My Favorite Media Things

I love Oprah Winfrey.

I’m an ex-TV guy with a great appreciation for the production values that go into her show every day that has been popular for ages now. She knows her audience. Knows how to focus on the right topics. She’ll keep bringing back fan faves as long as they are popular and it doesn't hurt that she's been able to launch a career or two along the way.

Oprah does an annual Favorite Things show built around Christmas in which – and you may have seen or heard about this – she shows the audience her favorite things (gifts that holiday season). Then gives them away to everyone in the audience.

With that as my premise, I’d like to offer you My Favorite Media Things up to the minute as of today. Unfortunately, I am not going to open the prize closet and give one to every reader. Hey, I'd didn't get that much money from Clear Channel!

My Favorite Cell phone

I have owned the Apple iPhone for over one year and while I have not switched to the faster 3G AT&T service yet, I love the new features. Now I can send email and actually clean up my large email backlog on my laptop almost at the same time (many of you have seen my iPhone responses when you write to me). I hate AT&T service, but I have made my deal with the devil. The new applications available on iPhone are perhaps the happiest I’ve become as an owner. I have a great To-Do list (and I’m nothing without that) and I cannot believe that I play at least one complete game of Scrabble from Electronic Arts every day. If I’ve learned anything, it is how much time I (like my young friends) spend with a cell phone. And, it's getting worse. Not making calls. That remains the same. It's everything else.

My Favorite Satellite Radio

I have Sirius – in fact, I’ve had it in as many as three cars in two cities. The manufacturer of my cars never offered me the ability to get XM (thanks to the FCC) so I am happy with the prospect that I might be able to opt in to some of their content going forward. Either that or I will have to choose my next car not on how fuel efficient it is but whether it has XM installed. It’s an absurdity. My favorite channel is Sirius 7 – the 70’s channel because Magic Matt and J.J. are very good jocks --- maybe even Drake-type jocks that I prefer – except for stepping all over the station I.D. And what’s a satellite station doing a legal ID for anyway?

My Favorite Computer

MacBook Pro. I’ve by and large had Macs for a long time. Steve Butler who used to be president of my company Inside Radio, Inc, was a great Apple enthusiast. He even had a Newton for a time as I remember it. Tom Taylor, the editor also seemed very much at home on Mac. Now more than ever it’s an easy choice. And I never have to worry about viruses – except this cold I got when I returned from vacation.

My Favorite Television Network

HBO. You know I liked the Sopranos. And Entourage is my present passion. But now there is YouTube for everything else. It’s hard to believe we lived without YouTube. I get many YouTube items sent to me daily and you can do a search of almost anyone – even me – and find a clip. YouTube, as you know, is more of where television is going due to sociological issues. Short attention spans. The growing popularity of media on demand. The folks at Google haven’t found a way to monetize its $1.8 billion acquisition but they may not ever be able to monetize it adequately -- at least as they are proceeding now. It seems everyone wants to run commercials – something young folks skip anyway – and I don’t believe you can support these new media platforms with old school commercials on a pre-roll basis.

My Favorite TV

I just had a 52-inch Sony XBR 5 Bravia LCD installed and the picture is damn nice. Maybe it's not as sharp as the Pioneer Elite I have in LA but it doesn't glare like that either. You can buy most of today's electronics from big box stores but I had a great local company called Plan B do a fabulous job. Isn't that a great name -- Plan B? Unfortunately to be honest (and I don't think you'd appreciate the alternative), I rarely watch more than an hour or two of TV a day. Often less. Occasionally more (Go Flyers!). So now I have this great "theater like" system and I spend more time on the Internet, the computer or my iPhone. Bet I'm not alone.

My Favorite Social Network

My choice is Facebook. I was introduced to it when I was teaching at USC. At the time only students and professors could join. I think they (and I) liked it better that way, but I have met so many interesting people through Facebook. I can see what they look like, what they are all about – get personal. They can also do the same. There are many other social networks from Linked In to Plaxo and one I was invited to join called A Small World. A Small World may be out of my league. Okay, it is out of my league. If I am looking for a place to stay at the French Riviera, just go to ASW and you’ll find a willing helper. Even a way to arrange a private jet. (No need for me to call Mel anymore). This Jersey boy marvels at A Small World. The next generation is right – it’s all about social networking. I joined Twitter the site that gives you a few hundred characters to type what you’re doing right now. I do it but I’m not hooked. The site is very erratic -- often down and can't handle the demand. People "follow" other people and learn what they are doing now. I can hear my Italian mother’s voice now – “no one cares about what you’re doing”. True then. Not so true in today’s world.

My Favorite Web Sites

Like you, I go to too many of them a day. Really a lot now that I think about it. All the trades, news publications, blogs that I can consume. I am embarrassed to say that my number one bookmark is Drudge Report – not because I like his right-wing agenda, but because even with his lousy news judgment, I get everything that is going on in one place. I also go to a great site (that I pay for – the only one other than the Wall Street Journal Online) called News Blues about the TV news business. I started in TV news back in Philadelphia and it’s a real comedy of errors these days. Then onto The Raw Story to get the left-wing agenda to counterbalance Drudge. Yes, and a few gossip sites that helped me keep up with my students – The Superficial and Perez Hilton. I also like Real Clear Politics a lot – fair and balanced truly. But, like you, I spend hours a day online -- the number one place I go for news, entertainment, social networking and communication.

My Favorite Internet Stream

Love Rich Brother Robbin’s Rich Bro Radio. I find that AccuRadio has almost everything that I like and well done. I don’t listen much to Live 365. I do use the new AOL CBS link to hear WCBS-FM in New York and to hear some Philly radio when I am in the sunny west and feeling guilty. Or homesick for a cheesesteak. I love Pandora on my iPhone and hope that it will be able to continue in light of the royalty mess. I created a channel called Delfonics Radio just to put Tim Westergren’s music genome concept to the test. Damned if it doesn’t bring back the Philly-sound r&b I love. Sure wish I could do other things on my iPhone when listening to Pandora, but the iPhone software doesn’t currently allow it.

My Favorite Internet Radio

I do not own one. I listen on my laptop. Too many of my friends are advocates for the ones they bought. RoKu is supposed to be good. One thing is for sure, no one – that’s no one – that I know who has made a decision to purchase an Internet radio – isn’t in love with it. My radio friends use it to listen to terrestrial streams elsewhere but they also have great appreciation for independent Internet streams (at least the ones that can still afford to operate). I can’t bring myself to buy any kind of radio – really. I am getting counseling for this, but I admit it openly and honestly.

My Favorite HD Channel

I’m playing with you now. Who can even find an HD channel that has a signal let alone one that is worth the price of a radio. Maybe next year. Maybe not. Maybe radio companies ought to either budget for new HD programming or pull the equipment and make a coffee table out of it.

So, these are a few of my favorite media things.

Sure like to hear yours.

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HD Radio’s Last Stand

Even Custer knew he couldn’t win the battle at Little Big Horn but you have to admire him for fighting to the bitter end.

The bitter end was his death and the death of the troops fighting under his command.

Bob Struble, the man who brought the industry HD radio, is at his Little Big Horn and he’s acting like he’ll fight to the finish as well.

Except the death of HD may very well coincide with the death of radio as we have known it for 50 years.

Look, I knew General George Armstrong Custer, and, Bob Struble, you’re no General Custer.

Okay, I saw the movie.

In recent days Struble said that HD radio is at the “inflection point”. What the hell is that? Tipping point for radio people, or what?

Struble’s point is that now with automakers on board to make HD more readily available to consumers – just you look out.

And satellite radio, Struble thinks he’s going to take a piece out of Mel Karmazin at Sirius XM. (I often try to use some humor in my writing but the preceding is dead serious).

The HD Alliance hasn’t been able to convince broadcasters to do even satellite-level programming on their HD sub-channels and this guy thinks he’s going to win the battle of Little Big Horn – I mean, HD radio.

Nonetheless, studying the radio industry vis-à-vis HD radio technology is a fascinating spectator sport. And if you look closely enough, it will tell you a lot about the sorry state of both.

1. New People Meter numbers for the first few PPM markets (or soon to be markets) show that HD listening did not meet the minimum reporting requirements. Say what? HD has been around in one phase or the other for decades. And still, no one listens.

