better than it is now? Meaning, is satellite radio going to become less popular? Is Internet radio going to become less popular? Are people going to find fewer things to do when they’re in their cars?

I think the answer to all of those questions has to be “no,” that traditional, terrestrial radio is a zero-sum game. In fact, it’s worse than a zero-sum game. It is clearly headed towards a dead end. There’s no dip ahead. There’s no breakthrough that’s going to occur.

But, you have all these assets. You have advertisers. You have access to creators of content like record companies. You have access to some listeners. Why not use those assets, use that leverage to build something new where there may very well be a dip. If I ran a radio station today, I would say, 'How do I get every one of my listeners to sign up so I can have a direct relationship with them by phone and by email? How do I learn what their zip code is? How do I discover what they’re interested in?'

Because if I could do all those things using the assets I have now, I could find a new dip and get through it. I could be the go-to source for where listeners should go when they want to party, where they should go when they want to go out for dinner, where they should go when they want to buy a car. And if I use the stepping stone of my terrestrial FCC license to create something new, knowing that I’m going to quit radio as soon as it’s done what I need it to do, then I can move forward, find a dip and build behind me a moat, a valley of death, a dip so deep my competition could never get through it."

For those of you who read me regularly you know that the future of terrestrial broadcasting is in question due mainly to the fact that the next generation which hasn't fully impacted broadcasters yet is rejecting radio. Part of their reasoning is that "it sucks" -- and we have heard that many times before from young people.

But now they have lots of alternatives -- mobile phones (and soon the iPhone that promises to change everything as a mini-computer and entertainment center), the Internet, music downloading (legal and illegal) and social networking.

I am more convinced than ever after my recent years teaching at USC that this move to mobile Internet is permanent and is just beginning. Radio does not fit into their lives.

It isn't that they dislike radio -- it's not the analog nature of it -- it's the programming! And radio operators living in their world of denial think that everything is okay because their business is still a pretty damn good free cash flow enterprise. In other words, it hasn't gone to hell in a hand basket -- yet.

The Godin interview prompts me to think about what's next. The time is coming when we're going to have to go to a higher power (probably Wall Street) and tell them that our business is changing and that we have a new business developing.

But we don't -- at least not yet.

HD radio is not a new business. Hell, stations won't even invest in its programming.

Youth formats are worthless on radio because young listeners are on their computers and cell phones. And if we continue in denial any longer our cellphones and computers will merge (it's happening now) and a radio will look like a typewriter -- an unrecognizable relic from the past.

Radio dabbling in the Internet space is nice, but it's not a business. Don't waste the time and money.

The future of radio (and I could do hours on this) is creating content for the mobile Internet space.

Sounds good, but not easy given most radio broadcasters are still in denial and don't understand the sociology of the next generation. They get the technology -- that's easy. It's the people stuff.

What I want to do is create the morning show of the future -- no -- the morning shows of the future and I won't deliver it over the radio. I have a better way.

What I want to do is not stream new 24 hour formats on the air -- young people consume their media through time-delaying devices like TiVo (it's just starting but it is major). You can stream your terrestrial signal to existing listeners -- that's not what I am talking about. I'm headed to the delayed listening content business.

What I want to do is create content for social networks because social networking is, in my opinion, more significant that any technology you can name. More and more you will see small groups of like-minded people communicating with each other. Broadcasting is so 1920's to them.

The largest radio group of tomorrow won't own 1,100 stations. It will own 10,000 streams of non-terrestrial entertainment and information content delivered using the latest technology at the time.

We should all live long enough to see a nationwide WiMax network to allow constant connectivity to the Internet. In spite of the long delay ahead in bringing this enabling technology to the marketplace, there is lots that can be done in the meantime.

If you're searching for "The Dip", look beyond your towers and transmitters. That's what I'm doing. This is a business I want to be in.

Do you?

For those of you who would prefer to get my daily posts by email for free, please click here.

Bill O'Shaughnessy -- The Original Social Networker

I love this man.

I have known him a long time going back to the early days of Inside Radio when he offered wise advice and counsel. I still consider him my Irish consigliere.

When I married my wife, Cheryl, in 1998 he and his beautiful wife Nancy (shown here with Bill) were there as Pennsylvania Governor Ed Rendell married us at the Four Seasons in Philadelphia. O'Shaughnessy provided the "smoothies" who made the music as only he can. And can he and Nancy tear up a dance floor!

This is my way of saying I cannot be objective about Bill O'Shaughnessy, but I remain observant.

In all my years in broadcasting this fellow is one of the few who gets it.

Long before the kids invented the term social networking, he was a social networker. When radio got all full of itself during consolidation he was among the few (but the most eloquent) voices to remind us that radio is best when served locally.

Many of you know the colorful owner of WVOX in Westchester, NY, but those of you who don't, let me paint a picture.

He's been running two small local AM and FM stations for a long time. His research is done through direct contact with his community. He has no set agenda. He's a Republican who counts former New York Democratic Governor Mario Cuomo as a friend. Governor Cuomo is a fierce defender of our journalistic and broadcasting freedoms. So is O'Shaughnessy.

He sees himself as a "permitee" not a license holder. Someone forgot to tell O'Shaughnessy that consolidation changed everything in radio because it didn't change anything for his stations in little but affluent Westchester, NY. He personally does editorials on the air. He hosts talk shows. Advocates for both the little guy and big guy equally.

Forget the Arbitron Portable People Meter. He doesn't need it for his two small stations. You should read the "rating book" he publishes for his advertisers with hundreds of testimonials from people from all walks of life. No numbers. No meters. No expense other than paper. Z100 couldn't live without ratings, but his two local stations can.

You could say Bill O'Shaughnessy is a throwback to another era and you would be correct.

But O'Shaughnessy has also seen the future. And I don't think he gets the credit for that.

While Clear Channel sells radio stations for fun and profit, O'Shaughnessy knows that the sooner small, independent operators regain control of broadcast radio, the sooner they can improve its content and eventually join the Internet generation.

Ask young people what they hate about radio -- and many do hate it -- they'll tell you consolidation and the programming it has spawned. They don't hate radio -- even though it is so analog and so retro.

To the extent that the monopolies of consolidation can be broken up or at least whittled down, the greater the chance radio can save itself from its apparent fate -- irrelevance in a digital, Internet world. With O'Shaughnessy's way, it's literally back to the future.

Gen Y loves social networks like YouTube, Facebook and MySpace because they still create local communities. They're big (YouTube owned by Google, MySpace by News Corp) but their focus is local. While the radio industry ran off and had a disastrous affair with consolidation, O'Shaughnessy remained loyal to his own type of "social network" -- the ones he pioneered on the air.

It's called local radio.

FCC take note.

Congress listen up.

When radio becomes too big a footprint it falters. That's because radio works best when its focus is local. I got a kick out of the new NAB when I heard that it prefers "local radio" over the term terrestrial radio.

If only it were true.

I believe that if today's radio remained local, it would not be on its current decline.

Before radio executives look to the Internet for their future they should get back to local radio and create the social network built around the radio station. Then, introduce the Internet for contact with listeners and marketing with advertisers. Then create niche contest for segments of your terrestrial social network and do it online.

The Internet can be part of their future, but servicing the local public interest, convenience and necessity is the formula that still works today and it must come first.

For those of you who would prefer to get my daily posts by email for free, please click here.

Next After Silence

The "Day Of Silence" in support of more equitable copyright royalty rates charged to Internet streamers went off remarkably well yesterday.

Kurt Hanson's RAIN reported that massive listener support crippled servers and switchboards at Congress -- the ultimate target of this protest.

There was significant support for the "Day of Silence" from Internet broadcasters particularly but not limited to the large companies that have the most to lose July 15th when the draconian new rate structure is to be implemented.

I was not impressed that many, many streamers ignored the call for support. This confirms that these folks are not too smart because they ultimately will be paying rates that they probably will not be able to afford. Just as in any movement, the ones who could benefit most from change, remain silent.

Most terrestrial radio groups just looked the other way. Greater Media, Cox, Lincoln Financial and a few independent operators like Jerry Lee's WBEB, Philadelphia got on board. Never forget that these non-participating radio groups are the geniuses who tried to sell you HD radio -- so much for being able to see the future.

So what was accomplished?

Whenever you can rock the servers and switchboards of Congress, you have accomplished something. Many legislators have already signed on to support a bill that would level the royalty playing field. But as July 15th approaches it is unlikely that any type of legislation can ride to the rescue.

Unfortunately the cure may not be possible until the disease spreads. Internet streamers have to wake up and understand that they must fight to the end for equitable rates.

And terrestrial streamers have to understand that the CRB rate hike is also about them.

