Mr. Mean Genes Fights Furlough Unemployment Claims

By Jerry Del Colliano

I didn't want to believe it, but apparently Cumulus has taken their brand of mean management to another level.

You may remember those furloughs that Cumulus forced upon all but their sales people earlier in the year?

Well, turns out these folks were really not forced furloughs at all.

At least that's what we are being told is the argument Cumulus is using to defend against numerous unemployment claims made by employees for the one week they were told not to come to work.

Apparently they are forced furloughs when Cumulus issues the order and "voluntary" when Cumulus tries to get the one-week unemployment compensation denied.

In other words, if Cumulus prevails -- and so far I have no indication of a single case where they have prevailed -- the "furloughed" employee would have to return their unemployment compensation already received (usually in the $180-220 per week range).

Apparently the geniuses at Cumulus Mean Management Central never thought their employees would miss the week's pay -- maybe that's because Lew Tricky Dickey, Other Brother John, Captain Jon Pinch and "Gallows" Gary Pizzati haven't seen an unemployment line lately.

They should.

But apparently they have been insulated against the things mortal humans must endure like being out of work at the hands of Mr. Mean Genes -- the Dickey media dynasty.

The furlough idea -- which in all fairness has been picked up by other "stoopid" radio groups to save a nickel -- could actually cost Cumulus money in increased taxes going forward.

No wonder Cumulus Mean Management Central is busy running employment ads for positions so many of its currently employed employees hold -- they just won't play nice.

Seems like this is at least a moral victory for the indentured servants of radio's worst radio group in America.

A rumor spread like wildfire after the one-week mandatory furlough was meted out. Some employees including brave market managers filed for unemployment compensation in various markets. At least one state has sided with the employees, I am told.

As Chubby Checker once sang, "how low can you go".

Mr. Mean Genes has apparently missed the boat. They act as if this is all about punishing employees who will not subject themselves to any further dehumanization but meanwhile no one is seemingly watching the bigger picture.

Cumulus is being gutted.

I'm told by some Cumulus people that precious meeting time is devoted to what I have been writing in this space in recent months about Cumulus' misguided management tactics. I thought they blocked Inside Music Media from their employees email so how could they be reading any of this?

Since Cumulus is apparently discussing my stuff anyway, why don't you discuss this on this week's Skype Gripes:

Let me give you a cheat sheet:

1. Why are you fighting unemployment claims as "involuntary" when you forced your employees to take a week off? (I'll be on a plane to LA in the morning but I'd be happy to ask you these questions directly if you like. I'm looking forward to seeing Lew at the NAB, as well -- after all -- bullshit doesn't fly in Philly).

2. Tell us the truth about recent employee deaths due to high pressure management tactics. Just heard that Gene Michaels, Cumulus employee in Lake Charles, LA died about three months ago. He was PD of KKGB. Was it natural causes because now I know of three Cumulus deaths recently -- an unusually high number. Coincidence? Are there more? Even the other groups aren't losing people like this. What will you do to improve working conditions from now on in the interest of employee health? Seriously, don't blame this on me too. I wouldn't be running Cumulus as a national company but rather, as local stations competing to meet their goals. So come on -- answer.

3. Explain how Cumulus beat even Clear Channel as the worst radio group among over 1,000 voters on our Worst Radio Group poll. Come up with a better reason than the vote was on my site. Did I fix it somehow? Or is it real? Address the real issue -- mean management.

4. Why are you publicly advertising for management replacements where employees are already in place? Are they not good enough or do you disrespect them so much as to torture them with the prospect of losing their jobs while you recruit? Look at it another way. What if investment banks to whom you are close to defaulting on your loans, recruited for your replacement right in front of you? Think it would worry you, Lew? Maybe, make you nervous? Maybe put in a call to dad?

5. While we're on the topic, what's your big obsession with hiring non-radio people when you are firing so many damn good ones? Think these new ones will actually obey you better? Radio experience is something prized except at your company. Explain, please.

6. Why are you forcing some of the employees that you have to sign one-year non-competes in return for, well, virtually nothing -- two to four weeks of severance? Not legal in California and shouldn't be elsewhere. Why shouldn't your employees be calling their Congressman on this?

Oh, well ... I've lost my Skype connection.

Answer these questions or ignore them but I'm simply telling you what your employees are complaining about.

Just in case these issues do not come up in the Cumulus conference call Kumbaya, then I'll take it it up with him in person when we get to Philly. You know, the place where they boo Santa Claus (don't worry you are safe -- you're no Santa Claus).

There's too much happy talk out there and not truth about how these companies hurt their people, their listeners and their industry.

Keep blaming the messenger if you must, but I'm going to say -- it is time to stand in solidarity with the fine and talented people who work at Cumulus, Clear Channel, Citadel and other bottom feeding groups that are prematurely driving a good business into the ground.

Speak up.

When what has been described in this piece today is representative of one of radio's biggest consolidators, what more will it take?

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Jerry is planning a 1-day media seminar like no other

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• Likely time: winter.
• Jerry will teach an interactive program that includes a new and traditional media forecast, reinventing terrestrial radio, podcasting, webcasting, social networking, mobile content and how to effectively predict generational media.
• If you are interested in putting your name on the "notification" list, click "email the author" below or email: jdelcolliano@earthlink.net.

Radio's "Believe It Or Not"

The big three bumbling consolidators are screwing up radio even more these days what with high anxiety management, totally irrelevant priorities, potentially illegal recruitment tactics and contradictory policies.

Yes, certified "stoopid" ways to get in your talented employees' way while they are trying to save your bacon.

Incredible stories of death, destruction and self-immolation by or at the hands of the three most dangerous companies owning radio stations -- Clear Channel, Citadel and Cumulus.

And, a programming note -- Cumulus has far surpassed Clear Channel as "Radio's Worst Group" -- virtually impossible before Lew "Tricky" Dickey started competing with Clear Channel to be "worser" than them. See the up-to-the-second voting results from readers like you, here.

Now, let's play Radio's "Believe It Or Not" ...

• Apparent pressure has cause the death of two Cumulus employees

You may remember that a Cumulus business manager died a few months ago in what a reader apparently thought was workplace stress.

Again, most recently Kevin McDonald, account executive at the Cumulus Pensacola, Florida cluster -- 38 years old -- died after he reportedly was fired. Of course, workers predictably say that he was pressured -- their opinion. Nonetheless, some wonder whether the intensity of the Cumulus management approach could be a factor. Here's McDonald's death notice.

My opinion is that Cumulus has tightened the screws over the past year in an attempt to get its many employees to do what a handful of Atlanta executives think is best. There is a great deal of pressure on people. Employees do not have a lot of options -- other than to quit. Some are leaving, however. Most can't afford to be without work in a recession.

It's one thing to poke fun at Cumulus. But far more serious when employees are dying or losing their good health under the Dickey regime.

• Grand Rapid's concert venue sues Clear Channel

That's a swticheroo.

Isn't it usually the Evil Empire that does the suing?

Anyway, the city of Ionia dragged Clear Channel's B-93 country station into court to be reimbursed for $40,703 in extra expenses related to flooding during a recent music festival.

You may remember, there was some confusion over whether B-93 adequately warned 60,000 or more concert goers about one little thing -- that flash floods in the Grand River could leave their cars inaccessible and buried in mud.

That's what happened.

The National Weather Service knew it, but apparently Clear Channel's weather source didn't.

At first Clear Channel indicated it would pick up the tab for towing the 1,400 cars out of the mud and then came to its senses and decided to screw them out of the money instead. Meanwhile, station executives and talent who really care about their listeners and the popular annual event were hamstrung by Hogan's Heroes.

Don't believe it?

Read this account, but wait -- you won't believe the next item.

• No money to tow 1,400 stranded concert cars, but $989,250 to keep a corporate lawyer from leaving Clear Channel

That's right, as incredible as it may seem -- Clear Channel agreed on July 20th to pay almost one million dollars to EVP/Chief Legal office Andy Levin to -- and this is a quote -- "induce" Mr. Levin to remain in these positions through January 8, 2010. He also keeps his eligibility for a bonus under the company's regular incentive plan.

Hey, this guy makes more money by leaving than staying.

I wonder why Clear Channel is so hot to keep him?

They don't make Polaroids anymore, do they?