2. No one listens because no one wants to spend any money at all to own a radio – especially a radio that doesn’t come as standard equipment in a car. Duh! And once enough cars have them STILL nobody will want to listen to HD.

3. Group operators don’t even want to invest in special HD programming – you know, the kind that might make someone, say – buy a new radio. That speaks volumes for HD. The listeners don’t want it. The stations don’t want to program them. Poor General Struble – he’s the only one ready to fight to the finish.

4. HD is the waste can on the radio industry. Owners dropping formats have been known to send the formats they were dropping into the HD dumpster where their fans could not listen. Some also made the dropped format an Internet stream. Just brilliant. The Internet is the place for radio’s “A” material – not the ceremonial burial grounds for discarded radio formats.

5. Last week, even NPR affiliate WGCU in Naples, FL decided to drop classical music. Oh, no – they didn’t really kill it off. They did worse. They sent it to HD Siberia where their fans can’t hear it unless they want to buy an HD radio – and we’ve already covered that unlikely prospect. Radio should be ashamed of itself, anyway. You’d think you’d have one of every format in every market – and a damn good version of each format as well. Sorry if classical isn’t hip-hop but can you see why satellite has the edge here and why WiFi streaming is going to kill radio.

6. Sooner or later the HD radio proponents are going to run out of money. You can’t keep getting funding forever with promises and no results.

Look, I really have nothing against HD radio.

Fifteen years ago!

With full participation by radio owners. That means new and different programming, promotion, talent and marketing.

Hell, they won’t even do that now on their main channels.

HD radio is no longer just a controversial issue to the declining terrestrial radio industry.

It’s a major distraction.

Time to turn off the HD and get ready for WiFi, streaming and podcasting – the future relatives of an industry that used to know by sheer instinct alone what to do next.

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Welcome to the Bungle

Fourteen years to make an album is too long.

Now the rumors are out there again that Guns N’ Roses is ready to finally put the finishing touches on what will probably be called “Chinese Democracy”. That Axl Rose is nothing if not a spoiled brat – an aging spoiled brat.

Talented spoiled brat.

Whatever.

Now, in the hands of Front Line Management, Guns N’ Roses may actually have a distribution deal with a big box retailer such as Best Buy or Wal-Mart.

Wal-Mart produced the blockbuster sales figures for the Eagles “Long Road Out of Eden” recently in their exclusive deal.

For some reason these groups – and I like them both, don’t get me wrong – are slobbering all over themselves playing record label.

Front Line’s Irving Azoff has record label in his DNA and he likes these big box distribution deals. Guns N’ Roses' label is Interscope and no one really knows at this point who is negotiating what for the band.

I’ve kind of had it with Live Nation signing big acts for big money and Don Henley leading his angry jihad against radio.

These are not solutions for a declining music industry.

Repeat.

No solution.

What’s good for Madonna and Jay-Z has nothing at all to do with how vibrant the music industry will be in the days to come – and right now things are pretty gloomy.

What's good for The Eagles and Guns N' Roses is good for -- well, The Eagles and Guns N' Roses. And that's okay.

The labels can blame radio (for not paying performance rights taxes) and consumers (for wanting to access music from bit torrent sites), but the real enemy is within – the artists and their handlers.

Hey, the labels are what they are. We can’t make them Mother Teresa – they never were anything more than businessmen who manufactured things. First vinyl. Then plastic. No wonder the digital world is so alien to them.

But the music industry has no future without lots of new music being released from more genres and exposed in all kinds of places. Not just radio (which has lost its clout) but by giving it away and feeding the monster – the desire by this next generation that it can’t get enough music.

Free music.

This is a good thing.

But you’d never know it by listening to the labels piss and moan.

And you wouldn’t know it by the way artists, their “management” and other parties are proceeding.

With all due respect to Wal-Mart and Best-Buy, it isn’t enough for them to sell music on an exclusive basis. They are too smart not to understand this fine point which is why CDs – even The Eagles most recent one – is what retailers call a loss leader.

How appropriate? Music as a loss leader to get consumers into Wal-Mart and Best Buy so that they can buy other items that provide these two giant retailers with an actual profit.

You'll note that Wal-Mart is actually cutting back its CD titles available for sale in their physical stores.

It’s time to wake-up and smell the irony.

1. To have a vibrant music industry, many genres of music must be exposed and developed. Just working a few acts for radio (where the record buying public is less available to hear them) or in sweetheart retailer deals like the ones Guns N’ Roses plans will not work.

2. Artists need to get back to making music (with all due respect to Trent Reznor and others).

3. If the record industry is salivating over Guns N’ Roses finally releasing an album – how pathetic is that? If they wait any longer, some moron will come up with a retailing deal at nursing homes.

4. There is no getting around the main point that record labels must become distributors of their own music – they must do it.

5. Giving away free tracks online or through bit torrent sites like Limewire is tantamount to what airplay on radio used to be – free promotion!

6. iTunes is not the solution to any music industry problem – it is only a distribution channel – and in terms of profits, a minor one at that. Selling songs for 99 cents a pop is nice for Apple, but it isn't the future of the music industry.

7. Suing consumers is a waste of time and money for the labels. Spend the money on developing acts.

8. Back off trying to get the radio performance tax exemption lifted. It doesn’t matter. Radio has lost the next generation and soon will not be able to sell your music anyway. Make friends with radio, though, because my belief is that the smart operators will enter the Internet streaming and mobile content business and you’re going to want them to be your friends then.

So, welcome to the jungle.

No, not the one Axl sings about in the outstanding Guns N’ Roses song of the same name.

The jungle I’m referring to is the one created by the labels, artists and managers who are now suffering from a crisis of their own making.

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Chrysler’s WiFi

It’s here.

Chrysler is offering all sorts of Internet connectivity on its 2009 models as they make the entire automobile a hot spot.

The car, once safe haven for you and your radio, will soon become so much more.

I remember Mel Karmazin when he did the keynote at one of my Inside Radio Management Conferences waxing eloquent about the virtues of radio over cell phones – from a safety standpoint.

Mel was correct.

There is something different about talking on the phone and conversing with someone in the car while driving. Even hands-free laws are of little use it turns out. Drivers are literally driven to distraction when they have cell phone capability.

The New York Times did a scary article Sunday warning about the negative effects of WiFi in the car. Two studies – one Canadian -- reported in The New England Journal of Medicine and a separate Australian study examined cell phone records of people injured in car crashes. According to the article, “Both studies concluded that when drivers were talking on phones, they were four times as likely to get into serious crashes.” The author, Randall Stross, was quick to point out that we won’t be seeing any studies done here in the U.S. very soon as cell phone carriers refuse to provide such records to researchers. I wonder why?

Personally, my wife and I were on our way to Phoenix Sky Harbor for our weekly trip to Los Angeles a few years back when a young gal on her cell phone and driving struck and hit our SUV at an intersection where I had had the right of way for at least 30 seconds. Outside of remembering her with blood dripping down her face (and her phone still held to her ear), it was all I needed to wake up and take note.

But potential death by auto is one fatality.

Death to radio by auto with WiFi is another.

Radio broadcasters fear mobile WiFi because it could kill them off. Kids not listening to radio but online or watching video on laptops.

Yes, Chrysler’s WiFi indeed makes the entire car a hot spot. No need to have any conversations with your children. No more games on long trips. They won’t have the fun of identifying as many license plates from various states when the family travels together.

In fact, backseat video is already here with DVDs and satellite operators offering content.

Now, anyone in a UConnect car can surf the web -- even the driver -- and don't think that's not going to happen.

You often hear me talk about the sociological aspects of technology which is why I got into this subject. The fact is that WiFi alone doesn’t guarantee Internet operators anything. In fact, for them and for their traditional media competitors, I recommend they go back to the drawing board and rethink what auto hot spots can mean to the audience beyond the obvious.

I think WiFi is a game changer.

It will allow consumers to access everything they like from the Internet in the car. That includes video. It also includes email and surfing the Internet. Never mind that many lives may be lost going forward from distracted drivers – the mobile Internet is here and is not going to go away.

What would Steve Jobs do? (Sorry to invoke the name of the Lord).

No one knows for sure, but could we assume that whatever he did would be intuitive so that it is easier (and perhaps) safer to access audio, video and text?

