Radio's Youth Disconnect

I just returned from a fabulous time at Tom Kay's Conclave in Minneapolis where I had the honor of doing a two-hour teaching seminar for a most remarkable group of learners.

These are radio people who got up to arrive on time for an 8 am session on The Next Generation of Radio.

I didn't know what to expect.

For the past four years or so I have been teaching young, idealistic college students -- the heart of Generation Y. I have learned a lot from them -- not only about their likes and dislikes vis-a-vis the media business -- but their views about what's wrong with the record business and radio.

Our session at the Conclave focused on what I have learned from The Next Generation that I wanted to share with radio folks. It included the future of terrestrial radio, a glimpse of what future radio might be and some exercises for those who wanted to get started on the road to becoming better at generational media.

I left the session even more uptempo than when I arrived. This group was eager to learn. They took many notes. Participated in discussions. Worked together to help build a podcasting arsenal for a mythical local radio station that I threw out there as a learning example. My readers know I believe podcasting will be the next radio.

Still, I came away with even more insights about why good and smart people who run radio stations have such a hard time wrapping their arms around radio's youth disconnect.

On her blog, consultant Jaye Albright pointed out the irony of removing all technology for the presentation. Jaye said, "I suppose his point, as he ordered the AV folks to get rid of the presentation graphics projector, screen, and even all the playback equipment and microphones in the room, was to showcase the importance of high touch in a high tech world".

I wrote to Jaye and shared an email I had received just a day earlier from a student of mine who showed all of us that we really don't know the next generation the way we think we do. This bright young student was waxing eloquent about her generation beginning to turn off the technology.

Who knew?

"I don't know if you've seen it, but the idea of "you can turn it off" is starting to be seen with all things among people I know my age. I'm starting to see people who used to spend their saturdays on IM texting now going hiking for four or five horus--putting an away message on the mobile AIM and only checking their phones during water breaks.

I'm seeing kids who choose to drop the earbuds for a half-day of wake boarding or surfing. Who can leave the computer long enough to enjoy a sunset or walk down the street to the store (cuz gas is so expensive). And who can turn off their cell phones for a week to bring food to starving kids in Africa".

If I could have invited everyone in radio to spend a semester in college with Gen Y, they would soon discover, as I did, that young people have come to hate PowerPoint professors -- actually they sleep through their classes. They would prefer not to attend those classes and, in the alternative, get the class notes online.

What they want, believe it or not -- is one-on-one engagement. I soon learned to lose the PowerPoints and start a dialogue where I stimulated group discussion and the students taught me in return. In fact, the motto I always wrote on the board was my favorite Eastern saying "The teacher and the taught together do the teaching".

This is endemic of the problem. Maybe it would be better if we all step back and listen to the audience -- in a dialogue not a focus group -- to really hear what they want.

Radio is disconnected from the youth demographic for many reasons:

1) They grew up without the love of radio and had an alternative that they pioneered -- the Internet. They've moved on. Consolidation helped radio take its eye off the next generation.

2) They are more mobile and interactive than their elders -- and a Walkman is so Eighties to them.

3) What they really want, radio execs would choke on.

What is that?

• Djs who play their own music -- not corporate or station playlists (I know, I know -- it won't work. It never does. Tight playlists and repetition win out in the end. Bla Bla Bla). No, this Gen Y audience means it.

• Fewer commercials and better commercials. You'll never get them to listen to 12 commercials an hour in any cockamamie configuration. See you're getting irritated now because you think I've spent too much time in academia (I've heard it before, believe me). Still, one unit at a time. Then a song. Then another commercial. Stop and start -- like the old Drake format. This generation has a short attention span. They really like things to start and stop. We radio folks think we'll cram all the commercials into two or three sets and the audience will like it. It's the opposite with the youth generation. We just can't stop doing it.

• Better commercials mean -- as I told the Conclave session -- not the ones with music library tracks behind poor copy crammed into 30 or 60 seconds. They want live reads. They want the person who is knowledgeable about music to talk to them about what to buy -- what's cool, what's necessary, what they buy.

• This is the original social networking generation and radio is the official "I'm in denial" about social networking industry. They think MySpace and Facebook will pass. And it will. But this generation will be remembered for social networking. An impressive 12 people in my Conclave group either heard of or used Twitter (I wrote about it a few days ago) -- a new online social networking tool that asks the question "what are you doing"? We radio folks are not connected with that. Look at some of the comments my Twitter story got. Real radio think. Well, that won't cut it going forward.

So, the good news is that radio people are open-minded and enthusiastic about change. They want to change even though their employers are forcing them to do business as usual (for less money). My Conclave group was shot from a canon when they left. I gave them a one-sheet with a handful of ideas that I hope they will be able to use to start mending the youth disconnect. I'll bet they succeed.

The concern going forward is that unless we stop doing radio business as usual, the only available audience will be the older demographics that grew up loving radio.

I deeply believe after my college teaching sabbatical, that the ideas that most of us reject because they are so outrageous and out of line on their face are exactly the things that would even invigorate the available audience as well.

Of course, I ended with my view of radio becoming a content provider to be delivered by emerging technologies -- not just towers and transmitters.

We can do this.

But first, we need to change.

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Radio: Bob Dylan, Program Director

I love to watch the legendary, brilliant programmer Lee Abrams talk about Bob Dylan's XM Satellite radio show "Theme Time Radio Hour" which is heard on XM's Deep Tracks channel every Wednesday at 10 a.m. EDT.

Now that's a great reason to have satellite radio.

Dylan's show was the topic of a Friday Wall Street Journal article which describes it as "Each week Mr. Dylan plucks a topic out of the air -- colors, trains, death and taxes, spring cleaning -- and plays recordings of a dozen songs whose lyrics relate to it in some way. In between songs he chats about the music and its makers, interspersing his gnomic mini-lectures with a cornucopia of old radio station promos, celebrity vignettes and phony phone calls and email readings".

Reporter Terry Teachout noted that on a recent episode Dylan "played, among other things, Jackson Browne's "Doctor My Eyes," B.B. King's "Walking Doctor Bill," Doc Pomus's "Send for the Doctor," the Rolling Stones' "Dear Doctor," the White Stripes' "Girl, You Have No Faith in Medicine," an obscure 1955 calypso song by Lord Lebby called "Dr. Kinsey Report," and "Hadacol Boogie," a jumping ditty recorded in 1949 by Bill Nettles and the Dixie Blue Boys whose subject was the once-celebrated patent medicine touted by its maker as a cure-all for "stomach disturbances, gas, heartburn, indigestion, nagging aches and pains, and certain nervous disorders."

Actually, Dylan's approach to radio has not gone unnoticed by young people.

Many of my USC students last year were aware of the show even if they hadn't actually heard it. And some heard it -- even though they were not satellite radio subscribers. Their parents were.

I'm not surprised.

One of the many reasons radio has lost the next generation is that music stations are unremarkable. They are vanilla. Sound the same. Too repetitious. Too many commercials. Too phony. Not real.

After four years of my teaching sabbatical -- I have concluded that if I owned a radio station, I'd get to know what these young folks really want -- even if it is unlikely that they would ever become big radio listeners.

1. Someone knowledgeable about the music. In local markets that obviously can't afford a Bob Dylan, who is the guy or gal who is the most knowledgeable and put them on the air? By the way, local works even better than national but for a satellite network the highly-rated Bob Dylan show is perfect for their mission.

2. They want the dj expert to play their own records. Now I know a lot of my radio friends have gone into cardiac arrest on this one. Damned if they are ever going to let someone bring their own music to the station. Well, apparently that's what Bob Dylan does. That's what Dave Herman did at the prototypical progressive rock station WMMR in Philadelphia back in the Sixties. That's what Don K. Reed did when he did the Doo Wop Shop on WCBS-FM in its last life.

3. A sense of adventure. Teachout talks about this in his article. When was the last time a listener got a sense of adventure when listening to the radio? Duh! They didn't. That's why they turned to iPods -- that have no sense of adventure, but they also have no commercials and exactly the songs young listeners want to hear.

