Radio's Extra-Terrestrials

Radio is losing touch with its audience at an alarming pace.

I'm not just talking about the youth audience that radio all but ignored during the past 13 years of consolidation.

Even older folks -- yes, baby boomers who are trying new media and liking it.

Facebook, once the bastion of Millennials, is experiencing its greatest growth from over 30's.

Baby boomers are using Facebook to find old flames, high school and college buddies, friends lost while life was happening.

Twitter is engaging radio users -- not to learn what the next song is that radio stations are playing, but as a way to have immediate contact with people all day 140 characters at a time.

I call these people -- the members of Gen X, Gen Y and baby boomers -- radio's Extra-Terrestrials because they are going beyond radio to add communication, entertainment, information and social connection.

They are using Facebook, MySpace, Twitter, email, the Blackberry, iPods, the Internet, mobile devices and more to engage themselves in media other than terrestrial radio.

Southwest Airlines is now twittering to let customers know -- in their own wild and wacky way -- what is going on system wide minute by minute.

Tony Hsieh, CEO of the wildly successful online Zappos shoe store has a huge cult following of 650,000 people on Twitter.

Do you know where your radio CEO is or what he thinks?

For that matter, do they know what they think or do they just wait for the investment guys to tell them to hire a bunch of yield managers and everything will get better?


Methodist University Hospital in Memphis did a video webcast of a patient's brain surgery as a marketing tool.

Doctors tweet from the operating room.

The hottest new position in a company today is social media specialist.

You may like it or may not but this is the world we live in.

Except for radio.

True, on-air personalities and others have used Twitter and Facebook to communicate with audiences -- that's always a good thing.

The problem is that their employers, the companies they work for, are living in a world of their own -- pre-2000 where radio lives in seclusion from new technology and changing sociology. Garrison Keillor might call radio "the little town that time forgot and the decades cannot improve ... " not necessarily in a positive way.

Radio's Extra-Terrestrials are moving on, but it's radio consolidators who are looking at new media like it is alien.

There are some hard and cold reasons why this is so -- the best of which is that consolidating radio groups have run up debt they cannot handle and are on the brink of bankruptcy. The only thing saving these companies is that the lenders don't want them back.

So, you're seeing the debt get converted to ownership.

Jeff Smulyan of Emmis has coughed up a lot of his company to satisfy the banking institutions he cannot pay. Same is true of the other consolidators.

You'll likely see Citadel go down this road.

Cumulus as well.

Clear Channel will probably also have to convert debt to equity.

The problem is -- what these clueless banks will eventually own and control is a business with no tomorrow.

No longer a growth industry.

And not because radio people can't produce good programming but specifically for the reason that their CEOs won't let them. They've fired a lot of their talent and will continue to cut costs where necessary as the recession and their own mismanagement take its toll.

Our audience is becoming Extra-Terrestrial.

They look beyond terrestrial radio and it is happening at an increasing pace.

This could be a bump in the road but I suspect it is more because except for minor examples, radio does not live in the real world of 2009.

Radio groups don't have interactive divisions with real budgets. Where they exist -- and they are few and far between -- new media divisions represent a minute percentage of operating budgets.

Radio having lost 13 years through hubris, bad decisions, faulty financial management and taking on too much debt, is betting it can return to profitability by being something that has no chance of working.

A national repeater of cheap network and syndicated programming.

These CEOs apparently will accomplish this without people (or as few as possible), without understanding generational media and why it matters and without funding any meaningful Internet, mobile or new media initiatives.

I might be able to understand a radio consolidator not seeing the digital future in the headlights but it is pretty hard to imagine how they still can't see it in their rearview mirror.

Radio has no other option but to get into the digital future. But it may already be too late.

Owning radio in an era when so many other media choices are coming of age will spell disaster to the owners and the medium.

So, here are a few ideas:

1. Replace the radio CEOs. (Okay that isn't going to happen but replacing these proven losers would be the fastest lifeline to the future).

2. Budget 15% of your operating expenses to new media this year (that's 2009) through a special assessment and 20-25% in 2010. (Okay, that isn't going to happen, either. But without an initiative, the Internet, mobile, social networking and other digital projects cannot be sustained).

3. Have the CEO of each radio group run a Twitter site as if they actually cared to tell employees and listeners (not to mention advertisers) what their vision is to save the radio industry they destroyed. Hell, they only have to come up with 140 characters in each Tweet. (Stop laughing!)

4. Unload some of your stations for bargain basement prices -- hold the paper on the financing -- and use that money to ... oh, never mind.

5. Go bankrupt and let the judge oversee the sale of your assets.

Actually, number 5 is the only viable option because there is no way out of the mess these radio CEOs have gotten themselves into.

Station sale prices are not going up any time soon.

Even if the recession ends, few people actually believe it will be back to business as usual. One of the things that got us into this economic crisis is the greed that drove prices out of sight (i.e., inflated prices for radio stations). All numbers must be reset. The value of everything in our economy redefined.

You can't spend 13 years and counting letting listeners get away.

An entire generation -- the Millennials -- grew up without a love and addiction to radio. Yet they have become the media changemakers who now drive new media as they are coming of age.

Now, I'm saying older listeners are getting caught up in new media -- not all, but a surprising number. They were once considered safe radio listeners.

Even if radio CEOs are calling the trends right, they have fired most of their talent. Lots of luck competing with Electronic Arts on an iPhone when you're running voice tracked music on a radio.

And speaking of Apple apps, a lot of radio executives don't see the iPhone as a threat.

Jeff Smulyan says just put an FM chip in a cell phone and radio is back.

Not quite.

Remember the sociology.

Some 80 million Gen Yers are used to choosing their own content -- stopping it when they want, deleting it at will. Many have short attention spans. There is no need to broadcast from your towers to them when they can get all they need on demand.

So, the world continues to turn and apparently radio CEOs have better things to do than worry about being an archaic medium lost in yesterday.

Like saving their skins.

E.T. the Extra Terrestrial is the story of Elliott, a lonely boy who befriends a friendly extra-terrestrial ("E.T."), who is stranded on Earth. Elliott and his siblings help the Extra-Terrestrial return home while attempting to keep it hidden from their mother and the government.

Radio the Extra-Terrestrials is the story of the Mays family (and clones) who befriend venture capitalists who are stranded on Wall Street. The Maysian characters help keep the fact that they are no longer doing local radio hidden from their listeners and the government.

As they say in the movies, "The End".

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