Category Archives: Mentor

January 12, 2020 · 3:00 am

Radio’s History of Feeling Inferior

Family Listening to Golden Age of Radio“There are some things that will scare you so bad, that you will hurt yourself,” said Molly Ivins. And that’s exactly what I believe the radio industry has been doing to itself for most of its 100-year history.

The Golden Age of Radio

The first golden age of radio was during the 1930s and 40s, and was a period when over-the-air commercial radio was sewn into the fabric of American’s daily lives. It delivered the day’s news and provided entertainment to people struggling with the effects of the Great Depression and a second world war.

Here comes TV

Television was introduced to America at the 1939 New York World’s Fair with a live broadcast of President Franklin Delano Roosevelt opening the fair on NBC’s experimental station W2XBS in New York City.Family Watching TV

Unfortunately, the development of television in America was halted by Japan bombing Pearl Harbor on December 7, 1941 and bringing the United States into World War II.

When the war ended, there were only six television stations on the air in America, three in New York City, one in Chicago, one in Philadelphia and one in Schenectady, New York.

The number of television sets in use in 1946 were about 6,000, but by 1951 that number grew to over 12 million, and by 1955 half of all homes in the United States had a black and white television.

Radio’s Over Because of…

Radio’s inferiority complex began with television, and probably for good reason. Television stole radio’s prime time programs and right along with it, it’s listeners. Worse, radio’s big station owners and radio networks, CBS and NBC, would use radio’s revenues to fund the development of television stations and TV networks.

There were many who predicted that television would be the demise of radio broadcasting.

This was the first known case of “radio’s over because of…”

What’s Killing Radio, Let Me Count the Ways

I worked in the radio industry all of my professional life. Other than earning money as a professional musician early in my working life or as a Broadcast Professor at the end, radio has been my source of income and my love.

During that time, I would hear about the latest new technology that was going to put radio out of business.

  • TV was going to be the end of radio
  • FM was going to be the end of AM radio
  • CB Radios were going to be the end of commercial radio
  • 8-Track Tapes were going to be the end of home & car radio
  • Cassette Tapes were going to be the end of home & car radio
  • Compact Discs were going to be the end of home & car radio
  • MP3s were going to be the end of home & car radio
  • Satellite Radio was going to be the end of radio
  • The internet was going to be the end of radio
  • iPhones/iTunes were going to be the end of radio
  • Pandora & Spotify et al were going to be the end of radio
  • YouTube was going to be the end of radio

Have I missed any?

FCC Symposium Sees Radio Industry Challenged by Competition and Regulation

The FCC held a symposium at the end of 2019 to solicit things it needed to be addressing for the health of the radio industry. Fingers, by the invited panelists, were pointing in every direction, but at themselves.

The radio industry believes it can make itself better by more consolidation and less regulation. Yet when I look at the history of radio, its most successful years were during a time of intense regulation and severe ownership caps.

However, it amazes me that the only answer offered continues to be the same one, that to my eyes and ears, got the radio industry into this predicament in the first place.

Don’t it always seem to go
That you don’t know what you’ve got
‘Till it’s gone.
They paved paradise
And put up a parking lot.

-Joni Mitchell

What’s Radio’s Real Problem?

radio signWhen television came along and took away radio’s people and programs that were attracting its large listening audience, it was forced to re-invent itself.

Radio dropped its block programming and began programming music. The transistor made radio portable. Radio personalities, promotions and new music made radio exciting to a whole new generation of listeners.

One of the people at the FCC’s symposium was Karen Slade, VP and GM of KJLH Radio in Los Angeles. Instead of the 30,000 foot view of radio’s current situation being shared by the radio owners and CEOs, she said she saw the problem from about ten floors above street level. She said her radio station had 500,000 listeners but that she was trying to reach more listeners through a variety of other platforms. My question is why?

For my entire radio career, I don’t think I ever managed even a cluster of radio stations that delivered that many total weekly listeners. Yet, my radio stations were very successful.

I managed a radio station in Atlantic City that had about a tenth of that many listeners and still delivered a million dollar bottom line to the stakeholders, plus we delivered results for our advertisers.

