Clear Channel Suing a Community It Serves

Cumulus CEO Lew Dickey called me yesterday to say why don't you write about Clear Channel once in a while -- after all, they are more evil than we are.

Alright, I'm lying.

Dickey didn't call but I'll bet you he's praying we write about some other consolidator's evil actions today after all the apparent misery Cumulus is causing its loyal employees.

In fact, things have been so intense at Cumulus lately that in our ongoing Inside Music Media poll of Radio's Best and Worst Groups, Cumulus has pulled ahead of Clear Channel (see for yourself by clicking here and scrolling down the right hand side -- you can even cast a vote).

It seems there is no shortage of missteps conducted by consolidators these days, but we have a whopper for you this morning.

Believe it or not, the geniuses at Clear Channel are suing a local community group in Philadelphia to halt their annual Unity Day festivities.

Why?

Because Clear Channel has pulled out of the event this year -- probably due to money -- and (please sit down and don't hurt yourself) Clear Channel says it owns the term "Unity Day".

I wonder if they trademarked the term "Evil Empire" because now they sure own it in Philly.

So Philadelphia, the community they are licensed to serve, can't use "Unity Day".

Watch out for Clear Channel filing trademark rights for "Martin Luther King Day" next

Perhaps nobody told Clear Channel's brain trust in San Antonio that it is not nice -- nor is it good business -- to sue a community group in a public trademark fight.

Unity Day on the Parkway, Inc. is getting its butt sued by Clear Channel which goes to show it's not easy being a black station in a black market when your owners are seeing green in San Antonio.

This group wants to put on a Unity Day event.

The city and the community want this event.

Clear Channel actually loved this event when they could afford to be part of it. If you're not already sick to your stomach, here is how Clear Channel spun their public service spirit in the past, read this.

Of course, that was then and this is -- well, now.

Today, Clear Channel wants this community group to cease and desist.

There I've said it!

Clear Channel's three favorite words: cease and desist.

Instead of creating goodwill for its local Black-oriented stations, Clear Channel is forcing the community to rise up with Save Unity Day in Philly. See their war literature here.

Hogan is in trouble.

So much for localism.

But then again localism to Clear Channel is running a local public service spot in nationally syndicated, networked or voice tracked Repeater Radio. At least, if Clear Channel Community Service Director John Slogan Hogan has his way.

And speaking of Hogan's ineptitude at community service, betcha if his local management caused this PR stink, their sorry asses would have been fired already.

So now Clear Channel is playing hardball with a group that actually wants to do good in the community and has widespread support. A former partner. Hey, radio is not that beloved that it can win an unpopular war with their own listeners and community.

Clear Channel lawyer Matthew Jennings, carpet bagging from San Antonio argues:

"It is Clear Channel’s policy to enforce its intellectual property rights vigorously. In that regard, this letter serves as formal notice that your use of the UNITY DAY Mark, in any manner, is wholly unauthorized, is likely to cause confusion, and constitutes trademark infringement, cybersquatting, and unfair competition in violation of federal and state law. While Clear Channel does not wish to engage in a protracted legal dispute, we simply cannot allow continued infringement of the UNITY DAY Mark or statements implying an affiliation with Clear Channel’s past festivals..."

Say what?

These are your listeners for God sakes -- the community you are licensed to serve here -- is this gobbledygook any way to talk to them?

A representative from Unity Day on the Parkway, Kyle Davis argues:

"...that once Clear Channel cancelled the event for 2009, it was our responsibility to protect a (30) year heritage that been adopted by the Communities of Philadelphia as their own. A lawsuit is forthcoming against Clear Channel, and it is unacceptable for Big Business to bully the Little People, when clearly, the law is on our side".

I'm on their side -- The Little Engine That Could vs. The Big Stuffy, Puffy Steam Engine from San Antonio.

So let's get this right.

Clear Channel cancels the event and screws the Black community.

Doesn't want the group with the same name to continue the popular event because its lawyers in Texas just have to defend their trademarks. You understand.

Can't we invite everyone to Scottsdale to have a beer with me on my patio overlooking the 8th of the Lakes Course? Can't we all get along when Clear Channel decides to impose budget cuts?

Talk about taking your eye off the ball.

Radio used to serve the community -- some stations still do. Their employees are only too happy to get involved -- on their own time. It's what we do -- and we do it well. I lived in the Philadelphia area most of my life and I can tell you WDAS-FM is a big part of the African-American Community. Why not help them succeed with an event that they obviously think is worth fighting for?

Lend them the name, alright? Be a good neighbor.

I can't speak for WDAS but I suspect WDAS-FM employees are ready to jump to it and be a part of this thing.

Betcha it's John Slogan Hogan who is the problem -- again.

Who appointed him boss anyway?

If Unity Day was such a great idea---and it appeared to be judging by the crowds it drew to the Parkway in previous years -- shouldn't Clear Channel use the money it will spend on a cadre of lawyers for a donation so Unity Day can go on?

If I were running a competing station, I'd go pay the group's legal fees against Clear Channel and let them hang themselves on this stupid move.

Where are the competing stations? Afraid of Clear Channel or too cheap to step up?

I know money is hard to come by but it also takes money to sue your local community groups. It's a matter of priorities.

And, Clear Channel's return on its "legal fee investment" is going to be some unfavorable footage on "Action News" at 5, 6 and 11.

Is it me or is this another example of how consolidation enabled large owners to take their eyes off the reason they exist -- to serve their cities of license?

And will you agree that if Clear Channel had to ascertain community needs to petition for its next license renewal instead of get automatic renewals, they wouldn't bully community leaders and rain on their Unity Day parade.

Imagine who might file for the WDAS-FM license if Clear Channel can't operate in the public interest?

A lot of radio folks don't want to wake up the federal bureaucracy and invite more regulation back into the industry.

Isn't that what Clear Channel just did when it sued the community it serves?

Hello Commissioner Copps!

And you wonder why radio is in trouble.

How it has lost its mojo.

It's not the people who work at the stations. They know what is the right thing to do.

I've fought the Evil Empire in a $100 million lawsuit and while I am not an expert on when bad things happen to good people, I came out okay. They are the ones on the brink of bankruptcy.

So this time let me give the Evil Empire a little free advice that they will not take:

Settle this now and let your great station people do what is right and serve their city of license.

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Radio According to a 15-Year Old

I thought you might be interested in what Morgan Stanley did recently in the UK.

They offered a two-week internship to a 15-year old to critique the media business and write a report called How Teenagers Consume Media. In it, Matthew Robson believes he is speaking for over 200 other teens.

And if he is, we may want to listen up.

First, he proclaims Twitter for old people.

Stop and think about it. My young friends and former students are not all that enamored of Twitter. My older friends are in love with it.

Maybe Matthew is right.

And we know that only about 9% of the people who have Twitter accounts -- no matter what their age -- tweet daily.

Young people have Facebook but perhaps even more significant is that they have text messaging and there is nothing more critical to young folks today than texting.

In class.

At the dinner table.

While driving (yes, that's right -- many if not most texters admit to texting while driving which is thought to be more deadly than driving under the influence). Here's more on the dangers of texting and driving if you're interested.

More revelations:

1. “You use a mobile phone if you want to talk to girls,” as “only about one in fifty girls plays computer games.”

2. Girls are more into social networking -- at least in the UK and according to this 15-year old. Twitter is for adults. Facebook is for teens (and adults, I might add).

3. Eight out of ten teenagers don't buy music -- they steal it or get it through bit torrent sites. But then again, my readers already knew that, right?

4. Radio is a loser with teens. They can listen to Last.FM in the UK (or I might add, Pandora here) and eliminate commercials. They can choose the songs they want instead of having to listen to what a station features. And those in tune with generational media and have heard me talk about the importance of understanding the sociology of media know that an on-demand generation wants to be their own PD. And social networking buzz about music means more to the next generation than anything a dj can say -- assuming stations still have djs.

5. "No teenager that I know of regularly reads a newspaper, as most do not have the time and cannot be bothered to read pages and pages of text while they could watch the news summarised on the Internet or on TV".