4. Unpredictability. It doesn't take a PD to know what the second half hour of a radio station is going to sound like -- the first half hour! And on and on.

Here's what's got me pumped.

Radio knows how to do this. Abrams, the old die-hard that he is (in spite of the fact that he now professes to be newspaperman for Randy Michaels Tribune Company) knows all of this.

Consolidators do not.

Need proof? Just turn on the radio.

They have sucked the life out of their program directors, many of whom have their hands full hanging onto their jobs and can't risk telling the boss the station needs to innovate.

So, let's all try this together.

• Sunday night -- at 9 pm -- really safe time -- put an local music expert on the air in your market. I don't care if it's market #156 or #1.

• Let him or her play their own music -- do their own thing without the genre of your musical format.

• Break all the rules -- be unpredictable.

Try it for a year.

Let me stop right here. I know I'm nuts. I know I am talking to myself. But that's one of the gifts that Clear Channel gave me six years ago so stay with me on this, okay.

One year.

No interference.

Watch the audience build.

Watch some agency person come to you to inquire about advertising.

And, for God's sake, don't run spots. Figure out a new way to deliver the commercial message effectively.

Radio's glorious age of top 40 -- WABC, WLS, WIL, KHJ and many others were perfect for its time -- the age of the jukebox when TV had reared its ugly head into radio's world.

Now, the opportunity is out there to throw out the liner cards, promos, sweepers, IDs, positioners and do what one of the most prolific musicians of the rock era does.

Make good radio by not being radio as usual.

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Radio: Watch Out for Twitter

Have you heard about Twitter?

It's the hottest new social networking tool that allows people to "stay in touch" all day by exchanging frequent answers to the question "How are you doing?" (or as we say in South Philadelphia, "How ya doin'").

Try this thing to get the hang of it. The next generation will.

Less than 200 words -- so you have to keep it short.

And what are young people saying on this site? Well, they are narrating their lives -- from the meaningless to the significant and they are doing it in real time.

It's just another of the many things listeners can do other than listen to radio.

Nothing against radio, but if you've been following my observations about these young folks then you are not surprised to find they want to be active, part of the action, and it doesn't hurt if what they are doing is about them.

Twitter can be as addictive as texting.

When I told my classes that my old Italian mother used to remind me that the world isn't built around me, they would look at me in amazement.

It isn't?

Well, it may not have been for me (or you), but it revolves around the next generation in every way. It helps that they have control of the Internet and mobile media -- and they've mastered it.

Last summer when I was vacationing on Long Beach Island at the Jersey shore, it struck me how many joggers on the beach were running with their cellphones up to their ears.

Sweaty.

Out of breath.

But in touch with someone while running -- phone held to the ear, not even bluetooth. Obviously the sound of the ocean was not enough of an attraction in our digital world.

In Arizona, when nine months a year the weather is to die for, walkers enjoy the climate with cellphones up to their ears -- and they're not always young walking with their phones to the ear.

Go to any supermarket and you have to wonder how anyone previously shopped without a cellphone. Is there a better way to ask, "what do you want me to pick up for dinner", continue socializing or doing business while loading up the shopping cart.

I know many of you like me to share insights on new trends, but my point here is that if someone could reinvent radio to be the most compelling thing the next generation ever heard, it would still have an uphill battle.

That's because increasingly the short attention span young generation and even the rest of us are getting increasingly distracted.

You can't ignore it.

I know it is blasphemy, but the fabled Randy Michaels radio motto, "the noise you can't ignore" is no longer valid. The next generation can ignore it. And they do.

None of this concerns me.

What concerns me more is if the media industry does not deal with the reality of living in today's social, technologically advanced, increasingly in the moment mobile world.

Again, cooperate with the inevitable -- don't deny it.

So, play with Twitter for a while.

Remember when I asked you to do the same thing with Facebook six months ago? And in a few more months Google is going to introduce a new social networking system that can be accessed on individual websites of all kinds -- not just Facebook or MySpace.

Obviously, to be in the communications business today we've got to master the art of social networking.

But for radio, we've got to catch up.

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Music Radio: The Royalty Rat Pack

I thought it was bad enough when Eagles lead singer Don Henley demanded that radio pay additional performance taxes.

But now, the insult of all insults.

Nancy Sinatra, the unplatinum daughter of the Chairman of the Board is lobbying Congress along with other ingrates to see if Congress can do something. (Sorry about the imagery here – I think I wrote “Congress” and “do something” in the same sentence).

Let’s hope Congress doesn’t pass the necessary legislation to repeal the exemption for radio.

Now, I know I am going to hell for opposing a Sinatra. My mother, if she were alive today, would not be pleased.

She and I were born in Hoboken, New Jersey and no one knows better about Hoboken's famous export -- Francis Albert Sinatra. We lived on the same street. Of course, I was only a baby (as witnessed my picture, right?).

Still, I’m madder than hell.

No one seriously can argue -- let alone Nancy Sinatra -- that radio should have to pay one cent more to a recording industry that profited from every penny of the music it has sold from free radio airplay.

Her boots wouldn't have been made for walkin' if radio wasn't made for playin' music for free.

The ingrates argue that radio got free programming material.

That’s a weak argument based on what, say, Frank Sinatra and his record labels pocketed from all that airplay. If they gave me a choice I’d rather be Sinatra or his labels than radio.

We could really end this desperate move by rich record artists to earn even more by remembering what Sinatra, The Eagles – all of them – would have made if radio didn’t play their music.

How about – zero.

How about no platinum records. No gold. No silver. No tin. No junk metal. Nothing could be earned without radio airplay.

Nothing.

Radio has seen its better day – no doubt about it. Challenged by new technology, the Internet, seemingly endless competition and the next generation hooked on everything but radio.

Radio does not have enough young listeners to sustain its franchise. But there is no doubt that up until the last few years, without radio you don’t have record labels, rich artists, fat concert venues or extraneous merchandising money.

It’s simple.

Don’t play the Eagles and the Eagles wouldn’t have sold albums back when they were, well – The Eagles.

Don’t play Sinatra and that big franchise – the one his heirs most certainly have their eyes on when they lobby Congress – is poof – gone, vanished into thin air.

So, I propose some legislation of my own.

Lobby Congress for a retroactive performance tax called The All-American Music Moochers Act (has that Patriot Act sound to it, doesn’t it?).

This legislation would require every ungrateful record label to retroactively repay the nations radio stations the same tax they are seeking against radio. They can even pay it to a general fund and I’ll help divvy it up later.

Imagine the money.

And I’m here to tell you that it would still be a bargain for the labels because there has never been anything more cost effective than radio playing the labels music for free – especially when the labels and artists keep all the profits derived from that airplay.

I bring this issue up from time to time because even though the performance tax revocation isn’t likely to pass any time soon, the record label and artist ingrates will be at it every year.

Radio has been a good business. It has entertained a lot of people and made a lot of money for recording artists.

Radio deserves better than to be disrespected now at a time when it is fighting for its life -- especially by the record labels who got rich on the back of free airplay.

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CHANGING FORMS AND FUNCTIONS OF NEWS MEDIA

Fundamental social and technological changes are altering the functions of news media for audiences and advertisers and significantly altering the situations of specific forms of news media.

Most of us recognize that form and function are linked together, with the form of objects influenced by their use, economics, and technology (Something architects and designers have recognized for more than a century). Contemporary technology has broken the connection between the traditional forms and functions of news providers and made it possible to serve the functions of legacy news organizations and news distribution in many different forms. This development is undermining the consumer and financial bases of long-established news media.

Because they have been in place for so many decades, it is easy to forget that established news media developed their forms within specific economic and technological environments. The form of newspapers and radio and television newscasts developed when new technologies allowed creations of mass audiences, distributed news to them at specific times, and supported the delivery of low priced and free news because advertisers of general consumer products paid to reach those audiences.

