Now, how about some good news about the radio industry.
1. Satellite Radio Isn't Hurting Radio
Remember when Saga CEO Ed Christian would throw a snit over satellite radio content as it related to terrestrial stations. Are you aware of the NAB spending millions of dollars on fighting satellite radio?
Well, they wasted their time and money.
Satellite radio was never the enemy and it is even less potent a threat as 2008 winds down.
Have you listened to the new Sirius XM lately?
Since the XM people (known for longer playlists) merged with the Sirius programming (more hit oriented) the result has been a mess. Many music channels previously good are now unlistenable. Satellite radio has become a repository for stiffs.
This is not just my conclusion.
It's yours.
Many of my industry readers have cancelled (some sending notes to Mel so he knows it). Ask the average listener and they'll tell you the merged entity is not as good. There was a 4,000 person grassroots effort to bring back country personality Dan Dixon -- so far to no avail -- and Sirius XM relented on the disco "Strobe" channel and old school hip-hop "Backspin" station.
After all, satellite is supposed to be about more variety, isn't it?
With fewer autos being sold and a world recession taking hold, life at satellite radio is tough when your content is no better than -- say, terrestrial radio.
In fact, terrestrial broadcasters have gone out of the way to cheapen their product over the past year so terrestrial radio is not much better than satellite.
But satellite radio carries a hefty monthly subscription fee.
Radio is free.
Advantage: Terrestrial radio.
2. The Music Performance Tax Has Not Been Passed
You can give your NAB some credit for this one, but the record industry campaign to get radio stations to pay additional punitive taxes for helping them expose music to the CD buying public has stalled in Congress.
Both sides are quite adolescent in their pissing match with each other -- one that deserves a more serious approach in my opinion.
Just this week, according to Kurt Hanson, the NAB sent a Christmas message to members of Congress "reminding lawmakers 'free airplay and promotion to recording artists' makes for a U.S. radio industry 'mutually beneficial' to broadcasters, artists, and the record industry alike".
Then the labels' musicFIRST coalition shot back, "'Radio, don’t be a Scrooge,' musicFIRST executive director Jennifer Bendall wrote in a statement. 'Join us in creating a performance right on radio that is fair to artists and musicians and fair to AM and FM radio stations,' she asked broadcasters".
Next year could be another thing.
The vote is close. This is no slam dunk for radio and any additional financial burden on radio operators could cause more cutbacks in personnel at local stations.
That means lost jobs.
And that's the message I'd be sending Congress -- they most certainly don't want to be responsible for anyone in their district losing jobs because of their vote, do they?
Forget the kid stuff.
Still, radio for now, retains a special exemption that allows it to expose the record labels' music to their benefit and for the benefit of radio listeners.
Advantage: Both Radio and Records.
3. Music Is Alive and Well Even Though the Music Industry Isn't
This is a good news and bad news scenario.
What often gets lost in the remarkable decline of the big four record labels is that more music is being made -- with more variety, from more artists with virtually unrestricted distribution.
The appetite for music in our popular culture is as strong if not stronger than in previous generations.
What's wrong is that record labels, basically manufacturers of plastic in the entertainment business, can't figure out whether or not they can be a player in the new digital world.
Paid downloads are healthy but are not likely to make up the shortfall in CD sales. And, yes, CD sales are down again. Music is being shared for free at greater numbers than ever before. The record industry's problem is not exactly like radio's because their consumers (or pirates waiting to consume) love the product.
Radio listeners on the other hand are increasingly disappointed with radio content. They use it, sure enough -- especially when they are in a car, but with radio companies never missing a chance to cutback, the loyal radio listener is getting shortchanged on programming.
So an unrelenting passion for music -- not just by label-anointed artists but by amateurs with grand dreams has fed the music monster.
Advantage: record industry -- if it finds a way to create a business based around free music distribution and ancillary streams of revenue.
4. Stay of Execution: Phones Still Being Used for Talk, But...
I keep saying that the cell phone will be the most important delivery system for content in the future. And the future is approaching very rapidly.
There's a new Pew study that shows the mobile phone will be how most consumers access the Internet within the next 11 years. Mobile phones are fast becoming the new laptop.
In the meantime, it isn't surprising to see that laptop sales have increased as consumers want to become untethered to their desktop computers. The next logical step will be to rely on future generation mobile phones and universal standard of delivery.
These phones won't be just cell phones. They will be thought of the way we think of laptops today. Look at an iPhone for an early preview of the mobile future.
The USC Annenberg Center for the Digital Future says,
"While there are dramatic increases in the functions Americans find for their cell phones, it is clear that they are still overwhelmingly seen as devices for voice communication. Close to 100% of cell phone owners use their phones to communicate by voice. But steadily in creasing numbers of web users are also finding additional uses for their mobile phones. Close to 40% of web users take pictures on their phones and almost as many also send text messages. Just under 20% play games on their phones and just under 10% access the web".
Therefore, radio executives who have been dallying on becoming content creators still have time to do their homework and conjure up new business revenue streams.
As offensive as it is to broadcasters, the next generation has already moved beyond the radio. They haven't. But their young listeners have.
What is also alarming is that older demographics are embracing the technology and even social networking of the younger Gen Y. The only people, it seems, that fight the new technology and changing sociology are -- radio executives. Perhaps that explains why almost every decision they've made in 2008 has been harmful to their own companies.
But let's not lose the thought.
We know mobile is the future. Oddly, radio is not considered mobile by the next generation even though transistor radios and Walkman devices used to qualify as mobile to previous generations. Look at young people today and see what they don't just own, but what many actually carry around in their hands all day -- a mobile device.
Advantage: radio -- if it can accept that broadcasting on a telephone is of limited appeal and that they still have the creative talent and production values to own the mobile content business.
5. There Is A Solution To Radio's Decline
It's the talented and dedicated people who built radio into the business that investment groups open their wallets and overpaid for over the past 12 years.
Unfortunately, the group CEOs aren't convinced of that which is why you see good companies like CBS acting like Citadel and Clear Channel. Our former compadre Mel Karmazin fired 22% of his satellite radio force this year.
That's 458 people with names, families, kids to put through college and this tends to get lost as part of doing business.
After all, according to Inside Radio, Sirius XM expects to save $425 million next year between these layoffs and other expense savings.
Lucky listeners.
We've got programmers, consultants, researchers, voice talent, morning personalities, general managers, programmers and sales people sitting on the sidelines when they are needed the most.
And many of the employees that are left in radio are fearful of losing their jobs, their dignity and of course their reputations because it absolutely is not possible for one person to do all that they are being asked to do in the name of the economy.
While 2009 will be brutal -- even these misguided radio CEOs will eventually come to realize that they cut too deeply into the backbone of their content and they will have a bigger problem than finding ways to cut costs -- especially when their franchises continue to evaporate.
I said this was good news and let me tell you why.
I know many under-employed or unemployed radio people who would have been willing to take a pay cut to keep their jobs or return to radio. This pool of talent will be available to these screw ups who have run the industry we love into the ground.
So, there it is.
Radio may never be what it was to previous generations, but it has the potential of becoming a content provider to the number one delivery system of the future -- HD radio.
Just kidding -- I was checking to see if you're still with me.
Not HD radio. Not satellite radio. Not car radio. Not TV. Not the computer.
It's the mobile phone.
Look up to the masthead of this website and note the subtitle for Inside Music Media.
It's says "Music, Broadcasting & the Mobile Future" and that says it all.
The future of radio and records is mobile.
Get on board now.
Or wait too long.
But the future of all media will be mobile.
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