I'm just guessing now.

Do you think Jobs would make interactivity easier – a click, perhaps – so you can contact the person you are watching or listening to with little or no effort?

Would he develop a new kind of auto-Google or do a partnership with the search engine giant so that finding what you want is easier yet?

Remember, the road ahead is full of even more distractions -- both for drivers and media companies.

Perhaps you’ve joined me in cursing out someone who veered into your lane while they were attempting to text someone. Or perhaps they cursed you when you did it -- come on, fess up. My young students sheepishly admitted that all of them – all – text while driving. I believe it.

What a great opportunity for radio.

I love my technology as much as you do, but I think that a technology Armageddon is coming some day in the next five to ten years. We are turning ourselves into prisoners of the very things that could make our lives better because we are unwilling or unable to be disciplined in their use.

In other words, just the ability to interact may not be enough some day. Today, it is. In fact, society -- in my view -- has bent itself out of shape to utilize all the new technological opportunities that we have.

Would you be surprised to know that many young people tell me that they leave their iPods at home -- on purpose -- and that others wish they could text less and have more time for other things. But make no mistake about it, they -- like us -- are not ready to disconnect.

Forget students, look at the idiots who push their way down the jetway bumping into everyone trying to get on the plane. That would be everyone with a Blackberry. How is it that they must scroll through all their Viagra junk mail while getting on a plane. I know. They’ve got legitimate business.

It’s the balance that is missing.

I confess. During my recent blast from the past at the Jersey beaches, I whipped out my iPhone constantly to check and answer emails. Could I be that important? We both know the answer to that. All of us are submitting to the technological crack that is provided by connectivity.

Not that this would ever happen at a terrestrial station in the era of consolidation, but I’d encourage one-day seminars on the sociology of technology (radio, mobile phones and WiFi in cars). When you get so many smart radio people together focusing on understanding the end user – for better or for worse – it can be very important.

It’s the difference between jumping on the WiFi bandwagon with what you think the perceived benefit will be and getting it right from the beginning -- offering content that cooperates with the inevitable.

Auto WiFi is in its infancy and the radio industry which still doesn't have a workable strategy for the Internet is surely not ready for the one thing that may single-handedly cut out the home field advantage in the cars.

So I'm putting it out there.

Learn from past mistakes.

Understand what WiFi means to consumers -- not to your business -- and come up with a game plan.

What a novel idea for an industry that has done it half assed backwards for the past 12 years.

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My Favorite Radio CEO

I know what you’re thinking.

That I’m going to name John Hogan or Farid Suleman as the lesser of the evils just to titillate the masses and coerce them into subscribing to my daily feeds.

Now, how could I do that?

What I’d like to do is describe some of the characteristics and strategies that I think a radio CEO should adopt in the digital age. I often blister these poor (or should I say rich) incompetents with criticism. Why not step up and offer some positive things so they can criticise me. Turnabout is fair play, after all.

One caveat.

Don’t take any of this advice. I want to do it and I want to be paid $11 million a year for it like Farid.

Sorry, I’m getting carried away. That's selfish. So in the spirit of good karma, please take it and go use it if you like.

• Work for $1 a year

What? What? CEOs do it in other industries. You know, they ask their people to deal with pay cuts, firings and budget reductions and they lead the way by taking the biggest hit. See, this is what is missing in radio and why virtually all of the group CEOs are not well respected. The pain starts at the top. Do this and maybe the rest of your team will follow.

• Fire corporate people that someone reports to

How dare you fire the morning guy who just turned in number one ratings in one of your markets (this happened again recently, by the way). After cutting your salary to $1, get rid of the corporate people who I define as the ones someone reports to. So if you are employing anyone who exists so that someone reports to them, they’re history.

• Make all managers report directly to the boss – you

So, if you own six stations in a market – have six managers who have clearly defined missions (more on this later) and direct accountability. The only thing you need is the financials that show what he or she is doing is in fact working. If they can’t get it done, plug in a manager who can. Everyone works separately and they make their goals or else you replace them. By the way, I hardly know anyone who would argue with this kind of accountability. What they can’t stand is running a station that they aren’t really running.

• Meet with your managers once a year

And don’t be a cheap SOB and make them pay for lunch out of their station budget, either. Take a page out of the richest person in the world’s playbook – Warren Buffett. Buffett buys the assets of companies – no, not the widgets and hard structure – the people and management. He meets with his company CEOs once a year – that’s it – reportedly for just a few hours and then he takes them to a restaurant in Omaha and they have lunch – on him. This will work in radio because the not ready for prime time players who act as CEOs are so far removed from the street they don’ know what to do next. Check their share prices if you've got any doubts.

• Offer a one-page employment contract

Hire a manager for a year. Give her or him a one page list of what you expect – measurable goals and a judgment date. If they meet these goals to your satisfaction, promise them a renewal with an increase in pay specified in advance (you could always make it more). Be specific. If they don’t, they know what’s going to happen. You have the right to replace them. If they succeed or overachieve you may also offer longer term renewals but you have to honor them and stay out of their business.

• The Manager hires the PD and Sales Manager

I know, this happens already. Ya think so? I hear of too many hiring’s that were misrepresented because corporate was either not told or not willing to live up to the handshake some poor sucker made. The manager should always decide who his or her program director and sales manager will be. They serve at the station manager's pleasure. And do the same thing – one page employment contract with goals and judgment dates above.

• No corporate initiatives – ever

Now, I’m really pissing you off. Sorry, didn’t mean to, but your current system doesn’t work. Even my precious Internet, mobile and podcasting initiatives that I would implement in a nanosecond must come from the local level. I know this hurts you and will cause great pain – to you. Corporate should see itself as advisors. That’s what I try to do with my clients – advise, not consult. Inspire (hopefully), help them determine their game plan – become a resource -- not a replacement for local decision making. This would work for corporate just as well. Boy oh boy, imagine all the savings when you eliminate those corporate Internet positions (I'm being sarcastic here) and let the local manager and their team answer your mandate for the digital future.

• If it works in New York, forget about it

Or San Francisco or Davenport or anywhere. Another great mistake of radio CEOs is taking something that might have worked in one market and then ramming it down the throats of some poor manager trying to keep their job, make their house payments and send their kids through college. No need under my plan. Your job as “advisor” not “corporate dictator” is to introduce success stories to each other. You hired the best person for each station and act like it – let them decide.

• One manager per station

If you’re unwilling to do this I’m taking back all my ideas and I quit. Look, what is it going to take to get it through our heads that each station needs a top dog? You’ve been trying this three for one deal for twelve years and it hasn’t been working. Each station deserves – no, requires – its own full-time manager and if you still can’t recognize that then you are indeed going down with the ship. It’s an unbreakable rule – a demand – one manager per station. (Yes, and one PD per station and guess what I’m going to say about the number of sales managers per station).

• Help your stations sell

You’d be wiser to encourage but not demand local managers to continue to train their sales people. Radio salespeople are under trained. Corporate should offer solutions and the local manager should be free to opt in. And if the local manager wants to triple the sales staff, encourage it.

• Don’t contact, call, email, text or visit your managers

I know what you’re going to say – I’ve spent too much time in academia. Right. I want to be more like the CEOs who can’t get their share prices up over a few dollars. Not. Hear me out. Your time is best spent by coming up with corporate strategy and hiring the best people who can carry it out. Stop calling them. Stop with the weekly or monthly reports. You have your yardstick for judgment day – that one page contract with what you expect. Send memos to all managers with things that have to with resources – ideas. Don’t micromanage.

Hey, I’m just getting warmed up. I know the people who are reading this and saying “amen” are the ones actually running radio stations.

The ones who need this advice the most – the wannabe Jack Welch’s of the world – are probably saying, “I never liked him anyway”.

Bottom line: radio is broken and it is falling behind in the chain of media available to future audiences.

Top down management is a failure. Hands-on grass roots management is the answer to radio’s problems.

The digital future will not come from New York or San Antonio.

What to do with radio’s future will not evolve from five regional managers. That system didn’t work in good times and it won’t work now.

One more thing.

I often ask for some of my compensation in salary and stock. This is a good idea for you. If you give someone a chance to make a difference, see if they are willing to bet on it with some of your stock.