Today, the underlying elements of that business model, which was highly successful in the twentieth century, are decaying. Mass audiences are disappearing, technology is providing new ways to reach audiences, individuals are becoming active, integral participants in the communication process, and advertising are seeking more effective ways to reach potential customers.

These changes are significantly altering the functions previously played by metropolitan daily newspapers and network and local radio and television newscasts as primary creators and distributors of news and information. The dominance they once had has been replaced by ubiquitous distribution technologies that provide a continually updated stream of news through cable channels, Internet portals and news sites, social networking sites, mobile devices, and news screens on buildings and in public transportation.

It should be no surprise, then, that the form of legacy news provision is no longer as successful as it was in the past. Those who own and work for legacy organizations see the changes as cataclysmic, but the shifting of functions to more forms is natural and provides significant benefits to those who want news and information.

We have seen this type of displacement before, even within our lifetime. Life magazine, for example, played significant roles in conveying news and features on social life from the 1930s to the 1970s, but lost its functions with the arrival of new technology and changes in social life. As the foremost visual presenter of photojournalism, the magazine once garnered 13.5 million circulation, but changing media preferences for audiovisual materials on television news and magazine shows stripped Life of its audience and advertising.

Many functions of network television news, which grew rich in the 1960s and 1970s, were displaced in the 1970s and 1980s by local television newscasts that provided more hours of news and more opportunities for viewers to get international, national, and local news. That displacement was compounded by the development of 24-hour cable news channels.

Today, further displacement of the functions of network and local television news is taking place and the functions of metropolitan daily newspapers are being significantly affected. This does not the end of news provision, however. Although many journalists in the legacy media desperately assert that only the forms of news in the organizations that employ them can serve social needs and provide quality journalism, the reality is far different.

Reputable and well-trained journalists are now establishing new journalistic forms on the Internet, linking web and print operations, and syndicated materials produced by web-based news providers. There are more journalistic startups now than anyone can ever recall.

Although web-based news has historically be aggregated materials from traditional sources, these new enterprises—some commercial and some non-commercial—are increasingly providing original journalism. Some are concentration on serious investigative national and international reporting; some are providing hyper-local coverage; and some are providing coverage of specialized topics. These serve some functions previously provided by legacy media and some functions legacy media ignored.

The technologies are also allowing engaged citizens to create and distribute news and information on their own, supplementing material produced by professional journalists or providing material in its absence.

These are healthy developments for journalism and for those who want news and information. Although the form of provision is changing, the functions of gathering and conveying news and information and the functions of keeping people informed and engaged are continuing and being improved.

Radio: Suleman in the Morning

The latest Don Imus mess is on Farid.

The CEO of Citadel -- the guy who brought Don Imus back from the dead after he insulted the Rutgers girls basketball team -- should be held accountable for his decision.

Not that Farid Suleman is ever held accountable for his many mistakes running Citadel.

The $1.42 stock price.

The excessive $11 million compensation -- including taxes paid with the good judgment of the Citadel board of directors.

Shoddy executive oversight.

Turns out Suleman's former company, CBS, was right after all.

CBS canned Imus' tired act when he went over the line about a year and a half ago. I'm not going to repeat the insult that made CBS Radio walk away from their profitable WFAN-AM, New York morning show. You know what he said.

Al Sharpton was right.

It doesn't matter whether you think Sharpton himself is over the top -- on the Rutgers girls basketball team controversy he called it right. Imus should be fired.

He was.

Sharpton also said Imus should get a second chance.

He did.

And that he -- Sharpton -- would be keep an eye on Imus.

He is. Sharpton promising yesterday to investigate the latest racial misunderstanding.

Monday the wheels came off again when Don Imus talked on-the-air about the arrest of suspended Dallas Cowboys cornerback Adam (Pacman) Jones by asking "What color is he?" Sports announcer Warner Wolf answered that he was "African-American."

Imus responded: "There you go. Now we know."

Imus said in a statement: "I meant that he was being picked on because he's black."

Weak. Very weak.

Another radio personality might have gotten away with it. Rush Limbaugh has been known to go over the line when talking about Barack Obama and Hillary Clinton.

Not Imus.

Because Don Imus is now a two-time offender.

Don Imus might have a heart of gold for all we know. After all, when it comes to the kids he helps on his New Mexico ranch through charitable fund raising efforts, we know he has a soft spot in his heart. But on race -- who can know what's in his heart?

It's his words -- and then his explanations. After a while, people get tired of all this.

But while a lot will be made of the latest incident, who among us didn't know Imus would do it again.

It was a time bomb waiting to happen and while Imus may not be able to help himself, his boss, Farid Suleman knows better.

I'm thinking Farid sold his soul to the bottom line again -- something that hasn't been looking good for a long while.

Because Imus is cheap programming.

True, Farid pays millions to employ him but Citadel also doesn't have to employ local personalities on some of its stations -- that's radio hamburger helper. Then Citadel syndicates Imus to other stations to offset the talent and production costs further -- about 45 at last count. After all, if he is anything, Suleman is a bean counter.

In a way, Farid needed Imus more than Imus needed him.

Soon they'll be calling for Imus' head again.

Farid knows that he should be the one who should take the hit which is why it is very likely that nothing will happen to Don Imus.

Until -- the next time.

And there will be a next time.

There is no room in radio for a repeat offender. In the glory days of radio it would have never been tolerated -- especially when we feared the FCC and our employers. My old friend John Rook, the legendary program director who has programmed a talk station or two wouldn't tolerate it for a minute.

In a country where race relations is rearing its ugly head in presidential politics especially underscored by a recent ABC/Washington Post news survey, this stuff just isn't funny. Or useful.

Imus is protected by free speech which enables him to push the boundaries of good taste. No one is arguing our freedoms. Just making a case for good management.

So, the brouhaha brews and the media gets its juicy news story but they are only getting half the story. When it comes to Imus, let's remember that it all comes down to this.

Fool me once, shame on you.

Fool me twice, fire the man who gave him a second chance.

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Radio: Lee & Bain vs. Jerry Lee

Thomas Lee Partners out of Boston and Bain Capital, the buyout firms behind the Clear Channel privatization (and many other buyouts) have one way of doing radio.

They buy a large established industry leader, cut expenses to the bone, operate it until the market allows them to -- sell it for a greater profit than what they paid.

That's the Lee & Bain way -- nothing wrong with it -- if you're an investor.

But for operators, there is another way.

Last week, Jerry Lee, the owner for life of WBEB (B-101), Philadelphia showed the industry what operators do when they want to actually keep the stations and make lots of money.

Lee along with his former partner, the late engineer David Kurtz, have been milking 101.1 for fun and profit for forty years and for some reason -- maybe because they only owned the one station -- few people went to school on them. That has to change -- now.

B-101 is near or at number one no matter whether you consider Arbitron diaries or the People Meter. It is a franchise aimed at women -- women and more women.

Lee, a general manager type, teaches us a lot of lessons, but let's start with the latest:

B-101 is going directly to advertisers in the interests of not just Lee's station, but all Philadelphia radio stations to make better commercials than the ones advertisers may be running on, say -- television.

And, Lee, a research addict, is going to pay for the research himself. Lee has had a long history of fully employing researchers -- something that most consolidators have long ago dispensed with due to the costs. Bill Moyes, the Research Group founder, has had a long prosperous relationship with Jerry Lee -- and you can see his fingerprints on this latest move.

So B-101 will pitch advertisers on making better commercials -- using excellent research -- with the goal of creating a stronger emotional connection with listeners.

B-101 will pitch clients on behalf of the entire market -- not just the station. That means Clear Channel, CBS, Beasley -- everyone.

Now this is the way radio should be.

Lee will pay copywriters and will test the spots using his station's research experience. B-101 has been testing its advertisers spots for free for years now. Lee estimates his costs will be between $30-70,000 per commercial. He's fronting the money and relying on other stations that benefit from this strategy to pay 15% to him to underwrite the costs.

It's like a tip jar. It's voluntary. Let's hope he doesn't get stiffed.