Radio’s real problem is not investing in what it already owns. Radio instead thinks the grass is greener in someone else’s media playground.

Smart Speakers

Forbes says smart speakers are the future of the audio. AM and FM radio is available via smart speakers, but so isn’t the entire world of audio content.

It’s estimated that smart speakers will be in 75% of American households in five years. Smart speaker reach had already passed a tipping point, before this past Christmas’ robust speaker sales, with 41% of American homes owning at least one of these devices.Child using Smart Speaker

So, what makes a smart speaker owner choose an AM or FM radio station’s content to listen to versus a pure play or even TV audio content? Let me use television as an example to demonstrate what I think matters.

Why does Stephen Colbert’s Late Show reach 3.1 million nightly viewers versus the 1.8 million viewers that both Jimmy Kimmel and Jimmy Fallon combined reach? Each of these shows look pretty much the same on paper. The difference can be found in the personality that presents the various program elements.

Radio stations used to understand how important the air personality was to the success of the station and its revenues. Radio promoted its air personalities on billboards, buses, on TV, direct mail and in print.

George Johns wrote about the time he hired a competing air personality in his market and paid him to sit on the beach for a year to wait out his non-compete contract. At the end of the year, he put him on the air in morning drive on the radio station he owned and was rewarded with huge ratings and revenues.

When Larry Lujack moved between WCFL and WLS in Chicago, his listeners and revenue moved right along with him. They didn’t call Uncle Lar “Super Jock” for nothing.

Mel Karmazin knew that Howard Stern would change the fortunes of Sirius Satellite Radio when he hired him away from his over-the-air commercial radio network. While Howard and SiriusXM prospered, his former radio properties became a shadow of what they once were.

Everyone I know who ever fell in love with radio growing up, has stories about the radio personalities that they couldn’t live without. My students at the university told me they would listen to their hometown radio personalities on streams in their dorm rooms.

Sadly, it seems like every day I’m reading about tenured radio personalities being let go. The very people who spent years building an audience are disappearing.

As Molly Ivins saw so clearly, sometimes there are things that scare us so badly, we hurt ourselves.

 

 

 

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January 5, 2020 · 3:00 am

How Do You Spend Your Time?

U S Music Industry Revenues 1H 2019When this pie chart was posted on social media, it immediately captured my attention, by showing where the United States Music Industry is making its money. You can read the Mid-Year 2019 RIAA Music Industry Revenues Report HERE.

Total revenues were reported to be growing at 18%, with 80% of the industry revenues coming from streaming. By comparison, the radio industry ended 2019 up 2% and the inflation rate for the United States for 2019 was 1.7%.

Going Apple

I’ll admit, I was late to the Apple party. When I was a broadcast professor at Western Kentucky University, Steve Newberry, EVP with the National Association of Broadcasters, and I were having lunch one day, Steve asked me if I had an iPad. I said “no, and I didn’t know why I needed one.” Steve said, well I can’t explain it, but once you get one you’ll wonder how you lived without one. So, I got one. It would be my second Apple device, the first being an iPod Classic. I purchased my iPad2 on Black Friday in November 2011.

Blackberry to iPhone

I had owned a Blackberry Pearl “smartphone” since my days as a Market Manager at Clear Channel, I loved all it could do and I loved its compact size. But in less than a month of owning and enjoying my iPad2, I would upgrade from my Blackberry to an iPhone4S in January 2012. In 2015 I would switch my university desktop computer from a Dell to an iMac, and today I have added Apple TV for streaming my video entertainment.

One of the wonderful things about the Apple operating systems are that once you know how to operate one, you can operate them all, and they are very intuitive.

iTunes Match

When I got my iPhone4S (the “S” stood for Siri and it was the first introduction of voice command, that has since been joined with offerings by other companies such as Amazon’s Alexa and “Hey Google”), I immediately added a couple of other Apple services like iCloud and iTunes Match.

iCloud backs up all my data and iTunes Match makes it easy for my music library to be available on all my Apple wireless devices, which in 2012 was my iPhone4S and iPad2.

iTunes Match is an annual subscription service, that for me, renews every November for $24.95.