Hmm. Let’s see.

So, if I can turn around Citadel with some of these concepts, let’s say I get $50 a week for salary. And lots of stock – priced at 94 cents as of Friday. When it hits $2 a share I’ve more than doubled it.

I'm rich!

We’ve had some fun with this topic but keep in mind that in every way – radio works best when it is local.

Local terrestrial radio.

Local new Internet streams.

Locally-generated podcasts.

Local WiFi strategy.

Oh, and I guess I’m also saying – management in control locally.

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Radio's Carnac

Johnny Carson used to do a sketch called Carnac The Magnificent in which sidekick Ed McMahon first fed him the answers and "Carnac" then supplied the questions.

McMahon: Anheuser Bush

Carson: Where do you grow Anheuser berries?

Carnac's character was a seer and soothsayer. I thought of him when I received one of the most astonishing emails recently in which a radio executive provided both the questions and answers back before consolidation.

But this email was no laughing matter.

Many of you ask me what I think the industry will look like in the next five or ten years. It’s always dangerous to predict, but too much fun to ignore.

Look back. Could you have imagined five or ten years ago the mess radio is currently in?

Paul L. Gleiser could.

Who is Paul L. Gleiser?

I sure didn’t know when my friend Barry O’Brien sent me the link to Holland Cooke’s outstanding newsletter in which Cooke printed an absolutely chilling letter written by Gleiser to former NAB CEO Eddie Fritts.

It seems Gleiser is an old time operator – the kind I like – who runs a handful of stations around Tyler, TX.

Gleiser, in his letter to Fritts, warned about consolidation and asked many intelligent and pertinent questions that deserved intelligent and pertinent answers.

Unfortunately, Gleiser never got them.

And writing to Fritts, the guy who single-handedly got radio deregulation tacked on to The Telecommunications Act of 1996 is like writing to Satan himself on this issue.

How do you turn the heat up where Satan lives?

Nonetheless 13 years ago, Gleiser asked Fritts:

“Pardon me if I seem cynical but I don't believe that those in our industry who are promoting this legislation (and I have close observation of two of the major proponents, the Hicks family and the Mays family) are really concerned at any core level with competitiveness.

Hicks and Mays are, at their roots, investment bankers. And I believe that they - and others - are promoting the lifting of ownership limits in order that sufficient numbers of radio properties can be aggregated quickly in order to get revenues above a practical floor for going public”.

You’ve got to love this guy, already. He called Fritts out before the evil deed was done and consolidation was allowed.

Here are some of Gleiser’s predictions to Fritts on what would happen if consolidation became law:

• “…some company will set out to be the first to own a thousand stations nationwide just for the bragging rights. A thousand stations!”

Remember, this was before the first radio group started acquiring stations post consolidation.

• “A lot of good broadcasters will succumb to the extraordinary offers and sell and quit the business”.

Boy did he call it right. Imagine radio today if those operators were still at the helm. Think radio would be a lot more competitive moving into the digital future. I do.

• “The resulting dilution of management attention to any operation will result in an overall degradation of the quality of what goes on the air and what goes on the street”.

Gleiser really did write the letter November 6, 1995. No kidding.

• “With dramatically fewer employment opportunities in the business, it will be exponentially more difficult to attract bright and talented people to the industry.

I can’t go on.

This is too painful.

How did Gleiser get to be so smart and all the folks who ran radio groups so dumb?

I know that many of my friends and readers of Inside Radio back in the mid-90’s also expressed concern, but the majority caught consolidation fever. Remember, when managers were “elevated” to running a “cluster” of stations. (Point of order: what do you call a cluster manager who fails to effectively run their stations – could it be a cluster-f#@k?).

At the very least, Gleiser’s premonition deserved to be considered by the man the radio industry trusted with lobbying on their behalf.

Instead, Eddie Fritts himself has blood on his hands – sorry to say it – for his part in selling out the radio industry for the interests of a few.

Isn’t that what a lobbyist does?

Isn’t Gleiser what a clairvoyant is?

I’ll say it again – with Regent, Radio One and Citadel on the verge of being delisted from the stock exchange – as part of a failed industry effort to run radio as an aggregate and not as a lot of local entities – consolidation failed.

You can’t blame the mom and pop operators who sold out for unimaginable profits, but radio and its fine people were sold out by Fritts, their NAB, their not ready for prime time CEOs and the federal government.

Gleiser’s letter is another reminder that it didn’t have to turn out this way.

I'm suggesting that we think long and hard about how radio got into this situation -- 15 months of declining revenues, declining audience, the loss of the next generation, replaced by the Internet in promoting new music, a compromised on-air product, talented people fired every week of the year. And -- no Internet or mobile strategy in a digital age.

Consolidation has done nothing good for radio.

It's the eleventh hour and the most important people in radio are the handful of CEOs who have the power to lead this industry in a digital direction.

I'm under no illusion that they will come through with tough answers and brave decisions.

This is for the rest of us who could have what it takes to position radio as the leader in entertainment, news and talk content no matter what device a consumer uses to listen.

The paralyzed radio CEOs are likely to go down with the ship. They're making great money in spite of the fact that the stock they hold is worthless. The original characters are still running the show today. No downside for them.

Gleiser's letter is a reminder that many of us saw it coming -- he just happened to articulate it in writing.

Now it's time to move on.

Not just to let it go, but to part ways with the handful of "leaders" who don't seem to know where to turn for the answers.

Their employees.

(Read Gleiser’s letter here in full if you dare, but you’re going to cry, I’m warning you).

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Radio After Denial

I was impressed to see C.L. King radio analyst Jim Boyle tell it like it is in his latest analysis of revenue projections.

Boyle said July's 6-7% projected drop in revenues will be radio's 15th straight monthly decline.

Boyle laid out radio executives when he asked the question "what are radio leaders doing to change direction". Here's his response:

Not much, it seems to us. The industry’s larger groups do not appear ready to institute revolutionary changes yet in sales, programming, promotion or station clusters. There is a notable sense of denial of how harsh the prospects have been and continue to be for Radio. The classic CEO reply is Radio is not bleeding as badly as Newspapers. We concede there is too little radio ad demand, but there is also too little rate card integrity and too little investment in radio’s product and people for the long-term. It very much looks to us as all rear-guard counter-punching.

Boyle's remarks are right on because radio's monthly declines are not about to turn around any time soon and yet radio CEOs -- the ones I keep skewering right here -- are content to do the same nothing they've been doing.

I should note that smaller markets are outperforming larger radio markets and that's good for them, but the industry together has a problem -- no, scads of problems -- so I want to focus on what I see ahead for radio after denial in honest terms.

Warning: you're entering a "No Diplomacy Zone". I'm pulling no punches.

1. Radio is nowhere near hitting the bottom.

The economy will be awful for the rest of 2008 and while I believe 2009 will get better, I am not sure radio will feel it until 2010. But, it isn't the economy alone that is the problem in spite of what radio's CEOs may say or think. It is radio's inability to remain current with how the audience gets their entertainment -- that would be the Internet and mobile devices. So, rock bottom should occur in 2010 and then it will get worse if radio strategies do not change drastically.

2. Many lost advertisers will not return to radio.

Once they get their businesses on track, former radio advertisers will not likely return to previous levels of financial commitment to radio advertising. One reason is because radio is getting older (in terms of audience) and advertisers are wanting younger (consumers with money to spend on homes, cars, kids, etc). The genius CEO who thinks that when the economy gets better radio will return to its former numbers is smoking something seriously strong.

3. The consequences of ignoring the next generation will kick in.

I've often said the students I taught while on sabbatical from radio are now out there working at good jobs, getting married and I expect to hear soon -- having families. These folks do not like radio. They listen when there is little choice. They prefer their own generation's radio -- the Internet and the more short form content is available for their mobile devices, the more they will listen. Even radio executives admit they blew it when it comes to the next generation. They thought they'd always be there listening to some radio station as has been the past experience. In effect radio twittered away 12 years while their big eyes were set on consolidation. Our mother's were right. Their eyes were bigger than their stomachs. They ate up all the radio stations they could get Wall Street to finance and eventually got sick because the audience shifted to the Internet.