Levin has magnanimously and unselfishly decided to make a great personal sacrifice and stay on for another 90 days with no additional compensation (other than the million, that is) and then will be available through May 31, 2011 at a rate of $200 an hour for hours in excess of five hours per week -- you read that right -- in excess of five hours a week. He's also agreed to employee non-solicitation covenants until May 31, 2011.

You can't make this stuff up.

This is reality in the unreal world of radio consolidation.

He's got to have pictures!

Those poor suckers called radio listeners/concert goers in Grand Rapids, let them eat mud.

• All Cumulus managers may not attend the Philly NAB, except ...

One of my Repeater Reporters sent me a memo purported to be from Jon Pinch -- dated February 23 of this year reminding Cumulus workers how much their hard work is appreciated and sorry they can't go to the NAB Radio Show in Philly this September.

Okay, I made up the appreciation for hard work part. Here's the real zinger from Pinch to his market managers:

"It should go without saying that given the present economic conditions, no one should be attending the RAB or NAB this year. This means regardless of whether they recruited you as a “speaker” or other participant, your focus is required on improving your market revenue".

First of all, if it should go without saying, why is this guy then saying it?

Maybe what Captain Pinch is saying is, "you shouldn't go without me saying it".

Second of all, why is CEO Lew Tricky Dickey pulling a slight of hand move to appear on a panel in Philadelphia while his managers are toiling back at their sweat shops?

Does the fact that Dickey is defying Captain Pinch mean that Dickey can't focus on improving Cumulus market revenue?

Just asking.

• Citadel violating EEO laws by asking for applicant's pictures

Remember that cockamamie contest Citadel is having in Providence to find salespeople? I think the phrase they used was that they were "teaming up to give away the ultimate prize to one lucky Southern New Englander… a job in radio!"

They're kidding, I hope.

Do these poor suckers know who they are auditioning to work for?

The problem with the “Can You Sell” contest was that it solicited pictures of the applicants -- not kosher in the world of equal opportunity. But hey, who is watching anyway?

Here were the rules as they explained them:

"On Thursday, August 6th from 9am-4pm we’ll host an open job interview at Aqua at The Providence Marriott for the Account Executive position. Interested applicants are encouraged to come down throughout the day with their resume and selling spirit to “wow” us!

From this group, we’ll pick twelve semi-finalist’s who will compete in a series of four weekly tasks to determine who will be the next account executive at Citadel Broadcasting! The tasks will be based around the fast paced work environment in radio and feature things like writing and producing a commercial for Newport Creamery.

Listeners will get to keep up with the contestants through blogs and webisodes online at www.hot1063.com and www.92profm.com. A popular vote online by the listeners will give feedback to a panel of executives from Citadel and Newport Creamery".

Maybe Citadel thinks this is Survivor?

Well, they missed the deadline for finding their new sales superstars.

Citadel calls itself an equal opportunity employer.

As one of my alert readers points out:

"In the contest promo is: 'don't forget to include a photo and/or video to get your foot in the door.'

Jerry, I haven't done hiring in a few years but all the places I hired for, plus my own companies, would never have stood for requiring pictures with an application.

Am I so out of touch that screening under EEO but here are some comments I found to be related:

1) 'In the USA it is NOT a good idea to include a photo or video or picture because Equal Employment Opportunity Commission (EEOC) regulations put the employer (not the candidate) between a rock and a hard place when photos, videos, or pictures of the applicant are included with or on a resume.'

2) The Texas Workforce Commission said hiring decisions cannot be based in any way upon race, color, religion, gender, national origin, age or disability. 'Requiring a photo would likely be considered a clear example of discriminatory hiring practices, according to our attorneys,' a TWC representative wrote."

Oh, one more thing -- isn't Citadel one of the consolidators that fired a heap of sales people in the past year? I think the term they used at the time was "layoffs".

Then, why do they need to do a silly, possibly illegal contest to find salespeople when they could recall good ones who were doing the job for them and were fired to save money?

Guess that firing salespeople to make money thing isn't working out too well, right Punchin' Judy Ellis?

I call it Ethics Cleansing -- fire people under the guise of tough economic times and then come back and rehire cheaper, less experienced employees months later.

I know radio groups are bankrupt financially but are they also bankrupt of good ideas? I mean there is a recession and Citadel is playing "Sales Survivor" with stations while they are five months away from breaching their loan covenants.

Believe it or not, these things are really happening in the radio business. Radio was never a joke like it is now. And the solid business execs have been replaced by jokers.

A talented diverse group of people always kept it relevant and made the industry so profitable that even Wall Street eventually came a calling.

About ten years ago or so, I hired Peter Drucker, the management genius, to address one of my Inside Radio Management Conferences.

Drucker, who has been right about almost every business issue he has addressed, said flat out that very few consolidations had ever worked in American history.

And the few that did work have seven things in common but one of them was that when they spent hundreds of millions or billions to buy companies, they really wanted to buy its management and then support them because only these managers could come up with the innovations that could guarantee future growth.

By contrast, radio consolidation saw the opposite happen.

Management, sales and talent were systematically fired over the 13 years since consolidation began -- and I note that it had nothing to do with their most recent excuse -- the recession.

Creativity and innovation rarely comes from the top down but in radio's case, the innovators were fired and retired. You probably know a lot of good radio execs who were expendable once this group of management trainees got their hands on these companies.

That leaves you with the likes of John Slogan Hogan, Dickey Doo and Fagreed Suleman.

And that explains the almost unbelievable screw ups you've just read about.

When the Three Blind Mice are at work, see how they run the radio industry into the ground.

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Jerry is planning a 1-day media seminar.

• Location: Scottsdale, AZ.
• Likely time: winter.
• Jerry will teach an interactive program that includes a new and traditional media forecast, reinventing terrestrial radio, podcasting, webcasting, social networking, mobile content and how to effectively predict generational media.
• If you are interested in putting your name on the "notification" list, click "email the author" below or email: jdelcolliano@earthlink.net.

Radio Needs Video

Video streaming has been growing in popularity especially in the last six months.

There is a new research study out from Ipsos MediaCT's MOTION that is picking up on a trend that radio people should consider and understand.

Americans with access to the Internet are now streaming more TV shows and movies than at any previous time in history -- 26% streaming a full-length TV show and 14% a movie within the last 30 days alone (an increase of double that of September, 2008).

This is a red light for the television and motion picture industries, but it is also a warning to radio -- a medium depending exclusively on the aural experience.

It will not surprise you that the 18-24 age group is leading the way into the video future. And you know who follows them.

That's right, everyone else.

In the past month, 30% 0f 18-24's represented in the Ipsos study streamed a full-length movie and 51% a full-length TV show -- dramatically more than last year.

This is more than two times the levels measured in September 2008. Not surprisingly, young adults 18 to 24 years of age have been the most ardent supporters of this medium.

Perhaps you remember when I spoke of my students preferring to watch TV on their laptops when the rest of us were obsessing about HD and big screens. At the time my college aged daughter and her roommate would rather watch DVDs than live TV as long as it was on their laptops. In fact at my daughter's apartment, her TV is not even working. And she could care less.
Perhaps you've witnessed similar behavioral changes among your friends and relatives.

She gets MLB package to watch her Atlanta Braves (how did I have a daughter who is not a Phillies fan?).

Hulu, the replacement for TV for the next generation, is a popular means of watching ad-supported video programming. Young users by and large ignore or put up with the ads and in return they get to watch their favorite network TV shows.

Sooner or later advertisers will figure this out. A blatant ad on YouTube actually gets better results.

This commercial has over 700,000 views and you can see why it literally leaves viewers hungry for more:



This hits at the heart of the problem.

Radio, TV and newspapers want to print content and run advertising within it to support and pay for that content.

The new world media order suggests that a "commercial" such as the one above may get better results just by being a commercial -- a sexy commercial, but nonetheless a commercial residing on a social networking site such as YouTube.

You don't need listeners or viewers paying attention to commercials to have a growth industry -- duh, look at radio and TV.

Try to even remember a single Super Bowl ad one week later.

The paid subscription model will not work right now for streaming video so advertising supported video sites are the interim choice for an obviously increasing number of people.

Many students tell me they just check email or their phones text messages while the pre-roll commercials are on. They're willing to put up with them even if they don't pay attention.

The Ipsos research now confirms what I related to you earlier:

"...even among digital video users, 64% would rather watch hour-long dramas and half-hour comedies live on their TV than rent or purchase them, or watch them on their PC or portable device".

The average American watches 15 hours a week so the TV will not be turned off for a long time in the future, but it is safe to say that its monopoly on longer form video content is probably over.