6. With regard to viral marketing, "Most teenagers enjoy and support viral marketing... Teenagers see adverts on websites (pop-ups, banner ads) as extremely annoying and pointless...they are portrayed in such a negative light that no one follows them.” Wake up, America. We don't just simply have a radio crisis, there is an advertising crisis.

Here's the full report. I think you'll find it fascinating.

But that leaves folks in traditional media such as radio, with not a lot of good news.

The reason is that radio companies make decisions based on their perception of how consumers use or could use their services. Infrequently, if ever, do they study what consumers actually want based on generational considerations.

A few observations:

1. Radio is hell bent to cram towers and transmitters (or at the very least what they are broadcasting from their towers rerouted to the Internet) on young listeners. It has no growth potential. Look at Microsoft deciding to get into the Apple retail store business -- many, many years late. Betcha it fails. The market doesn't need or want a Microsoft retail store as much as Microsoft needs and wants it. That's what radio is forgetting -- the next generation doesn't want radio anywhere.

2. This doesn't mean they don't want content -- and radio talent can provide that content. But first, radio industry types have to stop making everything turn into radio. I can tell you that if you listen to a radio station podcast it is radio on a mobile device. No growth there, either. I work with clients to concentrate on the mouth-to-ear part of the relationship they are building in podcasting. This used to be what radio had with its listeners on-air. Podcasting is simply the next radio on devices the next generation cherish.

3. Audio alone is so 1920's -- if you want to be part of future revenue streams audio must have video and text capability along side it. That is, a podcast in the future will have all these things. If you accept that the next generation will not revert back to terrestrial radio, then you must consider that they are used to seeing, hearing and reading as one step. Think this way and crack the mind jam that radio people typically have.

4. The Apple Tablet -- which I tipped you about last Spring -- is on the way and will be the must have device for reading, listening and watching. Therefore, the media business has an opportunity to rethink delivery. Of course, in radio the content these days is threadbare. We think of new programming as The Sarah Palin Show. The Apple Tablet (or whatever cool name they call it) will be as significant as the iPod and maybe eventually as significant as the television. Today, we watch TV for content, listen to radio for content, read for content. The next generation will have a master controller in their hands (maybe the Apple Tablet) and they will project video onto screens that will be slaves to their devices. This is all good because radio companies can get back into the game again. Their record shows, however, that they are hell bent on doing just audio and will miss this revenue stream, too. Oddly enough, radio won't work without pictures and text.

5. Radio would have died a decade ago if not for availability of radio sets in cars. That's where listeners hear it and as the industry's own RADAR study recently reported, there are slightly more listeners who spend less time with radio. Not a growth business.

6. Music and radio are tied together. Mark my words, Apple is making nice to the labels because the tablet is coming. Where once radio was necessary for the music industry to thrive, iTunes will be increasingly critical to the music industry. Radio standing around and thinking voice tracked music will ignite the next generation is pure folly.

7. Radio's best bet for surviving new media is the exact opposite thing it is currently doing -- personality. On-air for now. Hundreds of local niche podcasts (and repeat after me -- that do not sound like radio). Music intensive in spite of the royalty problems. I'd like to sit down with the music industry and radio and negotiate a royalty rate that would include new media -- obviously, I believe there is no radio without new media. The labels will eventually win the repeal of performance tax exemption -- they're very close now. If I'm radio, I'm giving a bit up to get an agreement for new media projects that could be my future. Instead, they are fighting a losing battle here as well. They are going to wind up paying an added performance tax and will not have a sweet deal upon which to launch music podcasts.

You don't need a 15-year old to tell you the radio industry is missing the next media wave.

But you have to see the future to pursue it -- and we could all do a better job of doing that.

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Laughable Radio Recruiting Tactics

Citadel and Cumulus, your market leaders on bankruptcy potential, have fired a lot of talent in the past year -- including valuable sales people.

Now, they are apparently hiring again.

No, not hiring back.

Hiring new.

And to listen to the way they are selling the open positions, you'd think Capital Cities/ABC had come back from the dead to run these help wanted programs.

So, let me set the stage.

Among Clear Channel, Citadel and Cumulus alone -- not to mention the bottom feeder consolidators -- there are enough so-called "laid off" account execs ready to work again to help these bumbling radio companies.

Instead, look what they have come up with to attract "more qualified" prospects:

• Citadel is running a "Can You Sell -- Win the Job of a Lifetime" working in radio contest

You've got to go to this site right now before they take it down -- you won't believe it.

In case they do, here's the pitch:

"92 PRO-FM & HOT 106 are teaming up with Newport Creamery to find our next great radio and Interactive sales person! We have your chance to win the job of a lifetime - working in radio! If you are outgoing, creative, savvy - and never take "NO" for an answer, then we want you. We will be choosing 100 applicants for the ultimate job interview. Over four weeks, we will determine who REALLY can SELL - through various tasks and tests - plus, we'll be broadcasting the highlights online! The one person left standing at the end will be offered a full time job with 92 PRO-FM & HOT 106 (Citadel Broadcasting)! Fill out the application below - don't forget to include a photo and/or video to get your foot in the door. Hurry up - we're waiting for you to impress us! We strongly encourage you to send in a short video of why we should hire you here at the station...be creative...it'll help!"

The Citadel video portrays good seller vs. a bad seller and if this is what radio advertising has become, we're all in trouble.

This is how one of my Repeater Reporters assesses the prospect of a juvenile sales contest to sell an industry in which young people do not want to work:

1. "We think we can look good to our community in tough times", when in fact it's just the obvious. Finding a job, from first hand experience, is not funny, not a contest, and not a stunt.

2. "We need to look like we're doing something proactive in our recruitment process." What we're really seeing is a group of managers who, bogged down by endless and meaningless reports and directives (just like Cumulost) they don't have time to recruit...and if they did, they wouldn't know what to do.

3. "It will be fun and instructive to put candidates through a set of tasks to see who can really do this job." What is this...an episode of The Apprentice? Setting up artificial tasks and competition to find a "winner" is so far from a predictor of future success it's embarrassing.

4. "A radio sales job is something people are really going to want to fight for." Really? I haven't been able to convince my daughter, nephews, nieces, or any of my friend's kids to go into radio and I wonder why? 100% commission. No training. No laptop or cellphone. No management support or development. No salary. No car. No gas money. And if Dad "who's such a great Dad/Uncle can't get hired because he's not a corporate lackey then "what's up with that?"

5. "I used to think Radio had become a parody of itself then a tragedy. Instead we've become a farce."

6. "The contest will receive glowing trade press and a special award at the RAB convention...to a standing ovation...of the 34 people in attendance."

Thanks to my razor sharp reader for that.

Look, I can tell you from experience as a college professor at USC that students don't want to listen to radio let alone have a career in it. Nothing I see in the Citadel ad is going to change their minds.

Not even invading social networking.

Over the weekend, among the five followers of this contest on Twitter (They have a Twitter page for "Can You Sell?") were the promo director/dj, both radio stations, and Evan, the CEO of Twitter. Pretty underwhelming for the press it received.

No job candidates were following the Twitter feed.

Respectfully, rehire some of the qualified people you've been methodically "laying off" and get on with it. There was nothing wrong with their performance, experience or know-how.

You're the ones making radio an impossible sell.

• Cumulus as a cutting-edge sales operation

Another reader thinks he can make you laugh at this legitimate Cumulus job posting for a Wilmington sales opening.

Description: We are looking for an experienced radio manager for our 5 station, market leading cluster. If you would like to get your hands on the most cutting edge sales operating system and a top notch sales team to execute it, then you need to look into this position.

STOP!

Where's the part about the spy cameras at the weekly sales meetings?

Or the threats to take accounts away if you don't perform -- right there during the video sessions?

Or the rigidity of forcing salespeople to make tons of calls to come up with a few sales?

Or pricing sales higher for existing clients than new ones?

Sorry, I digress ...

It is a demanding, structured and process oriented system with clear expectations and the tools with which you can succeed.

Give them credit for at least saying "demanding". Boy, these candidates ain't seen nothin' yet.

If you're ready for the challenge, send your resume to Jon.Pinch@cumulus.com. EOE. Posted 7/20/09

I wish I was making this stuff up, but you almost can't. It's that unbelievable.

There are still good radio groups -- let's not forget that (see my Best/Worst Radio Groups poll on my website InsideMusicMedia.com and scroll down the right hand side to see the updated tallies).