Radio will have to pay much more to stream music July 15th but worse yet terrestrial radio is next. Greedy music industry groups are not going to let terrestrial radio get away with avoiding performances fees when satellite, cable and Internet radio are subject to such charges.

The record industry is shooting itself in the foot as it always seems to do. Radio is declining, the CD is out of vogue and legal and illegal downloading has become the new access route to music. So why not strangle the one growth area that is a slam dunk for promoting music -- online streaming. It's insane!

The radio industry has botched its future since the late 80's -- consolidation was just its excuse to look foolish in front of Wall Street. Boy did radio show Wall Street that it absolutely could not make radio a growth industry even as a virtual monopoly.

And forget about the Internet. Radio did.

The plight of the large and small Internet streamer may get worse before it gets better. Activists are right to target Congress because only lawmakers can save the most exciting growth industry to hit music media since -- well, radio.

Therefore, I favor any approach that targets Congress. You make the non-supporters of fair royalty rates pay by not supporting them. This takes mobilization that can only happen through that great political tool called the Internet.

This is exactly how our representative form of government works. The great majority of Americans support this growing segment of music media. Congress should enable the ability of these folks to enjoy music entertainment online and allow entrepreneurial businesses to prosper simultaneously.

The next "Day of Silence" should come after election day when the politicians who are not savvy enough to see the urgency and importance of this issue pay for it with the ultimate price -- their silence.

For those of you who would prefer to get my daily posts by email for free, please click here.

Talk Radio Is Broken But Works Just Fine

Take an issue -- preferably a polarizing issue like immigration or the Iraq war -- turn it over to terrestrial radio and they beat it to death.

In the process, they quickly sink to the lowest common denominator and insult just about everyone who disagrees with them sometimes ending by questioning the patriotism of those who disagree.

And, of course, they get ratings -- big ratings.

It doesn't matter whether they talk from the left side of their mouth or the right, their listeners are kind of on the older side.

Now let's test my assertion.

Take the issue of Hillary Clinton and Barbara Boxer out to "fix" talk radio. Add one unreliable and biased senator, James Inhofe (R-OK) who claims to have personally heard Clinton and Boxer scheming to find a legislative "fix".

Presto - you have terrestrial radio's talk formula.

Never mind that Inhofe has backtracked on his original assertion or that Clinton and Boxer deny having it in for talk radio.

Oh, and ignore that the Republicans are screaming bloody murder that talk radio is killing them on immigration -- witness the protestations by Republican senator Trent Lott. And you've got all the ingredients for talk radio -- good or bad, win or lose.

Seems like talk radio is coming under attack from the left and the right. Inside Radio cites a report by two liberal groups that says 91% of the local weekday programming on 257 news/talk stations by the top five radio groups is conservative while just 9% is progressive. (Note the term "progressive" instead of "liberal").

What's going on?

How can Republicans attack their own talk radio pit bulls? Why would the Democrats think they could actually "fix" the formula for talk radio? Their razor slim margin in Congress hasn't allowed them to pass very much significant legislation.

Maybe its the fact that California Senator Diane Feinstein is saying that Congress is looking into reviving The Fairness Doctrine. It's all bluster. They don't have the votes. But the Fairness Doctrine is not what is broken about talk radio. It's simply a non-starter with young people -- even old young people.

Why can't we all just get along.

The Republicans liked it when their talkers followed the GOP's talking points. And the Democrats need not worry because no liberal is going to be influenced by Rush Limbaugh no matter what he says.

What we have here is a failure to communicate.

Easy. I'm having a little fun with you here.

I really don't want to see talk radio change.

I think it works better when talkers are conservative. There's something about the liberal message that works better elsewhere -- like on Keith Olbermann's MSNBC "Countdown" or Bill Maher's HBO show "Real Time". And yes, there are some excellent progressive talkers.

While everyone is getting their lapel pins caught in the wringer, we're missing the larger issue.

Why don't younger (I said younger, not necessarily my college students!) listen to talk radio?

And by the way, I listened to talk radio when I was in college. I know -- I know, I was atypical. Heck, all my atypical friends listened, too. And it was great. You know why? There were very few listeners calling in on the air back in the day. We got to hear the host instead of the boneheads that tend to call these stations.

I'm thinking, boy, is the radio industry missing the point. Younger listeners including but not limited to the next generation have the Internet. They don't have to put up with a format that is so transparent.Youg people can have instant input just as you can react to this story by simply clicking and having at it.

They have social networks. They can find like minded people to share thoughts or pick an argument with someone of a different persuasion.

Talk radio is a staple of terrestrial broadcasters. Let's not mess with it (even though I'm sure we'll beat to death the vast right wing -- or is that left wing -- conspiracy to "fix" talk radio in the process. Never mind if it is true).

Don't fix it.

It's broken, but it works just fine for lots of older listeners.

Instead, how about giving some thought to the future. Not Free FM or anything like that -- but the future of talk for younger listeners. Not on HD either because they're not going there.

There must be an encore for talk radio beyond this transparent, predictable format for people under 35 and possibly available as a separate Internet stream.

Once we finishing milking the latest unsubstantiated yet audience-provoking threat to "fix" talk radio, let's fix talk radio ourselves.

For those of you who would prefer to get my daily posts by email for free, please click here.

If Clear Channel Supported The Portable Truth Meter

Over the weekend Inside Radio broke the news that Clear Channel had finally decided to become an Arbitron People Meter client. It's reportedly a multi-year deal covering 50 markets.

I don't know how Clear Channel does this with a straight face. I am going to get sick when I see the trade press coverage today and Tuesday hailing this as a great step. Of course, no one should know more than I do that you don't want to get Clear Channel mad.

Since I guess I never learned my lesson, I've got another take to share with you.

This is all about one company -- the largest with over 1,100 radio stations and a near monopoly over this medium -- shirking its responsibility to lead. Not only that -- using its might and influence to obstruct progress for many things that would have been good for radio after consolidation.

Clear Channel has opposed The Portable People Meter (PPM) from the very beginning. It has done little to help it develop into the modern ratings tool the radio industry needs.

If you were to hook up a portable "truth meter" to Clear Channel executives you'd get an ironic story of resistance, lack of leadership and eventually -- once the ad agencies are on board -- compliance.

Consider that until everyone else signed on with Arbitron's People Meter in Philadelphia -- test market and first market to go live -- Clear Channel brought up the rear and bought the electronic ratings last -- and only in that one market. Clear Channel had to -- the ad agencies wanted electronic ratings and everyone else including the little guys took the lead position and signed their contracts.

Consider that Clear Channel sought alternative rating service bids -- some from mighty fine companies -- in my opinion knowing that they never had a chance. The radio industry has tried several times before to replace Arbitron as their ratings powerhouse, but they failed. What could the number one radio group have been thinking when they threw this monkey wrench into the process at the Eleventh Hour?

Then, you'll remember, Clear Channel complained that the People Meter was too costly.

That's odd, the other groups -- the smaller ones who actually took the lead on electronic ratings -- may not have liked the prices but they ponied up and signed their contracts.

Oh yes, and Clear Channel called the People Meter technology flawed. Guess, it's not flawed any more. I'm sure there is a more diplomatic way to address that issue if anyone can get a straight answer from the radio group that can't shoot straight.

So let me get this right.

Clear Channel fought PPM, threw roadblocks in front of its adoption, came up with no alternative to the outmoded, outdated paper diary, attacked the integrity of the PPM methodology and threw a temper tantrum over price.

Now, it's ready to sign a long-term contract with Arbitron for PPM ratings for its 50 top markets.

You know the real winner here is Arbitron. I have had my moments with them over the years but their unwavering commitment to the People Meter won out in the end and for that the radio industry should be grateful. Radio groups also ought to stop complaining about the increased cost of modern ratings -- a system that will credit radio with more overall listening at a time when their stations need it.

Cox was a complainer. Bob Neil didn't much like the People Meter. But he posed excellent questions and raised legitimate concerns and knew when to fold his cards. And, of course, Cox is not big like Clear Channel.

Radio needed Clear Channel to lead and but instead it followed.

I have never been impressed with Clear Channel's management. I think they were selfish, misguided and they acted too much in the best interest of their company and not the industry in which they became the leader.

Their employees and ex-employees -- well, that's another story. I have great admiration for their professionalism and dedication to stick with owners who in many cases cut and diced, ran an ineffective centralized company from San Antonio, Texas and eventually incurred the ill will of the rest of radio industry. Many of their employees have been and still are friends of mine and I value them.

But Clear Channel -- the consolidated corporation -- has become the name for radio's decline.

