Not just Facebook and MySpace. The concept of building a social network around almost anything and having passionate people come together.
2008 may go down as the year of Twitter -- the 140 character communication system that asks what you're doing -- short and sweet. If you haven't tried Twitter, do it now and experiment with it -- (follow me, too).
We'll be talking a lot about the importance of understanding social networking in the year ahead, but for now let me caution you not to fall into the traditional media misconception that social networking sites are the successor to direct mail.
They are not.
To be successful, social networking sites have to have give and take. You need to listen and respond to others. Offer things that will be helpful and work 24/7 at staying in touch. (I answer all my emails -- and I get plenty, thank God -- whether it's via traditional email, Twitter, Facebook or whatever). Last year I strongly suggested you start a Facebook page if you don't have one. Let me suggest again, try it and you'll be able to understand the conversation about why social networking is a game changer.
Traditional media execs want things to remain the same. They're paying for that stubbornness on their bottom lines. The future is also attractive. Have a little sense of adventure.
Music industry and broadcasting people have proven skills to learn and adapt.
This will be the year of social networking.
The Record Business
When you see the labels backing down from their strategy of divide and sue, you know just how bad things are in the record business. While it is a long overdue move, they are switching strategies with an evil heart.
Labels are still proceeding to litigate cases already started.
That's dumb.
Imagine -- suing customers hasn't worked all these years so go ahead and finish suing the litigants in progress. Makes sense, right?
The real problem in 2009 is not RIAA lawsuits -- they didn't make a difference (except to the poor unfortunate suckers who the labels tried to make an example of -- usually college students).
The labels are headed into 2009 with bad information:
1. That selling CDs in big box stores is a strategy that will work. Actually, it has failed miserably. Why do you think Wal-Mart is cutting back on the number of CD titles it plans to carry? Remember that long-awaited big box bust called Guns N' Roses new album? Selling something the public has cooled off on such as CDs in limited retail locations is like shooting yourself in the foot. Not like -- it is. If labels continue to turn to BestBuy which has tons of problems of its own to sell product, my prediction is the labels will sell fewer CDs when the year ahead ends.
2. That they can actually make money selling 99 cent songs on iTunes. That ship has sailed. While there will be consumers who will spend the 99 cents -- many more will opt for free. Without digital rights management it will be even easier. The labels blew this one. They should have embraced the 99 cent iTunes instead of fight it. Now the next opportunity is to offer music for five or ten cents a song (priced like text messaging) to feed the public's addiction to music. When it costs next to nothing, stealing music won't be as attractive. Then -- and I emphasize then -- the labels can sell package plans just as cell phone operators do for texting. No young person would be without that $20 a month texting add-on. Same could be true for the music industry. But they have to create the desire first. And that's done by feeding the monster not suing it.
3. That artist development is not so important to a turnaround. Hell, if there is one thing the labels had better do in the year ahead it is to get back into the music discovery business. They are no longer big enough or powerful enough to play pin the donkey on the long tail. With the Internet in full force and social networking a rising force to reckon with, if the labels don't quadruple their efforts to discover new bands, singers, writers and genres, they will deserve what they most certainly will get.
4. That radio still sells new music. No, talk to young people. You'll hear them tell you that they are not as influenced by radio -- in fact, they listen only when they have to. It's laughable that the labels have turned on radio stations when they're down and out in pursuit of repealing the performance tax exemption for stations. If the labels eventually win this repeal, they will lose. If they lose their attempts, they lose. The word "lose" is showing up a lot lately. You don't waste your political capital on grudge fights.
5. That consumers will pay for all-you-can-eat music plans. As I said earlier, why should they? They get the music for free now by and large. Without lowering the cost of music to next to nothing, there is no way to drive the demand. It would take balls for them to do it. Ah, forget about it.
6. That ISP's may someday charge consumers a gatekeeper's admission price for access to all the music ever made by man or beast. If the labels keep thinking like this, they would have made more investing their last dollars in the Madoff Ponzi scheme. Seriously, this idea is a loser and deserves no further consideration. Isn't gonna happen.
Radio
Wait until Farid Suleman's compensation is made public. Just wait. Excess compensation for underachievement. $10 million a year for what?
Wait until Clear Channel unleashes the firings and cutbacks it has in mind for the year ahead.
It's going to get ugly.
I think you may find some of these "discombobulators" trying a new tack which I call water torture. Instead of attracting attention and outrage at mass firings, you may see them spread the axing of staff like a slow drip over 52 weeks. This way maybe no one will notice (except of course, the fired).
The radio industry is headed into 2009 with bad information:
1. That the continued growth of using syndication techniques to cut local programming costs actually works. Wrong again. It cuts costs alright, but also makes radio less local which is less good and will make less money. The word "less" seems to be popping up a lot here. But after all, radio is the industry that invented the concept of less is more. If you don't like a washed up Don Imus on the air everywhere some cheap ass consolidator wants to save money, try being the poor listeners. This is a typical radio decision -- act before you think. Bad move. And there will be no getting back the lost radio listeners. It's like spreading the ashes of the deceased over the city by air. You can never get the ashes back in the urn once they have been let go. Nonetheless, 2009 will be the year of radio's own suicide. Up until now it was murder committed by the CEOs.