Emmis has a lot of financial problems but you never see them sinking to desperate measures when it comes to employees. And in good times and bad, Emmis treats its people well.

As does Bonneville.

And Lincoln Financial.

And Greater Media.

And Cox.

And hundreds of smaller owners who know the value of local radio and the importance of treating people with dignity.

Forgive me for making a mockery out of some owners but they are making a mockery out of themselves and this once proud industry.

I just think you have to call out this foolishness for what it is -- incompetence.

Let me go back to my earlier reference about that outstanding broadcast company Cap Cities/ABC and let me leave you with this question.

Would Citadel's Fagreed Suleman or Cumulus' Lew Tricky Dickey or Clear Channel's John Slogan Hogan ever get hired to run the much smaller but better Cap Cities/ABC group in the day?

What about just one of their stations?

Any one?

And they are running hundreds and hundreds of consolidated stations today.

I rest my case.

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Cumulus Is the New Clear Channel

Don't worry, Clear Channel is still the "Evil Empire".

But Cumulus under the leadership of the Dickey boys is more like the Brotherhood of Evil Mutants, the fictional Marvel Comics super villain team devoted to mutant superiority over normal humans.

Of course I am poking fun at the Dickey brothers because as they have been tightening the noose on their talented and able Cumulus employees, they have also been tightening the noose on themselves.

It is unthinkable that a radio group could spy on employees using cameras installed at their stations, punish salespeople who can't meet corporate goals in a brutal recession and continue to pay the founding brothers excessive compensation without much corporate oversight.

And to coincide with this harsh approach to operating a radio company, the Dickey boys led by CEO Lew Tricky Dickey have driven the stock price down to about two quarters, run amuck of their loan covenants and have failed to prove old Lew Dickey, Sr was right in installing his carefully educated sons to run one of the biggest radio groups.

We're doing a Best Group/Worst Group poll on my website InsideMusicMedia.com between now and the end of the year. Early voting has started (you'll find the poll in the right hand column if you're interested). Look at it and you'll see my point about how people feel about Cumulus being the new Clear Channel. But you don't need a poll to tell you Lew Tricky Dickey's apparent draconian methods in dealing with employees is coming home to roost.

We're all entitled to an opinion and this is a free country -- so while Cumulus employees must swallow their tongues to keep their jobs, others can call it like it is -- which is -- a travesty.

An unnecessary travesty.

Back when Clear Channel was dubbed the Evil Empire, the largest radio group was suing people left and right, bullying everyone in sight and using its heft and power to gain what should have amounted to unfair advantage or as I call it -- a monopoly.

But absolute power absolutely corrupted at least their power and Clear Channel eventually imploded. Today they fight to avoid bankruptcy.

There are a lot of Clear Channel wannabes including Citadel which is teetering on the brink of bankruptcy with Clear Channel.

Eric Boehlert, the talented reporter and writer slapped the term "Evil Empire" on Clear Channel and I assume he came up with the description because Clear Channel was and is mean.

That's why I say Cumulus is the new Clear Channel.

Their employees think the Brotherhood of Evil Mutants are evil and hardly a day goes by without more corroborating evidence:

1. One reader reveals, "I personally witnessed employees performing a morning ritual of facing west toward the corporate office and flipping them off to start their days. That’s a team building activity that pulled people together in their misery. Every decision was based on How would Clear Channel do it? And as we all know that does not lead to good decision making".

2. An ex-Cumulus employee writes, "In order to avoid cuts, all non-sales staffers are required to make over an hour worth of calls each day to set up appointments for the sales department..who are also making their own calls. That's wasted time that keeps programming and promotions staff from programming and marketing the stations".

3. Employees make fun of the camera that the Dickeys have creepily placed in the meeting rooms where corporate conducts their spy-in-the-sky sales meetings from Atlanta -- meetings in which some attendees have reported punitive tactics disguised as Cumulus sales "motivation".

4. The pressure is apparently being applied so tight that one Cumulus employee blames what he alleges as the recent death rumor of a Missouri employee on it. While we have no way to corroborate the accusations at the very least this is representative of what some Cumulus employees think: "An unreported story is the business manager in Missouri who was allegedly so upset and stressed out by the verbal beatings they get on their weekly beating conference calls, so upset and stressed by deadlines that are shortened, staff eliminated, computer programs that don't do as promised, and reports that were do (sic) yesterday, that she quietly left the office a few weeks ago. Drove to her house, parked the car in the garage, closed the garage, while the car was still running, and ended her life. She didn't believe she had the choice to quit, she had bills to pay, and clearly she felt death was a better answer than another day at Cumulus. Tragic". Again, that's one person's account but when it launches talk -- right or wrong -- that the stress is so great that employees can't take it any more -- that's a problem for the Brotherhood of Evil Mutants.

So, the point -- Cumulus is apparently stepping on the throats of its employees and answering discontent with harsher measures (monitoring emails, blocking some email communication, threatening to take accounts away from salespeople who don't meet goals, etc).

It's even worse than that -- and I'll pass the latest abuses along to you in a future piece. You see, they can block their employees email, but they let their fingers do the talking from their unmonitored personal accounts when it comes to unhappy Cumulus employees looking to out the Brotherhood of Evil Mutants.

But I've got what I think is a great answer.

And, ironically, it comes out of the mouth of Chief Other Brother John Dickey.

Other Brother was quoted in the trades recently on the topic of ratings -- and there it was in all its eloquence -- John Dickey's answer to all Cumulus employee problems:

"Cumulus COO John Dickey says tumultuous debate over ratings the last two years has led him to believe there should be a single point person to represent radio owners to research companies. He says an ombudsman could "keep everybody honest and make recommendations."

That's such a great idea for ratings, John, why not appoint an ombudsman to oversee management-employee relations since the board of directors is apparently not interested in this topic?

An ombudsman is "an official appointed to investigate individuals' complaints against maladministration, especially that of public authorities".

And it would keep everybody honest and make recommendations just as John Dickey wants the ratings ombudsman to do for the industry.

If it's good enough to keep Arbitron honest, why shouldn't it be good enough to keep Cumulus honest?

None of us can know if there are human rights abuses in China -- I mean, Atlanta -- without an ombudsman.

Let's take an idea from John Dickey and run with it or maybe we'll just watch John Dickey run away from it.

Look, our great industry is being reduced to one big sweat shop by failed radio consolidators.

Let's at least speak out for them and hope sooner or later all of us can either help misguided radio CEOs find their way again or at least let me "keep everybody honest and make recommendations."

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Disney's New Radio Killer

Disney's ESPN is up to something big that radio and new media interests should keep a close eye on because they are about to steal local listeners away from radio and move them to the Internet.

A number of months ago ESPN the sports giant (television, radio, publishing, online, mobile) began testing a concept that is reminiscent of local radio when radio was in fact local.

Three months ago in Chicago, the test site, ESPN began digging down deep into local communities in an effort to create total domination of all things sports. In Chicago, ESPN is up against Randy Michaels and Tribune. So far ESPN is leading the race for faces with 590,000 unique visitors in June beating the locally-oriented Chicago Tribune with 455,000.

These numbers are very impressive in and of themselves after such a short period of time, but what is more significant is the ESPN strategy.

It goes beyond the major sports teams.

ESPN, the brand, is now moving to penetrate local sports -- high school football, baseball, hockey, basketball, soccer -- you name it. They are not too proud to include middle school, either. The idea is for students and parents to find sports schedules and scores on their ESPN site.

In addition, they could have game summaries, statistics -- and the starting point for conversation in a social networking setting.

It's all on the ESPN site and on their mobile products.

ESPN can use all its media operations to drive visitors to their new local sites and that includes ESPN radio. You'll see ESPN launch its local web branding in New York, Los Angeles and Dallas in the near future.

And eventually, ESPN will cover every market worth owning with sports from pro to little league. In other words, ESPN will get bigger by thinking smaller.

Smaller teams.

Local focus.

All this may be boring to Lew Dickey, Cumulus and Dickey Broadcasting which just signed a five-year contract to air the Atlanta Braves. Clear Channel is giving up the broadcasts.