I started by saying radio needs video.

And I don't mean pointing a camera at Don Imus and calling that TV suitable for the Internet.

In fact, back to the days when Arthur Godfrey did a simulcast radio and TV show the question wasn't whether it was possible, it was why?

Today, there is clearly a place for audio even if that audio is not terrestrial radio.

To my way of thinking, the new radio is podcasting because it cooperates with the inevitable -- that is, short attention spans.

The new talk radio is podcasting. But if talkers think they're going to do their radio shows for an iPod and not make substantive content and formatic changes, they will not transfer to new media successfully.

Two-way talk was a feature of radio decades ago. Two-way talk is no longer necessary for generations younger than 60 (the talk radio audience). Younger people increasingly communicate through social networking not phone calls. Even here at Inside Music Media, readers comment by going to Facebook. I don't even have to link to Facebook. They just go -- intuitively.

"Talk radio" will be talk podcasting -- 45 minutes or less, and they will need compelling content because here's the challenge with podcasting -- forming a daily habit.

I'm a new media advisor and I don't listen to most podcasts every day. My clients, Dave & Geri, have figured out a way to get their loyal and growing audience to visit them as frequently as they did in their cars during morning drive. It can be done.

And, I don't think Dave & Geri would mind me sharing this tidbit with you.

Downloads for their new age "morning" podcast peak in the morning, but nighttime downloads almost equal morning downloads.

The morning show is now in essence -- on demand -- and their fans download the content at these two times in great numbers.

But even podcasting will need video.

Radio stations can operate as an aural medium until the last listener dies or turns the radio off or in the alternative, they could build content for new media using the talent they already employ.

In the end, there is a new realization and the faster we embrace it the more successful we will be in the new world of media.

A generation is now coming of age that is used to being -- and demands to be -- in control of their content.

They want it on-demand -- not necessarily in the hands of the "broadcaster" or content provider.

When they want to read something, they expect to click and see text.

When they want to hear something, they expect to touch and get audio.

When they want to see something, we have trained them to click and get video.

If "radio" (whatever that becomes in the future) can't do all three of these things, it has no future in the digital world.

The name "radio" may be part of the problem because everyone knows that it means listening, not seeing and not reading.

I say, dispense with the names -- deploy the talented people, managers, marketing and sales execs already in place (or recently laid off) and reinvent the radio industry to include video, text as well as audio.

The tablet mobile entertainment device from Apple is coming.

That means a great delivery system to give the next generation access to all these things with the consumer remaining firmly in control.

The first step is to see and understand the forces at work both technological and sociological that are causing the change.

The choice for radio is to adapt or die.

I don't care how many buyers there are waiting on the sidelines to scoop up consolidator's debt-ridden stations, it is not a solution that passes the generational media test.

Ironically, the choice to survive is not just in the hands of consumers but squarely under the purview of radio execs.

Can they get it in time?

For those of you who would prefer to get Jerry's daily posts by email for free, please click here. IMPORTANT: Your subscription will not become “active” until you open an email from Feedburner immediately sent to your email inbox or spam filter.

Thanks for forwarding my pieces to your friends and linking to your websites and boards.

Jerry is planning a 1-day media seminar.

• Location: Scottsdale, AZ.
  
• Likely time: winter.
• Jerry will teach an interactive program that includes a new and traditional media forecast, reinventing terrestrial radio, podcasting, webcasting, social networking, mobile content and how to effectively predict generational media.
• If you are interested in putting your name on the "notification" list, click "email the author" below or email: jdelcolliano@earthlink.net.
  

The Best Radio Group

Years ago when I was publishing Inside Radio, I received a phone call from one of my advertisers who said they were going to go out of business.

The economy was good.

The advertiser was very solid -- certainly as far as how they paid my invoices.

But, they still had the majority of a $60,00o signed contract to fulfill.

To my delight and surprise, the advertiser said "we'll keep paying your bills until we have paid for the contract in full". They just didn't want me to run any ads since they decided to close down their syndication division.

That client -- the one that could have just said, "too bad, you're out of luck" was Bonneville.

Corporate had decided to close the beautiful music division and leave the field as more youthful formats were taking hold.

I mention this because the company that over 700 of you have voted as "The Best Radio Group" is Bonneville -- getting 21% of over 150 votes. You can see all the up-to-the-second results of both the "Best" and "Worst" radio groups by clicking here.

Cox, CBS Radio, Saga and Greater Media also received 8% or more of the vote. By contrast Clear Channel, Cumulus and Citadel polled 4% or under.

Why Bonneville?

Well, they are not a big group of stations and you could argue they got out the vote. If so, then why did the much larger Clear Channel only manage 3%?

No ... it's not about stuffing the ballot box.

And you could argue that Bonneville has the best radio stations across the country.

No ... many of the other poor performing groups in this poll also have excellent stations and that was not enough to win the day for them.

As it turned out the continuous, real time voting for "Best" and "Worst" radio group was a referendum on competence of management and effective skills in handling employees.

Many readers believe that the "Best" radio group is the one that treats people well and the "Worst" is Cumulus -- and you know the stories of how they treat their people.

A better way to look at it in the waning days of radio consolidation is -- what group would you like to work for if you had the chance?

That's what this seems to be all about.

I've been asked, which groups would I like to work for and I usually include most of the ones that polled well with my readers.

Bonneville is a 29 station well-run privately-owned company that believes in radio. (Does that mean less is more, John Slogan Hogan? Hogan can't seem to run the largest group of radio stations with every benefit that comes with size).

It's a traditional company with an outstanding CEO in Bruce Reese.

This man is no Lew Tricky Dickey. Not an empty suit like a few of the other group CEOs. He's smart and stable.

Look, Bonneville is not perfect and I'm not saying it is.

They do some of the things the "Worst" groups do like using voice tracking.

But they don't lay people off in bad times.

How many radio groups can say that these days?

In fact, recently when the recession forced economic cutbacks at Bonneville the higher paid employees saw their salaries cut. For everyone else, fewer holidays, less vacation and reduced benefits like gym memberships.

That's it.

I know a lot of Clear Channel casualties that would have taken that deal any day of the week.

Bonneville CEO Bruce Reese was quoted at the time in the trade press as saying, “Our corporate management team and market managers have looked at this very carefully and thoughtfully. We believe these adjustments are reasonable and necessary to maintain the health of our company and its valued employees."

Yet some wonder shouldn't the people at the better performing Bonneville stations such as WTOP in Washington be rewarded instead of punished for hitting their goals?

That execs at V100 in LA -- one of the most recent $137 million Bonneville acquisitions -- should be making less while top performers make more. V100 is reportedly poor in billing after 16 months in their music format.

But Bonneville management has decided that the richer stations in effect should subsidize the poorer performers at least for now and my readers apparently agree. Bonneville gets only 4 negative votes in the "Worst" category out of approximately 1,100 votes cast so far.

In the days when companies were restricted by law to owning seven AM, seven FM and seven TV stations, there were still lousy operators.

Weirdos! I worked for some and you may have as well.

Still when you did something stupid or they did (like let you go), there were always a lot of other stations in the same market (or nearby markets) so that your career could continue and your family did not have to be uprooted just to stay in the business.

Even Clear Channel when it was just a gleam in the eye of Lowry Mays was small and harmless. It used to be called "Cheap Channel" but never "The Evil Empire" back then. In fact, Lowry Mays was the last guy I thought could ride in and steal an industry. But he did.

So in the 13 years since mega consolidation, a 29 station group is considered the best. In fact, all of the top finishers are rather small and Saga is a small market group that really isn't that large, either.

Perhaps it is no accident.

Small means better.

Since the voting started I have received lots of email from Connoisseur employees (and management) asking why they were omitted from the voting. No particular reason other than to cut off my large BIA generated voting list somewhere. Yet Connoisseur employees expressed a lot of pride in working for their company -- at least that's what they told me.

Could we then project the qualities of the ideal radio group?

We could certainly try.

1. Small (50 stations or less, let's say).

2. Compassionate management that values people and tries not to fire people.

3. Stability of management (i.e., is this a company that radio people would like to work for?).

Being the best seems to have little to do with the grandiose plans of companies and families that went on to dominate the radio business (The Dickeys, The Mays).

Little to do with "our eyes are bigger than our ability to pay the debt that it took to build our group" companies like Citadel.

In reality, the government had it wrong when it enabled consolidation.