This year after it renewed for 2020, I realized that since owning my Amazon Echoes, I really never use my music library on iTunes anymore. It so much easier to just say “Alexa, play…”

Streaming

I’m sure I own more AM/FM radios than you, unless you’re also a radio geek, then you might own as many as me or even more. But these days, the radios throughout my house broadcast whatever I stream via my Whole House FM Transmitter.

I may stream music from Amazon Prime or Pandora or from one of my favorite internet radio stations, but I never change the dial position on any of my radios because I simply need to tell Alexa to change what I’m streaming from virtually anywhere in my house. (That device has incredible ‘hearing.’)

When we go to bed, one of the things Sue and I especially enjoy is asking Alexa to play some of our favorite songs. Alexa’s the only “DJ” I’ve ever known to not only take requests but play them for you as soon as you ask her to.

You Are No Longer in the Radio Business

This year during Radio Ink’s Forecast 2020 this year, Scott Flick told the audience “Whether you like it or not, you are no longer in the radio business, but the audio business.” Today, the competition is not another radio station or even another media source, but the competitive landscape is for people’s time. We live in a world where a plethora of options can fill our time.

Relevancy Replaces Local

What is local to you? The price of gas at your local pump? The price of goods at the place you shop? The quality of the air you breath or the water you drink? I’m sure you answered, they all are. And chances are not any of them are produced locally, but somewhere else in the world.

Local today is planet earth.

What will make any media property worth a person’s time will be how relevant it is to the person accessing it.

Relevant radio will be one that is closely connected with its audience.

 

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December 29, 2019 · 3:00 am

Best of the Blog 2019

DTB Best of the BlogOn this last Sunday of 2019, it’s tradition to look back at the year just past and share with you the Top 5 Most Read and shared blog articles of 2019. Maybe you missed them or perhaps you’d like to read them again.

To date I’ve published 281 articles that have been viewed 188,000-times around the world.

Most Read Article of 2019

My most read article of this past year was “What’s the Purpose of a Radio Station?”

It was published on September 8, 2019 and examined how the role of radio has changed since it was founded almost 100-years ago.

Today’s communications company needs to clearly define its mission and needs to earn the trust of all of its stakeholders. That means building trust between its employees, advertisers and listeners.

We need to stop thinking of “radio” as AM or FM.

We need to think of radio as being the audio leader for creating an environment for convening and supporting groups.

We need to be preparing for a future that is still coming into focus.

Read why this article was the most read of 2019 HERE

Second Most Read Article of 2019

After I sat-in on a webinar in April of this year, I wrote an article lamenting how the radio industry doesn’t think anyone over 55 matters. The world economic forum said for the first time in the history of the world, there are more people living today over 65 than there are under 5. The article was titled “You’re Not Talking to Me.”  The amount of reads and comments almost tied that of the article above. You can read it HERE

Third Most Read Article of 2019

Readers loved learning about radio’s “super power” that will allow it to cut through the plethora of media choices in the 21st Century. The question radio broadcasters need to be asking themselves is, why aren’t they leveraging radio’s most powerful asset? The article was titled, “A New Direction for Broadcast.”

The article created a lot conversation about radio’s mission for the future. You can read it HERE

Fourth Most Read Article of 2019

We all know that all traditional media is having to deal with disruption. The question posed by this article from June of this year was, “Is Radio Being Disrupted or Simply Lacking the Human Factor?”

Radio needs a visionary leader.

Let’s consider what Steve Jobs gave Apple upon his return, and leading the company out of near bankruptcy; a vision. Jobs then backed up his vision with management fortitude and people with the technical skills to make the new Apple vision a reality. It was those human factors that carried Apple to become one of the most valuable companies in the world.

Imagine that same kind of leadership for radio in the 21st Century. Read more HERE

Fifth Most Read Article of 2019

We live in a world of “more, more, more.” In the article that kicked off 2019 in January, I pondered the question: Can we have too many radio stations on-the-air? The article was titled “Too Much Is Not Enough.”