And that's what traditional radio calls sports -- either play-by-play of the major sports or talk about sports. Sometimes there is college sports talk but high school info -- especially in the detail that ESPN is obviously going -- is ignored.

Look for the Dickeys to put the Braves on their AM and FM in Atlanta and on some nearby market stations as part of a network. Imagine all the money they will save from airing the Braves everywhere.

Don't put it past the Dickeys to get the rights to Atlanta's favorite sports team and then fire the radio play-by-play announcers. That's happening right now on Long Island where the hockey Islanders wasted their two play-by-play announcers so they can save money by simulcasting the TV audio.

Any hockey fan can tell you the level of description needed to enjoy a hockey game on radio. The TV simulcast will not suffice.

Radio has been ruining a lot of formats for itself in the past 13 years of consolidation, but I chose the ESPN example because if they succeed, they will be doing what radio should routinely be doing -- building local brands on multi-media.

Young people -- 80 million of whom are of age or coming of age now -- are happy to subscribe to Major League Baseball on their computers or NFL goodies on their cell phones. They don't need radio here, either.

Disney-owned ESPN gets an "A" in my book for reading radio's potential or lack of it and the same grade for innovating.

I take you to Radio Disney, the kid's channel that plays more new music than any traditional terrestrial radio station. Their production is more appealing to youth. All of this was done on crappy stations (I'm being unfair using that description but I'm trying to convey that Disney didn't buy great signals).

Many radio executives laughed when Disney fired up Radio Disney for kids, but who is laughing now?

Disney stuck Citadel with its ABC operation -- just at the peak of its value -- and Citadel is currently dismantling everything good about the previously excellent ABC stations.

Interesting -- Disney didn't sell Radio Disney (those "crappy" signals).

And they continued to buy outlets for its ESPN venture almost as if they knew what they were doing -- an oddity for media companies these days.

Now, you can see what Disney is up to.

ESPN, one of its strongest and most dominant brands, will seek to become all things to all people on a local level using not just radio but everything technology can bring its way.

Haven't I been saying radio should have done this when it had all that investment capital?

But consolidation CEOs never could see the future. Hell, they can't even see the present.

You'll note that ESPN's local sports initiative is not repeater radio or national syndication. They are hiring -- that's right, hiring -- real people. You know, the kind who breathe, work, make good content.

Meanwhile radio groups come up with asinine ways to cut costs, fire people, take their eyes off the future and they are failing even before this new challenge from ESPN comes along.

Tribune is not a radio company, and Randy Michaels is not going to let ESPN take his bacon without a fight -- I can promise you that. Of course he's working for a bankrupt company owned by Sam Zell so his resources are more limited than ESPN with the backing of Disney.

Look, radio knows how to do what ESPN is taking to the next level.

It's called being local.

I remember observing the hardest working dj I have ever known, George Michael of WFIL, Philadelphia and WABC, New York who later went on to sports fame in Washington and nationally.

As a young jock doing a teen radio show, George visited virtually ever school in the listening area, called his contacts and taped high school news and sports on a daily basis. I don't supposed you'd be surprised if I told you his show was far and away number one for years with that formula.

Imagine what a George Michael would have done if he had the Internet, iPhone, iPods, Facebook, Twitter and all the rest of today's new-age tools available to him then.

Other stations and formats have also made it good business to be part of their communities and offer things listeners crave.

Over the years radio people got to believe traffic and weather was the reason for existence even though audiences had changed and found other ways to get that information. Radio has become more national for at least the last 20 years in slow and painful steps.

The last real local format was all-news developed by an appliance and light bulb company named Westinghouse that also owned a few big city radio and TV stations.

Even local talk didn't last long when greedy managers figured out that syndicated political talk could get ratings and give them low cost content to sell. In the process, they set up their own eventual demise as social networking has become the new talk radio to the next generation.

Talk radio has become a bloated, aged imitation of its former greatness.

And herein lies the magic of what ESPN is doing:

1. It isn't about terrestrial radio right now or for that matter only TV or print or online -- it's all of that being employed to drive a multi-media local brand.

2. Just because websites reside on the world wide web does not mean that national trumps local. In fact, ESPN is going to show radio and print what happens when you build a brand from national to local and even micro-local (including children's sports).

3. The mission going forward is to nurture the brand, enhance it, hire talent locally to make it compelling and then embrace every technological way to distribute that content.

Go back and review 1, 2 and 3.

Radio could have and should have done all of this.

Instead, it got into a pissing match with satellite radio -- a medium that doesn't matter.

Caught up in cost-cutting that has not insulated them from the bankruptcy they now face.

Fooled itself into thinking they could get away with cheap radio that is increasingly national.

No Internet, mobile or social strategy in site even in this day and age.

So, closely watch ESPN teach the radio industry a lesson that it should have learned in its illustrious 75 plus year history.

It's not about AM or FM or XM or PM or iPods and iPhones and Macs -- it's about all those things where applicable.

To survive -- radio must take strong brands and build them across all technological platforms and concentrate on every sociological area at the same time.

It takes money this industry doesn't apparently have.

So watch the outsiders come in and clean the clocks of all broadcasters who try to just do terrestrial radio in an era of great change.

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The Cumulus War Against Itself

Cumulus Media -- the 64 cent stock is all Harvard grad Lew Dickey, Jr. has to show for 13 consolidated years of radio -- is at war with itself.

This is my opinion.

When a company has to revert to tactics that inhibit productivity at a crucial time and dissipate the good will of their employees, it can only be due to desperation.

Cumulus is in free fall.

The stock price is in the toilet. The value of the company worth less than ever. The future mortgaged by overspending and now the employees in a sense pistol whipped because they need their jobs and the ruling Dickey family needs cheap labor.

It's not just about Cumulus or the Dickeys for that matter.

Clear Channel does the same thing. You don't earn the name "Evil Empire" by handing out gold watches. Hell, Clear Channel doesn't even give out Timex's when they're kicking employees to the street.

Citadel has flushed so much talent out of its company that it has no choice but to recycle its programming and run infomercials.

There's also a group of what I call bottom feeders who want to be Clear Channel and get their mean off by playing John "Slogan" Hogan (heaven forbid!).

Let me put my Dr. Phil hat on for a second.

These failed CEOs have self-esteem problems.

They must because they don't seem to like the people they hired (unless in Cumulus' case, they previously worked for a uniform company).

They are cruel -- cutting off lives, livings, careers - hurting families. You might counter that they really have no choice but to let these folks go and I would add, "but they do have a choice as to whether they take raises, bonuses, perks and the others things they all do even while they are firing employees".

They have anger issues -- I'm still being Dr. Phil here -- because why would you continue to hurt careers and families when you don't have to -- and when you absolutely don't have another option but to dismiss employees, compassion is missing in action.

My point is that most consolidation CEOs have run their companies from the beginning. Had virtually all the power. Puppet boards of directors. Until now, money flowed in from Wall Street banks to refinance and cover up the suspiciously overvalued prices they paid for their assets.

Clear Channel people are ticked that the founding Mays family took the money and ran -- twice -- while mixing the Kool-Aid employees were asked to drink.

Citadel employees have complained to me (and I've documented it in this space) that their leader Farid "Fagreed" Suleman was getting rich while the company was tanking and that his minion, Judy Ellis, was more than tough in her dealings with fellow humans.

Saga CEO Ed Christian -- although brilliant for avoiding running up company debt -- is criticized by some of his employees for making them take a 5% pay cut while he takes a pay raise.

What the hell is going on here?

But the Dickeys are presently number one with a bullet (to borrow a Billboard term) when it comes to waging war against itself.

You already know they "spy" on their employees with cameras installed at their radio stations. The sales meetings conducted via Skype appear to discourage the attendees more than inspire them to higher sales.

The Dickeys are being aggressive in trying to put down the employee unrest that threatens the company’s financial production at a critical time.

Here are their latest tactics:

1. Email surveillance
One employee reports “on the just completed Market Manager weekly beating conference call, John Dickey of the Dickey Ding Dong management team informed us all that Richard Denning the corporate counsel was creating a disclaimer for the bottom of all corporate emails, that prohibits them from being forwarded and or copied.” By the way, to show you how well watching employee email has worked, you’ll note all the corroboration from Cumulus workers in this piece are presumably from personal email accounts. Guess you can't keep people behind the Berlin Wall try as you may.