Deregulation created this fire -- to borrow some imagery from Billy Joel's song.

Near monopoly not only was not an advantage, it turned into the industry's downfall.

For every big group assembled around the Dickey Dos, Fagreed Sulemans and Slogan Hogans, the industry and listeners wound up getting short-changed while their companies, principals and investment banks profited.

I think of the clown image that consolidators have when companies like Citadel hold a "Survivor" type audition online for salespeople at their Providence cluster after they fired tons of their own good sellers. That's no way to recruit salespeople.

That's what consolidation has become -- a circus.

Or you can see what stability in management and sales gets you.

What treating people right (or at least trying) means to your business -- and you have Bonneville.

The screw ups running most of today's radio groups never give us a shortage of things to talk about here. Today, it's nice to see that so many of you have recognized an elite handful of radio groups as worthy of the honor "Best" operators in radio.

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The Media Crisis of 2009

Terry Teachout wrote an excellent article recently in The Wall Street Journal about lessons the media industry can learn from the last big technological and sociological revolution when television replaced radio.

In The New-Media Crisis of 1949 the author accurately framed the debate over what to do with the Internet, mobile space and social networking. Just as important, by inference he was giving us a view of what not to do.

My purpose in bringing this up is to add some additional content to the issue specifically targeting radio, music and new media.

Ironically, networks played a role in the previous technological revolution.

The early, popular radio shows were networked across the country and by 1949 -- at the advent of commercial television -- there were 85 million radios tuned in to hear these national programs.

By contrast, today, Repeater Radio and voice tracking exist not to offer one-of-a-kind talent to a nation but to offer one-of-a-kind cost savings to consolidators.

There were only 1.3 million TV sets in use -- mostly on the East Coast -- by 1949.

Unlike today -- when the Internet, cell phone, social networking and file sharing became available for exactly the opposite reason -- it was free and more readily available.

Some of my USC students felt that even though the Internet is everywhere, the devices upon which to access it were not available to all socioeconomic groups. So there was a parallel -- televisions cost about half of what a new car would run you 60 years ago -- and a laptop isn't cheap today.

It was, as Teachout points out, that the rise of network TV due to the laying of coaxial cable between a number of major cities made the new medium available if not affordable.

Radio stars were big back in the day -- so big that many didn't want to cross over to television. Some did -- successfully. Some did not. Careers, thus, were prolonged or eliminated by a radio star's ability to make the transition to radio's new competitor.

Today, we see radio groups embracing the Internet only in a cursory way -- repurposing radio shows, streaming terrestrial formats online and inserting different and less expensive commercials.

That's not much of a business plan for the future when there is no future in it.

Talent is mired in terrestrial radio unable or unwilling to see podcasting as the new radio, the Internet as simply a delivery system and not a format category and social networking the "coaxial cable" of the future -- is not the product, not the content -- only a component.

Fred Allen, one of the biggest radio stars that never made it in TV insisted that radio was still better because the listener "had to use his imagination" (quoting WSJ).

Oops.

Doesn't this kind of remind you of what is happening in the radio business right now in 2009?

The "for us or against us" attitude that permeates radio (i.e., you're either a radio person or not). By radio person that would be someone who works in a terrestrial station and takes a lot of crap from management that doesn't see the future. Dare to say that radio is over -- and you'll be lynched (figuratively speaking).

In the Journal article, three "lessons" were offered that I would like to comment on:

Lesson #1

"Network TV lost vast amounts of money in its early years. It was only because the existing radio networks were willing to subsidize TV that it survived—leaving CBS and NBC at the top of the heap in the '50s and '60s, just as they had been in the '30s and '40s. The old media of today have a similar chance to prosper tomorrow if they can survive the heavy financial losses that they're incurring while they develop workable new-media business models".

Aah!

Can you see the difference already?

Radio groups today are not willing to subsidize their future competitor that is the Internet/mobile space. In fact, radio groups stubbornly refuse to invest anything in the burgeoning new technology.

Most large and small radio groups have no Internet strategy, limited understanding, no funds budgeted to the media that will likely surpass radio for good this time.

Unlike the early days of television where radio interests were developing radio with pictures, radio now is a minor player at best in the future of webcasting, mobile content and social networking.

Lesson # 2

"Established radio performers such as Benny and Hope, who embraced TV on its own visually oriented terms, flourished well into the '60s. Everyone else—including Fred Allen—vanished into the dumpster of entertainment history. The same fate awaits contemporary old-media figures unwilling to grapple with the challenge of the new media, no matter how popular they may be today".

That's right -- radio's biggest names today will vanish like the dinosaurs into ancient history.

As I like to point out, the ones who will invest and innovate in new media -- particularly podcasting -- may go on and count themselves as the few and the fortunate to transcend a dying medium into a growing industry.

History repeats itself.

There is a reason why the old saw still rings true.

And why does history repeat itself?

Because we never seem to be willing to learn our lessons from it -- so, any radio talent looking to end his or her career need simply to stay where they are in a medium that is about to be replaced by a new one in which radio has little interest.

Lesson #3

"Americans of all ages embraced TV unhesitatingly. They felt no loyalty to network radio, the medium that had entertained and informed them for a quarter-century. When something came along that they deemed superior, they switched off their radios without a second thought. That's the biggest lesson taught by the new-media crisis of 1949. Nostalgia, like guilt, is a rope that wears thin".

Radio people need to read and reread that last paragraph.

An entire new generation of 80 million are in the process of departing for new media leaving terrestrial radio with no growth potential and no real way to survive ten years from today. That is a fact.

Even older available listeners have taken to Facebook, downloading songs to iPods, embracing Twitter, watching YouTube -- to mention a few -- all at the expense of their radio listening time.

The monopoly radio had in cars for years has come to an end -- the car radio is now called the entertainment center.

Satellite radio was to become the next radio and all it managed to do was be a costly part of this entertainment center not a stark contrast to its competitor -- terrestrial radio.

Radio listeners have embraced new media and continue to gobble it up at a record pace. Still, radio groups exist as though they have no competition and everything is still beautiful.

The lessons are many but they are happening in real time and cannot be ignored.

There is a reason why radio operators in the 1940's supported and subsidized its eventual replacement -- television.

It's because these leaders then saw a vision of the future and wanted to be part of it.

By contrast, today's radio consolidators refuse to acknowledge let alone subsidize what may very well be their technological and sociological replacement -- the Internet and mobile space for exactly the opposite reason.

They can't see the vision and don't want to be part of what it considers the enemy -- not the future.

This Wall Street Journal piece is excellent if you have the time to read it -- click here.

I hope this discussion has resonated with you as it has with me and I encourage you to share it with your media friends.

The richness of radio is its talented managers, salespeople and on-air performers. They are being forced to take their futures to new media without any industry leadership.

That did not happen in 1949.

But it must happen in 2009 if they are to find a place in the digital future.

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Will Disney Repossess ABC from Citadel?

Citadel is on the brink of bankruptcy.

It could happen within the next six months if CEO Farid "Fagreed" Suleman cannot win another stay of execution with anxious lenders.

That raises the question of what happens to Citadel stations if the company winds up in the hands of a bankruptcy court -- specifically, what's the fate of its most valuable component -- ABC?

Citadel paid sucker money to Walt Disney Company to the tune of about a billion dollars for ABC and the ABC Radio networks several years ago in what was a highly touted but little understood maneuver called a Reverse Morris Trust, (RMT).

It was all a little bit too cute but what RMT turned out to be was a legal tax dodge -- a very complex legal tax dodge, at that.

Now, with the wolf at the door, buyers and speculators are wondering whether Disney gets its properties back once Citadel goes belly up because of the Reverse Morris Trust.

Morris Trust expert Roger Wilkens helps me shed some light on the possibility:

1. In the event of a Citadel bankruptcy filing, Disney will not automatically get its stations back.

2. Citadel is now a wholly separate entity from Disney so that if Citadel were to file for, say, Chapter 11 bankruptcy protection, its creditors would become the owners of its stock and existing shareholders would almost certainly emerge with nothing. Ouch.

3. But if the bankruptcy arrangement was a "liquidation", the assets of Citadel would be sold and the sales proceeds would be distributed to the creditors in partial (and I mean partial) satisfaction of its debts. The remainder of its debts would become worthless. The shareholders would receive nothing for their stock.