It's not completely fair because consolidation was only one of many problems that came together to cause the decline of radio that we see happening right now and that will no doubt continue into the future.

What gets me is this.

Can you imagine if CBS/Infinity or Emmis, AMFM, Greater Media or just about any other company had assembled 1,100 radio stations. I believe things would have been different. Not perfect, but a bit better. It's only my opinion, but this group of out of towners happened to be the wrong people at the wrong time for the radio industry.

Anyway, it's a good thing that Clear Channel finally saw the light and joined the PPM love train.

And, it's wonderful that Clear Channel is going to go private and sell the smaller market stations it can't run (that's why their selling them).

But with leaders like Clear Channel, still a plentiful owner of radio stations after it goes private, the People Meter fiasco offers a lesson for the rest of the radio industry at a critical time.

To borrow a phrase from the late political writer Molly Ivins, also a Texan, "You Got to Dance With Them What Brung You".

In radio's case, that means turn to the "little guys" for leadership -- the smaller operators who actually know what they are doing.

For those of you who would prefer to get my daily posts by email for free, please click here.

Radio's Sounds of Silence

How can so many smart people do so many dumb things.

Take the music industry's move to get radio to pay a performance tax.

Dumb.

Free exposure on the nation's airwaves is what sells music.

The radio industry is up in arms about the possibility of paying such a tax, but they are doing nothing to prevent it from becoming inevitable.

Nothing is what radio has done since the late 1980's -- the Dark Ages of Radio then began.

Radio execs have a hard time seeing the progression of unfortunate events. Satellite and cable radio were forced to pay a fee to broadcast music. And on July 15th the Internet streamers will either be put out of business or will be paying through the nose to the music industry in unfair copyright royalties.

Guess who is next?

But terrestrial radio uses silence in the wrong way aiding their enemies and not helping their brethren Internet streamers. They refuse to get behind the "Day of Silence" this coming Tuesday that would make a huge PR statement to the media and elected officials who are the only ones who can really right the unfairness in the CRB's ruling.

Just one terrestrial broadcaster has agreed to join the protest Tuesday.

Just one. Greater Media according to Tom Taylor's Taylor On Radio Info.

Not even the major consolidators who stream music themselves and who could wind up in harm's way. Maybe they think they'll just let their lobby group -- the NAB -- handle it.

Terrestrial radio broadcasters need to stop their Internet music streams for one day.

Pandora is doing it.

So are the other major online streamers: Live 365, Launchcast, Rhapsody, MTV, Real Networks, AccuRadio among others. These folks will substitute a sound that simulates static instead of playing their streams. Their goal: get people to ask their elected officials to support legislation that would provide fair compensation and avoid the potential end of these music streams as we know them.

Clear Channel is a streamer. Where are they?

How about CBS and the other major consolidators?

Broadcasters have been awfully proficient at talking a good game but now that they're being asked to simply shut up, they can't or won't do it.

Won't? Why not.

Can you say HD radio?

Somehow, someway these terrestrial powerhouses feel that Internet streamers are their enemies and that HD radio is the anointed son of terrestrial radio and therefore immune from such threats. And why wouldn't they think like that? Their lobby group managed to negotiate an exemption for HD radio back in 1995 when it was still a gleam in iBiquity's eye. Nothing sticks to terrestrial radio.

But that's about to change.

The big bad wolf is at the door -- your buddies, the record labels. They're boxed into a corner and when an animal gets cornered they attack. They do the only thing they know how to do -- raise rates or sue (or both). And they're coming after you, too, terrestrial radio.

HD is to radio what the Edsel was to Ford Motor Company -- an ugly failure that consumers never wanted.

Go to radio's fabled retail partner Wal-Mart and see if you can even buy an HD radio. Ask one of their young "sales associates" what an HD radio is and why you should have one? If you buy a new HD radio plug it in try to find an HD station that was worth the investment.

HD radio is not worth it and is not worth withholding radio's support for a unified front against unfair royalties on streaming.

The radio industry is going to wear this mistake on their bottom lines for a long time to come. They are going to have to need a major presence on the Internet through rebroadcasting their terrestrial signals to creating new channels. And when they do, they will be paying the same outlandish rates that are going to force a lot of Internet streamers out of business July 15th.

This is one time when radio wins by not saying anything.

This is one time when Clear Channel can finally put some meaning into "Less Is More".

This is one time when solidarity with the digital world will pay benefits to terrestrial radio companies for years to come.

This is one time when the record labels' march toward performance fees can be halted by taking a unified stand against the CRB inequity.

In other words, actions speak louder than words.

Help Internet streamers help you.

Go silent Tuesday or else stay silent after Tuesday and don't complain when the fate of your Internet future is sealed by your inaction.

For those of you who would prefer to get my daily posts by email for free, please subscribe below:

Subscribe To INSIDE MUSIC MEDIA™ -- It's FREE.

Enter your email address here then check your mail or filter for confirmation

Delivered by FeedBurner

The Pirates of LA and New York

Do you ever get the feeling that the four major record labels can't be bothered with the next generation and their unorthodox ways?

These labels are so secretive, silent and yes, shameful these days while almost everyone else is at least trying something to become part of the digital future.

Their seeming indifference to reality leads us to to butcher a famous Marie Antoinette quote: "Let them eat vinyl".

Look, I don't like theft any more than the labels do.

When I owned the trade publication Inside Radio we used to charge over $400 a year for each subscription to the daily fax of news and comment. I sure as hell didn't like it when managers -- that's right corporate types, executive VPs and station staff -- subscribed to one copy at full price then re-faxed it to all their stations for free. I liked it less when consolidation came along because there were more stations to pirate my only living.

But a funny thing happened on the way to destruction -- profitability. Enough people paid for subscriptions and did not retransmit the content to make me a nice living for many, many years. So nice, Clear Channel paid a premium to buy the company and they're no fools. (Okay, I'm pushing it now!).

But in time I came to learn that the more those media pirates stole my content, the more people became exposed to it and yes, subscribed at full price. They unwittingly made Inside Radio one the biggest brands out there.

It was nerve-wracking in the early days but as I became certain I would not go out of business, it made Inside Radio's billing bigger and it made the business more profitable. (I have to laugh when these fine examples of honor and ethics bitterly complain about stealing).

I never had to lower the Inside Radio subscription price as many of my competitors did to combat such thievery.

In a perfect world everyone would pay for that which they consumed. But this is not a perfect world and has never been even before the Internet came along with its so-called band of youthful pirates downloading music for free.

Some of you think I have been drinking their Kool-Aid during my sabbatical at USC. I've heard it all. They are privileged (many are). They are atypical (many are). They are too young to matter (no, no).

They do pirate music. But they also buy music.

They want to share digital music as they do music from a CD and they will eventually get their way. What's so wrong about the marketplace getting its way?

The real problem the music industry faces is the band of thieves running the record labels.

There are a few key record people who are beginning to wake up. I know them. They are smart. But they, too, are being held back by a lack of vision as to what they can become in the future. I hope they will be able to get out of their comfort zones and shake things up a bit. Take some leadership. Do something other than attack a whole generation of their customers.

But many are clueless. Arrogant. They are sitting out this revolution while young Internet whizzes and the number two computer company are dictating the new rules.

You've seen the Pirates of the Caribbean on the big screen.

Well, these are the pirates of LA and New York. Unsheathing their mighty legal swords aboard the good ship RIAA to pummel grandmothers and kids -- those dastardly music thieves that they are.

The real pirates are the record label execs who serve as no example of ethics or honesty to be sure. They point fingers at a generation they should be marketing to -- not suing. And while they are pointing fingers at their customers they have three pointing back at themselves.

The mystery has been solved.

The youth pirates are stealing their music and promoting it through viral sources and social networks. They are still buying product, merchandise -- they are still supporting live music.

The real pirates are record industry swashbucklers who are hell bent to go down with the ship.

And the treasure will not wind up at the bottom of the ocean because it has already been plundered.

Moral: Just as in my personal example, maybe -- just maybe -- the "thieving" next generation is actually promoting your music and you are preventing the sale.

Ridiculous?

You don't have to look any further than the record industry's latest attempt to charge additional performance fees to their other great promoter -- radio stations.

For those of you who would prefer to get my daily posts by email for free, please subscribe in box on the right.

What If Apple Marketed HD Radio

HD is amazing radio -- the best that's ever been created. Its revolutionary ability to deliver several channels from the same station will bring variety back to radio listening. HD radio combines three products -- your usual channel in enhanced audio, several sub-channels with additional programming and a digital readout to provide critical information. It's an entirely new way to listen to radio and it's available June 29th.

Wait!