4. Big trouble ahead with WiFi.

If radio CEOs fear satellite radio, they are really going to be scared of WiFi which is coming to a new car near you starting next year. Satellite radio never hurt anyone. WiFi is the killer app. Give the next generation tens of thousands of streams in their cars and see how much less radio listening they will do. Terrestrial radio thinks one way and one way only. We do radio. 24/7 radio. Many of us also package it for the Internet. We regurgitate our morning show on podcasts. Our motto is, "I did it my way". Too bad. If you don't like radio's chances now, see how you like them in two years if you insist of business as usual.

5. Cutbacks will come back to haunt radio.

Radio CEOs are still smitten with Wall Street. They think they are Jack Welsh. Dream on. All these cutbacks that CEOs are making for what they term financial necessity are going to kill them. In fact, it's already happening. Making radio less local does have ramifications -- who needs another faceless (voiceless) national music stream? Taking favorites off the air because they make too much is false economy -- favorites is all radio has that is different from an iPod. Hello? No news. No fun. One program director doing three or more jobs with fewer resources -- sounds like a growth business to me. Not.

6. HD is VD.

The sooner it is wiped out, the healthier the radio business will be. No one in their right mind -- or should I say, with any familiarity of Gen Y -- can really believe that HD sub-channels will save the radio star. Whatever delusion these folks are operating under is laughable. HD isn't going to happen. If I told you I could sell you a $100 horse at Best Buy, would you be interested? Radio -- all radio -- is outdated content and technology as far as the next generation is concerned. Available, older radio listeners will stay with their favorite medium -- in the car -- but don't be surprised of the lure if WiFi doesn't beckon them, too. I think it will.

7. Lack of an Internet plan leaves radio odd one out.

Repeat after me -- what percentage of a radio operator's budget is actually spent on Internet and mobile content? Five percent? You wish. Herein lies the problem. Radio refuses to get into the future. It is married to transmitters and towers. It won't even acknowledge that the Internet is the future for the next generation. While a few group operators would be fast to tell you they have Internet divisions, they are woefully underfunded. If you reap what you sow, look out.

8. The commercial is also the problem.

Radio for years got away with salespeople writing copy (more than you can fit in a 30 or 60, by the way), the part-timer/swing guy or gal voicing the copy with music from one of the production libraries that are sitting around. Emphasis on music under the announcer. Anyone of us who did this for a living knows the dirty little secret -- radio commercials as I have just described don't work for the paying client. (By the way, I feel the same way about Internet ads that call a 2% click-through rate success). Nonetheless, radio can't be a business that provides solutions for businesses when it takes the lazy, cheap and ineffective way out. Radio should guarantee results to advertisers. Then raise rates. Believe me, if a radio station guaranteed results, they wouldn't put the crap on the air they call commercials. Even without the vanishing next generation, radio revenue would have fallen anyway because to put it bluntly -- spot radio as most stations do it doesn't work.

9. 24/7 broadcasting is unnecessary.

Used to be -- when entertainment could not be time delayed and listeners had longer attention spans -- that radio's best option was to broadcast 24 hours a day, seven days a week. We guessed when listeners would be doing certain things -- like driving to work at 7:20 in the morning or washing their cars on the weekend -- and we blasted our good stuff at them. Well, today, radio operators are doing the exact same thing in spite of the fact that sociological changes have become apparent and the stuff these stations are blasting at the audience is not their best stuff. Welcome to time delayed listening. So as harsh as it may seem, there is no reason for a station to broadcast 24/7. None. Even a news station can utilize new technology to get better (and that doesn't mean inviting listeners to "check us out online at W-whatever.com). It isn't cool to direct young people to the Internet. They know. They're there all the time. You look like a fool. So, the future of broadcasting will have to, by necessity, have a transmitter platform, if you will -- a podcasting platform (separate and apart from broadcasting) and an Internet strategy. Keep doing 24/7 and you'll keep getting bad marks from analysts like Jim Boyle when your revenues continue to decline.

10. The music will kill radio.

You think I'm referring to the needless repetition and lack of variety? That, too. Once the labels get radio to pay something more called a performance royalty then it's all over. Radio people don't get it. They'll go down with the ship to play the same 27 records over and over again. P.S. - there are now more than 27 records you can play. Repetition that worked well for all of us for so long, no longer does. The next generation rejects it. They are different. One way or the other -- ironically, music will be the death of most radio stations.

Now that we're all emerging from denial, some advice -- remember, it's free so it's probably worth exactly what you're paying for it.

1. User-generated content. Repeat. User-generated content. A new, young associate of mine (also a USC grad) and I will be offering platforms for the holy grail of the next generation -- user-generated content. We are not expecting our phone to ring -- from radio executives, that is. Watch. New media will embrace what radio should be doing -- stations built from the ground up on -- you know the routine -- user-generated content.

2. Best way to cut expenses at a radio station (remember, this is free advice!), do fewer good programs. That is, do a few things really well and re-run it almost as if a listener wanted to record it (which they won't). Keep your personalities. Sign them to long-term contracts. Give them the resources. If you can only afford 12 great hours a day, rerun them for the other 12. Great content never gets old. Watered down content (the kind budget cuts are creating) will never attract an audience. Stop firing your talent!

3. Budget no less than 20% of your operating expenses to new media in the year ahead. Don't want to? Scroll up and reread Jim Boyle's analysis. Your next year will be another one just like the other one.

4. Break format. Come on! We haven't come up with a new format (you know, with new formatics, no sweepers, no promos, etc.) in decades. Let's all come up with at least -- one -- before we go to work in another industry. Let's see. Here's an idea: a dj doing his or her own show -- their own music, their own imagery, their own format. I know it is sacrilegious from an ex-Drake format PD to talk like this, but do it. Every generation would like more discovery. Let's all go to therapy together to find out why such smart people can't separate from our inner Cousin Brucie. I believe listeners will really go for this. I know of a few brave managers (proud readers, I might add) who are taking my dare. I don't think you'll be sorry if you do it right.

5. Stop with the spots, already. Less isn't more. None is more. Try a new form of commercial. One that actually provides solutions for your best advertisers. Test the concept. Devote whatever time you need on-air. Make it multi-platform. Guarantee results -- okay, have a drink and stop shaking. I can see some big contracts getting signed when the focus is on the advertiser (large or small) and not the spot vehicle (large or small).

I must stop now.

But this is exactly how I feel -- as the saying goes -- and I'm sticking to it.

I hope I've inspired, angered, or agitated my talented friends in as many ways as possible.

Because it's time to take control and make change a strategy and not just a word.

The Marines may still be looking for a few good men. I'd be happy with one radio CEO with cujones.

One.

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Conspiracy Against Internet Streamers

There is something seriously wrong when Pandora – arguably one of the most popular Internet streams out there – is close to pulling the plug and shutting down.

A million daily listeners and record numbers of iPhone users (and me) are going to be very unhappy.

The reason?

SoundExchange, a company that works for the record labels and artists, won a copyright decision that implements a burdensome (if not unworkable) financial formula on Internet streamers to pay copyright fees. Webcasters are trying to get relief but SoundExchange just drags its feet.

No one really cares.

Satellite radio pays a much smaller fee – go figure.

Radio pays nothing other than the customary ASCAP, BMI, etc licensing charges.

And few are coming to the defense of Internet streamers – thousands of whom went silent June 26, 2007 when the higher royalty fees kicked in.

The NAB has been worthless on this issue. After all, they think Internet streamers are not their constituents. They represent terrestrial radio and I guess they think that it’s not in the interest of the radio industry to fight for their Internet brethren.

Foolish. The NAB should represent streamers because if they're going to go out of business with the radio industry that just turned in its 17th consecutive monthly revenue decline.

Radio has no future beyond the listeners who already like radio and keep listening. Only a small percentage of hard core radio listeners listen online. Radio companies are asleep at the wheel when it comes to anything to do with the next generation – and this includes, as George Bush would call it, the Internets.

Pandora founder Tim Westergren is quoted in The Washington Post as saying that 70% -- that’s a whopping three-quarters – of its paltry $25 million in revenue will go toward paying royalty fees.

If radio had those ratios, they'd be screaming bloody murder.

No wonder Pandora is not long for the world. Pandora is in Westergren’s blood. Talk about genomes – it’s in his DNA. The last thing he would want to do is shutter the operation.