Lee is also taking his pitch to national advertisers this week -- again, with the goal of producing better, more effective radio commercials so that radio can close the gap with TV. Radio only gets on average one-third of the rate that TV commercials get. So you can see where Jerry Lee is going with this. There's lots of room for more radio revenue by focusing on more effective radio ads.

(There's a great piece in Friday's Inside Radio -- June 20 -- about what Lee considers a great spot and what the goals of better commercials should be -- I recommend it for those interested).

This is all well and good but Lee's commercial testing initiative raises a bigger question.

What is the best way to grow the radio business knowing that the next generation is defecting from the radio dial at a record pace?

Is it running more ads? Cheaper ads -- believe me, some markets have operators that are being killed by competitors whoring out their rates -- or put another way my definition of a lack of sales skills.

Radio can still be a good business, but not with cheap spots -- and no next generation -- and too many ineffective commercials.

If you're looking for good news about radio's future -- you just got it from Jerry Lee.

For years a radio spot was copy that was, say - 45 seconds of commercial content jammed into 30 seconds. Written by a salesman, a client, a clueless agency or worse yet -- a production person.

Add music to distract from the message-less commercial and you've got -- 30 seconds of wasted time and money.

Here's what I like about Lee's approach.

1. It is being done for the good of all radio -- not just one station or company. When an industry prospers, all its members have a better chance to prosper (and vice versa, by the way -- look what happened to the industry when leader Clear Channel put its own interests ahead of the industry).

2. It cooperates with the inevitable -- that is, it's aimed at available radio listeners who are already listening and presumably still like radio.

3. It is a long overdue makeover of a lazy industry that for decades got away with running any old noise and calling it a commercial. Stations were less interested in whether it worked and more interested in how many of these awful things they could cram into an hour. Now, the focus is where it should be -- how to make it work. In other words, the industry obsession with less is more should have been better means more (money).

4. It emphasizes the importance's of ongoing research at radio stations. I know I've committed a mortal sin in the world of consolidation by saying that, but even Mark Mays, Farid, and David Field need someone to help them see the future. Look at their stock prices and see where their vision has gotten them without this help.

I don't want to sound like a politician here because I have already been swift boated in the past, but let me take a chance.

For the first time (in a long time) I am proud to be in radio as I watch a proven leader do something very important not just for himself but for the entire industry.

There are two Lee's in the news lately, but this one is in it to make the entire industry more profitable.

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The Future Radio Morning Show

I am expanding my private practice to include advising new media and broadcasting on future content models that could reap financial benefits.

And here's why.

One of the many concepts that I believe passes the litmus test with the next generation – a group that will be necessary to build a lasting franchise – is that of a morning show that is not the one presently on your air and not available on a terrestrial signal.

As many of you know I have spent some considerable time for nearly the last five years working in generational media as part of my teaching sabbatical. I wanted to share with you the concept of a different kind of podcasting by broadcasters beyond simply putting existing air talent on a podcast.

If you're as excited as I am about this business, you'll see why it's important to brainstorm about your future beyond the terrestrial signal, the Internet stream or the few mobile things that most broadcasters do.

Here we go:

1. Start ten morning shows (other than the one that is airing on your terrestrial station). The content should aim at one demographic that is desirable to sell. Example: women 25-54. Ten shows that don’t air on the radio.

2. Each show should be the duration of the average commute in your metro area. So, if the average commute to work is 45 minutes in your market, your morning show podcasts will be 45 minutes in length.

3. Each podcast should be delivered from your “source” to subscribers' mobile devices just in time for their morning commute.

4. You’ll need legal help to negotiate music shows because of the unfortunate rights muddle podcasting faces. If you cannot secure the rights to the music every other terrestrial station carries, include music that independent artists allow you to use rights free. Believe me, the youth audience would rather hear this than the same old songs on radio’s tight playlist.

5. Come up with content ideas by brainstorming. We used a very disciplined and creative approach with students at USC or you might develop one of your own. Remember, content for these ten shows must all target the same sales demographic. More later.

6. Use broadcast production values on these podcasts. So, if one of your 25-54 year old podcasts is – Love and Money™ -- and includes the freshest new music aimed at this demographic as well as help in career, family and fun – you’ve got the format.

7. Hire the right person(s) to host this 45-minute show – not, I repeat, not anyone from your airstaff. Podcasting is not to be confused with broadcasting. You may be a professional broadcaster but it is not in your best interest to make these podcasts son of what is already on your air. Give the host a piece of the show and lock him or her into it for the long term. As it develops it will be a moneymaker for you and for your talent.

8. Do not include traditional spots in the podcast. Commercials have seen there better days. Young people don’t listen – but consider the “live read” approach that goes over very well with young people. If they are hooked on a podcast then they will listen to a “live read” by the host(s) if it is sincere and keeping with the overall approach of the show.

9. Open a podcast store online. This is where you will sell merchandise from clients directly to your listeners. You get a piece of this commerce. Also a good place to tell subscribers about the other shows you are making available.

10. Once you have ten morning shows up and running that have found a following, take them to an advertiser interested in reaching a specific demographic – in this example, 25-54 year old women. Bring them all ten shows. And while you’re pitching your reach and response (the new term your sales staff will use), start developing another ten morning podcasts.

Terrestrial radio can still be a good cash flow business for several years. There are many challenges. BIA says radio won’t see a return to profitability until 2010 and I am not even that optimistic.

I would never throw away terrestrial audiences, but I’d also never rely on getting Gen Y back to radio.

It isn’t going to happen -- at least from what I've come to learn about the next generation.

They went through childhood without a love for radio, unlike baby boomers or Gen X.

They are attached to their iPods and smart phones – their new radio.

If you still want to be in the content business when the last baby boomer passes into The Hall of Fame, learn about the new radio – podcasting.

No one is more able and ready to build this business than radio broadcasters who have the resources and talents to succeed.

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Who Is the Mr. Burns of Radio?

C. Montgomery Burns is – according to The Simpson’s website – the richest man in the mythical town of Springfield.

He has a monopoly on the Nuclear Power Plant.

He controls local elections.

He built “a contraption large enough to block out the sun and plunge the town into complete darkness”.

Mr. Burns is “more misunderstood than evil”.

Sounds like some people at the helm of powerful radio companies to me.

And it begs the question who is the Monty Burns of radio?

Able to monopolize their business. Able to control Congress, the FCC and to some extent the DOJ. Big enough to build a platform large enough to block out daylight for the smaller operators who live in their shadow.

Is it Citadel CEO Farid Suleman?

Let’s do the litmus test.

He can’t really monopolize the business, but he does have some impressive stations he purchased from ABC – a company that sure gave new meaning to the concept of timing is everything based on their sale to Citadel.

Farid Suleman has power, but he can’t control Congress alone – just doesn’t own enough stations. However, like Mr. Burns, he can block the daylight out of his employees future by operating stations on his bean counter theory that “Even Less Is More” – which one ups Clear Channel’s “Less Is More” strategy.

No – Farid may be heartless. He may be in over his head. He may be chummy with the board of directors, but he’s no Mr. Burns.

What about Clear Channel?

Certainly Clear Channel is big enough to monopolize the business and set the standard on Wall Street (as low as that standard has been lately for radio stocks). Clear Channel not only has great influence in Congress, they devote staff and revenue to trying to influence lawmakers.

Clear Channel is certainly big enough to block out the sun and rain on everyone else’s parade at the same time.

Sounds like the right company, but who is Mr. Burns?

Lowry, Mark or Randall?

And if one of this trio is Mr. Burns, does that make their assistant, John Hogan, Smithers?

Just asking.

Alright I am having a little fun here, but on the serious side what have the advantages of power, privilege and ownership done for Clear Channel – or for that matter any other major radio consolidator?

It’s not lost on some of us that radio consolidators have been granted unprecedented advantages – even a near monopoly – and they have managed to do worse for having a leg up on everyone else.

Maybe disadvantages are better than advantages in radio.