The value of a broadcast license was being a limited commodity, and as such being granted spectrum on the public’s airwaves benefitted the community, the advertisers, the listeners and the broadcasters.

The internet has created an infinite radio dial and has challenged the value of an FCC broadcast license.

The FCC’s inability to protect the AM spectrum from the myriad of electrical devices that produce an ever increasing noise floor, has doomed the future of the senior band as it closes in on a century of service.

Unless something is done, I fear the FM band will suffer a similar fate.

The article drew a lot a response and you can read it again HERE

Most Read Articles, Period

Two articles I’ve written, continue to see quite a bit of traffic and continue to be far and away the two most read on my blog. They are “SiriusXM Radio is Now FREE”  and “The Day the “Dumbest Idea Invaded the Radio Industry”.

Both articles have now been viewed over 18,000-times.

The record holder for any of my articles, for the most reads in a single day is “We Never Called It Content.” 3,587-people read that article when it was published on Sunday, September 6, 2015. To date, the article has registered 4,901-reads and 67-comments.

Why I Blog I blog for broadcasters, educators and students. I blog to provide media mentorship and to pay-it-forward to the broadcasting industry that I have been a part of for over 50-years. I’m grateful for the more than 142,000 people from all over the world who have visited my blog site (https://DickTaylorBlog.com) to read an article that caught their interest.

FREE SUBSCRIPTIONS You can subscribe to this blog for FREE and get a copy of each week’s article delivered to your email IN BOX every Sunday morning. To subscribe, simply go to the bottom right-hand corner on your screen and click on the FOLLOW button. (If you’re accessing this blog via mobile phone or tablet, that button may not be visible, so be sure to do this on a computer or laptop.)

Thank You for reading, next week I will begin my sixth year of blogging with all new articles.

Together we can all learn from one another by sharing our experiences, knowledge and wisdom. Feel free to contribute your thoughts to the discussion in the comments section, I read every one of them.

Happy New Year!

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December 15, 2019 · 3:00 am

Why?

Why why whyIt’s not unusual for little boys and girls to ask the question “Why?” They ask it a lot.

Why? Because they want to learn, to know why things have to be that way.

But what happens to the person who is asked the why question?

They are forced to think about it, sometimes even reassess the answer they knew and wonder if it was really the right answer or merely a convention. In other words, is the reason simply because, it’s the way something has always been done?

It causes one to consider that maybe things didn’t really need to be done that way, and could be done differently.

What If?

While why questions open our minds to new thoughts and opportunities, “what if” questions are like a fork in the road. They can take us in new directions.

For example, “What if radio stations only aired a single commercial in a break?” Or, “What if all radio commercials were delivered live by the radio personality?”

Edison Research revealed at this year’s Radio Show, that people would change radio stations or stop listening all together due to basically one of three reasons: 1) forced change, 2) engagement and 3) commercials.

Forced change was defined by a loss of signal or a bad signal. Engagement was described as boredom, didn’t like the song, the personality or subject matter. And I think everyone understands the tune-out factor of commercials to radio listeners.

Commercials

Why do commercials have to be a listener tune out? What if commercials caused radio listeners to lean into their speakers and pay close attention?

My first personal experience with doing just that was when I listened to Paul Harvey News & Comment and he said, “Page Two.”

Paul Harvey did his sponsor’s commercials live. He did them with passion and enthusiasm. The result was people listened, and even more importantly, they bought the products and services he told them about.

Podcasts

I’ve noticed that podcasters usually have a single commercial in their program and is usually delivered by the host of the podcast. What if that’s the reason podcast commercials deliver such powerful results and more advertisers are considering using podcasts as part of their advertising program.

Same, but Different

In my radio management career, I had the opportunity to live and work in different parts of the country with some fabulous radio professionals. The radio business is an identical business everywhere in America, but back in the days before consolidation and the concept of “Best Practices,” radio people tended to innovate the creative process in completely different ways. It’s one of the reasons many, my age, loved to DX AM radio signals after sunset.