I can't do this. I'm playing with you just to make a point.

That exciting first paragraph is inspired by the Apple web site description of their much-anticipated new iPhone due out -- June 29th. I wanted to show how unexciting the savior of radio -- HD -- is compared to the coming of the iPhone.

With the iPhone, Apple even tells its visitors how to get ready to buy. Can you imagine creating such anticipation for this amazing new "high definition" set? The product manufacturers could have started with a more exciting and more descriptive name. HD radio isn't really high definition -- it's high fidelity sort of -- but that term was used a long time ago.

Apple has created a product people really want.

Radio has created a product it really wants.

An HD set that will allow stations to create more stations through sub-channels -- more stations they are not willing to professionally program -- and they want the consumer to go out and invest in this losing proposition.

Apple is taking chances and offering innovation (i.e., a touch keyboard that if it fails will doom the entire iPhone concept, but if it succeeds will radically alter mobile keyboards forever allowing larger screens and pop-up keyboards only when necessary).

Radio on the other hand is asking its listeners to take all the chances.

Go buy a new radio while we fail to invest in programming even at the same level of existing stations. Right now it's even hard to find HD programming in some markets. That likely will change, but whether radio will invest the same type of money in programming its sub-channels as it does on its original stations is suspect -- really suspect.

Apple is focused on delivering consumers what they really want -- an iPod and a phone along with computer compatibility and the Internet all on one device. Even their competitors admit that this phone will be a unique product. The only question is how big a hit it will be.

HD radio is giving consumers nothing that is new or exciting.

It boils down to a way to increase channels without buying more frequencies and it's done under the guise of high fidelity.

Nothing ventured, nothing gained.

The best marketers in the world can't put lipstick on this pig.

And therein lies one of radio's biggest problems.

It's all about them.

Don't they know that today, it's all about the consumer -- especially the younger ones. And consumers don't care if you can create more stations when they're not excited about the stations you currently operate. How can the radio industry convince people to upgrade their radios when it is unwilling to upgrade the programming on these "fantastic, new channels"?

Again, the master, Steve Jobs, is conducting school. He's teaching the most basic of lessons to Microsoft, Sony, the big four record labels and all the other companies that he's had for lunch.
Radio doesn't make the cut.

And, if you can identify even one person who is excited about buying a new "old" radio to hear new "old" programming then you have found an odd duck, indeed. Send them to Wal-Mart now before they actually listen to HD radio.

The ultimate obituary for HD radio is that even Wal-Mart, Best Buy and Radio Shack can't move HD radios off their shelves.

And Apple won't even include FM capability on its iPods and phones.

Get the message?

While you were out consolidating, the audience has moved on.

Maybe it's time for radio to do the same.

While Radio Says "What, Me Worry?"

Like the iconic heart and soul of Mad Magazine, Alfred E. Neuman, the radio industry is being run by many radio CEOs who have taken Neuman's motto to heart: "what, me worry"?

I don't believe -- no, can't believe, that radio CEOs are concerned about the digital future vis-a-vis their radio stations.

They certainly do worry about quarterly earnings.

They worry about share price.

They worry about the next play.

The digital future? It doesn't seem like our radio leaders have a care in the world.

All one needs to do is take a look at the amount of money terrestrial radio companies have committed to the Internet, streaming, alternative delivery systems or the mobile space. Or should I have said none committed to the future. And if that's not enough proof for you, look at how many of them live in a world that basically says "radio is still the greatest business in the world". This is tantamount to the owner of the baseball team giving a vote of confidence to his embattled manager -- before he gets fired.

I can say a lot of good things about radio. It's everywhere. It's the mobile choice for entertainment. From a business standpoint radio stations are free cash flow moneymakers.
Some stations actually still serve their communities.

On the other hand, radio executives admit to losing the next generation of listeners. They have shot themselves in the foot with consolidation. Not enough money invested in programming, program directors, marketing and audience promotion (these are the things cutbacks are made of). What's more troubling is that while radio was out consolidating, Apple was consolidating its power. It has neutered the record business, defined the delivery system of the future (iPod) and now with the iPhone promises to hit radio where radio really lives -- the car.

Can you imagine radio without its mobile audience -- that is, only broadcasting to homes or businesses via a tabletop radio but not in the car or even on a Walkman? According to an outstanding article on the front page of The Wall Street Journal Monday by Sarah McBride Internet radio listenership in the U.S. has risen to 29 million a week -- up from 20 million three years ago (Arbitron/Edison).

This growth is remarkable for Internet radio because it has largely been accomplished without mobile listening. In other words, the increases are due to listening on line, on the laptop or desktop computer tethered to an Internet service provider or within 300 feet of a wireless signal.

You want something to worry about?

What happens when WiFi or WiMax coverage becomes more widespread -- and eventually universal? Sprint is presently looking for funding to build such networks.

It then won't be too many years before consumers can buy cars with built-in Internet streaming availability. Would these radio titans who continue to take their eyes off the prize worry then?

Pandora, the programmable "radio station" built by pioneer Tim Westergren is making his popular service available through Sprint Nextel via the mobile phone -- albeit a stretch, but a breakthrough nonetheless. Unlike radio's over-complimented "Jack" format that brags about playing what they want, Pandora tries to play what the audience really likes based on its taste as captured through Pandora software. It's truly a programmable radio station.

CBS -- the smartest terrestrial radio company out there lately -- just paid $280 million to acquire Pandora's British competitor Last.FM. They are smart enough to hedge their bets.

Slacker is supposedly going to hit the consumer market this summer and then it will make music available through satellite channels it is renting. In essence their new devices should be able to pick up Slacker's stream via satellite. Again a personalized radio station that, according to its principals, can be heard on the fly.

Eventually one or more of these mobile, customizable radio stations will have to either charge listeners for the service or carry ads to subsidize the expense and make a profit. That's Slackers plan down the line. I'm not sure either one of those models work. (Hey, it's not going to be easy for an Internet pioneer either because the young audience is fickle and demanding).

There is a lot to worry about.

Many of my readers are atypical so they do know the challenges and opportunities that face terrestrial radio. Satellite radio has the same problem as its technology has never ignited with the youth demographic.

And HD Radio, forget about it!

Do you ever hear anyone (even older consumers) clamoring for high definition radio (whatever that is)? I think not.

The future is Internet streaming. Mobile delivery.

Furthermore, the way programming will be assembled will be strikingly different (i.e., morning drive no longer has to be four or five hours live -- it may be just whatever the average morning commute time is -- and the programming delivered to a device for use in the car, bus or train.)

The thing that keeps me optimistic about radio is not that it has any solutions for a digital/mobile convergence. It has few answers as far as I'm concerned.

It's that radio has all the talent -- all the content people. True, they've been under consolidated anesthesia for the past ten years and with a few courageous leaders to wake them up they could be back on track in time to be part of this exciting next phase of "radio".

That's what bugs me about radio CEOs. They know all this better than you and I do and the only reason their actions and words sound like Alfred E. Neuman is because they are not worried.

That's right -- they are not worried.

Why should they be.

Their end game is investment and acquisition while your end game may be development and operation. They have all the power and they win that game.

Or should I say, they lose that game because in my view it is very unlikely that terrestrial radio companies will have a major part in the Internet streaming and mobile revolution. And that's a sin because the radio industry and its people are uniquely qualified to develop the next thing.

It's ironic that the Alfred E. Neuman I have been referring to appears in every issue of Mad Magazine.

Mad, indeed.

To read my posts daily, subscribe below -- it's free.

The Lunacy of Citadel Buying ABC

Why is it that when a company spends $2.7 billion to do a complicated buyout of an old radio company everyone thinks they are good investors?

Am I the only one who looks at Citadel's purchase of ABC as a colossal overpayment for radio stations with an aging audience and a questionable future.

I don't mean this as criticism of the programming people and managers who have made ABC one of the most profitable radio groups. It's just that their time is up. Their stations are not going to win the future generation and yet Citadel gets backing to do the ABC deal based on a lot of good yesterdays.

I'm not naive. I know why Citadel got the funding. I know everybody makes money in this situation except perhaps the shareholders who will be buying a technology, content and an infrastructure that is definitely not the future.

So let me ask this rhetorically -- how is it that radio companies have so many excuses for not funding their online and digital futures? Check out the budgets of any of the large groups and you'll see they are not investing any serious money in the future. Heck, they're not investing serious money in anything. They are cutting budgets.

So let me say it like this.

Traditional media companies are more than willing to pull out the stops to buy yesterday's technology without the hint of a new generation of listeners in sight but they are unwilling to spend squat on their digital future.