4. If Disney had an interest in buying back the assets, it could bid with everyone else -- not a likely scenario as Disney sold ABC at precisely the right time to exit the radio industry with a huge profit. The future of radio is in grave doubt with the 80 million strong next generation moving on to new media while bumbling radio consolidators are stripping their stations down as outlets for Repeater Radio.

5. Therefore, the only way Disney could regain the stations/networks it sold to Citadel is in the unlikely event of a water landing (as they say in aviation) or, to be more precise -- should Disney want the stations and if Citadel chooses to sell them back to Disney.

So there you have it.

For all of you hoping that Disney will restore the once mighty ABC stations to pre-Citadel luster, sorry about that.

And for those of you hoping all those "white knights" like Larry Wilson will wind up buying Citadel stations, be careful what you wish for.

Citadel is distressed merchandise.

They've run that company into the ground.

That, too.

Citadel is distressed because it is on life support and should it enter bankruptcy, Fagreed will be in no position to bargain with bidders.

Plus, billing is expected to continue to tumble and even should it pick up a bit (from the average 20% losses most groups are posting quarterly), no Citadel station can get anywhere near full value on the open market during bankruptcy.

Multiples will be four times cash flow or less.

It will be possible for "radio people" -- the ones who still love this business to ride to the rescue and pick up these properties for pennies on the dollar.

But the real problem is -- what can new management do in an industry that has been pillaged by the likes of consolidators such as Citadel, Cumulus and Clear Channel?

Lose money, for one.

They'd have to do the very thing the three "C"s are doing now -- cut back, automate programming, install Repeater Radio, inflict economies of scale and probably lower ad rates.

That isn't a growth business.

A lot of good intentioned people are going to take a haircut after Citadel shareholders do. And they should know better. However, we radio folks are emotional. Many of us have been pained to watch the residue of consolidation on a once thriving industry. We know in our heart of hearts that we can turn it around and restore radio to profitability again if only we could get the chance.

Well, the chance is coming but the likelihood of making these stations (acquired at low, low bankruptcy sales prices) a growth business again are slim to none.

And "Slim" is vacationing while consolidators are voice tracking his show.

The reality is that buying radio stations even at bargain basement prices in an industry that has no upside other than an aging, older audience is tantamount to a future bankruptcy.

Radio has no Internet strategy.

No mobile strategy.

Never understood social networking other than asking listeners to text them during contests.

Fails to observe that attention spans, critical to the success of "broadcasting", are shrinking.

Blind to the realization that an entire new generation is coming of age and they are the program directors -- masters of their mobile devices. They stop, start, time-delay and delete their programming content on the go.

The radio industry could have made the transition, but got greedy (along with their Wall Street partners) and it all blew up in their faces when the recession came, the audience got older, the Internet and mobile spaces were ignored and consolidators took on more debt than they could repay.

Sure, radio stations throw off lots of free cash flow. And yes, if you buy bankrupt stations at low prices you'll probably be able to service the debt for a few more years.

Sorry to say, that soon won't be enough.

The world has moved on at precisely the time that the radio stations most of us have coveted all our lives are becoming available and if operators buy them now, they will wind up in Citadel's shoes eventually.

It's only a matter of time.

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THE TRANSACTION COST PROBLEM OF NEWSPAPER MICROPAYMENTS

The desire to monetize online news is leading some to enthusiastically promote micropayment systems. A number of the leading newspaper sites are leaning toward a cooperative payment system that will allow readers to use a single account to access material at the leading papers. Such a system will not be technically difficult to implement, but getting the price right will be a significant challenge because of transaction costs and significant differences in the economic value of articles.

To create the best industry wide effects, a micropayment payment system would need to include as many papers as possible (see "The Challenges of Online News Micropayments and Subscriptions" http://themediabusiness.blogspot.com/2009/05/challenges-of-online-news-micropayments.html). The fact that a consortium is currently being sought only among the major players illustrates, however, that such a system would be cost inefficient because content from smaller papers would attract fewer transactions and be more expensive to service.

A widely inclusive system would encounter the problems of small payouts that have plagued collecting rights societies for authors, composers, and performers. Those systems have found that the costs of managing transactions, accounting and auditing, and conveying funds to rights holders incur higher expenses than the payments due many rights holders and that such a system is possible only when the rights holders and content that generate the most transactions subsidize those that generate the least.

This occurs because each right must have a separate account, uses of all rights must be monitored and recorded, funds must be collected, expenses for accounting, auditing and other administrative costs paid, and funds must be transferred to recipients. These activities incur significant transaction costs.

Even a cooperative system limited to newspapers that attract the largest number of customers will encounter transaction cost challenges.

In single content sales systems, for example, the cost of making transactions takes up the bulk of the price. In the sale of mobile telephone ringtones, for example, the composer, arranger, and performer get only about 20% of the price. For digital song downloads everyone associated with the content--songwriter, arranger performers, and record company--receive less than half. This occurs because merchant and financial transaction costs are very high. The cost for using a credit card adds 5 to 7 percent to merchant costs and the expense for bank processing of each transaction is a minimum of about 25 cents. Even electronic fund transfers between bank accounts incurs about 30 cents in transaction costs.

These realities will affect the structure and pricing of newspaper article micropayment purchases. The most efficient system for users and firms will require the use of prepaid customer accounts to reduce the number of bank system transactions. This will allow users to transfer funds to their accounts and then purchase articles at pennies a piece. Funds collected would be then periodically transferred to papers. Such a system could also include the option for occasional users to make credit cards purchases of articles, but the price would have to be $2 to $10 per article to make it worth the effort.

The biggest pricing challenge, however, is that some articles will be more valuable than others and will be most sought after by consumers. This means newspapers will have to figure out BEFOREHAND which stories fall into those categories and they will have to decide what prices to charge for them. Papers will have to hire personnel to try to figure out before publication which are the most economically valuable stories--something that will be extremely hard to do--or they will have to set prices based on the costs invested in creating each story (something current newspaper accounting systems do not support). In either case, increased costs will result. The only other reasonable option is to set prices per article based on the overall average cost of producing an article or a column inch of editorial copy. This, of course, over and under prices content simultaneously.

Moving to a micropayment system is not merely a matter of starting to charge for content online, but involves changing the fundamental business model of papers. Newspapers have historically bundled all content into one product available at a single price. In retailing, bundling has always worked best for getting consumers to buy more of the product at a lower price than if bought individually. With this tactic the producer gains profit because the costs of distribution and sales are collectively lower. A second tactic involves bundling products of unequal or uneven value that are sold together to achieve a joint price that is higher than would have been obtained individually.

Newspapers have historically benefited from such bundling by filling pages with relatively inexpensive news agency and syndicated content and by including huge amounts of information culled from public sources that did not require significant investment of resources or added value. Unbundling and selling individual articles with a micropayment system will produce little consumer willingness to pay for this type of content--a significant problem because it is the bulk of editorial content in most newspapers today. Unbundling will also increase transaction costs, thus reducing profitability. This will force higher prices on consumers that will affect demand.

Disaggregating the newspaper and making more money off some individual articles will also create pressure for additional payments from journalists who write the most valuable articles. This will also increase costs of the micropayment system.

Making money from online journalism is, thus, not just a matter of saying "Let's all start charging." It will require fundamental rethinking of the value chain, what content is offered, and how it is produced. It will also require significant thought about what's in it for consumers--something that is glaringly missing from current discussions of starting online payments. The consumer challenge is especially salient because most online news readers do not currently buy newspapers. If they are not willing to pay for news in print, why will they suddenly be willing to pay for that same news online? If papers can't figure that out, no decision to implement micropayments will end happily.

Dear Dickey Do, Fagreed and Slogan Hogan

Remember what we used to do when a radio station started losing its audience?

That's right -- The New 92.

The same old thing packaged like we've fixed everything listeners came to dislike about the station.

I think of this sometimes when I think of Cumulus CEO Lew "Don't Call Me Tricky" Dickey, Citadel CEO Farid "Fagreed" Suleman and Clear Channel Radio President John "Slogan" Hogan.

These three blind mice haven't come up with one good idea in 13 years!

I dare you, name one.

See.

None of them is dumb -- in fact, they all well educated and bright. True, they may have sold their souls and their birthright in this industry but dumb -- they are not.

However, their policies are misguided by all measures -- nothing has worked -- except the huge compensation they have drained from their corporate coffers in over a decade.

Their stock was declining before the recession. Their stations were threadbare in advance of their massive layoffs and their cash flow was taken for granted as never ending even before their debt load was unmanageable.