It’s unthinkable – how could you close down one of the most popular streams with the next generation and let satellite radio – a loser with Gen Y – continue under a sweetheart deal?

It’s a conspiracy – alright, I’m being dramatic, but maybe not too dramatic.

It isn’t in the best interest of radio to allow Pandora to compete with them. They have enough problems. You get the point I'm sure.

It isn’t in the best interest of satellite operators – I mean operator – to fight for more competition online. How stupid could I be?

It isn’t in the best interests of the record labels to have another channel on which their music can be heard by Gen Y – the generation that gave up on terrestrial radio. After all, the record labels don’t think about strategy. They’re manufacturers of plastics discs that they used to sell a lot of and now since sales are falling -- screw everyone else.

Well, everyone is wrong.

Sorry to be so heavy handed about it but it is true.

I write every day about generational media. There is no future for traditional media beyond Gen X. The next generation is off and running elsewhere.

Radio has no future unless their many talented people can be reassigned and funded to create new content for the Internet and mobile devices.

In other words, these geniuses in the radio business are really screwing themselves when they oppose more equitable royalty rates for Internet streams. I know. I know. Big companies can afford big royalty fees and radio groups are big.

Not so fast.

Radio groups can barely break even in commercial radio let alone justify the Internet royalties they must pay.

How shortsighted.

So, have a good time everyone!

When radio is dead and satellite radio is still trying to be the next “radio” (a little late) and record labels wind up with nothing to sell, Internet radio will still be the future.

The public wants it – no, demands it.

Thousands of entrepreneurs including very talented and very fired radio executives and personalities could be tomorrow’s hot “radio” people.

Write it down. You read it right here.

Before the cock crows twice, all their brethren will turn on them – but Internet entrepreneurs will rise from the dead and resurrect a dying media business by doing one thing.

Playing music that isn’t licensed.

Go. Do it.

Licensed music isn’t exactly lighting up radio's hit lines.

There’s a whole new world of undiscovered artists out there and djs like Michael Tierson and friends (among others) who can engage a new generation in the music of the Internet made of necessity.

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Radio's 3% Internet Solution

New Arbitron People Meter information for July in several of its markets shows some impressive listening by affluent and educated people on the job at their workplace.

The Internet may be responsible for about 3% of the midday listening Monday through Friday and according to Radio & the Internet Publisher Kurt Hanson, that’s a big deal.

I like Hanson’s analysis:

According to Arbitron PowerPoint slides…Arbitron found about 60 PPM panelists listening to webcasts at the average moment on a weekday midday. Doing the math, it seems listening to local terrestrial streams (which is all Arbitron measured) must comprise about 3% of midday radio listening at this point in history. If one were to add in estimates of listening to Internet-only stations (e.g., Pandora) and out-of-market terrestrial streams, one could imagine that Internet radio listening now comprises 6-10% of midday radio listening. That’s meaningful. To look at it another way: If WBEB’s stream has a .5 cume rating, it probably adds .1 or .2 to the station’s 12+ share, and in Philadelphia, an extra .1 to .2 on a station like WBEB is probably worth an extra $300,000 to $600,000 in annual ad revenues. Again, that’s meaningful!

This is not surprising.

Available radio listeners – the older ones, inclined to listen to terrestrial radio in the first place – find it convenient to listen at work over the Internet. This says a lot for them and for the stations to which they show an affinity.

But the PPM figures also give us an indication of where the future is headed.

Online stations are also part of the listening stream. Terrestrial radio will have a whole lot more competitors when WiFi is available in autos starting slowly with next year’s models.

This means that terrestrial radio – if it is looking for real meaning in the PPM numbers – must find a way to compete with thousands and thousands of “stations” that will reside only on the Internet and be available to listeners at work and soon – on the go.

This is meaningful – very meaningful.

While terrestrial broadcasters will have all this competition, they could also offer programming that online streamers might find hard to compete with – personality radio, for example. But that is not the current trend in radio. The current trend is to cut programming budgets and rely more on the music.

In effect, radio decision makers have opted to play on the streamers playing field.

And, if they do this – terrestrial radio will lose.

Internet streaming is the antidote for cluttered, faceless, commercial radio. Streamers are the original “less is more” crowd. Except that the "less" streamers are talking about is less of the irritants that turn listeners off.

Less clutter (and commercials)

Less repetitive music

Less mindless chatter

But to win in the brave new world of Internet streaming – soon to be empowered by universal WiFi – radio will have to come up with new programming elements that are going to keep their available listeners loyal and perhaps attract some new young ones.

More creativity in presentation

More personal choice in music playlists (either by “jocks” or platforms such as Pandora).

More community and interactivity

It has taken the People Meter – the instrument that many influential terrestrial broadcasters have fought for so long – to legitimatize in-office Internet listening as another valued delivery system for radio programming.

But don’t be surprised if there is little growth ahead for broadcasters who think just being one of hundreds and thousands of streams will be enough to enter the digital future.

My prediction is that over the years, Internet streamers will rise up and leave traditional broadcasters with a small share of the listening.

For radio owners who want a presence in Internet streaming, a few thoughts:

1. Create forty or fifty Internet streams as soon as possible targeted at a group of common listeners as opposed to a meaningless demographic. Not simple music streams.

2. Have no tie-in whatsoever with your terrestrial operation. That's broadcasting and the next generation has already made up its mind about terrestrial broadcasting content.

3. Do hire your terrestrial talent (managers, salespeople and programmers as well as on-air talent) to create, run and breath life into these new streams. But if they work for your online product, they must come off the air. Fat chance of that happening in this world of cutbacks and firings but it is the right thing to do if terrestrial radio wants to succeed in digital media. Terrestrial broadcasters think there is what they broadcast on the air -- and then nothing else. Stream it. Repackage it. That's a blueprint for failure.

4. Sell these streams with new approaches to commerce (i.e., not spot commercials). I know this puts an arrow in the hearts of radio people but radio commercials don't work online -- and that's assuming they work on-the-air (a big assumption).

5. Look for ancillary ways to earn big money (i.e., merchandising opportunities). This is the key to profitability in Internet streaming and mobile content. It's not like radio -- you don't air the content and sell commercials to monetize it. You air the content (for free) and find ancillary ways to build revenue streams -- a major difference.

6. Connect the streams through social networks that you create.

There’s, of course, much more.

But I’ve said it before and I’ll say it again – radio has a content problem not so much a technology problem.

We have new evidence here that die-hard listeners will find terrestrial radio on the Internet at work where they might have a hard time receiving a good signal.

What few want to talk about is that to become meaningful in a world of so many choices, terrestrial broadcasters are going to have to invest heavily in content and talent. Investing and heavily are two works you don't say to radio operators these days so you know what they are going to wind up with.

If not, enjoy your 3% -- it won’t be getting much higher.

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Radio and The National Enquirer

It says a lot when The National Enquirer (known as tabloid trash to former presidential candidate John Edwards) gets it right and The New York Times (known as the paper that gives you “All The News That’s Fit To Print”) gets it wrong about assumptive Republican presidential candidate John McCain.

If you think this is all about newspapers, you would be incorrect.

It’s about the media business and in particular radio. Stay tuned a bit longer.

The Enquirer hounded Edwards and asserted that he had a “love child” with Rielle Hunter, a former campaign aide. Edwards denied it. Hunter went into hiding – until, until – the enterprising reporters at The Enquirer caught Edwards escaping from a Beverly Hills hotel a few weeks back. Eventually, Edwards fessed up – although he didn’t admit to being the father of Hunter’s child. (The Enquirer, by the way, continues to say he is).

The New York Times meanwhile did a piece that insinuated McCain may have had an affair with a Washington lobbyist. It ran the story. Never backed it up in the minds of many readers. But now it is out there in any case.

Wait a minute.

What’s going on here?

Since the news media has been heading for the exits – slashed and burned by budget cuts, it seems like you can’t get a good news story any more. Except in a tabloid.

If The National Enquirer is the only publication that had the story right, is it possible that the news media finally accomplished the unthinkable – handing over the Fourth Estate to the inmates running the asylum?

To the next generation it doesn’t matter.

Because while America’s media companies were out cutting costs and telling investors that they were building shareholder value, Gen Y came along and said, “I don’t care”.

