The Audacity of Dopes

Barack Obama, the author of the book The Audacity of Hope, and Mike Huckabee, the spiritual GOP presidential candidate are the news media's new catalysts for change. Their surprising and convincing wins in the Iowa caucuses last week have forced many of their competitors into embracing change if for no other reason than to get elected.

Consumers of entertainment also want change.

I can tell you that first hand from the youth end of the market -- the next generation and I think you might be surprised to find that even older, prime demographic groups also want a new approach to the entertainment and information they get.

Consolidation is to radio what the Iraq War is to the country.

Consolidating group owners lied about the benefits of less competition (aka weapons of mass destruction) and just as in the hopeless war in Iraq some in radio are still arguing that the only way they can prevail is to send in more troops -- I mean, be allowed to own more stations.

In other words, a surge.

Now some would argue that the surge is working in Iraq since U.S. military deaths are down and that's good, but if you count Iraqi deaths -- things are not so rosy.

Radio's General Petraeus is FCC Chairman Kevin Martin. Is he a good solider commissioner or is he a politician?

Nonetheless, consumers and listeners and even investors are voting and they are rejecting consolidation from all sides. It hasn't enhanced local programming or made radio more competitive. It isn't getting higher ratings. And even Wall Street investors are avoiding radio. Citadel going from $10 a share to under $2 a share is not building shareholder value. And they're not the only under performer. Radio isn't a great investment when your largest consolidator, Clear Channel, is trading at $35 down from $90 in the hey day of consolidation.

Radio's best and only candidate for change is Steve Jobs.

I know many of you hate him but I'm not talking about his personality now, I'm talking about his ability to offer hope.

Jobs is the Barack Obama of entertainment. He offers us hope that old baby boomers who run media companies can know what 18-24 year old consumers really want.

And what does the next generation want?

Mobile phones with music on them. Texting ability, of course. No radio, but they're open to podcasting if the agents of status quo can ever work out the royalty issues.

They don't want their MTV anymore. They want their Internet on the go and it's starting to happen now as consumers can listen to streams on the fly. But they don't just want streams. They want content in all forms.

If the Iraq war is radio's consolidation then the subprime mortgage crisis sums up the record labels' dilemma.

Just as the economy is paying the price for a housing market that borrowed money from sketchy resources, the record business is paying the price for the questionable practice of selling CDs when the marketplace was demanding digital. Record labels are not going to be bailed out. In fact, like a cornered animal with its back against the wall, the record industry is attacking everything it can in a last act of desperation.

Suing consumers.

Trying to get the performance tax exemption lifted from its loyal partner, terrestrial radio.

Sustaining a useless pissing match with the man they enabled in the first place -- Steve Jobs. (i.e., he outsmarted them).

Entertainment consumers are demanding change.

They want to sample music online for free -- not 30 seconds, but the entire thing. Many are willing to buy music that is not restricted through digital rights management. They want to share their music as if they purchased it on a CD. And they most certainly want to be able to download their CDs onto their hard drives and do what they want with it.

They will get change because they are a generation of great numbers -- comparable to baby boomers. If the labels don't give up the status quo and start doing some of the things these consumers want, they will soon be out of business. After all, the record business has been declining since 2000.

In fact Nine Inch Nails and Radiohead, Madonna, Live Nation and lots of artists and entertainment companies are bypassing the labels today and trying things -- anything -- that might be better than just relying on traditional CD sales.

The television business is in for change, too.

Young consumers watch TV on their laptops and PCs. They don't need or require HD flat screens hanging on the wall. They don't want commercials -- won't watch them online -- they'll hit mute until they are over. TV networks seem hell bent on becoming YouTube -- a delivery system that has never made a dime of profit. The TV networks, too, are misreading their constituents who are voting every day, hour and minute with their clickers.

Big money wants consolidation.

Big corporations want monopoly.

Traditional media is stuck in yesterday.

The Internet, mobile devices, podcasting and social networking are the future.

In the media business the audacity of hope is that someone -- anyone other than Steve Jobs -- will stand up and respond to what consumers want and demand in a world addicted to status quo.

Instead, we see the audacity of dopes -- labels suing consumers, trying to tax their radio partners, clinging to DRM.

In radio -- firings, voice tracking, syndicating shows to save money, outsourcing ad sales to Google, Less is More, HD radio, a paranoia that satellite radio will hurt them, a passion for more power (further consolidation).

In television -- a misguided desire to be the delivery system rather than the content provider, a wrongheaded strategy on what constitutes mass entertainment, a critical misunderstanding about time-delayed (TiVo-type) viewing.

Failing to get back on course will likely result in an upset landslide for the rock star of entertainment's next generation -- Apple CEO Steve Jobs.

Jobs offers the audacity of hope -- that music will be digital, affordable and freely enjoyed; that consumers can carry their music and video in their pockets. Finally, a candidate from Cupertino, California who understands the next generation. Just as in our current presidential primary, the establishment is out.

The candidate of change will be elected (or shall we say, selected as in buying their products and/or services).

If you'll allow me to take some liberties with the adage, "there's no business like show business", today the motto is "There's no business in show business".

Entertainment is about content delivered on the Internet and through mobile devices. Shared and even generated not always by the provider but by the user. Promoted and held accountable by social networking so diverse that all the promos in the world can't sway tomorrow's listeners, viewers, surfers and texters from taking hands-on ownership of their entertainment.

The revolution is now ten years old as the young and restless are coming of age.

In future writings I'll share some startling research on how "tweens" 8-12 have so embraced mobile phones and text messaging that their traditional media use is in great doubt going forward. In other words, if you don't like what you're seeing with 18-24 year olds, you'll really hate this trend among their younger brothers and sisters.

No leader other than Steve Jobs in traditional media has successfully engaged the young and the restless on a major scale.

Revolution will come not only to national, presidential politics in the year ahead but to the traditional entertainment media.

Radio consolidators will be kicked out of their corporate suites for incompetence. Hey, they can't run their companies and build share price. Their self-imposed ratings system to gauge success is share price. Oops.

The record labels are approaching the tipping point -- get on the love train or die.

TV networks will get their butts handed to them as Rupert Murdoch has something special in store for them -- more trouble ahead.

Cell phone companies will find the likes of Apple and Google taking over their businesses in response to the revolution. Cell phone companies know as much about content as today's radio consolidators. Oops.

2008 is a year of change.

The willingness to take bold risks is the prescription for what ails traditional media.

After all, it is the definition of audacity -- the audacity of hope -- that so many smart and talented media people will finally step up and grow some big --- cojones.

If not, the one who has -- Steve Jobs -- will continue to rule the entertainment world.

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