2. That the next generation can be ignored one more year. This from the braintrust that interrupted the long standing practice of programming to youth to get them addicted on radio. Back in 1996 when consolidation came along, the arrogant new Wall Street Wonders could care less about these kids. Today, "these kids" have taken over the Internet, are governing pop culture on their own terms through social networks and over mobile devices. They are fickle. They don't believe hype and they don't like Ryan Seacrest (sorry, Ryan). Even if one "discombobulator" decided to amp up the move to deliver content where the audience lives, it might be too late. To radio CEOs an Internet initiative is, at best, a small operation that costs little money and gets less than 5% of the group's total budget to go do Internet things. What fools.
3. That selling commercials at a cheaper price in a recession year will work. No one listens to commercials. They never did. You were on the air once (or maybe still are). Listeners don't care about the worst content on any radio station -- a spot. And the radio industry knows this in spite of their public denials. After all, why do you think they allow programmers to bury as many commercials as they can in four to six minute stop sets. Come on! Fewer commercials. Better commercials -- with the goal of actually delivering tangible results for an advertiser will even make ratings irrelevant. This is the only future for radio and yet the radio CEOs are cutting salespeople, cutting prices, cutting people to produce passable commercials. The word "cutting" seems to be showing up a lot -- like in cutting off your nose to spite your face.
4. That you can stream a radio station over a telephone. I know. I know. There's plenty of applications out there to allow streaming radio on phones. But a phone is not a Walkman. The world has changed. Attention spans have changed. People want to choose what they want to hear -- and prefer short snippets of content. The iPhone is turning into a big source of downloading books. That will work. Games on the phone will work. Social networking tools, yes. Radio by nature -- a product broadcast by the source out to the public does not and will not work for most people on a mobile phone. Old radio hands may like it. Otherwise, no young person (the next generation the media industry needs to win over) will listen to radio programming that they don't like on their most precious asset -- a phone. (Steve Jobs had it right when he left radio off iPods and iPhones because he understands the next generation. Radio CEOs do not).
5. That HD radio will still work work. In Washington, there are reports that no radio stations are broadcasting in HD. Zero. Most cities have lousy HD reception and even worse content on the subchannels. Hard pressed operators are now turning their HD equipment off. Sorry about your luck if you are a consumer that bought an HD radio. HD radio will stand as a monument to how stupid decisions quickly become institutionalized until finally hard times killed them off. Consider HD dead in 2009 for radio executives. For everyone else, we "mourned" its loss years ago (wink/wink).
6. That understanding generational media is not as important as understanding business. May I say that I have been able to call a lot of trends up until now not by using business benchmarks but by considering generational aspects.
7. Young people aren't the only important listeners. True. But they are the change makers. When they adopt iPods, then older folks buy them -- not the other way around. When the next generation wants applications on their phones, then older folks line up to buy iPhones to play games and have fun. When kids used Facebook as a social networking tool, older folks quickly jumped in the moment Facebook opened the door to them. When young people downloaded music online, then older folks discovered how to do it -- not the other way around. And -- sit down for this -- as young folks abandon radio for new media and social networking, watch the decline in traditional media usage in the year ahead for older, typical radio listeners. As Steve Jobs and Barack Obama can tell you -- don't underestimate the power of the next generation to embrace thinking differently and bringing about change. But radio CEOs continue to get it wrong.
And speaking of Steve Jobs -- it's amazing to watch how much one person can mean to a company. Rumors have Jobs dying every other day. Whether he is ill or not, I don't know. CNBC reporters claim they're told by Apple that Jobs is fine.
Beyond that, who in radio -- or the record industry -- is so important to a company that their health would be so much cause for concern as it is with Jobs and Apple.
Radio and record CEOs are the under performers -- underachievers. Pretenders in a Wall Street world where they failed and were ultimately dismissed for poor performance. Some threaten to be delisted in the year ahead.
So, that's the honest to God truth -- as I see it.
Let's see if these screw ups make me look smart again by the end of next year.
I will tell you what I told a group of students a few years back -- I'd give up any money I have earned to this point, any good name I may have made for myself over the years -- just to be their age and coming into the media business at this time of great change.
I smell money.
I didn't say it because I'd rather be 21 than 41 (okay, whose counting?)
It's because we are living in a serendipitous age when the media possibilities are as exciting as they are confounding and where those who pay attention to generational media will eventually reap great rewards.
On a personal note: Thanks to all of you who have helped my website grow this year. Inside Music Media has by far more daily readers than Inside Radio when I owned it -- thanks to you. It has earned a Google page rank 5 -- not possible without you spreading the word, emailing topics of interest to your friends and associates and linking to Inside Music Media on your sites.
Oh, and to all of you in the underground network that spread this "treasonous" content to the employees of Cox and Citadel, blocked from accessing Inside Music Media at work, thanks for waiting to go home to see someone call their executives out when necessary.
So much for censorship.
Happy New Year!
See you on the other side with food for thought.
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