So, I'd like to offer some constructive criticism so that arguably the three most important people to the future of radio, will put their thinking caps on and change their ways.

Look, I know they won't, but this exercise is about what could have been if they would.

Let's start with Dickey Do...

1. Read a good book on human relations.

2. Fire your brothers or ask them to fire you -- something isn't right about the chemistry in your company. And while you're at it, there are a couple of guys who are sucking up big time and acting like asses to your employees. Fire them and be a hero to the people who really matter -- your employees.

3. Pull those spy-in-the-sky cameras out of your station conference rooms and have a party where you encourage your salespeople to stomp all over them until they are broken into pieces. Catharsis is needed.

4. Let your local sales managers lead the team. Give each station manager one year to make the numbers you need and they agree to -- if they don't, then you can let them go. If they do, then you can reward them with more money and another year. Promise them you'll stay out of their stations.

5. Make each station local -- don't force national programming down their throats. They can get you more than adequate local jocks for not a lot of money and win more audience.

6. Don't raise rates until you do something that matters for your clients. Stop talking about going after "elephants" -- Cumulus is the big elephant in the room and that's part of the problem.

7. Stop making life so stressful for your employees. They are human. They may not have your lineage and guarantee of perpetual employment but they are good people.

8. Fight your demons and give your employees a good reputation to live up to not one to live down.

On to Fagreed Suleman...

1. Judy Ellis can be toxic -- many of your employees don't like her. She may be qualified but they think she is too harsh and not caring. Get her aside and have a talk with her. Hard nose tactics may work in the short run but don't last for the long term. She was a pretty good exec in her prior days according to some industry people -- how about backing her off the bare knuckle tactics? Times are tough enough and so help your employees help you.

2. Don't like that suggestion? Promote one of your ABC managers to Judy's job.

3. Work for $1 a year like a lot of other CEOs during hard times. That $1 is worth more than one single share of your stock -- if you need another reason. You've had $10 million years, $17 million years and benefits like crazy. Don't be a pig.

4. Your ABC stations have enough good talent in it alone to bail you out of your mess. Try to keep out of running their business. You bought it for $1 billion so show some respect and let the people who made it worth that much do their thing. Citadel is not a good business model for ABC. Better yet, adopt the former ABC business model for Citadel and you'll turn it around.

5. National programming will kill off whatever you can't by micromanaging your stations. Let the local managers come up with local programming. It's not that expensive. And it will be more popular. Keep Don Imus on in New York if you like, but what are you thinking -- he's not that popular. Oh, I get it -- you're thinking like a bean counter. You're already paying Imus' salary so why not get your money's worth and spread out the costs of his salary.

Now, John Slogan Hogan...

1. It's okay not to be Randy Michaels. Randy was a bigger than life figure who in many ways knew what he was doing. Maybe he was a bully but he was a smart bully. You are also a bully and not that -- well, you know.

2. Raising rates after 13 years of consolidation when it was your company that has helped keep radio ad rates low during good times calls for an apology.

3. Everything doesn't have to be a slogan. "Less Is More" was -- face it -- an abortion. How about something that is a statement of good intention that is not a slogan like "Thank you Clear Channel employees for being so professional". It may not rhyme but it has a pleasant ring to it.

4. Stop with the national Repeater Radio, already. You know it won't work. Let local managers hire local people. They can do it within a budget if you stick to the budget. Nothing against Ryan Seacrest but really! As the largest radio group the more you embrace network and syndicated programming or voice tracking, the more you personally lead the radio industry into oblivion.

5. You've got so much talent at Clear Channel -- ask and you shall receive help.

6. No more firings, please. When you fire people, Fagreed and Dickey Do imitate you.

One of my readers, a radio professional, sent me the perfect ending for this piece.

It's about negative reinforcement -- the type all three of these gentlemen apparently practice.

It works in the short term -- as it does for coaches who clamp down on their teams. But it fails in the long run which is why so many of these tough coaches eventually get fired.

Here is his advice as he applied it to one of the three serial employee abusers, Cumulus -- but it applies to the others:

"In one study, a rat is put into a cage and the bottom of the cage is electrified.

The rat will run and jump around looking for an escape. He's very motivated to run and jump...but if the electric shock continues the rat realizes that there is no behavior it can engage in to end the shock.

Eventually in these studies you see the rat just hunker down or lie down in surrender. They just give up because ANYTHING they do is futile.

Therefore, Cumulus management get as mean as they want, but they'll never achieve long term motivation and performance at Cumulus. The opposite, "positive reinforcement" far outperforms "negative reinforcement".

Now as impressive as the results of that study are, here's what impresses me.

It was articulated by a radio professional, not a CEO proving once again that the people who actually know and can run radio should be, well -- running it. Or at the very least, the executives who rose to the top, should be listening to their people for guidance.

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Brainstorm with Jerry.
In-person, face-to-face. About your entrepreneurial ideas. Turning around traditional media. New streams of revenue for radio stations, new media companies, podcasting, webcasting, mobile. Helping to unlock the potential of your team -- 480-998-9898, jdelcolliano@earthlink.net or click on "Email Author" below.

Radio's New Obsession with Cume

By Jerry Del Colliano

For decades, radio stations relentlessly pursued quarter hour listening dominance.

We sold advertisers and agencies on the importance of buying commercials in a setting where listeners listened longer.

That was, until now.

Until Arbitron's Portable People Meter came along and changed everything. Or should I say, the radio industry changed everything based on its understanding or misunderstanding of this new technology.

Some context is needed.

I'm sure old timers (that's is anyone who was hired one year ago or longer) remember that we swept across the quarter hours with music to -- all together now -- try to win an extra five minutes of listening in the subsequent quarter hour. Under the diary system, that's all it took to get credit for two quarter hours.

Sweepers, jingle-assisted segues -- always content and not commercials on the quarter hour.

In the minds of program directors, this helped boost quarter hour listening.

Of course, it didn't. As playing tricks with listeners in the hope that a diary keeper could be influenced to report longer listening was a figment of our imagination.

The radio industry has a great imagination especially when it comes to ratings.

In reality, the only way to influence the diary reliably and effectively was to make your radio station their favorite radio station because under the diary recall system, respondents would tend to recall listening just before they had to return paper diaries to Arbitron.

If CBS-FM is your favorite station and you kept an Arbitron diary -- unless you were a super geek -- you'd recall your listening not by how many times the station played music across the quarter hours but by how long you thought you listened to your favorite station -- or other stations.

This little detail is forgotten in today's PPM world because in radio, we are all experts (including me, as you can see) in our own minds.

The problem is we're at it again.

The People Meter is picking up a disturbing trend --shorter listening spans.

However, less listening is offset by more listeners because the meter can actually record radio listening that isn't really happening as long as respondents are in earshot of an encoded signal while their portable device is in their possession.

So, now market by People Meter market, you see that the switch pitch is on with advertisers. That troubles advertisers who pay to have their messages heard and don't think that shorter time spent listening is good for them. It's also not good for stations when it comes to maintaining their ad rates.

Our present "industry think" is that if you play music all the time and minimize the talk -- the old "more music theory" -- that PPM listening will also increase. And, it apparently does.

What stations cannot do is get radio listeners to listen longer thus the switch to a new benchmark -- cume-type figures.

Anyway ... how would radio expect to get listeners to listen longer?

Most financially pressed group owners have cutback on-air personalities, bargained off their beloved 50-minute music sweeps for unlistenable stop sets of commercials. No contests. No excitement. No real reason to say -- that station is my favorite.

Again, look at one of the last of its breed -- WCBS-FM and you see that they dominate PPM cume for two reasons:

1. They are a companion station.

2. Their listeners can say CBS-FM is their favorite station.

By companion station I mean, a station they like to have on because it is good company.

And most important -- and what should be the real goal of any successful radio station -- is to make it the one that their listeners can actually say is their favorite station. That's what I did right here.

A New York radio station is one of my favorite stations and I live in Scottsdale, Arizona.

It's not even about the music. I've heard it all and played a lot of it while I was working at stations. It really isn't.

And choose your own favorite station and take the test.

As I would say, let's brainstorm about this. Find out how to make your station a listener favorite. Don't rely on old PD wisdom or Arbitron fly-ins.

Of course, we won't do this. We know everything when it comes to manipulating audience ratings.

That's why commercial free days are popping up even as we piss off more advertisers by delivering shorter time spent listening.

Never mind -- average quarter hour didn't matter anyway, we will now have to argue.