The Innovators

I believe some of the best innovators for setting the course for radio in 2020 are working for you right at this very moment. They aren’t necessarily the “A players” or even the most focused ones, but they are the ones that are asking “Why & What If” and are continually looking for new problems to solve.

If you create a culture within your radio station that encourages that kind of inquiry, a culture that continually asks “why” do we always do things this way and “what if” we did things differently, radio for the 21st Century will begin to be born.

If you don’t, your business is ripe for disruption by another media innovator.

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December 8, 2019 · 3:00 am

Has Radio Become a Commodity?

commoditiesBy definition, a commodity product lacks a unique selling point. Two examples of what I mean are lettuce and pencils. No one has a brand favorite of either. To the consumer of both, they’re all the same. Commodities are interchangeable with other products or services, widely available, and therefore undifferentiated except maybe by price.

How about Radio?

Recently, an administrator of a radio group that I’m a member of on Facebook posed this question to the group “Rick Sklar once said jocks are like spark plugs and can be replaced with another one. What do you think?”

Now for those readers that may not be familiar with the name Rick Sklar, he became program director of WABC – 770AM in New York City in 1963. With WABC’s clear channel signal, a tight playlist that targeted teenagers and air talent which included Dan Ingram, Ron Lundy, Harry Harrison, Cousin Brucie, Chuck Leonard and Charlie Greer, Sklar made Music Radio 77 into the most listened to radio station in North America from the mid 60s to the late 70s.

Needless to say, the comments by former air personalities in the group took issue with this “spark plug” analogy, me included.

Unique Air Talents

One-of-a-kind radio personalities built radio into the listener favorite that it’s enjoyed for nearly a century. More recently, there’s Rush Limbaugh, Howard Stern (who said he was influenced by Arthur Godfrey), Paul Harvey, Super Jock Larry Lujack, Robert W. Morgan, The Real Don Steele, Dave Maynard, Joel Cash, Dale Dorman, Larry Justice, Jackson Armstrong, Salty Brine, Bob Steele, Dickie Robinson, Danny Neaverth, John Records Landecker, J.J. Jeffrey, Bill Bailey, Big Ron O’Brien, Don Imus, Bob Dearborn and so many more. Those are just some of the names that inspired me to pursue a 50-year radio career.

Each of these radio personalities is unique and the shows they presented attracted an audience that was loyal to their style of broadcasting. They were anything but, a commodity.

Computer Automation

With the advent of computer automation, the concept of voice-tracking was born. Now a few disc jockeys could be heard on-the-air over a multitude of radio stations across America. Unfortunately, this meant that customizing their radio shows to a particular radio market had to be eliminated and the DJ patter had to be appropriate for all markets the program was airing in. It became watered down and because all big box radio operators were employing the same “Best Practices,” the ownership of the station really didn’t matter as everything began to sound the same.

Contests became nationally oriented, jingles (if there were any) all sounded the same, and playlists, which once reflected regional differences and artists, were now homogenized.

On Air production, which was once an art form in and of itself, was now also computerized. The result being a disjointed, sloppy and anything but smooth radio experience.

The result of all of this was radio being turned into a commodity.

Culture Shock

“Technology is enabling great gains in convenience and diversity,” says Tyler Cowen, professor of economics at George Mason University. “What is being lost is a sense of magnificence.”

He goes on to say

“It is possible we will look back on the present day as a special time when both patterns of cultural consumption could be enjoyed in tandem and enriched (by) each other. But I suspect not. As today’s over-50 crowd slowly passes away, and our experiences fade from collective memory, I wonder if the world might be in for a bigger cultural shock than we currently realize.”

 

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December 1, 2019 · 3:00 am

Radio’s Brain Challenge

radio on brainI often wonder if today’s youth would gravitate to the style of radio that attracted me to make radio broadcasting my career for five decades. Would they be attracted to a Dan Ingram, Robert W. Morgan, Dave Maynard, Ron Lundy, The Real Don Steele, Big Ron O’Brien, Larry Lujack or any of the countless other personalities that so influenced me as I was growing up?