You know, the one owner who can barely afford to own four stations and loses money perennially, but serves the community and subsidizes any losses with revenue from other businesses.

Or cost overruns caused by hiring live talent, one program director per format, paying sales commissions and expenses and dare I say – spending money on audience promotion!

Maybe only owning a few stations made all of radio better – more diverse, more bullet proof.

After all, these so-called mom and pop operators who sold their stations to the consolidators got the better end of the deal now, didn’t they?

They got their money off the table at the top of the market?

And whose stock is selling for little more than $1 a share.

Actually, now that I think about it – I am doing a disservice to Monty Burns.

At least he is able to make a big profit.

Who in radio can make that statement today in spite of every advantage they could have every dreamed of?

Imagine if the real advantage had been leadership and not just monoply.

Radio, then, might be part of the solution to the record industry's ills not part of the problem.

Radio might be ready to annex new media instead of having its fate become a prisoner of new technology.

Radio might also be synonymous with mobile and cellphone content not just entertainment in a car.

At least Mr. Burns knew how to run a local nuclear power plant -- a lesson radio broadcasters should heed.

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The Satellite Merger

Maybe I am missing something, but the FCC (and before that the Department of Justice) have taken almost two years to ultimately approve the merger of XM Satellite with Sirius Satellite Radio.

Did the DOJ and FCC really need all that time to do what many of us knew they would do anyway?

The entire process is a joke.

Keep in mind that a condition of approval to allow XM and Sirius to operate back in 1997 was that the two companies must never merge.

Oops.

When the two satellite operators finally had to embrace each other to gain major economies of scale in an industry burdened with huge technology costs such as -- say, launching replacement satellites (no cheap thing), the sanctimonious opposition reared up and prepared to fight.

Then elected officials blustered their way against the deal even as the DOJ dragged its feet. Then, once the DOJ gave the green light it was up to the FCC to make the final call.

FCC Chairman Kevin Martin made it a few days ago.

He said he was going to recommend the merger (surprise) which is likely to mean approval (surprise) since his two Republican commissioners are likely to guarantee a 3-2 ruling.

I don't have a problem with two satellite companies becoming one if the FCC doesn't have a problem. What I have a problem with is the hypocrisy that surrounds the conditions to approve this monopoly.

When the only two companies in satellite radio become one it is -- well, I don't want to say the word again. You know.

But who cares if they merge.

Maybe the National Association of Broadcasters cares -- but they've got nothing else to do with their money. They see satellite radio as a big threat to terrestrial radio. Seriously -- find something worthwhile to fight.

They could fight the unfair Internet streaming royalty because it may bite their constituents in the butt someday. Or spend more resources on beating back the record labels' attempt to undo the performance tax exemption for radio. Nah.

Satellite radio has been a money losing proposition from launch. They have not bothered anyone including terrestrial radio which somehow got the idea that satellite radio was its competition.

Look at the farce the FCC is making out of this merger -- a merger most commissioners apparently want. I guess the merger proponents at the FCC just don't want anyone to think they are creating a monopoly -- which, of course, they are. But since satellite radio is a money losing business, you don't get the sense too many people are outraged about it.

Here are some of the terms of the agreement between Martin and the merger principals according to The Washington Post -- and keep in mind that they may not be through coming up with more meaningless, cockamamie conditions before the deal gets done:

• Place price caps on programming and offer a la carte programming so that subscribers could pick programs they want and not have to subscribe to all channels or certain packages. Officials with XM and Sirius said they would offer radios configured for a la carte programming within three months of the merger.

This is a meaningless condition because a la carte programming may turn out to hurt consumers in the pocketbook eventually. I thought the appealing thing for satellite radio customers was all those channels -- not fewer channels at less money. This is the FCC pretending to be consumer advocate.

• Open their technology standards to any radio-device manufacturer, paving the way for consumers to buy radio transmitters from retail stores. Currently, subscribers must buy directly from XM and Sirius, or through car manufacturers that have installed the devices in new cars.

This is a punishment? Please! Thanks, FCC, for helping us wind up on all types of radios and, by the way, the customer is still going to have to pay us to activate service. So, if radio manufacturers want to spend more to include satellite, all the better for -- satellite radio.

• Provide interoperable radios. Current subscribers have radios that deliver programming from either XM or Sirius. Within one year of the merger, these listeners will receive radios that could access programming from both providers.

The FCC required this at the time of approval and apparently they let the two satellite networks get away with noncompliance until -- now. Now they are mandating interoperable radios as if they just thought of the idea for the first time. This is the FCC channeling its bureaucracy.

• Each set aside 4 percent of their radio spectrum's, or 12 channels, for noncommercial services such as educational and public safety programming. They would lease another 12 channels for programming run by minorities and women, groups that are underrepresented in entertainment broadcasting.

They're kidding, I hope. Betcha the ratings for satellite radio in ten years will not include these ransomed channels. Betcha no one listens to these "set-asides". A satellite radio customer is paying for programming options, not access channels. This is the FCC at its political worst.

So, approve the merger, already.

Most people are alright with the monopoly part.

It's pandering to private interests in order to justify the merger that is the hardest part to swallow.

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Wal-Mart – The Fifth Major Record Label

For some reason the consumer press is obsessed with the thought that Wal-Mart, your friendly neighborhood local business killer, will become the fifth major record label of sorts.

Of course, Wal-Mart doesn’t produce music or for that matter even manufacture it, but it has sure become active in selling something that the other four majors are having a hard time selling – CDs.

The Eagles album Long Road Out of Eden sold over three million plus CDs through Wal-Mart alone (figured corrected from earlier edition)

Journey had a successful arrangement.

AC/DC is next to sign a deal with the retailing giant. But this deal was brokered by the group's label SonyBMG and it stands to alienate other retailers because only Wal-Mart will carry the next AC/DC album.

Make no mistake about it Wal-Mart is not a friend of the music business or for 99% of the musicians out there. It’s a piranha with sharp teeth looking to rip into any prey – a fearsome predator.

While everyone is waxing eloquent about Wal-Mart’s CD selling ability, it is lost in the fine print that Wal-Mart is also considering cutting back on the number of CDs they sell.

CD sales in general have fallen almost 17% so far this year. Things are not getting any better because consumers continue to make the transition to digital downloads.

Wal-Mart is the second largest music seller – 21% of the nation’s music.

iTunes is number one with 30%.

I’d rather be iTunes than Wal-Mart because iTunes is cooperating with the inevitable --- the eventual 100% digital distribution of music.

Wal-Mart is still hanging on to hard goods and through sheer muscle alone – doing very well.

But as the major labels have discovered, the CD business is dying. That’s a problem for the labels that still reap in excess of 80% of their revenue from CDs.

Wal-Mart tried to get the major labels to reduce the price of CDs to between $5 and $12 – at most. The labels wouldn’t go there. I've written anecdotally about my experience with the next generation that indicates (to me, anyway) that a $5 CD would be a blockbuster. There is not enough profit in it for the labels so they reluctantly cut CD prices only when they feel they must.

So now Wal-Mart is tinkering with the idea of weeding out the music they don’t need to sell.

Still, the record industry derives the major part of its revenue from a product that is tanking exponentially year after year.

The labels must now turn to biting the bullet and reinventing themselves.

Sit down before you read the next line, please. And please don't read this while you're driving.

The labels should become the new radio.

Cut out the middleman – go directly to the consumer. No towers, no transmitters. Just podcasts of their content. Deriving revenue from advertising partnerships and selling merchandise big time.

The labels seem to be through with radio anyway. Why else would they try to punish their former partners by seeking to lift radio's performance tax exemption.

And radio stations don’t seem to care about music, either. Just ask any young person (you know, the people who consume the most music).

Stations play a limited list of songs over and over again – less variety.

So, Wal-Mart, you’ve been warned.

You may be able to dictate the price of product from manufacturers in China, but you can’t dictate the next generation’s thirst for music variety.

Record labels, this is not a problem – it’s an opportunity.