Cume is radio's new obsession -- and a fatal one in my view.

And we get cume by being on everywhere and by shutting up and playing music. Here's an interesting article in the Denver Post on the new world of PPM and shorter listening spans.

CBS is doing "commercial free Mondays" on many of its stations as a ploy to get increased listeners. It will probably work. And CBS is selling the commercial free days to advertisers and focusing on new ways to monetize the time without specifically running spots.

But other groups are doing the same thing and screwing it up.

One of my Repeater Reporters checks in with this embarrassing situation:

"An Entercom station here in Indianapolis, classic hits WNTR is doing "Commercial Free Mornings" with no spots between 9 and noon every day.

Oh, what they don't tell you is they're loading up long 10-unit breaks in the other hours.

Oh, and another thing: There's no jock on during these hours, either. Just a weird pre-recorded back-announce voice, which identifies some (not all) of the songs. And it gets many of them wrong! Sounds terrible.

They're also doing the "Now we're LIVE" thing. "It's Saturday Night Live! That's right, tonight we are LIVE from our studio!" Wow. So now we know you're not live the rest of the week!"

Another reader identifies what radio is doing with PPM right now as over-steering:

"PPM causes 'over steering' If you've ever had your car hydroplane or skid on ice the tendency is to yank the wheel in the other direction, and all you do is over steer...PPM results overnight to paranoid programmers is a BAD idea. It's killing any spontaneity that Radio has left."

One of my mentors, Marlin Taylor, who first hired me at Jerry Lee's FM station in Philadelphia as always put his finger on the problem:

"When I conceived the idea of commercial-free blocks back at WRFM in NY in 1969 ... we never, never spoke of not airing commercials, after all they were our lifeblood.

We called them "Total Music Hours ... where, in the next 60 minutes, you'll hear 59 minutes of music!"

So, let's take a positive look at this situation and see if we can shed some light:

1. "Commercial free" days are not bad in and of themselves if they are portrayed using language that does not make commercials as seeming to be bad. But encourage personality and keeping company with listeners not just blah music sweeps.

2. Make the commercials you run better -- and encourage testing of spots to help advertisers be more effective in their campaigns.

3. The only way to win at the ratings game -- and this includes PPM technology -- is to make it your goal to have listeners articulate that your station is their favorite station and to do this you'll need personality and companionship.

4. Radio is mortgaging its future by cutting personality time for more music alone just because it seems to build PPM cume.

5. Cume is nice. But time spent listening is the benchmark radio sold to advertisers for decades and now more than ever, time spent listening is what advertisers crave. Trying to switch pitch them at this late date will fail.

Oh, and dump those long stop sets.

If you don't have the guts to do it during the week, try one unit breaks out on the weekend and see how good they sound and how long music sweeps in an age of short attention span is simply our arrogance that we know what listeners want.

What listeners want is -- a station that is listenable and eight unit stop sets are not listenable. And 50-minute music sweeps are, well -- unremarkable.

Steve Eberhart's history of KLIF in Dallas and the radio pioneer Gordon McLendon sums it up today as it did decades ago:

"Time and again -without exception -successful broadcast operators have proved that in order to survive and prosper financially, any radio station must provide a programming service of utility to a meaningful segment of the potential listening audience. Neither sales nor general administration nor engineering comes first. Programming does. The station failing to provide some service of unique programming utility to one or another reasonably large demographic element of the population is doomed.

The programming-ahead-of-sales philosophy was really Gordon's broadcasting credo. 'You can have the greatest sales staff and signal in the world and it doesn't mean a thing if you don't have something great to put on the air,' he would say. If he kept his eye on the programming, Gordon assumed, station advertising sales would take care of itself. And, of course, he was usually right."

Dickey Do, Fagreed and Slogan Hogan -- are you listening?

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GOOGLE SETTLEMENT STEALS RIGHTS AND REWARDS APPROPRIATION

I received another letter from the Google Book Search Settlement Administrator this week informing me that my rights will be affected by the proposed settlement of the class action suit against Google for copyright infringement by scanning books and other publications. I have been a de facto part of the class action lawsuit because I am the author of numerous books, chapters, and other publications affected by Google’s decisions to scan and sell copies of materials still protected by copyright.

The settlement has been supported by the Association of American Publishers—which represents major publishers—because it protects their interests, but it is opposed by the National Writers Union and the American Society of Journalists and Authors because it seriously degrades the rights and interests of those who actually write the content. The split between publishers and authors is not surprising because anyone who has observed the uneasy relationships between musicians, authors, scriptwriters and recording, publishing, and production companies immediate recognizes they have very different and competing interests.

Under the proposed settlement, the court will take away portions of my copyrights that were created under legislation and protected by international treaties and it will give them to Google. The only way for me to protect my rights is to take deliberate affirmative action to opt out of the settlement and to seek to enforce my rights against Google individually—not a great option since its capacity to hire lawyers and stretch out litigation is far higher than mine.

The process and effects of the settlement are stunning and will dramatically alter authors’ rights. For nearly a hundred and fifty years copyright law has recognized that copyrights belong solely to the author (or persons to which the authors sell them) and that commercial uses of copyright material can only be made through negotiating terms of use and payment with the copyright owners.

The Google settlement will essentially rewrite copyright law by allowing the company to use the material without permission, without negotiating how the material will be used, and without negotiating compensation and payment provisions. It is particularly offensive because the court will be saying the government doesn’t have to protect authors’ rights, but authors’ have to protect their own rights. This is a significantly different approach from that which prosecutors and courts have taken in the cases of music, game, and software file sharers who have violated copyright on the Internet.

The settlement disassembles the basics of copyright law without legislative consideration and essentially forces the results on rights holders. Its effects are far reaching. Not only does the settlement apply to U.S. authors, but it is binding to authors worldwide even if they are not aware their rights are affected by the suit.

The settlement turns copyright upside down. Instead of protecting authors’ rights, the proposed settlement asks the court to reallocate the economic and moral rights to authors’ work, to give Google rights to use their material, and to determine the compensation authors must accept. To make matters worse, the effect of the settlement essentially gives Google a monopoly over the scanned publications and does require the company to make them available to other online services that might offer them at different prices or with different compensation for authors.

The proposed settlement is theft—pure and simple—and its proponents want to ravage and rewrite authors rights so that Google's acts will no longer be defined as larceny. The result will reward Google for illegally appropriating material, hardly a message that society should want to send to thiefs.

If the court accepts the settlement, authors will be victimized for the sake a $150 billion Internet company and the world’s biggest publishers. Where is the equity and the justice?

Citadel Facing Near Certain Bankruptcy

You think Sam Zell has problems with his bankrupt Tribune Company?

Citadel is on the fast track for disaster by the end of January and what you may be seeing in the next few months is their admission that things are hopeless.

For example, Radio-Info's Tom Taylor has been all over rumors that Citadel may be selling its ABC stations to raise cash.

Bonneville is the name Tom keeps hearing.

And as usual, Tom's nose for news is outstanding.

There are several scenarios emerging -- one worse than the other -- for the financially pressed Citadel. Perhaps you've not heard much from them lately. There's nothing left they can do. Fagreed Suleman can fire everyone and he's still not likely to make Citadel's debt payments.

Here are the possible -- some say, probable -- options by the number:

1. Citadel could sell one ABC station or several to generate enough cash to be able to meet their liquidity targets by early 2010. That way they will be able to payoff the debt that matures then.

2. Citadel needs a whopping $150 million minimum in cash by January 15, 2010 plus another $49 million to repay their convertible notes.

3. If Citadel sells all its ABC stations -- the least likely scenario in my opinion -- they could manage the maturing debt or try to renegotiate the covenants again. This would allow them to return to their pre-ABC merger form. What were they thinking anyway? Few thought the ABC merger was a smart move. And there really weren't a lot of other buyers for ABC. Emmis kicked a few tires and walked away -- or should I say, ran away.

4. Another option is to sell an ABC station or two -- Bonneville is a possible buyer in Detroit. Bonneville is privately held. Their balance sheet is healthy and they are well-run. (In previous editions I said that John Gallagher was a Bonneville exec -- he is with Greater Media).

5. Cox or Greater Media (also privately held) are the only other possible buyers in the view of an analyst familiar with this situation but there is no way to know if either corporation is interested in buying some or all of the ABC properties. If there are other buyers lurking -- not likely -- they'd need to have ready resources available to buy and manage the station(s).