Think about it.

Back on 9-11 you remember turning to radio and TV for coverage of the World Trade Center and Pentagon tragedies. Remember, we watched Peter Jennings’ beard grow darker as he sat perched in front of our TVs for what seemed like forever sucking in every bit of news we could get on how 9-11 happened and why.

You may be like me. Today, I go right to the Internet when I want news.

Earthquake while I’m In Los Angeles? No problem.

I’m pulling my iPhone out and going to one of several earthquake tracking sites I’ve bookmarked.

When Ted Kennedy got a brain tumor, I was notified by several news sources I subscribed to online and on my phone. Maybe you were, too.

I find it's easier to get local news on a local website than from local TV where viewers have to put up with superficial reporting and news consultants who advise anchors to say “here’s a story you won’t believe” – they’re right, I won't.

Oh, I used to be a TV and radio newsman among other media careers in my past, but radio and TV are the last places I would turn to now. For all practical purposes, radio got out of the new business long before it got out of the local radio business. It's doing that now.

I mention all of this because as radio (and television) leave their audiences behind in news coverage, the next generation has turned to other sources.

You asked for it – you got it.

The smarties running radio groups think their job is all about shareholder value – cutting costs or at least containing them. But I don’t think radio has done anything truly new or bold since the late 1980’s. Things certainly got worse after consolidation.

The real story is not about John Edwards or John McCain. It’s the way the next generation gathers news. And before we indict these young folks as not being representative of the majority of people, wait one minute.

All of us have changed the way we get news and information.

The Internet and mobile devices are the new radio and TV – even for those of us who are older than Gen Y.

Blackberries. iPhones. YouTube (admit it). Video on demand.

And the same thing is happening in music.

While the record labels try to inflict a performance tax on radio, the point is already moot. Radio has less and less influence with the record buying public – that is, if you can even find the record buying public.

The new radio?

The Internet and mobile devices.

The lunacy we see almost every day now in the radio business is that less is more –
Less staff, less local programming, less news, less variety of music – you name it.

Farid Suleman is out slashing Citadel staffers because he just turned in a 9% decline in revenue last quarter. The board of directors isn’t all hot and bothered over it. Shareholders are apparently okay with Citadel's share price under a dollar. And advertisers continue to spend money – although obviously at a slower pacer.

But the one thing that has changed is that consumers have discovered that less isn't more -- more is more.

More options, more channels, more ways to communicate to others, more variety of music, more social networking.

So as radio, TV and print make The National Enquirer look legitimate, I’ve been thinking.

The first influential leader who can start investing in the Internet and mobile future will be pursuing a growth industry.

And don't tell me that the major radio companies are already involved with the Internet. Run the numbers -- look at the percentages. See how little they spend on the only future they could possibly have.

For those of us who love the traditional media business and think it – and its people – have the skills to make it in digital media – it's discouraging to realize that a handful of radio CEOs still get their news the old fashioned way.

From investment banks.

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ASK DEEPER QUESTIONS ABOUT FINANCIAL CONDITIONS

Many observers tend to conceive any changes in media businesses as trends that are irreversible or to combine them with other changes to make sweeping generalizations about industry conditions. The results are often wrong and distract observers from asking deeper more appropriate questions about longer-term developments and how media companies use the resources they have.

To understand changes one needs to consider developments separately to determine their origin and expected duration. This allows one to determine what are the result of external trends and what are the result of company choices. Only then can one begin combining them with other observations.

Thus, one needs to consider whether the ratings increase for AMC is due to people spending more watching cable channels or an effect of the AMC's investments in quality programming and the popularity of programs such as Mad Men? If it is the former, one can enjoy benefits with little effort or extra investment; if it is the latter, the company will want to consider additional investments in other programming.

Is the decline in broadcast television advertising in the first half of 2008 a harbinger of a advertisers moving expenditures out of broadcasting or a reflection of the current economy and the condition of the automobile industry and its declining ad budget? If it is the first, long-term trouble is brewing and companies will need to give significant thought to their business models and cost structures. If it is the latter, the financial difficulties caused by the reduction may be short- to mid-term and will merely have to be endured until conditions improve.

Is the decline the in national newspaper advertising the result of reduced spending by advertisers or because of changes in the number of national advertisers and the ways they allocate their budgets. The latter requires rethinking income potential and expenditures for selling national advertising, whereas the former will create less longer-term trauma.

Many observers also seem to think that budgets cuts are necessarily bad and unusual for companies, but they are normal occurrences because of the cyclical nature of advertising expenditures. When ad dollars are flowing vigorously, media companies expand their budgets; when that flow lessens, companies reduce their budgets.

What is important about budget cuts is that they be instituted in strategic way to leave the core capabilities of the firm intact so the firm can benefit when conditions change and not miss critical time and financial benefits by having to rebuild those capabilities when better times occur.

It is alo important that budget cuts not be made equally and across the board, but that they be made by clearly analyzing the necessity of existing cost structures and operations. The challenge for many traditional media is that they are labor intensive and labor costs often are the one of the leading portions of their expenses. If one must cut labor, it should be done considering which employees can easily be replaced later, whether all operations, products, and services need to be maintained, and whether outsourcing some functions is an option.

Many companies also forget to look at the top as well as the bottom of their operations when cost cutting occurs. Today, for example, many newspaper companies need to be asking whether expensive corporate offices, private jets, and high corporate salaries and perks are warranted and necessary or if they should cut those corporate expenditures and the management fees they lay on local newspapers to pay for them.

In times of change, one needs clear vision of what is happening to an industry and company and to ask broader questions than are typically asked in firms and by industry observers. Those who do so benefit; those who don't pay a price.

WiFi and NoFi

Next year BMW will introduce the Internet to its upscale car buyers.

That’s only the start. Other auto manufacturers are already in or planning to offer WiFi on wheels.

It’s coming – as promised – and the youth generation has been waiting for a way to access the entire Internet on the go.

This is like what FM was to us – and more.

What about terrestrial radio?

If terrestrial broadcasters are afraid of 100 plus extra paid satellite channels as competition, you can imagine the arrival of WiFi to cars as a Depends moment.

Terrestrial broadcasters will have to make many changes not the least of which will be to program to local communities – or at the very least – to a targeted group of people. Demographics will be so out – and the novel idea of finding a target audience will be so in.

That’s the gift WiFi will bring to the terrestrial radio operators who are paying attention.

Just making terrestrial radio signals available on the Internet is senseless – after all, drivers will continue to have radio available in the car’s entertainment center. But if you want to hear KLOS, Los Angeles in Chicago – well, there’s a new use for WiFi radio.

But that isn’t going to make it with the next generation who – I’d like to remind you – is beginning to age very nicely like the rest of us. They’re becoming consumers, employees and moms and dads.

The richness of WiFi will be the variety not available from terrestrial operators. After all, you saw how consolidators and their lemmings rose to the occasion to program their much-touted HD channels.

Don’t put your head in the oven – yet.

If I’m owning a group of radio stations right now, I’m seriously trying to super serve the available listener.

Cutting back on things they like is not super serving them.

Then, I am looking to anticipate the arrival of auto WiFi by doing the unthinkable – creating new stations – you guessed it, aimed at target audience groups not demographics.

These stations will reside on the Internet but I’d package them for WiFi. WiFi promises to be a household word like texting. Good time to plan for it.

Remember my mantra:

• Programmable and customizable

• Short form not 24/7 (in other words, fewer hours of quality programming repeated is better than 24 hours of blandness).

• No commercials or a different type of monetization other than the proliferation of spot radio

• No terrestrial radio djs or personalities (that’s broadcasting, remember?) Our goal is something better than broadcasting – at least in the perception of the next generation. So if you employee a great terrestrial talent, pick broadcasting or streaming. Not both.

Listen, this is taking nothing away from radio formatics that have served the industry well for decades. It’s simply something new.

You should see what happens when I get a group of broadcasters together to lead a brainstorming session on broadcasting and new media. Their initial reluctance when we get to new media is replaced quite quickly by fascination and then by innovation. At the end, it’s a sin to send them back to a terrestrial radio station and waste their ideas and enthusiasm where they can’t be heard by the next generation.

WiFi is radio’s best chance.