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Clear Channel 3.0

Version 1.0 was Lowry Mays and Red McCombs building their little Texas radio group pre-consolidation.

And 2.0 was Lowry and sons Randall and Mark with Randy Michaels telling them how to build radio clusters. It was when Jacor and AM/FM were acquired to build the 1,10o station platform Clear Channel used to dominate the industry, that is -- until it ran out of gas.

Now, what's Clear Channel 3.0 likely to look like.

Clear Channel is aggressively moving to get the new deal to take the company private approved by its shareholders. The Mayses have moved the voting date up to the end of July -- smart tactic in an industry that is posting declining revenue every month. Keep in mind that shareholders must approve the new terms – and if they don’t send back a ballot, that ballot counts as a no.

The $36 buyout price is a few bucks lower than the one negotiated well over a year ago. A lot has changed since then. I think the big institutional investors might be in the mood to take the money and run.

Shareholders would be crazy to let this elongated, painful and public privatization bailout go on any longer. It’s time to take the chips off the table, suck up the losses and move on. The principals will be more fortunate.

They will take more profits and what will likely emerge is a new Clear Channel – not influenced by the Mays family but run for a while by buyout firms that have only one thing in mind – getting out whole one day. Getting a return on investment.

Lee and Bain, the investment firms now have the banks ready to close and once they do, look out for the new Clear Channel.

OPERATIONS

I can’t imagine that the new owners will have any use for Mark or Randall Mays. They may get an office somewhere, but if there were ever two nonessential managers, these would be the two.

Want three? Add John Hogan, their man although Hogan could be a critical force in a time of great transition.

Since the company is likely to be downsized, management will be cut back as well. Lean and mean. With the emphasis on mean. But it is also possible that better management will be put in charge. This would be a good thing for the many Clear Channel employees who have endured so much and it would be in the best interest of Lee and Bain if they want to hold the assets together at a time when the economy stinks and radio is facing that plus an aging audience and no digital strategy.

LAYOFFS

More pink slips are coming as these non-radio owners will do what they do best – look for economies of scale.

That means more stations carrying Ryan Seacrest doing his national show mornings or midday's on a local medium. Believe me, these bean counters are not going to get caught up in the local radio argument. They need cost concessions. So, what's wrong with an LA morning show in many other markets. Or so they think.

Voice tracking and program duplication will increase.

Cheap talent will be employed.

Multitasking will continue or grow – one PD to run many stations. One GM to – well, you know – they’re doing this now. And these PDs are likely to have their private parts cut off meaning they won't be able to stand up and do what they know has to be done.

Increased use of syndication.

Pruning expensive air talent.

SALE OF STATIONS

If Randy Michaels and Sam Zell ever wanted to get back into radio, this is their chance – buying devalued properties that Michaels knows better than anyone since he set many of them up in the first place.

The naysayers would have you believe that Zell can’t raise the money to buy some or most of Clear Channel, but that is not true. And don’t discount the potential sale of the Tribune Newspapers or Local TV. Don’t lose the name Rupert Murdoch, either.

It’s always possible Lee Abrams, Jerry Kersting, Bobby Lawrence and the increasing number of radio folks who are defecting to the newspaper business really want to end their careers once and for all with the apocalypse that is called the newspaper business.

But I see more Clear Channel people crossing over to the Michaels side after they get their money. A lot more.

More newspapermen in training?

We report. You decide.

A few of my readers are believing that Michaels and his followers have detoxed from radio -- I don’t believe it.

I see Zell and Michaels cherry-picking what they want at very favorable prices. In fact, I think they’ve probably already kicked this topic around with Lee and Bain. The Mayses can’t stop the stations from going to their nemesis, Michaels. And Zell doesn’t have to buy everything.

I'm worried that if more Clear Channel people defect to the powerful and charismatic Randy Michaels to work in newspapers that they should be careful if he asks them to drink any Kool-Aid next. It could be deadly for their careers.

So, Lee and Bain will act as a work out company – cutting, pruning, slicing and beefing up the remaining stations and assets for sale. There are few that believe dealmakers like Lee and Bain want to be operators any longer than they have to be to make a profit.

INTERNET, MOBILE AND THE FUTURE

Don’t hold your breath. Mobile content provided by broadcasters for new media will take a long time to ever be reflected in the real value of a traditional media company. Therefore, you can expect gratuitous (at best) efforts in new media by Clear Channel.

EMPLOYEE PROSPECTS

If you’re working for Clear Channel now and survive the onslaught of belt-tightening to come, you’ve likely retained a job in a more stable setting. The game plan is obvious: cut costs, improve revenue, sell the assets.

But outside of the very fatest of fat cats, money is hard to come by and radio is not exactly a growth industry -- at least by Wall Street standards. So, Lee and Bain will have to operate for a while, fatten the bottom lines and sell where possible.

The long anticipated privatization of Clear Channel has been too long in the making. It’s been real tough on the professionals who keep the good content flowing under tough restrictions.

But there is always hope – after the Mayses are out of the decision making process.

You may be working at a Clear Channel station that will be sold to another owner -- eventually.

Perhaps a better owner – maybe not.

An owner who understands that terrestrial radio has a short shelf life without the next generation and one that wants to be part of the mobile future.

The more likely scenario is that the next three to five years under new management will be as difficult and challenging as it was under the Mays family.

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The Radio & Records To Do List

First, the record labels:

1. Stop the RIAA lawsuits against college kids and youth by declaring victory and giving up on this failed strategy that has backfired by increasing piracy not stopping it.

2. Give up trying to sell monthly subscription plans so listeners can access millions of songs – most of which they don’t want. Consumers are showing they want to own music, not rent it. And by own, I don't necessarily mean they paid for it first.

3. Drop attempts to get Congress to revoke the performance rights exemption on radio. If eventually successful, it will only hurt the industry it may someday need to promote its music especially if radio becomes a mobile content provider.

4. Renegotiate the copyright fees for Internet streaming and guarantee long-term stability of rates. Radio may be declining but the Internet is where the labels future customers live. This will help an endless number of streamers promote music that labels can sell.

5. Start an iTunes-type online store in conjunction with a consortium of radio stations to promote music, play it and share the revenues from the site.

And, here’s how radio can make things better:

1. Hire more sales people. Revenues are down. Triple the sales staff. Pay attractive commission rates to avoid vacuum cleaner salesmen. And train them.

2. Make all morning shows local.

3. Put a personality afternoon drive show on the air. Listeners from the next generation say the number one way to even have a chance to get them to listen to a radio is to put morning show type personalities on at other times of the day. I know groups won’t do this because it will cost more money than hiring cheap talent, but it can help radio with available listeners.

4. Get into the podcasting business.

5. Encourage a faster rollout of the Portable People Meter. The diary system is a liability -- just as radio CEOs who are leading the fight against it. PPM will show increased listening. That's a good thing. Paper out. Digital in.

6. Adopt a one-PD-for-one-format policy and list on a single sheet of paper management’s specific goals for the year ahead. Have the PD agree to these terms. Then leave the PD alone and support him or her with a budget that will be agreed upon in the “contract”. If your PD achieves the goals to the station’s satisfaction, reward him or her with a raise and another contract. If not, you have the right to review the entire situation.

7. Improve corporate governance and hold CEOs and top executives more accountable for their actions and compensation. Continental Airlines is one of many airlines hurting these days. When they announced massive layoffs recently, the two top Continental execs relinquished their salaries for the remainder of the year sending the right message to those surviving the cuts. Hey Farid and Al Liggins – your stock is worth between $1 and $2 dollars. Give up your compensation (and stock options) for the rest of the year. Make do with last year's jet.

8. Stop voice tracking. Hire live talent instead. Get rid of a strategy that saves money and loses listeners.

9. Adopt posting in major markets. Advertisers -- the ones who pay you -- want it. Enough said.

10. Give your morning show the ability to connect with people by being a consumer advocate, helping them pay their bills or save their homes and provide them with chances to interact with the music acts you air.