2. Sales meetings that employees fear
Cumulus employees that have contacted me definitely don’t appreciate the tenor and tone of the weekly half-hour spy sales meetings. Some say these meetings are enough to make you cry. Meanwhile, it never occurred to the Harvard-trained Lew Dickey that the best sales meeting may be no sales meeting at all. When I worked for the Dale Carnegie organization, they taught a meeting concept where all participants remained standing and the “business” was conducted more swiftly with less time wasted. Hey, it’s an idea.

3. Gaining needless unfair advantage with non-competes
It’s bad enough that Cumulus has every advantage over its employees -- a bad economy, a declining radio industry with fewer jobs available at other companies, etc. But it continues to make employees sign non-competes sometime up to one year making leaving even harder if they could find a job in the media business. It’s arguable as to whether these non-competes would even stand up in court but who has the money for court? Everything is stacked in the favor of Cumulus.

4. Romper room sales tactics
Here’s how a Cumulus salesperson describes the situation: “No one should be allowed to speak to their employees the way they do. It's never enough ... and the big wheels in Atlanta can't figure out why we are not closing 4 new accounts a month. Lets see, make 80 calls, 40 contacts, 20 appointments and close 4. That's the formula. With 12-18 sales people tripping over themselves calling the same people who are screaming at us to take them off our "list" ... try to find a number not called … and, oh, make sure to find elephant accounts ... is this a safari? Oh, and how (a) … veteran who is subjected to managers listening to their calls and evaluating them? If I don't know how to prospect by now, I should not be doing this.. I was told I said too many ummms, and not following the script to the letter .. lets see, for years a million dollar plus a year in sales with great client relationships, and doing all the things it takes to be a good account exec but suddenly I need to be re-trained?”

5. Commission cuts
One Repeater Radio Reporter checked in to say, “I have a friend who sells advertising for Cumulus, and she is severely suffering financially since the most recent pay cut where 'corporate' took 4 clients off her list. (This equals about $1200 a month off her commission.) Also, a couple of months ago, 'corporate' fired 7 people in the Savannah office. This is a travesty, and I truly feel that this company is EVIL!” When the seven people in the Savannah office were fired, it was actually 7% of the entire Cumulus workforce. Furthermore, they cut back all part time employees to minimum wage and cut out their benefits. Lew Dickey then awarded himself the half mil... and his BROTHER was given a bonus of 150,000 dollars!”

This is war.

Not with new media.

Not with Google.

Not with competitors.

Civil war within the borders of Cumulus.

The generals have dug in for the long haul – if from now until the next broken bank loan covenant is what you call the long haul.

The loyal soldiers have nowhere to turn but the unemployment line.

Every once in a while someone will say why do we care so much about the way consolidators run their companies?

Radio CEOs have had all the power they could ask for and now look where it got them.

There are lots of ways to look at the results of radio consolidation.

Penny stocks.

Loss of local radio.

Mass exodus of talented radio people.

Inability to keep up with generational preferences for new media.

Handful of CEOs dominating the markets like dictators.

Mortgaging the future of radio to investment banks.

But the sorriest, saddest and most representative indicator of just how far radio CEOs have fallen is to see this and other examples of how they routinely get away with abusing their employees and creating toxic workplaces.

Radio people know the industry's problems and know how to get started solving them.

It's employers like Cumulus who are standing in the way of their own survival.

Wall Street couldn't save a consolidator.

But radio people can't save radio CEOs from themselves.

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PROFITS, RECESSION, AND RECOVERY

New York Times Co., Gannett Co., Media General , and McClatchy Co. have all reported profits in the second quarter and the results have led to share prices doubling and tripling.

The developments must come as a surprise to those who saw the poor performance of recent quarters and convinced themselves that the newspaper industry is dead and gone.

Admittedly, the positive results in the past 3 months were achieved through restructuring, reducing news staffs to their 1970s levels, heavy cost cutting everywhere, and postponing reinvestments. But it shows there is still life in the industry and that the industry can be expected to recover in the coming year if economic conditions continue their current rate of improvement. As I have said many times, a industry with $50 billion in revenue is not going to ignore that revenue, close the doors, and disappear overnight.

Many have viewed the poor company performance in the past 2 years and then mistaken the steep concurrent drop in advertising as evidence of a general decline caused by long-term industry trends. In doing so, they have disregarded the impact of the economy on newspaper advertising and mistaken the dramatic drop in advertising as being an indicator of the industry's broader condition rather than the shorter-term results of 4 quarters of negative growth that have affected the economy as a whole. Some have also ignored the effects of corporate debt problems had on the industry's overall condition.

In multiple blogs and articles journalists and editors have pointed out that newspapers have fared worse than other media in the recession and used that the fact as evidence that the industry is a death's door. Two decades of research on newspapers during recessions, however, has shown newspapers typically fare worse because retail and classified advertising on which the industry relies are more affected by downturns than brand advertising (See post “The Credit Crisis, Volatile Markets, and Recession and Media” and the articles below). Obviously a lot of newspaper managers and journalists don't pay attention to research about their own business.

If one looks at the newspaper advertising expenditures over time (see Figure below), one sees that they fall with recessions and then recover. This pattern was especially evident from 1991 to 1993 and 2001-2003 when short downturns pushed newspapers into decline.

If one considers different category of advertising, it is clear that the classified advertising—which was a driver of growth in the 1990s—was significantly troubled after 2000, but recovered and spiked in 2005 (Figure 2). Its relative decline by comparison to retail and national advertising is probably the result of some substitution with the Internet, nevertheless newspaper classifieds produced $10 billion in 2008—3 times that of online classified.

U.S. newspapers are in a mature industry with low growth potential once recovery from the recession occurs. Most companies will performance reasonably well after the recovery, but certainly some companies will have difficulties because of imprudent strategies and choices. Nevertheless, the industry as a whole will still remain in place producing revenue for many years to come.

It will do so because more than 45 million people are still willing to purchase a paper daily and retail advertisers still gain better results from newspaper advertising than from broadcast, Internet, and other forms of advertising.

Related Articles of Interest

Picard, R.G. & Rimmer, T. (1999). Weathering a Recession: Effects of Size and Diversification on Newspaper Companies, Journal of Media Economics, 23(4):21-33.

Picard, R.G. (2001). Effects of Recessions on Advertising Expenditures: An Exploratory Study of Economic Downturns in Nine Developed Nations, Journal of Media Economics, 14(1): 1-14.

Picard, R.G. (2008). “Shifts in Newspaper Advertising Expenditures and their Implications for the Future of Newspapers,” Journalism Studies, 9(5):704-716.

van der Wurff, R., Bakker, P. & Picard, R.G. (2008). Economic Growth and Advertising Expenditures in Different Media in Different Countries, Journal of Media Economics, 21:28-52.

Options Ahead for FM Radio

It doesn't take long to conclude that the radio industry has a big problem.

Not the recession.

Or owing too much debt to repay it.

The listener problem.

Radio groups find themselves in an impossible position these days -- a sad situation of their own making.

You might argue that there was nothing they could do about the Internet, iPods, social networking, music discovery through bit torrent sites or the popularity of cell phones and text messaging.

Then again, radio CEOs could have seen these new technological and sociological trends as opportunities.

Nonetheless, the question of what shall become of FM radio as we now know it is a valid pursuit because operating radio stations as repeaters -- or cheaply voice tracked music machines is not very compelling, not even necessary given the alternatives and certainly is not a growth business.

One of my new media clients pitching a traditional radio client just two days ago was taken aback when the advertiser said they didn't want to buy radio and when asked why the response was that it doesn't sound interesting anymore. They must be hiring inexperienced people.

This is not good.

History allows us to take some context from what happened to AM radio when FM came into prominence in the 1970's.

What's AM radio?

Well, if you're under the age of 30 you know what I am saying. AM hasn't had much to do with your life.

AM was where the action was in music, talk, news, full-service entertainment -- you name it.

Until ... FM came along.

And while the FM band had better fidelity and stereo, consumers have long proven to be creatures of convenience not audiophiles.

FM radio originally had -- dare I say it -- fewer commercials.