I once posed this question to one of the media conglomerates initially interested in ABC. This guy got it. Their company passed. I mean -- who wouldn't want to own ABC Radio -- 20 years ago.

Again, as they say on the Sopranos, "with all due respect" isn't it insane to spend almost $3 billion on yesterday?

And you and I both know what Citadel is going to have to do. Their new ABC employees full well know it.

Citadel is going to have to cut costs -- drastically -- to make its promised numbers.

There you have it again. Radio's epitaph -- "here lies an industry that was once proud and healthy when it invested in itself". That's kind of long for a tombstone, but you get the idea.

Yes, Citadel will have to micromanage its new acquisition.

Micromanaging has really worked, hasn't it?

Citadel will have to pull back from investing in content as it watches its expenses.

Another winner from the greatest hits of consolidation!

Citadel will have to invest next to nothing in its real future -- the Internet, streaming and mobile content.

No radio company has made major investments in their digital future. They just run traditional companies on a tighter budget every three months.

Some $2.7 billion on old radio stations (albeit still very profitable) but arguably with no future absent the next generation -- and the next generation is absent.

They don't listen to Paul Harvey or Sean Hannity.

Would you invest in black and white TV?

Vinyl records?

I'd like to think no.

Yet there is plenty of investment money for Citadel to buy ABC Radio and for any record labels that may still want to merge.

I don't think Wall Street money people are fools.

I think the traditional media business is.

Former Disney CEO Michael Eisner took a lot of brick bats over the years -- after all he's a very contentious guy.

I said this then (in Inside Radio) and I'll say it again now, Eisner was the smartest of all.

Eisner was never tempted to buy overpriced radio stations during the heat of consolidation. Instead he spent a few million here and a few million there for modest AM stations upon which to build his Radio Disney kids franchise.

This begs the question did Eisner miss the land rush or was he smart enough to sit on his high profit radio group and let everyone else drive the value up. Eisner's successor made the decision to unload the proud and old radio group and the radio network.

Notably he kept the modest Radio Disney AM stations.

ABC gets out of a declining business at the top of the market without ever participating in the consolidation frenzy.

Citadel gets to makes its ambitious numbers now without the foresight of how to grow the group without young listeners.

All the Wall Street money people got paid -- for their hard work, their introductions to various parties and for the dough itself.

The shareholders?

Oh well, they should have bought Apple two years ago. Now we're talking about the future.

Unless or until a leader with power and money comes along and builds a new age digital radio business (including video and text and mobile!) I'll keep my money under the mattress. It's safer there.

Answer To Radio Music Royalties: Stop The Music

From the people who brought you suing their customers you now have "performance fees" for terrestrial radio.

Their argument goes: satellite and Internet must pay a performance fee, so the nation's AM and FM stations should, too. These extra fees -- in addition to music licensing charges -- could seriously impact the radio industry as it fights for a place in the digital world.

But what groups like Music First coalition are guaranteeing is their further demise as well.

The record industry is in worse shape than radio. This desperate last-ditch attempt to spit in the face of the broadcasters who gave these artists free airplay over the years is the final straw.

Suing customers and levying a surcharge on critical airplay is the same suicidal management that has gotten the music industry in trouble. It's how they lost market share and lost their future to a computer company named Apple.

While label and RIAA executives dream up new ways to generate revenue on the backs of others they are putting their own future in harm's way.

AFTRA, of course is supporting the royalties for the radio airplay movement.

NAB isn't.

NAB's position basically is that without radio, artists would still be performing in their garages. While that's powerful imagery it's just hot air because the NAB is fighting back without a weapon to get the attention of the musicians and labels. It's all talk and no implied action.

Radio stations should flex their muscles and the one area where they still make a difference is helping the record labels sell music.

I can't help thinking what would happen if radio united for a national day of "relief" from playing the same old songs over and over again and replace their playlists -- just for one little day -- with lots of new music that is available rights free.

A veritable nationwide "Stop The Music" protest, even.

Radio listeners would eat it up. Station ratings would go up. Radio might even attract some interest for a change from their younger listeners, the ones they are losing to the Internet.

Indeed, radio stations would make a lot of listeners happy. Finally, it takes an arrogant record industry to force terrestrial radio into doing what the audience wants anyway --more variety, less repetition, fresh music and artists.

And if radio had the guts, extend the national "Stop The Music" day to two days and really give the musicians and label execs something to think about.

The record labels are history anyway. None have showed any willingness to remake themselves in the real digital world in which most of their customers now live.

And the musicians -- the 100 or so who have so far stepped front and center on radio royalties -- should also feel the pain for without radio old dudes like Don Henley might be playing Chester, PA instead of the Wachovia Center in Philadelphia with the Eagles.

I've come to learn that blogging is pure fantasy. A lot of my readers ask how the ideas they read about and like can get legs. The sad truth is, they can't unless someone has the courage to act.

It takes resolve to put the music industry's latest outrage into its proper place and frankly, the terrestrial radio stations and their clever trade association don't have the guts.

That's why a negotiated settlement is more likely than a rebuff. And a negotiated settlement is the beginning of the end for radio.

And the labels and musicians need to get this message loud and clear.

We play your songs (and benefit from it) and you benefit directly by selling downloads, CDs, tours and merchandise. We're equal partners. Charging radio for the opportunity to make money is not going to happen.

To borrow and embellish a quote from Clint Eastwood as Harry Callahan: "Record Labels and Musicians, how lucky do you feel?"

If radio stops the music, there is no record industry.

Period.

End of discussion.

Let's do it.

Say it. Mean it. Demonstrate it. Stop the music while these poor, misguided excuses for leadership get a well-earned time out to think it through.

Panty Raids -- The Best Radio Can Offer

Did you catch the latest radio blunder -- this one out of Philadelphia?

It seems that CBS-owned WYSP's "Free FM" had a discussion on panties Wednesday morning.

Kidd Chris was entertaining frequent contributor Danny Ozark (real name Peter Goldman) on-the-air when Ozark confessed that he met a girl at a June 2nd Phillies game who was house sitting for local NBC10 investigative reporter Lu Ann Cahn.

As the story goes, the girl inappropriately invited Ozark and a buddy to the house where they eventually went through Cahn's underwear drawers. He is reported to have said that he had hoped to try some on but he knew they wouldn't fit. Ozark also didn't like her choice in panties and called them "government issues really bad underwear" according to a Philly.com press account by Dan Gross.

Funny, right?

Apparently the GM thinks so because he pays the bills. The PD is the coach, this is his morning guy!

Of course Cahn was humiliated.

The next day Ozark saw the revenge of Cahn as she rebounded and took her cameras to his apartment and interviewed him for a TV piece.

What the hell is wrong with us?

Can you see why CBS Radio President Dan Mason is killing off "Free FM" stations as his first act of employment?

Panties? Didn't Howard Stern do this act 20 years ago?

It seems talk radio today consists of either right or left wing political windbags or not-funny locker room antics in which radio has been there and done that.

Any wonder why the next generation isn't listening? There is nothing for them. Hey, there is nothing for the rest of us.

We live in a world where if you really want porn you can access it online at will 24/7. If you want political talk -- and even if you don't want it -- that's all radio seems to have. We have too few talkers who can discuss money, life and other topics. And all of these are not aimed at the next generation.

The future of radio is nothing without a new crop of young listeners. The big wigs who ran consolidation even have to admit that they lost the next generation -- unprecedented in the history of radio.

So as this seemingly never-ending barrage of bad taste and poor programming continues is it any wonder that the radio industry is helping itself into meaningless obscurity.

Can anyone at least try to do a morning show without the usual sex and drugs?

Is this as painful for you as it is for me?

Stop this right now!

By the way, in the interest of equal time -- NBC10 and its "humiliated" reporter were not too humiliated to miss a cheap news story with legs (TV is as bad as radio). Cahn was interviewed on her TV station. She said that she is not going to sit idly by while this happens to her. Too bad it's not sweeps.

Say what you want about him but Dan Rather was right. The news is being dumbed down and tarted up.

I'm looking to the top guy or gal running our media conglomerates.

This is on you.

The advertising outlook for radio and TV in the year ahead is not bright. Maybe that will get the attention of the decision makers.

Mandate change and do it now or suffer the consequences.

To read my posts daily, subscribe -- it's free.

Radio Failing Online

I knew this years ago when I arrived on the campus of USC.

I didn't want to believe it. Didn't believe that it was as bad as it has turned out to be, but now the latest Arbitron data is confirming my worst fears -- streaming terrestrial radio is laying an egg on the Internet.

This in spite of all the hype about how certain large conglomerates are increasing their online streaming numbers. In reality they are going from hardly any online listeners to their terrestrial programming to almost hardly any listeners when you compare apples to apples.