Spoiler Alert: probably not

Old Brains vs New Brains

Our brains are wired by our experiences.

Those of us who grew up in the 60s, most likely had a transistor radio that only received Zenith RadioAM radio. Mine was a Zenith Royal 50 that came with an ear phone, that allowed me to listen to the Red Sox while in elementary school or to radio stations from far, far away after it was ‘lights out’ and I was supposed to be asleep.

This is an advertisement for that radio.

I saw it in Bristol, Tennessee at the “Birthplace of Country Music Museum.” I’m finding that a lot of my career memories are now museum pieces.

My brain was originally wired for AM radio, then FM stereo radio and all of the great radio personalities, promotions and stationality of that era.

More recently my brain has been wired for streaming audio and the convenience of playing anything that fits my mood via an Amazon Echo.

But anyone who has grown up in a world where streaming audio has always been there, has had their brain wired for only this kind of world, not the world of the 20th Century.

Classical Music’s Challenge

Classical music venues, including radio stations, are searching for new audiences as their current audience gets older.

With the typical American adult spending eleven-plus hours-a-day connected to media, today’s musical consumer can’t help but have their brain wired in a new way. Most of that listening is via computer speakers or wireless ear buds, not known for delivering the highest quality sound, but very convenient.

Classical music aficionados are all about quality of sound, so huge sums of money are spent building acoustically perfect auditoriums that often are in locations that are anything but easy for people to access.

People want to listen to music everywhere; in cars, on buses, on trains & planes, and while walking on busy city streets. They don’t mind that the sound quality is less than perfect because convenience for them rules.

Our Brains Re-wire Quickly

To give you an example of how quickly our brains can be re-wired, V.S. Ramachandaran did an experiment where test subjects were shown a group of black dots on a white page. After studying the dots, participants soon began to see the form of a dog. MRI scans were used during the process and monitored participant brains being re-wired. Once the dog was seen, participants could not look at the paper again without immediately seeing a dog. Their brains had been re-wired that quickly.

On Demand Entertainment

I’ll admit it, I want my entertainment – audio or video – immediately available when I want it. My radio and television habits are nothing like they were when I was growing up when the only media I could see or hear came through the ether.

Initially cable TV and the TV remote control re-wired my brain for television viewing, but nothing has impacted my home media entertainment habits like streaming and on demand. Be it audio entertainment via our Amazon Echoes (now numbering 3) or video entertainment via Apple TV or Firestick, everything now is on demand to match our mood thanks to streaming via the internet.

Is It Real or AI?

Artificial Intelligence, or AI, has gotten so sophisticated that they are “paving the way for “deepfake” videos, content that falsely shows people saying and doing things they never said or did,” says CNBC.

Just the other week I read where James Dean, who died 64 years ago, will be starring in an upcoming movie about the Vietnam War. This has been made possible by the use of computer-generated imaging of James Dean.

A New Radio Format

Larry LujackThat got me to thinking that maybe a new radio format could be created bringing back deceased personalities like Robert W. Morgan, Dan Ingram, The Real Don Steele, Big Ron O’Brien, Ron Lundy, Larry Lujack among other greats by using the power of artificial intelligence. These incomparable radio personalities would “live again” via talented writers and programmers who would tell them what to say. Can you imagine how it might sound?

It would be like the “DJ Hall of Fame” on Rewound Radio, only the weather forecasts, the news, the community events etc. would all be current and up-to-date.

Which brings me back to how I started this article, would the radio listeners of today listen? Would their brains be so completely re-wired that they wouldn’t find it appealing? I fear they wouldn’t. Just as Vaudeville shtick stopped appealing to the generations of audiences with access to movies, television and radio.

In the end, doing something new means doing something fundamentally different.

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

If you’d like to know more about how advanced Artificial Intelligence has become, watch this five and a half-minute YouTube video. AI can clone your voice after listening to it for just 5-seconds. Click HERE

And for a really deep dive on how AI will change our future in ways we never imagined, watch this two-hour FRONTLINE report from PBS HERE

 

 

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November 10, 2019 · 4:00 am

Radio’s $$$ Challenge

Revenues going downRadio, like all traditional media, is in the economic fight of its life.