6. Citadel's debt situation is so public that it precludes them getting anywhere near what they originally paid for ABC properties in the roll up. In fact, Citadel selling even one ABC station is tantamount to a fire sale under such public distress.

7. Citadel, thus, will walk away with pennies on the dollar if they sell assets -- but money nonetheless to keep the wolf away from the door a bit longer. The destruction of capital that occurred on Fagreed Suleman's watch is that spectacular.

8. Citadel may not be able to sell any ABC stations to raise funds -- they may not get the price they need because certainly they will not be getting the price they want. In this case, do not pass go and go directly to bankruptcy court for reorganization.

To quote the late great ABC commentator Paul Harvey, "so now you know the rest of the story".

More firings may proceed but even this route cannot save Citadel enough money to prevent running up against its debt covenants.

If a radio broadcasting company could be in hospice, Citadel is there already being assisted on end of life issues.

With most radio groups posting 18 to 25% losses in the recent quarter and the economy still uncertain, Citadel cannot look to increased cash flow to help make up the difference.

It's come down to this.

Sell stations at very low multiples just to make debt payments.

Sell all of the ABC component keeping in mind what is left has already been gutted by Fagreed and his radio wife, Judy Ellis. Bet the shareholders will be angry to find what's left with significant ABC properties in the portfolio is a pig in the poke.

Or, bring it on -- let it go to bankruptcy court.

Citadel has been good to Fagreed financially and to some of the principals. Remember those $10 million plus compensation years not too many years ago?

Hey bankruptcy happens.

One last prediction -- something will likely happen within the next two to three months.

Time is not on Citadel's side.

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Commercial Free Mondays

By Jerry Del Colliano

CBS is doing commercial free Mondays in Washington at Fresh 94.7.

This is nuts.

Here's how they put it:

We agree - the other stations in town play too many commercials. Wouldn't it be nice to hear music when you're at work without all the commercials? It would. That's why we're giving you Commercial Free Mondays on 94.7 Fresh FM.

Every Monday, from 8AM to 6PM, you'll hear all of Today's Fresh Music without the commercials. Zero...nada...NO COMMERCIALS AT ALL! Share the news with your friends & co-workers and change that office radio station to The New 94.7 Fresh FM!

First of all I can tell you that anything a radio station brags about, listeners do not believe.

Every good programmer today can back that up.

Don't make promises -- deliver.

Times have changed. The only people who believe our boasts are working at the station making the boast.

So what do you think it says to the local advertising community when a radio station is treating commercials like the Swine Flu?

I don't get it.

Don't get me wrong. Dan Mason is one of the best radio execs out there and this is just one issue. Some Clear Channel people have accused me of favoring CBS but I'm just saying they do more things right than wrong. Yet, I disagree on this one.

How do you pitch advertisers and prospects on spending money at a station that infers that less of their commercials is better for the workday?

Hell, that's the US Airways model -- not the one a troubled radio industry should be embracing.

Commercial free anything is so old it goes back to program directors who tried that trick (sometimes successfully) when they were manipulating the diary. Why dust off this dangerous strategy in the middle of a recession?

I know ...I know.

Stations that do well in the People Meter play a lot of music -- or so the many new "experts" on PPM believe.

It's not station loyalty.

Not personality.

It's got to be "more music".

As a former program director you'll never get me to argue that music is not important -- hell, I'll go one step further and say music discovery (something radio does not do), is even more important in today's world of iPods and file sharing.

But this notion that you can play your way out of the diary into PPM favor by shutting up your jocks and becoming a jukebox is a short-term fix at best and a long-term nightmare that I'm warning you about.

And the ultimate concession to PPM Zenis that you really can't cram anymore music into a workday than by eliminating the jock and the commercials.

Radio without commercials on Mondays makes me wonder whether they are not setting themselves up for radio without commercials on Tuesdays as well. Why would you want to do this?

Be careful what you wish for in your promos.

Wouldn't it be nice to hear music when you're at work without all the commercials?

Okay, my answer to that question on the "Fresh" website is yes!

How about Internet radio at work or my iPod as I listen through those cool new Etymotic earbuds.

I know. It's a promotion. That's all.

But I think it's more.

Where is Randy Michaels when you need him?

Randy would attack the station going "commercial free" while he seriously cut his own spot load and then would play some dirty trick on his competitor at the agency level. I kid Randy, but still -- betcha he'd do it.

Radio is on a slippery slope and not just with listeners.

You can't go on-the-air and trash commercials by inference and then expect advertisers to buy ads. Maybe you could spit in their faces before, but advertisers are looking for something beyond radio and things like this give them a good excuse.

Look, CBS isn't the only group making mistakes like this.

Clear Channel raising its rates 15% after ten years of bastardizing the mediums' rates is a mistake.

And when Lew "Don't Call Me Tricky" Dickey decided to re-do his agency business, consolidate the accounts, piss off local Cumulus clients, he backed down quietly presumably do as not to lose face.

Sources in several markets tell one of my Repeater Reporters that Cumulus has made some exceptions after agency heads supposedly called Atlanta and threatened to pull their business. There are only a few ways this agency outrage could have forced the Dickey's retreat and I'm sure the Dickey dictators are thinking the same thing -- local account executives put them up to it.

As the Repeater Reporter puts it: "Whether they did or not, those AE's are now on a special Dickey list. . . and will have a 1/2-life future with CMLS!"

Oh, and their jobs may be in jeopardy. Check the help wanted ads for Local Sales Manager in Florence, S.C.

I love the last line:

"Also required is the ability to be flexible as our business is fast-changing".

Ya think?

Like flexible enough to pack a UHaul without throwing your back out.

Radio is blowing it with advertisers -- just at the wrong time.

Maybe because the industry gets away with commercial clusters loaded with 5-8 units -- a waste of any sponsors money to be sure. That's the original insult because even if listeners come back, advertisers will not.

And if you're thinking, our station doesn't do this -- keep in mind that many start music sweeps by saying their commercial free or uninterrupted -- you know, without commercial interruption.

I mentioned previously in this space that advertisers are telling my podcasting franchise clients that they are either not buying local radio or cutting back and yes, they are actively looking for alternatives -- like new media.

Why is it that so many smart radio people are coming up with so many dumb ideas?

One reason is that they don't understand generational media.

When I taught my USC students about generational media, I always said that each generation has just as many things in common with the other generations as it does differences.

The trick is to know the difference.

Steve Jobs does.

Radio executives do not.

Radio people would figure it out if their draconian bosses would treat them like they had a brain.

So, sit back and enjoy commercial free Mondays.

Have a good time cramming spots into bloated stop sets.

Keep using your cheapest production people to record unremarkable ads that don't get noticed and don't make a difference.

And continue to send what's left of your sales force into see agencies and clients without empowering them to solve one single marketing problem of theirs.

PPM means nothing -- even if you get away with stripping the personality out of your stations to make them more music friendly -- if you keep treating advertising like a disease.

Oh, by the way -- in my years of teaching at USC, no student ever told me they wouldn't listen to a commercial.

Just not the ones on radio.

They are too bad.

Too many.

I don't want to end without a positive solution -- so here it goes:

1. Cut your spot load to a maximum of eight per hour, 12 in morning drive. Units!

2. One spot per stop set -- stopping is good, short attention spans love it. Don't fight me on this. They're not listening to it your way, try pleasing the next generation.

3. Never say commercial free on a commercial radio station.

4. Hire Randy Michaels to do an attack on your competitor.

5. Sorry, 4 wasn't positive. I'm sorry. I don't know what came over me.

6. Help your advertisers test their commercial before you run them.

7. Hire more sales people -- train them, enable them to solve just one marketing problem that every client has.

8. Don't raise rates until you deliver more measurable results for your advertisers and then once you do -- raise them a lot more than 15%. Then you'll get it.

When you are ashamed of running commercials on-the-air -- or at least pander to listeners -- you need to take a serious time out.

Commercials alone are not the problem -- too many of them are, but the real issue is lack of local personality.

The Super Bowl is loaded with commercials -- to some, the commercials are more important than the game. No one says on the air, fewer commercials on this year's Super Bowl.

Radio fell out of love with commercials a long time ago.

Now advertisers are.

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Jerry is helping former radio talent build podcasting franchises that recapture radio audiences, build new ones using social networking and making money in ancillary revenue streams. When you're ready, Jerry has a one-year plan he can show you from start to finish. Invest in your digital future -- 480-998-9898.