How does less than 1% sound?

Online listening to AM/FM stations represents less than 1% if the total quarter hours in the 30 Fall, 2006 markets Arbitron analyzed. The proportion of listening went up causing a modest increase to individual station ratings but the overall number is bleak.

There were 20,331 unweighted quarter hours of Internet listening to specific AM and FM stations -- up from 4,684 in the previous spring. But that's due to new and revised reporting instructions in the Fall rating period.

And, it gets worse.

Most of the Internet listening for AM/FM stations is attributed to older males -- not the young early adopters a lot of radio companies thought they were attracting on the net. Lots of older people use the Internet although I'm not calling you names or anything.

This older male radio listening online is from listeners -- 78% of whom also listen to the terrestrial radio signal.

What does it all mean.

I know a lot of my blog readers think I put too much credence in my contact with college students but what they're reflecting is what is happening -- they have little interest in traditional radio programming.

Note I said programming.

It's true they don't like consolidation. Don't like Clear Channel (I love them because they made it possible for me to take a sabbatical from radio as a college professor).

It's really time to put aside some of your prejudices about the next generation and listen to what they are saying. It's also true that no college campus is 100% representative of the entire generation but this group is turning out to be a very reliable indicator.

So, let me tell you what I think their problem is and why even streaming terrestrial radio on the Internet doesn't make radio more attractive.

1. They don't like the way you talk to them -- relate to them. You're not talking to them. You're still doing sweepers that just happen to be aimed at youth-oriented formats.

2. All radio sounds the same to the next generation. It has a smell, if you will. The world has changed and we're still hiring the same voice-over people to cut the same meaningless sweepers and positioners. Sweepers don't resonate. Positioners box you in -- needlessly. Why is radio continuing to do this?

3. Not enough music variety. I know -- I know, I am a program director and I know they can't possibly want a huge playlist of music if it must also include marginal stuff. This is not to say that this generation doesn't really enjoy listening to non-hit material -- they do -- but what they are really saying is that your idea of variety is still too tight.

4. What you say it is, it isn't and they know it. If you say fewer commercials, they know it isn't so (even if it is true). Perception is still bigger than reality. If you say you play what you want they wonder, why do you have to rub it in our faces. We also play what we want on our iPods. The only time you'll hear me utter the phrase less is more without derision is when it comes to on-air hype. Lose it. Less is more when it comes to on-air hype. They don't buy it. Do it. Don't say it. They'll figure it out.

5. There is a big interest in knowledgeable djs -- thank God that didn't happen when I was on the radio or programming! Since their level of knowledge about music, genres, the music culture, etc. is so great (not just my students) you can imagine how stupid radio sounds with some of the jocks we all hear on our airwaves. I don't know if radio will ever take this one seriously but they should -- don't keep hiring dumb jocks.

6. They love news. You don't because you came from my generation of fighting the FCC to get the then-required news commitment moved to the overnight hours so you could play more hits. True, they don't care about the Iraq war (I'm generalizing, of course). Most are not as interested in politics as I remember from my college days. But they're not craving Paris Hilton stories, either. This generation gets its news instantly, on the go and online. You'll have to tell them something they don't know. You're telling them next to nothing right now.

7. They're more retro than you may know. You may only have to search your inner past to get a view of the future. In other words, radio used to do it right, before this generation was born. They didn't screw it up, we did. Put on a radio station that doesn't sound like one -- I dare you.

It's also helpful to remember that the Internet is just a delivery system the same as a radio transmitter is. Don't confuse the delivery system with content.

Good content is good content.

Too much of radio is not producing good content. It's producing content that fills up time and space -- cheaply.

That's why I'd rather swallow my bitter medicine about radio now than try to make it go down easier.

Remember the phrase "radio sucks"?

If you do, you'll note that it came into our vocabulary well, well before the Internet arrived, before mobile devices like iPods, prior to cell phones, before digital downloading, before email, texting and the like.

We were blowing it before our listeners could really do anything about it.

Now, the generation that has grown up online, is rejecting traditional media (TV and print, you're guilty, too!).

On my first day as a USC professor a number of years ago one student ended a class by proclaiming "we don't need radio". Remember, it was a music media class not a communications course. Still, he was sending me a message.

Are you beginning to get the same message?

Professor Paris Hilton Teaches Media

I have been as amazed as you most likely are about the clinic Paris Hilton is putting on for the media business.

It's true that sites like Perez Hilton and TMZ live another day just to cover celebrities such as Paris Hilton, Britney Spears, Lindsay Lohan and the like screwing up. Online, their readers come and go as their interest ebbs and flows. You can never get too much Paris Hilton coverage if you're the one clicking for more.

What you may not be seeing is how Paris Hilton is teaching the traditional media business all about its destructive bad self.

Except, the media business is not listening.

NBC News says it won't cover such tripe. Then it does. Even Brian Williams winds up with egg on his face.

CBS News promises to stay away from all things Paris, but the lure of everyone is doing it was much too much. They, too, gave in.

Forget the local news. Most young people have. No one can seem to find anything worth watching on local TV news so why not put Paris Hilton's plight on the screen. Forget the local angle. Paris is everyone's girl.

Radio doesn't do news. Oops.

Newspapers think they cover news but only a handful really do.

So what is Professor Paris Hilton teaching us?

That while she has little talent, neither do we if we can't discern the difference between a story that needs telling and an event that isn't a story. You could argue that the dispute between the judge in the case and the sheriff is news. Okay, is it a lead story?

Professor Hilton whether she knows it or not (and I suspect not) is telling us be careful what you create in the media because you may become the same thing.

We may become her.

No talent. No reason for being.

That is, if Paris Hilton is a meaningless hotel heiress who is covered in the popular media then be careful what you cover because you may soon become as inconsequential as the stories you broadcast.

We know why Barbara Walters panders to her.

Do we know what we've become?

I have a tendency to be overly nostalgic -- I admit it and if I didn't many of you have already pointed that shortcoming out to me.

But this is where I don't miss radio.

I don't miss television.

I don't miss newspapers.

I want my Paris Hilton news online (if I want it at all).

I'm getting demanding like the next generation. I want what I want when I want it. Damn it.

The Internet is becoming a main way we get our legitimate news and it is perfect for puff news stories. When you're in the mood for Nicole Richie anorexia jokes and pictures, you're only a mouse click away.

If you want politics, there are bloggers, reporters, publications -- all available until you get carpal tunnel.

Just at a time when the public has unprecedented access to choice -- the ability to turn you off and still get what they want -- the media business has become the ghost of newscasts past -- a buffoon, if you will.

Just when traditional media could help set the course for the future, it tries to act like the Internet without a mouse.

I think if Paris Hilton taught media she would say "don't cover me". The publicity hound that she is would even say, leave me be at The Simple Life. At least The Simple Life is reality TV. That's more than you can say for media coverage of Paris Hilton and friends -- there is nothing real about them. Little that deserves serious coverage.

Nothing is more embarrassing than the media business this past week in its widespread, unremarkable coverage of a little hotel heiress who doesn't matter.

Global warming, arguably.

Iraq, certainly.

The economy, yes.

Politics, government, scandal, safety, war -- yes, yes, yes, yes, yes.

Local -- absolutely yes.

The Internet isn't killing the media business. It is saving us from it.

MUSIC INDUSTRY: The Jersey Handshake

I caught "The Jersey Boys" on Broadway last week.

It lived up to its excellent reviews. Being Italian, a Jersey boy myself (Hoboken) and being in the radio industry the story resonated with me.

First, I can't remember being in the same place with so many baby boomers since my college graduation.

These boomers (usually called "aging baby boomers" by the press) had a grand old time reliving the career of Frankie Valli and The Four Seasons.

I am with the next generation so much in my teaching at USC I've gotten to know them in a way I never intended. They are just like the X'ers and boomers and yet they are so different. Many openly embrace hip-hop. Some lament its present sorry state. Others hang on to alternative. All anxiously await the next new thing (attention record labels: wake up!).

These great young people are so much more eclectic in their musical tastes than I remember being or remember my friends being. They really do appreciate more types of music than we did back in the day. Some of my students have expressed to me serious concern about the fate of their generation and their music going forward. I'm less worried because they will have their "oldies" soon enough.

What got me to thinking about the music industry, the media business and frankly, a lot of personal things, was the substance of the content in "The Jersey Boys".

Frankie Valli and musical partner Bob Gaudio sealing a life-long relationship with a "Jersey handshake" -- a contract more iron-clad than any lawyer could have prepared -- no matter how many pages. In the generation before Valli and Gaudio, Jimmy Durante and his manager shook on their relationship and it, too, lasted a lifetime. It's an Italian thing but it's not limited to Italians. People used to give their word and live by it.