No clutter.

No profit even -- at least at first.

Different kinds of jocks, production values and sometimes even longer playlists back in the beginning.

The radio industry liked to think it was FM's stereo capability that was the attraction. Ask my talented friend Mike Anderson what Stereo 92 meant to a Philly station we both worked at together called WIFI (really -- they were the call letters -- who knew).

It sure as hell wasn't the stereo in spite of how we rammed that "advantage" into our listeners ears.

It is significant that talk and news didn't start to migrate to FM until FM had long matured. And even at that -- AM is where the old people are (forgive me for that). But talk radio listeners are deep into their 60's. Gen Y doesn't do talk radio -- and there is 80 million of them coming of age.

They do new media. We keep wanting to make them radio listeners and they so don't need us to do that.

Then, once FM took off, radio worked its voodoo -- that is, cut the playlists, add AM top 40 formatics and there you have it -- too many commercials, no music variety and less music. Of course, we all knew how to handle that little problem: tell the listeners we played more music, fewer commercials and greater variety.

You wonder why radio is in a mess right now with listeners -- kind of a listening recession.

I got a kick out of the trades the other day when they reported new RADAR results as indicating that although there are more radio listeners, they listen for less time.

Radio was/is stuck with a diary ratings system that never fully reported the mediums full reach and now has to settle for the People Meter, a device you would never wear, that picks up any noise and reports it as listening.

PPM is better, but far from perfect.

Oh, and over all those decades when the industry could have pressured for a better audience measurement service, it failed to support even one adequately enough to survive which is why late in the game Nielsen will find out its chances of making it are slim to none with "slim" on vacation while his show is being voice tracked.

And, for decades while radio was red hot, it dropped its collective drawers and sold air time on the cheap -- a tactic it is paying for dearly right now when radio is not hot.

All of that is behind us.

Looking ahead then, what are the viable options for FM radio over the next five years? Beyond that I am unwilling to project for reasons I will disclose in a moment. Here's a sampling:=

1. Talk on FM.
Turns out Walter Sabo was right whether you like it or not. But instead of bringing over all those over 60 year olds (sorry, again!) try for some 40 year olds. To do that politics is going to have to get a rest. You're going to have to know your local region better. Abortion is not in the "A" list rotation. Nor are the usual political topics. But texting while operating a commuter train in your market -- notice how I said your market -- could be the replacement topic. Then, shorter discussions as all of our attention spans have shrunk. Add top 40 formatics and there you have it.

2. Local news.
This is a smash hit waiting to happen but it costs so damn much money. If you do it, it has to be local and live all the time and any shortcuts will not be appreciated. Stop with the garden reports and feature stuff -- make it compelling, now, cutting-edge. Live & Local 102 sounds compelling. You can no longer say, give us 22 minutes and we'll give you the world. You'll have to say, give us 2 minutes and we'll give you your world. I wanted to include this although slim to none is back again on this option.

3. Discovery channel.
That's a name radio should have thought of first before TV claimed it. Except we were busy stroking the record labels and showing them how big our --- well, our -- egos were in return for all those gold records on the wall. We created the short tail theory -- after all, radio stations played very little new music. Same today. But if you're going to be in the hit music business on FM, realize that you will likely not be the first choice of listeners for music but will hope to be picked up on People Meters everywhere. Thus, you will have to channel your deepest urges to actually discover artists and bands -- local artists and bands. There is some growth potential here, but remember no young person is trading in a mobile device for a radio even if you put the radio into that device.

4. Help.
When I worked for the legendary Dick Carr at WIP in Philadelphia, we had a great afternoon personality, Dick Clayton, who did a humorous feature called "Mr. Help Me" which he ended by saying, "tune in tomorrow and let Mr. Help Me help you". Who knew that Dick was light years ahead of even his great self? There is a place for "help" radio if it isn't done in long shows. I'm hearing it in segments -- a few minutes long -- on different topics with referrals to listeners' phones to pick up more info, to your website to see a YouTube video and lots and lots of sponsorship possibilities. Steal this idea, please!

5. Sports.
Why do you think CBS Radio President Dan Mason is going crazy building sports stations where there once was music (think WBCN in Boston for example). But play-by-play sports is not necessarily the ticket. Big Tom Bigby is the expert on this -- as good a programmer as I know of in the area of Guy Talk (also known as sports talk). His top 40 formatics are incurable which is why Bigby's stations sound so good and make money. But where there is Guy Talk there can be Gal Talk someday. Sports and the lifestyle it embraces is still a good short-term use of FM radio.

Now rest assured that I am not saying all other successful FM stations should abandon their formats.

Far from it.

There is still some juice left in them. You see what B101 does in the Philly PPM and WCBS-FM's oldies station is truly on everywhere in New York (as everyone but former CBS Radio head Joel Hollander believed). CBS-FM is number two in PPM.

But here's the gut check.

You can't have a growth industry without the next generation.

Please re-read that line.

And you can't have the generation radio neglected now that their sociological needs are satisfied by new technology.

Therefore, consider using FM in the ways I described above or continue your successful live and local format as long as you can.

Do not voice track.

Voice track at your own peril. Only you and your accountant will like it.

Advertisers, as I pointed out earlier, are figuring this out.

You are hastening the demise of radio when you continue to water it down, make it less local, less connected, devoid of personalities.

And if all of this isn't resonating, please keep in mind that my clients, the former Grand Rapids number one radio team Dave & Geri -- fired and left for dead by their consolidator owners who worship the wrong numbers -- are within striking distance of equaling their radio quarter hour numbers after only five weeks of podcasting!

Never forget where the future of entertainment is headed -- and get there early.

Or at least before it is too late.

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Pandora Radio's Box of Royalties

According to Greek mythology, Pandora opened a jar referred to as "Pandora's box", releasing all the evils of mankind.

But recently, Pandora Radio released all the evils of the music industry upon the radio industry.

Pandora Radio CEO Tim Westergren surprisingly opened Pandora Radio's box for his competitors in terrestrial radio when he came out publicly for the repeal of radio's performance tax exemption.

The record industry is pushing for the ability to tax radio further for helping them sell music. Go figure.

I have known Westergren to be a good man and he's a musician so you can tell where his sympathies lie.

Nonetheless, the way Westergren did it and the timing appear suspect to some.

You may remember that Pandora Radio itself -- wildly popular among consumers -- came this close to having to shut down.

Westergren can thank the record labels for that. They wanted to tax him into oblivion along with other webcasters. In fact the Copyright Royalty Board (CRB) decree was tantamount to 100% taxation just for the right to play music online.

Of course, Westergren and other webcasters cried foul.

A group led by my friend Kurt Hanson (AccuRadio and RAIN) went to bat for them and came up with an improved if not very imperfect plan to pay money they really don't have to the labels for use of their music. But it saved Pandora's bacon for sure.

Westergren was mum on whether radio should be subject to more music taxes until last week.

That's when he issued his very own fatwa on what's fair is fair.

Disappointingly, Westergren backed the artists once he had his deal in hand and he was quoted in Taylor On Radio-Info as saying: “We, along with the artists whose music we play, strongly support the establishment of a level playing field, a truly fair system, as articulated in the Performance Rights Act, H. R. 848.”

What's worse, Westergren issued a jihad (sorry about all the militant Muslim imagery) for his Pandora Radio listeners -- who number more than Sirius and XM together -- to flood House Speaker Nancy Pelosi's office and fight for what is right, gosh darn it.

The timing is suspicious but he tells me his motivation is pure. Here is Westergren's rationale:

1. It’s right and fair for artists to get paid.

"In spite of the difficult negotiation we’ve had, we have never advocated that Pandora not pay royalties; only that the amount be reasonable and sustainable. You’re right, they did have us for lunch – might even say we got regurgitated! But we’ve never quarreled with the fundamental notion that performance fees are fair – even though we provide a tremendous promotional benefit to musicians. I’m a long time working musician myself, so this is near and dear to me (as it is to the other working musicians at Pandora)".

2. The bill addresses the parity issue which remains a serious problem.

"I know you know all about this structural problem, but it’s still seriously unfair. The bill contains language that would hold Pandora to the same standard in rate setting as other forms for radio. We compete, as you have written about ad nauseam, with broadcast radio everywhere. There’s no reason we should pay so much when satellite and broadcast pay so little... Or nothing".