WiFi is just a delivery system. Using WiFi as the product -- well, that would be NoFi.

But to create and brand content specifically for WiFi that is truly compelling to the next generation.

That would be another new business opportunity that radio broadcasters by their track record are likely to miss.

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Duplication Is the New Radio Syndication

Radio operators led by frantic consolidators looking to slash expenses have entered into a risky game of duplication.

Most station executives can make a powerful argument for firing local talent and putting on outside programming.

Like keeping their jobs.

Syndication includes entire formats, time periods or shows that can be bartered for commercial inventory. That is, they are basically free to the stations. They most certainly save the local stations the expense of employing local talent – and that seems to increasingly be the lure.

Some are good. Many are just placeholders because the local stations have gotten into the habit of turning off the lights after 7pm. Some even earlier.

Delilah, for example, is one of many shows that could be considered an asset to these stations because of the unique nature of her show. But a radio station airing a lot of syndication seems to be a shortsighted solution to cutting costs at the risk of making radio less local.

Putting Ryan Seacrest on in various time periods in differing markets as Clear Channel and other operators are doing can save money but it is not syndication – it’s duplication. Seacrest's salary is being paid at his home station in LA and even with incentives for airing elsewhere, it's still a pretty sweet financial deal for Clear Channel.

Just give me a dj for free and I’ll schedule him here – that’s the new mentality. This is taking nothing away from Seacrest, a talented personality. It’s just that radio stations would be wiser to grow their own personalities. It isn’t that expensive. Cut costs elsewhere.

Local programming should not be open to such budget cutbacks.

That's the program director in me talking, but there are many who agree that the continuing and extensive ecnomies in radio programming budgets is shooting radio station managers in the foot.

This mindless stripping of duplicated radio programming in localities across the nation is tantamount – in my view – to radio drinking the Kool-Aid. When it’s too late, they will find that their stations will not awaken from the stupor of ill-founded cost cuts.

And, it's increasingly too late.

Some of the best radio shows – in fact, some of the best radio legends – got their start by being willing to pay a local station to be on the air. I’m not suggesting that arrangement. Just saying that there is no shortage of affordable talent across radio cities everywhere.

There really isn't -- programming expenses are not consolidators' main problem -- lack of understanding of what radio is and who is available to listen is.

A doomsday scenario for consolidators for becoming irrelevant is to look at their latest clever idea.

Duplication.

Amortize the cost over many stations. The hell with the fact that it isn't local. I can hear it now. Howard Stern wasn't local. Rush Limbaugh isn't local.

Nice try.

Radio works best as a local medium.

But stations are increasingly duplicating national programming.

They can't resist it but listeners can.

I understand that today’s economics requires drastic cutbacks. Go cut somewhere else -- like the CEOs salary.

Take Farid Suleman.

His excessive $11 million dollar compensation last year would help fund a lot of great local talent in Citadel and he could still earn, say $4 or $5 million. Then, based on thinking like that, maybe he would be worth it.

So, I am calling these operators out on this.

It's all about priorities -- and radio operators have their priorities all wrong when they think duplicate the same show in numerous markets just to save money.

And you wonder why the next generation wants nothing to do with terrestrial radio.

A dose of good judgment is what is needed now.

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Google Music

You remember the music industry.

You hardly hear anything about it these days. Even radio gets lots of publicity – most of it bad, but nonetheless.

I’m wrong.

Wired reports “Judge Hints at Mistrial in RIAA v. Jammie Thomas”. She’s the music fan RIAA targeted and initially defeated in her Minnesota piracy trial.

According to a Wired account, this is what got U.S. District Judge Michael Davis to thinking:

“At issue is whether the RIAA needs to prove that copyrighted music offered by a defendant on a peer-to-peer network was actually downloaded by anyone. During Thomas' trial last October, Davis, on the RIAA's recommendation, instructed (.pdf) the jury that no such proof was necessary; if Thomas had the music in her Kazaa shared folder, where it could be downloaded, she could be found liable "regardless of whether actual distribution has been shown."

But in May, long after Thomas had lost the trial and was dinged $222,000, Davis developed second thoughts. He wrote in an order that he may have committed a "manifest error" with that instruction. "I think I surprised everyone," Davis said at the outset of the Monday's hearing. As the hearing wrapped up, there was little evidence that the RIAA's lawyer had changed the judge's mind.”

Don’t say the record industry isn’t committed.

Committed to suicide by lawsuit.

Many label execs dislike the entire RIAA lawsuit campaign but somehow they let their trade organization continue to pursue suing their customers. They’ve made no friends and have not made a dent in music piracy which remains brisk.

Oh, there was something else. But you may not call it news.

As Steve Meyer reports in Disc & DAT “Music Industry Should Embrace Illegal Websites”.

“The music industry should embrace illegal file-sharing websites, according to a study of Radiohead's last album release that found huge numbers of people downloaded it illegally even though the band allowed fans to pay little or nothing for it.”

Look, the record business is over if it has to depend on the sale of CDs. We’ve already seen where that is going.

Down.

Year after year.

In fact, if the music industry has to depend on legally purchased digital downloads to make up the difference, well – we know where that is going, too.

Not up.

Is there anyone on this planet – and that includes record labels – who really believes there is a financial replacement for CD sales? If so, I have a bridge in Brooklyn I would like to talk to them about.

Bit torrent sites are the best friends of the next generation. Gen Y is not all of a sudden going to buy CDs or even purchase legal downloads when it is so easy to get it for free.

This is a serious problem from a business perspective and not so much so from the eyes of youthful consumers.

You see, they’ll still spend money on concerts because concert venues can control who gets in. If they could find a way to get past security and get in for free, this generation just might be the ones to do so.

But the labels cannot control their delivery system. They can’t make it so the only way you can get music is to buy it from them.

Unless of course the labels only release established acts on CD and not iTunes.

Of course, this is contrary to everything American. Piracy of music is not only the American way but the international system of accessing music. Arguably, labels could sell more CDs if the right act withheld its music from iTunes, but this strategy certainly doesn't cooperate with the inevitable.

The record label situation needs to be resolved. Rights revenue alone is not enough of a business to sustain the music industry if CD sales are going to continue their decline.

360 deals will turn out to be 180 -- a disappointment as well. Maybe the lawsuits over them will be interesting.

The music industry can’t have Radiohead doing all of its thinking.

And, Live Nation does not have the best interests of the music industry at heart. It has Live Nation’s best interests at heart. They’re not a label. They’re a promoter. Good luck with Madonna at 60.

The labels will have to find a new business – or businesses. That’s very hard for manufacturers who are left with nothing to sell.

1. They need to get into the podcasting business. They can work out the rights arrangements. Twenty minutes here, thirty minutes there. Hire the best radio program directors to create mini-programs – the kind that young people would love on their phones and mobile devices. Podcasting leads to merch.

2. They need to seriously get into the merch business. I know. They’re already in merch. Not the way I see it. They’ve got to be huge. Not just the usual items.

3. They need to bite the bullet and feed the monster – give the music away for free to sell other products and/or services to consumers. As I said earlier, if they can’t control the delivery system, they can’t maximize their profits. There is evidence all around us that music stolen on the Internet feeds consumers desire for more music. Young consumers have money – and their parents do, as well. They are not going to spend it on music when they can get it for free, but – they prove all the time that they will buy music-related products.

4. The labels should become Google. Not work with Google. Be Google. Control the flow of everything music on a platform that can accept advertising, deliver social networking opportunities and give away free music. The money is made the way Google makes their money – targeted advertising. Now, who the hell wouldn’t want to be able to target young consumers by the singers and bands that they support? Music is more important to this next generation than food or sex. (Okay, you get the point). Labels, good luck with this. It’s a better idea than hitching your future to CDs but way out of the labels’ comfort zone.

If they’re waiting for ISPs to charge their customers for all the music they can consume or monthly fees on cell phone plans, the labels are deader than they look right now.

Young consumers don’t want access to every song that has ever been recorded.

They want what they want or what their friends tell them is cool.

If you drive them to a recording industry site, a consortium of labels and publishers, where consumers can fill their iPods and mobile phones up with free music, you can monetize it with a Google-like source of revenue they can control.

And control is something the record labels have been losing for the past ten years.

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