In 2006, before the start of the Great Recession, the radio industry booked $18.1 Billion in advertising revenue. In 2006, the thought of earning digital dollars from doing anything on the internet was under development.

The Great Recession

Then America’s economy went catawampus. Radio’s ad dollars at the peak of the Great Recession dropped to $13.3 Billion in 2009.

Companies like Clear Channel began jettisoning employees, their biggest expense, by the boatloads. I sadly remember coming back from Clear Channel management meetings with a thumb drive and the dates that different spreadsheets would open and outline where the next employment cuts would be implemented.

John Hogan, Clear Channel CEO, told us at one of those meetings, “Never let a good crisis go to waste.” By that he meant, by using cloud of the Great Recession that the entire structure of the company could be changed.

Digital Dimes

In 2010, the radio industry began tracking the impact that the Internet of Things (IoT) began having on the total revenue of the business. That first year, $0.4 Billion was earned.

In those early years, traditional media talked about how they were converting traditional advertising dollars into “digital dimes.” In other words, for the same amount selling effort, the Return On Investment (ROI) for digital was minuscule.

U.S. Inflation Rate (2006 to 2018)

Not helping the radio industry chiefs was the inflation rate in America. A dollar in 2006 was only worth 75.44-cents in 2018.

How did radio revenues in 2018 compare to what they were in 2006? They were down $4.8 Billion. That’s comparing the same Over-The-Air (OTA) revenue of 2006, which had no digital income, to the OTA revenue produced in 2018.

But what about those digital initiatives?

From $0.4 Billion in 2010, they rose to $0.923 Billion in 2018.

So, comparing total revenues for the radio industry from 2006 to 2018, we see that radio is only down $3.9 Billion. But here’s the problem, just to stay even with 2006, and not grow in revenues, radio would need to have earned about $22.5 Billion in 2018. In other words, instead of being down $3.9 Billion, radio needed to be up about $4.4 Billion. That’s an $8.3 Billion gap!

A Look Ahead

Local radio is one of the top five advertising platforms in America today. BIA Advisory Services SVP and Chief Economist, Mark Fratrik, is predicting that OTA radio revenues will continue to decline one to two percent in 2019 and for the next few years.

Even adding in those digital revenues predicted to be $1 Billion for radio in 2020, Fratrik says total radio revenues are expected to remain flat for the next five years.

That’s why we’re continuing to see radio companies trimming their employment rosters every time we read the latest radio trade publications.

If misery loves company, the only bright spot – if you can call it one – is that the advertising dollar challenge for newspapers and television will be even greater.

Traditional media is converging on one delivery platform, the internet.

Today in China OTA radio trails streaming music for in-car listening. Even in America, for people who listen once or twice weekly, streaming and OTA listening are tied at 33%.

“The decision we have to make is

not whether this is the media environment we want to operate in,

it’s the one we’ve got.”

-Clay Shirky

 

 

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November 3, 2019 · 4:00 am

How is Radio Affected by Being Efficient?

EfficiencyI started my professional radio career in the 10th grade of high school. However, I started dreaming about being a disc jockey for as long as I can remember. I built my own AM/FM radio station in the basement of my parent’s home and broadcast to about a three block radius around my house.

Lots of People

In my early professional days, radio was people, lots of people!

Every aspect of running a radio station required people to make things happen. Sales, bookkeeping, reception, disc jockeys, copywriters, news anchors, reporters, engineers, production and promotions people with layers of management on top of every department, up to the general manager who oversaw the entire operation.

As an example, CKLW a stand-alone AM radio station in the Detroit metro, had 23-people just in their news department. Today that’s about double the total number of people running a cluster of AM/FM radio stations in any metro.

Was radio efficient back then? No.

Was radio effective? YES!

Did radio make money? Tons of it!