Westergren is aware that it may appear as if Pandora is trying to hurt broadcast radio, but he insists it is really not the case.

Now that he can see Pandora's performance payment schedule for years to come, Westergren's main competitor -- radio -- would be hurt by imposition of more music taxes. That's like kicking an industry when it is down -- which is fair, I guess, in a capitalistic world -- but disappointing to those who hold Pandora to a higher standard.

When I was a professor at USC, Pandora was revered as Westergren well knew. He visited several times and felt their adoration. Since many music students attended his sessions, I suspect they might agree with his stance even if they noted that the timing is sketchy.

You hear me talk about the importance of generational media and this is a good lesson.

The next generation looks up to Pandora and expects that Pandora would do what is right -- which on the surface could appear to be -- help those poor starving musicians.

They probably would not like that Pandora decided to stick up for the artists only after it had its only deal safe and secure.

By the way, we know that the starving musicians will continue to starve because of the record labels, but it sounds better than "help those starving record execs".

What won't sit well with the next generation -- if and when they figure it out -- is any perceived ulterior motive, a quid pro quo, if you will, where Pandora gets its deal and radio gets kicked while Pandora is trying to compete with them.

The timing couldn't be better for Pandora.

Pandora Radio is trying to monetize its mass audience posting its best quarter in history and now that royalties are not going to shut it down, I guess Westergren is playing hardball with its competitor.

Except he didn't need to.

Radio is its own worst enemy.

He's making a serious strategic mistake to bloody his hands with the terrestrial radio performance tax repeal issue.

All he needs to do is let radio execs kill their own business off -- as they are currently doing.

The best thing radio stations can do is stop playing so much licensed music.

They don't have the guts. Not even, a little bit. Radio execs could announce their stations will respond to local interests by adding non-published artists and bands to their playlists and that effective immediately they are adding 15% of unlicensed music to their playlists and playing 15% less of licensed music.

That would send a message loud and clear.

Not just to the labels and SoundExchange, but to radio listeners bored with the same old same old. There's a lot of good music out there besides the handful of things radio plays over and over again -- irritating their listeners.

So in the end, it's certainly Westergren's right to get tough with radio although in my opinion it is none of his business.

Pandora made it by being one step above everything else in quality and concept.

Fortunately, Westergren alone does not have the heft to swing momentum to the label's side on repealing radio's royalty exemption, but nonetheless you'd expect better from a great guy with a great product.

What's tragic about all this is that John Simson, the SoundExchange head negotiating for the labels, Westergren and many artists just don't get that they owe radio as much as radio owes them.

The radio position is -- we played the songs that made the record labels rich.

The labels position is -- that they provide the free music that allows the stations to get rich.

Both sides will go down in flames until they sit down and sincerely learn to see things from the other's point of view.

Then compromise until it hurts -- not one side, but both -- because right now radio and the music industry can't live with each other but can't exist without each other.

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Clear Channel Screwing Its Listeners

It is disturbing to know in these difficult times that Clear Channel is treating some of its listeners no better than it has been treating its employees.

For example, take those 1,100 or so poor souls who got their cars stuck at the Ionia Fairgrounds concert staged by the very popular Clear Channel country station B93 in Grand Rapids.

Clear Channel's hapless Radio President John Slogan Hogan has single-handedly undone the bond this fine radio station has built up over the years with his corporate policies -- that's my judgment, but you decide.

What happened as some may remember is that B93 had its annual outdoor Birthday Bash a few weekends back on a Saturday -- the day after a huge rain storm swept through the listening area.

B93 reportedly aired the wrong weather forecast on concert day although the National Weather Service issued a warning they could have utilized. I heard a weather service spokesperson tell the local Dave & Geri podcast Friday, July 17 that they in fact warned of flooding that eventually saw the Grand River banks rise and force B93 to send 60-80,000 people home for their own safety. B93 denies that they had the wrong forecast on the air.

What happened next -- 1,100 cars underwater and eventually stuck in the mud. They needed to be pulled out and they were to be towed at Clear Channel's expense.

So how can I call this company the Evil Empire when it agrees to pull mud clogged cars from their concert site and pick up the tab?

It's easy.

Clear Channel reneged.

Now their listeners are going to have to seek help from their insurance companies. Clear Channel is calling it an act of nature and therefore they are not responsible.

Of course it was an act of nature, but they should have seen it coming -- everybody else did.

Evil.

Here's a report from local ABC affiliate WZZM TV:

"A Grand Rapids car owner says the insurance company for B-93 is refusing to pay for damage to vehicles caught in the flood at the radio station's Birthday Bash last month. "They aren't doing anything," says vehicle owner Kelsey Freybler.

And now a Grand Rapids lawyer is organizing a class action suit against Clear Channel to help the stranded vehicle owners get something back for their troubles.

As TV 13 reported:

Attorney John Tallman thinks he can prove B-93 knew or should have known the parking lot at the Ionia fairgrounds would flood and damage hundreds of vehicles during the country music concert last month. While she was in watching the country music concert at the Ionia Fairgrounds, Kelsey Freybler says the flood in the parking lot filled her car with several feet of filthy river water. Damage is at least $2,500, but she says the B-93 insurance adjuster is refusing to pay. "He said they decided they are not going to grant the claims because it wasn't the fault of Clear Channel," she says. "I got out of it they aren't going to grant anyone's claim."

Finally, Clear Channel has arrived in its comfort zone -- court.

But the evidence against them is pretty convincing when all those San Antonio lawyers show up (to settle, that is).

At 4 am the morning of the B93 Birthday Bash telephone tapes substantiate that a staffer at the Grand Rapids National Weather Service told an Ionia County 9-1-1 dispatcher that the river was already over its banks at the fairgrounds and was rising.

The dispatcher then promptly notified the Ionia public safety officer on duty in the command center at the fairgrounds.

Still, no Clear Channel. Maybe they believed their own weather forecasts.

Look, this situation is a tragedy for all involved.

B93 is a phenomenal radio station -- it still has the power to pull 60-80,000 fans to an event in this day and age of Repeater Radio.

The employees and talent at the station feel awful over this. Many of the station employees showed up at the fairgrounds for days trying to help their listeners and loyal fans.

Most of the fans who were seeing their cars towed out of the mud were very respectful of what had happened. There were no riots. Many asked if the station was planning to have the popular Birthday Bash again next year.

Of course, that was before it became known that Clear Channel slipped off to the restroom before the check showed up.

The morale of the story:

1. Never take your eye off Mother Nature even if today's radio stations are built for Repeater Radio.

2. If you're a corporate owner, stay out of the relationship your local station has with 60-80,000 fans and let the local manager handle it. If he or she thinks they should pay for the towing, back him/her up. Chances are he/she has made you more money than he/she lost you.

3. Never dis your listeners. Or your employees. Your word is only as good as your deeds. Make good on your word.

Clear Channel would rather screw the unwitting victims of their concert management that day out of the towing reimbursement than buy what would have turned out to be cheap good will if they had kept their word and made good.

Bad press.

Bad video images.

Lawsuits.

As has become their custom, no one pushes San Antonio around even if they wind up pissing on their own shoes.

Will someone please wake Congress up before this cobbled system of Repeater Radio fails us -- the U.S. -- during the next Katrina or 9-11.

Congress needs to know that the deregulated radio system it created is now a lethal weapon that can't even guarantee the safety or viability of a local outdoor concert. Elected representatives could lose their seats over a debacle like this.

Call your Congressional representative, email, Facebook, Twitter, write a letter or show up.

Clear Channel can run from their responsibility to their fans but they can't hide from any concerned Congressman.

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The Redickulus Cumulus Employee Spying Program

Recently, I wrote a piece called "The Dickey Ding Dong School of Management" in which I commented on a memo they issued to employees that seemed to me to be disingenuous at best and abusive at worst.

Then, I heard from a reader who said he worked for Cumulus and that at a subsequent half-hour corporate sales meeting (more commonly called a spy session) using cameras and Skype, a loyal foot soldier from Dickeydom supposedly addressed my comments one by one.