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The Pirates of Radio One

Sometimes radio people say the darndest things – on-the-air.

That’s what happened at Radio One’s KBFB, Dallas recently when a jock apparently gave out information that included an illegal website where listeners could download the Carter III album – for free. The jock apparently got the story from a hip-hop web site.

You can bet the record label and distributor, Universal Music, was not pleased.

To its credit Radio One avoided further potential of legal problems when the program director reprimanded the jock. The station has since gotten religion on this issue by instructing on-air personalities not to give out website addresses where illegal downloads of music are available.

Stop.

What is a radio station doing giving out illegal websites to listeners?

How out of touch.

Listeners already know these things. You’re not telling them the latest news. A station promoting piracy alienates the record label and last time I checked stations still need record labels for music, promotions and other things.

The station apparently is now encouraging listeners to support Carter III’s artist Lil Wayne by buying the CD.

By the way, the KBFB incident is not isolated. Apparently numerous other radio stations have been foolish enough to encourage their happy radio listeners to go to the Internet and steal the music their stations play.

These are crazy times in the music media business.

Just the other day Prince put his record exec hat on once again and decided to cover Radiohead’s “Creep” at Coachella.

Prince, the most user-unfriendly artist out there, prohibited those who could not attend the festival from even seeing it on YouTube. Not only that, Radiohead – the group that gave the song away on an optional pricing basis to its fans couldn’t see it either.

This begs the question: who owns the rights to digital music.

Here you have two different acts with two different views on music and downloading. Radiohead offered optional pricing in the much ballyhooed release of In Rainbows and Prince would make the RIAA proud with his anti-consumer stance on the same issue.

Remember, this is the guy who disappeared from the music scene in a nasty dispute with his record label when record labels were really, well -- record labels. That’s how he became the artist previously known as Prince. But he’s up to his old tricks again. He shut down his official website in September and threatened to sue eBay and YouTube for not filtering unauthorized content.

What people seem to forget here is that music has been devalued because of digital downloading and stealing music isn’t going stop anytime soon.

Selling singles for 99 cents on iTunes didn’t devalue music, the inability of record labels to protect its delivery system did. They could put sensors on CDs to keep them from walking out of record stores, but they haven't (and will not likely ever) find an effective way of stopping music piracy.

So today we have some radio stations driving listeners away from their terrestrial signals to steal music online and artists driving fans away because in an attempt to protect what is not possible to protect.

It’s a real mess. The radio industry was the major force behind music sales and the labels were the only source to buy music.

Those days are gone.

In fact, this week Nancy Sinatra and other artists are going before Congress to argue in favor of repealing the performance rights exemption for radio – the people who even helped her have a hit record or two.

The RIAA targeting college students for stealing music is like the church excommunicating young people for having sex. It’s a nice threat but it can’t effectively be enforced.

The record and radio industries achieved their successes together and they apparently are going to fail together as well.

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The FM-Free iPhone

The NAB Board meeting in Washington this week has FM on cellphones as a big agenda item.

Too bad the NAB and most radio CEOs do not understand Apple CEO Steve Jobs' thinking in continuing to exclude FM radio from the increasingly popular iPhone.

Radio people think that if you build it, they will listen.

As I frequently point out, you have to take a closer look at the next generation and why they will reject radio -- even on an iPhone.

The radio industry fails to grasp that this new generation does not listen to its entertainment the way older folks did. You may see a young person with an iPod glued to his or her person but they are not listening to continuous programming.

In fact, they are the "program director" of their own devices and start, stop, advance or skip content as they please -- when they please.

In the past few years young university students have been telling me that increasingly they don't even allow all their iPod songs to play to completion. And, they say, their younger brothers and sisters are worse. In other words, they're not even listening to their favorite tunes all the way through.

Of course there are technological issues that keep Apple from readily including FM on iPhones not the least of which is the fact that U.S. FM is not compatible in parts of Asia and Europe where different standards exist.

But there is a bigger issue and radio broadcasters bridle at this obstacle.

People -- especially young people -- do not want to listen to continuous programming on their cellphones. That's not how they grew up with their phones. Not how they use them now. And there is nothing about radio content that makes them want to alter these habits.

There are other sociological issues such as the ever decreasing attention spans of the next generation. There are plenty of reasons to leave FM off the iPhone.

If I am right -- and I could be misreading it -- radio as we know it has seen its better day. While a minority of listeners might want to use their Blackberries or other smart phones as radio receivers, it is in fact -- a minority.

Of course, radio's "leaders" -- and I use this term very loosely -- continue to moan about being excluded from the coolness of Apple products. They are fighting a losing battle in more ways than one.

Remember when the HD advocates ballyhooed the HD docking capability to use iTunes for music purchases. Hold that image. No one else can picture it -- especially the marketplace. Tagging got tagged out at home plate.

What radio doesn't get -- and apparently isn't in the mood to see -- is that you can't cram a radio into a smart phone and expect an entire generation to use it like a Walkman.

So, what does it all mean if radio as we know it cannot get access to the growing product line of Apple portable devices?

It means its leaders must invent radio as we don't know it.

A morning show delivered in podcast form for download to mobile devices.

Or ten morning shows.

Just 45 minutes in length.

And, the morning show is not the one you air on your terrestrial signal -- it's far different, far cooler. But make no mistake about it -- the business I envision was made for the skills of radio programmers, talent and marketers.

I am going to touch on this and other strategies as to how radio can reach young people when I "teach" a session at the Conclave. I've also accepted an invitation to speak at the R&R in Austin this September to address in a more thorough fashion on this dilemma. I hope to see many of you there.

One more thing.

Unfortunately, radio's "leaders" are burying their heads in the sand.

They want to return to yesterday so much that they refuse to look up and see the future for an industry with all the skills to dominate mobile content.

It's just that mobile content for radio is not ever going to be continuous live stations -- not now, not ever.

Apple knows it.

The sooner radio does, the future will be accessible on a mobile device.

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The Hypocrites At Cox, Saga and ICBC

The CEOs at Cox, Saga and ICBC Holdings (Inner City) climbed out of their sandboxes briefly last week to shoot rubber bands at Arbitron once again over the issue of People Meter accreditation.

At least, that’s what they want everyone to believe.

These companies have paid for the latest in a series of what I think are childish ads aimed at their industry’s only credible ratings source in the eyes of advertisers.

They did this during a recession.

And while radio continues to erode as a growth industry.

The latest ad placed in industry trade publications is almost as funny as it is embarrassing. They, and the other groups that think like them (but were obviously too cheap to fund the ads), have the nerve to call the kettle black.

The ad shows a cartoon of a cat (dubbed “Arbitron Fat Cat”) with the headline "What’s More Important, Your Jobs or Making Arbitron Execs Rich?”.

They’re pulling our legs, right?

The execs who authorized this at Cox, ICBC and Saga are not “fat cats”, I guess. And all three of these companies are invoking job losses the way some politicians these days throw around the scare tactics of 9-11.

The ad plays the job security card by saying, “If the data is inaccurate, what happens to your job or your bonus? (In the ad, the emphasis on these words is underlined).

On the surface these malcontents would have you think that they are not against the People Meter – just that they want accreditation first. Of course, some of these same companies employ loud mouths who swamp the trade press with anti-PPM rhetoric (in the name of research).

I don’t have a problem with sticking it to Arbitron if you have a problem with them. But I do have a problem with the lack of honesty that these and other anti-PPM radio groups are showing.

Many of them have signed long-term contracts with Arbitron for People Meter ratings. No one forced them to put their hand on the pen and sign those contracts. Their concerns are right and just if they are their legitimate concerns – after all, once the contracts were signed, they became clients.

But why keep attacking the PPM that you supported with long-term contacts. The radio fat cats (as opposed to the Arbitron ones) have no credibility.

Read the ad and see what happens when top radio executives put their heads together. Is this the best they can do?

“Can we trust people with an incentive to continue the rollout to do the right thing?”