Fast-forward to today.

Entertainment law is a big business.

These lawyers sue everybody moving. The RIAA sues its customers. Howard Stern gets sued by CBS even after he gives one-year's notice to CBS and then another group of lawyers turn around and win a settlement in return for the CBS Radio Howard Stern archive. You don't really need me to tell you that the entertainment industry has been taken over by lawyers and damaged by their litigiousness, do you?

The point: the best, lasting contract is the "Jersey Handshake" -- it requires goodwill, perseverance and honor -- three words missing from our media industry today.

The Four Seasons is one of the few groups or individual artists to span multiple decades with hits and this comes from talent, luck and the ability to resist bad advice from the record labels.

When Bob Gaudio tried to sell a song deemed to be awful by a label exec the best Gaudio could do was to secure the promise that the label would release the record to him -- personally -- so that at his expense he could work it. When the audience heard the song, they broke into applause -- "you're just too good to be true, can't take my eyes off of you...").

Lesson: with few exceptions record labels were always awful at picking hits and managing talent. They still are.

What do record labels do anyway?

Not much.

In the past, they were manufacturers. They had a group of characters called promo men who "pushed" the records for radio airplay, but make no mistake about it -- the record business was and is about manufacturing which is why they are clinging to the CD even though the marketplace has moved on to digital.

They pressed vinyl (later CDs), had warehouses, shipped to retailers. They moved product. Marketing was an accident.

They were and still are the Dr. Kevorkians of managing careers.

For some reasons they were either so stupid or so vain (or both) not to understand that "one hit wonder" was a reflection more on them than the artist who never had another hit.

This brings me to today when label executives are no match for their potent competitors -- not new conglomerates, no -- but a generation of cagey adolescents who, armed with the Internet, piracy and social networks are kicking their butts.

The labels are still more of the problem than the solution. If this statement was incorrect I don't think you'd see so many people predicting the demise of the record industry as we know it.

When acts get big enough they can defy the labels -- and thank goodness for that -- or their careers would be in jeopardy.

Out of the remaining big four I am still hoping that at least one major will seize the opportunity to break with the past and get into the business of finding, creating, enabling and marketing talent.

What a business concept.

And how about doing it with a modified "Jersey Handshake" -- only one ream of paper and a firm hand clasp.

Now that would be progress.

RADIO: Lessons From "The History of Rock 'n Roll"

Over the Memorial Day weekend my wife listens to terrestrial radio for the only time of the year.

CBS-owned KOOL-FM in Phoenix cues up the Bill Drake-narrated rockumentary that many of us have heard in various forms from the very first edition over 30 years ago. And many of us as program directors have aired "The History" just as CBS was doing -- to make money over the three-day weekend and to keep listeners listening longer.

Tuesday morning, my wife returned to listening to Sirius satellite stations. I don't detect any great love for their programming on her part. The main advantage: it's installed in the car and there are no commercials.

But that's it.

She's not wild about the satellite jocks. Says it sounds too much like "radio". Heck, she turned to "The History of Rock 'n Roll" again this year commercials and all.
What's going on?

It's good content at work.

Shows like "The History of Rock 'n Roll" are few and far between. But they are riveting when well done and this one is, of course, polished after all those years. It points out one of the key issues that program directors are not able to address when they work for clueless owners -- that their stations must create compelling content that will keep listeners listening.

This, by the way, is a specialty of terrestrial radio which is why it hurts so many programmers and content-wise managers who are being forced to cut costs instead of invest in great programming.

I, along with many of you, programmed weekends differently from weekdays. The weekends were special. Listeners used radio differently then. Sunday nights were different than any other night of the week and many PDs invented niche programming from doo-wop to Dr. Demento to satisfy that need.

That's only one of my problems with radio programming. I'm still not wild about what happens during the weekdays.

And how many djs sound like clones of "Cousin Brucie" even if they don't know who he is and probably never heard him?

And stupidity out of the mouth of "pukers" who for some reason fail to understand that at least the next generation can't relate to them. If the disc jockeys reflect the audience, I don't know who terrestrial radio jocks think they are relating to.

Radio thinks its problem is too many commercials or too many iPods or too much Internet and too many cellphones. Yes, that too!

But "The History of Rock 'n Roll" proves to me again that if you record and revise it, they will listen. It -- along with other special shows -- gives your listeners some substance, some creativity.

As they say, the fish stinks from the head. So until the owners empower their managers to invest in programming that is compelling, you can even implant a chip in your listeners heads and they won't listen.

When I programmed WIBG in Philadelphia, one of our listeners came in to see me. He lived close to the towers where we also had our studios (Lafayette Hill, PA, outside of Philadelphia). He was complaining to me that he had a head injury in World War II and had a metal plate in his head. He said he couldn't turn our station off and was convinced that the plate and his close proximity to WIBG's towers was why he really did get our "All Hits All The Time" format all the time!

How do I say this delicately? I must admit the thought went through my mind that I wished all my listeners had metal plates in their heads. You're right, I'm a bad person for having that thought.

I never forgot this listener with the metal plate in his head.

When I program, I always think what if your listeners couldn't help but listen 24/7 -- would they love it or hate it?

There are only a handful of stations today that I personally wouldn't mind hearing all the time. I'm afraid if everyone was like the gentleman from Philly, with today's radio stations, surgeons would be busy doing a lot of brain surgery to remove metal plates from their heads.

Lesson: content is compelling on any medium -- Internet, podcasts, DVDs -- anywhere.

Get back into the content business and do yourself a favor.

As incredible as it may seem, we're not far from being "wired" for audio directly to our brain.

Will radio still be doing Cousin Brucie imitations then or compelling content that listeners will crave all the time?

Where The Internet Has Failed To Make Money

You need only to look to the panicked state of radio, records, television and newspapers to understand the monumental effect the Internet has had on the music media business.

Here's a short course:

Radio, the medium for every next generation since it arrived on the scene, is forced to share time with the Internet. How about 5o% of a young persons spare time directed to their life is online according to some researchers. Streaming of radio stations although on the increase has so so far not been the answer.

In fact, it's Internet streaming that will be the next hot thing. Probably not the kind of streaming done by radio groups.

TV is so concerned about YouTube that all the networks want to be YouTube.

So they've invented their own Internet delivery systems. And most networks have scaled back on their budgets for television show production. They are hell bent to go down with reality TV. In short, what they supposedly do best -- make programs -- is getting less of their investment money and what they do worst -- delivering audio and video over the Internet -- is getting more budget.

Record labels have done more stupid things since the first consumer became an online pirate.

They are still suing consumers who steal music even though that universe includes just about everyone in Generation Y. They've cut back on developing talent. Got the bug to cut costs and squeeze profit. And they still have no clue of what music trend comes next after hip-hop, the tired old genre that is embarrassing itself now.

Panic has set in and that's why traditional media companies are buying the Internet startups they couldn't start up in the first place. That they don't understand. They also don't know how to run these new Internet companies that they are buying.

Newspapers are cutting back resources daily because before there was ever an Internet they couldn't stem the flow of readers from getting their news on radio and TV. That's terrestrial radio and TV.

Newspapers never understood that they were in the unique news business not the print business. Anyone who has been around newspaper people know that print and news go hand in hand -- except with today's consumer.

What to do?

Print sales slide.

Advertisers look to online.

Internet readers don't want to pay for unique content so where does that leave you?

The Wall Street Journal has been somewhat successful in getting subscribers to pay for a subscription to the Online Journal but their readers have money to buy business publications. And they can rationalize that they are getting unique news.

Have I just been describing the Internet -- the place where everything is going and no one is really making money? And why does Internet earn a capital "I" in front of the word, like God?

The Internet has become a lot of things but what it hasn't become is a moneymaker for traditional businesses.

Porn on line, very profitable.

Google, they've found a way to sell search the way radio sold spots without anyone really knowing whether it was worth it. You know, the concept that says the only thing worse than buying advertising is not buying advertising.

The Internet has made money for a lot of people, but traditional content providers -- not really.

It's caused them problems.

Caused them to rethink their businesses (not very successfully, in my view).

Made them panic into over-spending traditional media money for a place at the Internet table. And they still have no certain plan on how to get a return on investment.

The Internet is the space of young people without whom it could not have been vaulted to capitalized status.

These same young people are not at all concerned with how traditional media companies make money for their shareholders. They don't even care if they go out of business (like in record labels).

A young generation independent for the first time of traditional media.

Misunderstood by everyone (except maybe Steve Jobs who actually owns them).