I have no way of knowing for sure because Lew Dickey has yet to wire my house or office for spy cameras. But he sure as hell has given new meaning to the term "Big Brother" at Cumulus.

This all got me to thinking that if Cumulus is going to dispute my critique of the way they treat, help and respect their employees, then it might be nice if I could provide a script for their next spy meeting.

It's kind of surprising because Cumulus corporate email blocks Inside Music Media every day so how is management getting it? Their employees can read it at home, but is Lew peeking?

Oooh! Never you mind.

I'll bet Cumulus employees would like my version of a 30-minute meeting and I'm going to give my blessing to Lew and his crowd to steal anything they like -- just change those abusive and useless spy-in-the-sky sales meetings.

How are they going over with Cumulus inmates who are forced to sit in on them?

Here are some comments from a reader who says he works for Cumulus:

"We all live with the fear from management..."

"Our managers seem to live in the same fear from Atlanta because its the only way I can explain their abusive nature."

"The F bomb is freely dropped and we were told to be on alert and watch what we say in case the camera is on. (maybe management should use Cumulus approved language)".

The abuse apparently doesn't end with spy meetings, one reader claims that when Gary Pizzati visited his station. Well, let me let him tell it...

"In one of his visits, he was going on about what we should do and how and he did not care about feelings or emotions and proudly announced that he is the man who 'makes women cry'... and was serious... how condescending can you get? He also said when he is watching on skype it drives him crazy when women twirl their hair and men scratch their head...it means they are not paying attention. Sr reps are dropping like flies we are all looking. Maybe the robots are good for them... (hey robots don't cry)".

Again, I wasn't there but nonetheless there appears to be no shortage of Cumulus workers who are not responding well to the apparent arrogance and harsh tactics being employed by the Imperial Happy Family.

So, let's give the Dickeys a new way to conduct their next spy-in-the-sky meeting. After all, if they are going to quote me by name at their meetings, quote this:

1. Open the meeting by announcing that Lew Dickey and brother John are going to relinquish their salaries and compensation plans this year and work for $1 (about what their management skills are worth to Cumulus shareholders currently). Other corporate CEOs do it before they ask employees to sacrifice. Come on, Lew. You'll have a very attentive, happy and responsive captive audience for the rest of your meeting.

2. Announce that Jon Pinch will be paid less than what he is worth -- after a round of hearty laughter, Lew can add, "but it is more than our stock price". You'll have them rolling on the floor, Lew. But you've got their attention.

3. Announce that effective immediately you will no longer be telling salespeople what categories to work or how many sales calls to make or how to role-play their skills. Instead, tell them you are going to be available to provide non-binding ideas, help, copy, talent sources and expertise in special retail areas. No more telling them what it's like on the street when you're behind a desk. Tell them, "we're here to help" not obstruct.

4. Next, inform them they will no longer be punished if a client does not pay on time -- meaning, salespeople who took a haircut on their commissions because of late pay in the past will simply get paid when the station does. I'm sure they will see this as fair. Nothing punitive from now on.

5. Rescind the corporate edict to increase ad rates for the best advertisers. Your sales staff may get up on their feet and even give you a standing ovation. Your best advertisers are also having a recession. Now is not the time to put a needless hurt on them because you overpaid for your radio stations and can't come up with the interest payments.

6. Reveal that each and every salesperson will now get a one-sheet from the manager which states clearly what is expected of them in terms of job description and revenue as well as your deal for them -- commission, health care, vacation, etc.

7. Apologize for complaining about corporate problems at your weekly meetings as you did in the "Ding Dong School" memo. You, Lew, got Cumulus into trouble not your talented people. Effectively immediately tell them you are going to be a big boy, grow up and take responsibility for your bad decisions and that you promise not to take it out on your employees again.

8. Go around the room (we know, you can see everyone) and thank each person one by one by name. If you don't include some evidence of what you are thanking them for, then it will be but mere empty flattery. If you don't know their names... see, what I mean?

Now, Lew, if you're not willing to do it my way -- then continue to do it your way even though it is going over with your employees like a lead balloon.

Or...

Tear down those cameras and treat your employees with the respect they deserve.

How would you like to have them spying on you?

Wait a minute!

Move over Jon & Kate, here's your new reality sideshow.

Maybe we can call it, "Lew Dickey: It's Complicated".

Or "Big Brother".

Or "American Idle".

The reason everyone is laughing at you is because you ran Cumulus into the ground, almost bankrupted your shareholders, made your people pay for it and now you look silly playing Donald Trump.

Wait!

That's it!

"Celebrity Apprentice".

And You're Fired!

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ONLINE AGGREGATORS AND NEWSPAPER STRATEGY

Google, MSN, and Yahoo and other aggregators are cited by newspaper executives are harming newspapers. But what have they actually done? It is important to have a realistic understanding of their effects if one is to fashion strategies for the future of newspapers and news organizations.

Aggregators carry news stories from major news services and thus make international and national public affairs, entertainment and sports news widely available. The headline news on the aggregators’ home pages is becoming the primary news provider for those less interested in news and the online sections are well-used by news consumers who want more news or more timely news than appears in their daily newspaper.

Aggregators and others sites carrying content from news services are now contributing about 20 percent of the revenue of Associated Press, for example, taking some financial pressure off newspapers to fund the cooperative on their own. Other news services are also gaining income from online operators, thus helping them keep prices lower for newspapers as well.

So how do aggregators news harm newspapers? They harms papers to the extent that some less committed newspaper readers are willing to substitute their local paper with a news sources that don’t cover their cities. Some are willing to do so and this is taking some subscribers and single copy purchasers away from newspapers. U.S. newspapers have lost approximately 6 million circulation since 2000, but about half of that was circulation of the 70 competing newspapers or second editions papers that have been closed since the millennium. So one can thus say that at least 3 million people have decided to use other news sources.

Aggregators are also accused of STEALING value through their search functions and links to newspaper sites. Certainly the aggregators are CREATING value with the technique but are they taking value in violation of copyright or norms of content use? The answer is “no” because they do not represent the material as their own and direct those searching to the newspapers own sites, where they are exposed to advertising sold by the online newspapers.

Newspapers are now getting between 7-10 readers online for every reader they have in print. This plays an important role in making their sites attractive to advertisers, a development that generated the $3.2 billion in online advertising revenue that newspapers received in 2008.

Newspapers, of course, could stop the aggregators from linking to their content by putting it behind walls and charging for its use. If they did so, the aggregators could not link to it legally or technically without users encountering a pay or registration wall. So why haven’t newspapers done this until now? Frankly, because they get more readers and more advertising income by offering the material free.

Publishers are increasingly arguing that they should turn newspaper sites into paying sites and they have been holding joint discussion about how that might happen and whether it would be beneficial to do so simultaneously. This has raised some antitrust concern, but it raises real and significant questions of what such a strategy would accomplish.

In my estimation it is not as easy answer to the challenges newspapers face and has some elements that put its effectiveness in doubt. This is primarily because it is uncertain what existing readers will do. Will they subscribe to print AND online? Will they stay with print only? Or will they drop print?

The first option would be financially beneficial, but is likely to attract a limited number of readers unless the joint pricing is so attractive that it produces little new income for the newspaper firm. If that is the case the benefit of the strategy is reduced. The latter option would be very damaging to papers because print advertising creates more value than online advertising and prices for print ads would decline more than would be gained online.

It also needs to be recognized that people who do not currently buying newspapers are unlikely to buy subscriptions to online news sites. Thus, creating a paid model will likely reduce the boosted audience that free online news currently provides. This would have a negative effect on online audience and the increasing revenue that is being obtained from online advertising.

But what of heavy news users? As I have written in other entries in this blog, heavy users tend to be promiscuous and move between many online news sites. A commonly used system for micropayments would be necessary or these heavy users will reduce their use of multiple sites if each requires separate payment registration. Even with such a system in place, it is unlikely that more than 5-10 percent of the newspaper purchasing population would regularly use such a system.

Moving to a paid online model will not be as easy as agreeing that everyone should switch to paid on January 1 next year. It will require considerable strategic thinking and providing new types of value for consumers if it is to be successful. Even then, the benefits for newspapers will vary significantly depending upon the size, location, and competitive situation of individual newspapers.