Did they just mention “trust”?

Are they sure they want this very public pissing match in front of radio’s advertising community. You know, the one that wants the People Meter.

The group says, “This isn’t about picking on Arbitron or on any individual…”

Then two lines later it prints Arbitron head Steve Morris’ phone number and calls for people to tell Morris that accreditation must happen before rollout.

Not everyone agrees with this vocal minority.

CBS Radio President Dan Mason said the other day that accreditation doesn’t mean currency. And there are other major players who also know that PPM is important to advertisers.

The diary system has a lot of known problems after many decades of use – some would say too many decades. And the new digital approach using the People Meter has and will have flaws now and in the future.

It says a lot about the forces of the radio industry who fight progress that will eventually be good for them. After all, why are they supporting it with their money?

Advertisers – at least in major markets – want posting accountability, some of the same crybabies oppose it.

Advertisers want PPM and this is the best radio’s brain trust can do – trash their own industry in the eyes of advertisers.

No one is saying you can’t demand answers from Arbitron.

No one says you have to support them with your financial backing in the form of long-term contracts if they are unresponsive.

Just stop demeaning radio in front of its advertisers.

Stop playing the job security card.

Stop acting like children.

And go back to work and get your share prices up before your scorched earth strategy winds up hurting somebody.

You and your shareholders.

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To Fix Radio, Fire the Boss

Tribune owner Sam Zell has declared newspapers dead.

In fact he reportedly memoed Tribune staffers recently "What has become clear as we have gotten intimately familiar with the business is that the model for newspapers no longer works".

So Zell’s COO, Randy Michaels, is looking to apply the now too familiar tactics that radio has used to shoot itself in the foot.

Cutbacks.

Fewer employees.

Fewer news pages.

That means instead of publishing more news pages than ad pages, this radio convert is looking for a 50-50 split in Tribune’s pages. At the LA Times, for example, that means eliminating 82 news pages a week at a substantial savings.

I’m not picking on my old friend Randy Michaels. He’s simply doing what radio people have done best for the past 12 years now – trying to grow companies by cutting them back. And, to be fair, it seems that just about all public companies operate out of the same playbook.

At least the ones in trouble.

On the other hand, real growth companies must have derived their name by actually growing their companies not cutting them back. Sounds simple, doesn’t it?

The radio mentality summed up by that hackneyed phrase “less is more” is a loser and now as radio people hired by Michaels for Tribune to reinvent newspapers get ready to do their thing – their thing is cutting back.

There is no reason for me to document all the radio companies that are laying off (a socially acceptable term for firing), consolidating staffs, physical plants and programming. In fact, the quickest way to say it is that virtually no radio groups are substantially hiring, expanding or experimenting.

It’s no accident that this strategy coincides with radio’s decline in advertising, audience and share price.

How can they expect growth to follow when they are committed to – no growth?

Clear Channel and others are continuing to debase the local radio concept by firing local personalities – especially on morning shows – and airing shows from other cities as a way of economizing. One show – many cities. But not local shows. And local is what makes radio work.

Citadel’s Farid Suleman is really into the one-show, many markets mode because his management has run Citadel stock into the worthless range and when that happens – radio CEOs do what they know best – fire someone else. But he’s not alone.

I don’t have any doubt that Randy & the Rainbows are going to save money at Zell’s newspaper company. The question is: can they also grow the segment and reinvent newspapers – a mighty large task – by spending less, doing less and thinking – less.

Here are today’s realities as they pertain to radio:

1. More is less - failure, that is. The first radio group to hire more PDs to program one station (instead of having fewer PDs run many stations) will get better local programming. More budget will lead to more resources that will produce better rated shows. This is a no-brainer. That’s how radio built itself into a fabulous cash flow business before the loonies in the accounting office ruined it all. It just happens to be polar opposite to what CEOs answering to Wall Street are able to do.

2. Less central control will get more ratings. Show me a radio group that gives its managers, talent, programmers and sales people relative autonomy, and I’ll show you a local radio station better able to compete for the available audience. I know I poke fun at radio’s CEO and COOs who are micro-managing but this is not funny. Radio has no future if it is not local.

3. More emphasis on the available audience will sustain more radio stations. The reality is: the next generation has moved on. One of my readers showed how deeply in denial he was in a comment recently when he basically said there are plenty of young people listening to radio and anyone who says otherwise is in essence nuts. Well, I may be nuts, but after a four year sabbatical teaching at the college level, there is no doubt in my mind that whether in college or among the non -college educated, radio is finished as we know it. Black and Hispanic youths are still strong radio users, but don’t get too complacent. That will change too.

4. Less complaining and more taking responsibility is the management formula that will work best in radio. Go ahead, name the radio CEO or COO who takes responsibility for anything that has gone wrong. First it was the inability to further relax ownership rules, then it was the Internet stealing ad dollars from radio, then the iPod was the culprit and the People Meter was going to be the ruination of radio. No, the ruination of radio is managing by dodging responsibility. Someone, please take some blame!

So, radio is dead among the next generation.

I got many emails the other day from readers, new friends and radio people who pointed to the recent Coleman study that documented for the first time the serious decline in teen radio listening. I have been screaming about the loss of youth listeners for years.

Sorry that teens have left radio, but they are not coming back. They don’t live by radios any more. The radio industry must go to them if they want to be content companies when baby boomers and Gen Xers go to that Hy Lit record hop in the sky someday.

But there is a new radio in their future – on-demand, mobile and different – that terrestrial operators could own if they could understand it.

Radio people are not dead in spite of the fact that radio companies are managing to kill their careers.

They are the ones who can deliver high production value content for all types of future applications.

To me that makes them a greater asset than a transmitter or a tower.

I will continue to talk about the new radio a lot in the months ahead, but I want to say over and over, if terrestrial radio (transmitters and towers) wants to remain a good cash flow business for the immediate future utilizing the available older audience it still attracts, there is one sure fire way to do it.

Fire the boss.

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The FCC’s Free Broadband Trap

Leave it to the Federal Communications Commission to come up with a way to control the free Internet.

It is proposing giving away broadband Internet for free in exchange for their right to control it.

There is an upcoming airwaves auction and if the FCC has its way the winner would be offering free wireless Internet to most consumers – perhaps in less than five years.

That is, if anyone takes the bait.

According to a recent article in the Wall Street Journal:

“Even so, the FCC's plan represents a major step forward in U.S. broadband policy, as the service would reach millions of Americans who currently don't want to pay for or don't have access to broadband. In the past seven years, the U.S. has dropped from fourth to 15th in the percentage of households that subscribe to broadband Internet. "We believe this is a good idea and demonstrates the [FCC's] commitment to supporting initiatives that have a positive impact on the next phase of broadband innovation," an FCC spokesman said. "Particularly with Wi-Fi it would give consumers greater choices to access the Internet."

Not so fast.

We know from the FCC that it will block pornography sites and while I see little use for them, they are still, by and large, protected under free speech laws.

Of course, the real question is – what else will the FCC regulate?

It seems to me that we are getting footloose and fancy free when it comes to our freedoms. To paraphrase Bill Clinton, before you sign on for this Pandora’s box, figure out what the meaning of free is.

Certainly free broadcasting is not included in the FCC’s concoction.

The Journal article poses the question, “who would bid on these airwaves?” The major telecoms have spent billions upgrading their spectrum holdings during an earlier FCC auction.

Is there a startup company out there that has the hefty entrance investment to make it all work?

Whatever.

This is another bad idea. We do need to provide wireless access to all consumers but not a service of, by and for the interests of the FCC.

The FCC’s proposed free giveaway of broadband space in return for control leads one to many old adages.

You get what you pay for.

Beware of FCC Commissioners bearing gifts.

The FCC is a relic from the past when radio signals needed to be regulated. That role is not necessary today and while it could take a stronger role in encouraging local broadcasters to be more accountable to their communities before winning license renewals, the Commission has just looked the other way.

The best advice of all might be this:

To gain control, you have to give up control.

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