Even the personal computer business -- the original access point to the Internet -- is on the way down. More complete mobile devices and mini-computers will be all the thing in the future, not desktop computers.

What should we make of all this?

I always tell my students to go study Steve Jobs (that is, don't just read an article on him -- study him).

What is it about Jobs that is so revealing and useful to the rest of us.

Is it that he's so intelligent?

But there are lots of bright people in the music media business.

Is it that he's an outstanding marketer?

He is that, but there is sure no shortage of great marketers.

What is it that Jobs has going for him that traditional media is going to need if it is actually going to get rich on the Internet, the medium they're betting the ranch on?

Jobs has a masterful understanding of the generations -- not just Gen Y, but Gen X and baby boomers. I teach my students to look at all things media in the perspective of the generations starting with the Greatest Generation, Baby Boomers, X, Y and yes Z.

What we've discovered -- and Jobs knows instinctively -- is that the generations are both very different and very much the same. Different and the same.

And perhaps Steve Jobs' greatest other asset is that he is so contrary and quirky. What great qualities to have when you are courting the next generation -- contrary and quirky.

In addition to being a professor at USC, I am Director of Executive Programs at Thornton School. We've done forward thinking projects for record labels, traditional and non-traditional media companies. Believe me, the interest is out there. Finding the way takes a first step.

The first traditional media company to figure this out becomes the next Apple.

The Mobile Future

With just weeks until the Apple iPhone becomes available to consumers -- the most significant mobile happening in history -- traditional media need to have a better understanding of the repercussions.

When was the last time a satellite radio executive said don't go to the store on the day satellite radio will be debuted. Or can you imagine a radio exec saying stay away from Radio Shack or Best Buy the day HD radio debuted.

Well, Apple's Steve Jobs had the chutzpah to tell cell phone shoppers to stay away from the Apple stores on the day the iPhone is released because the line to get in will be around the block. Ever the salesman, Jobs added that they could try going to partner AT&T stores that day.

The overpriced, over-promised, overdue iPhone will soon change the landscape for the media business. Read this New York Times piece on the anticipation and anxiety that is expected in the marketplace.

Apple will not only own the new record business (iTunes) but the new phone business (iPhone) with major ramifications for everyone else.

This blog is about music, broadcasting and the mobile future for a good reason -- because the future of all media will be aimed at mobile devices. This is not to say that you will never watch a large screen HD TV again, but some of the content you watch may be stored or accessed on your mobile device.

A lot of companies think YouTube was the second coming, but among the next generation it was just the next thing. To Google maybe it was their future, but already YouTube is only one of many video delivery systems. The TV networks with true penis envy have all started their own.

They just don't get it.

TV needs to concentrate on producing programs -- regular length, episodic videos. It is a losing strategy to try and control the delivery system. It's as if the prerequisite for being a TV network back in the day had to be owning every TV station that aired their programs. Today many TV executives would agree that soon TV nets won't need affiliates. Yet they're not learning their lesson and applying it to mobile video. They want to be YouTube.

The radio business is consumed with HD radio and economies of scale -- buying what properties become available, selling what it can make a profit from and they have a lot to lose by this strategy.

Radio used to be the mobile medium. Now it isn't even included on most mobile devices.

Why?

Young consumers don't like radio and don't need to have it on their iPods, MP3s or their cell phones.

Radio still doesn't get it.

Radio can't compete with other mobile programming sources like video clips, iTunes or even sending photos from built in cell phone cameras.

Radio needs to get pictures.

Today's consumer wants audio when it wants to hear something. Video when it wants to see something and text when it wants to read something.

Until radio gets pictures and text it can't compete on the mobile platform.

No mobile platform, no business ten or twenty years down the line.

Let's not let Internet web sites off the hook. Most have done a miserable job adapting to the mobile medium. The future of newspapers are looking up by attracting online readers even though they are not making big money for the publishers. No news, information or entertainment site that wants to own a piece of the mobile future can adequately compete unless it uses mobile phones to send information (requested and permitted by the consumer) in real time.

What I think is about to happen is that Apple -- with its direct pipeline to the young consumer -- will define the medium as it has done in MP3 players. It's really too late to stop them. There is also evidence that Apple and its partners will make applications for the iPhone that are likely to leave traditional media out in the cold (again).

I'd like to look at the mobile future with its official introduction by Apple in a few weeks as the start of a major change in how we consume content with Apple as the gatekeeper.

No matter that almost everyone has a cell phone and can't live without it. The real issue is what are all these consumers going to do with their mobile phone? Don't say -- make calls. That's so analog.

We can live without radio.

Manage out TV viewing with TiVo when we have it.

We don't read newspapers in increasing numbers.

The way it now looks, if I am right, the mobile future will be all encompassing and very lucrative and radio, TV and newspapers will not be driving its future. Worse yet they may even become its victims.

This needs to change.

We're devoting time and attention to this at USC, but in my view, to rethink, redeploy and redesign radio, TV and newspapers. This may be impossible for all but the adventurous. Oddly enough, the kind of people who put traditional media on the map in the first place.

Let's see if anyone stands up and goes to school on this fundamental change that will either bring great rewards or great ruin -- the official beginning of the mobile future when Apple thinks differently.

How To Fix The Music Industry

Now this is a headline that is irresistible because it is so outrageous. Who has the answers that will save the music business?

I confess, it's not me, but I do have some ideas and they're based on my observations of smart Internet people and the next generation which I have gotten to know very well over the past three years.

Amazon has announced it will begin selling digital rights management-free music as it creates its own version of Apple's iTunes.

For the rest of us, this sounds like good news. More music available without anti-piracy technology and it all plays on our iPods.

But it's not that simple.

Only EMI has agreed to join Amazon in unlocking the music. Amazon says it has 12,000 labels participating but we're not talking about the majors nor are we talking about the major artists. EMI recently did a deal with Apple to allow iTunes to sell DRM-free music with enhanced audio for 30 cents above the traditional iTunes 99 cent per download price point. This went over like a lead balloon with my USC students if that's any indication.

Amazon has not announced pricing for its DRM-free music nor has it revealed any of the other three major labels as participants in their new initiative.

There are some who speculate that Amazon's entry into the digital music store business will only help Apple sell more iPods which brings me to the crux of the situation.

The labels are not running the music business -- Apple, and more specifically Jobs, is.

The labels are choking on DRM -- looking at decreasing legal sales, increasing illegal sales and married to their losing strategy to hide behind protecting digital rights.

Music lovers, used to buying a CD and using it any way they liked including the freedom to share it, now want the same from their digital music stores. You can argue all day and night that this is a battle the labels have to win but the pragmatists will win out in the end. The next generation -- the record buyers -- are demanding DRM-free music or they will continue to find other ways to access it (translation: steal it).

I am intrigued by their willingness to steal music when they would not likely steal a CD from a brick and mortar store.

I'm not an expert on the motivations of Gen Y, but I have observations.

To many it's about stealing from the rich to help the poor (Robin Hood). Others defend stealing by saying they are just trying to find out what they might like to buy (many young people say that they also buy CDs even now). Some are incredulous about not being able to buy digital music and share it the way they would a CD.

The Internet makes it possible for the masses to revolutionize the record industry while the record industry rests on its history of backing into the future.

Add to this Steve Jobs and Apple and it won't take long to deduce that all music will be DRM-free in the future -- the distant future if the labels have their way, the immediate future if Jobs and his customers have theirs.

The labels can only hope and pray that all of this transpires before it's too late -- that is, before the next generation becomes too comfortable with not buying music.

Jobs, for his part, is smarter than everyone else -- as usual. He advocates DRM-free music out of one side of his mouth while reaffirming that he won't remove Apple's proprietary DRM system called Fairplay out of the other. It seems Jobs doesn't want his domination of iPod sales and iTunes operability to help his competitors.

This is like a bad movie.

Fast forward to the end now.

Skip the part about the labels fighting for DRM protection and Amazon trying to be iTunes. Scroll your way through the lawsuits against consumers, the death of radio as a hit-maker and the loss of consumers to social networks.

Go right to the end -- or better yet -- to the new beginning.

Music sold for less than 99 cents a download which will sell more volume the way text messaging sells volume among this generation. I like 49 cents or lower.

Drop the lawsuits.

Use the Internet and social networks to "scout" for your new artists and the next hot genres.

Embrace digital music stores of all kinds -- they are selling your stuff.

Get the gold records off your walls and start keying on the new standard -- building volume using the long tail, the medium tail, short tail or no tail at all. Sell volume.

Oh, one more thing.

Help Internet streaming (radio) get established. It will be your best strategic move and will potentially pay a heavy return on your investment.