The Gatekeepers

What traditional media had back then, were gatekeepers. Newspapers, magazines, radio and television had people charged with making sure there was a good flow of information and entertainment. These people acted as filters, and overtime they developed standards and ethics that all Americans could rely on.

It wasn’t perfect and mistakes were made, but it got us through the 20th Century and unified us as a nation.

The New Gatekeepers

The birth of the internet ushered in a new gatekeeper, the algorithm. Now lines of code would replace people as the filter for what Americans read, see and hear. Unfortunately, these lines of computer code lack transparency in how they filter the flow of information.

Have they been encoded with a sense of civic responsibility? Who knows?

Is the flow of information the same for everyone? No, it has been personalized to our likes and dislikes. It has put each of us in our own information silo.

Bowling Alone

In 1995, Robert D. Putnam wrote an essay entitled “Bowling Alone: America’s Declining Social Capital”. The essay chronicled the decline in all forms of in-person social interchange. What Putnam saw in his research was that the very foundation Americans had used to establish, educate and enrich the fabric of their social lives was eroding. People were now less likely to participate in their community, social organizations, churches, and even their democracy.

This trend has only been accelerated by social media and the internet. The unintended consequences of the internet are, that it has isolated each of us to a web of one. Algorithms have taken what Putnam saw happening in the last century and put it on steroids in this century. All in the name of driving more efficiency.

Efficiency Bubble

The “efficiency bubble” means that efficiency is valued over effectiveness in today’s world. It’s a term coined by Will Lion of BBH advertising.

Rory Sutherland, Vice Chairman of Ogilvy in the UK, recently shared this personal experience that demonstrated the efficiency bubble.

“The absurdity of the efficiency bubble was brought home to me in a recent meeting with an online travel company. The conversation repeatedly included the mantra ‘the need to maximize online conversion.’ Everyone nodded along. Clearly, it is much more efficient for people to book travel through the website than over the telephone, since it reduces transaction costs. But then someone – not me, I’m ashamed to say – said something revelatory: ‘Ah, but here’s the thing. Online visitors to the site convert at about 0.3%. People who telephone convert at 33%. Maybe the website should have a phone number on every page.”

“Perhaps the most efficient way to sell travel is not the most effective way to sell travel. What, in short, is the opportunity cost of being efficient?”

“Nobody ever asks this question. Opportunity costs are invisible; short-term savings earn you a bonus. That’s the efficiency bubble at work again.”

Consolidation is Just Another Word for “Efficiency”

During radio’s massive consolidation, Excel spreadsheets produced by new minted MBAs screamed a multitude of ways to have radio stations become more efficient. Unfortunately, the fast-lane involved the elimination of tens of thousands of radio jobs.

And it’s still going on as I write this article.

I don’t ever remember anyone asking about “opportunity costs” being sacrificed in the process.

In the last radio property I managed before entering higher education as a broadcast professor, I would spend my final year going to corporate meetings about Reductions In Force (RIFs) and coming home with a thumb drive that had dates to open new pages in an Excel spreadsheet, that listed what people and what departments were to be eliminated next.

It’s my belief that efficient radio chases away listeners, effective radio creates them.

Blame It on Competition

Tech Guru Pete Thiel blames the efficiency chase on competition. “More than anything else, competition is an ideology – the ideology – that pervades our society and distorts our thinking,” says Thiel.

When all radio companies chase the same efficiency metrics, they all end up sounding the same, their websites end up looking the same, and in essence, they’ve turned the creative medium of radio into a commodity.

Deregulation of broadcast, as I wrote about in The Birth of Radio in America article, now has virtually all of the radio stations in a radio market owned by one or two companies.

Radio always stole great ideas from other radio stations around the country, but most often those stolen ideas were massaged and improved upon in the process. Everyone was upping the game through their own creativity lens, and each radio station had its own unique sound.

Unfortunately, along with corporation radio came the concept of “Best Practices”. This would be yet another contributor to the end of personal creativity at radio stations, all in the name of more efficiency.

Emotions

Roy H. Williams, the Wizard of Ads, says we buy things emotionally and justify those buying decisions rationally. The pursuit of efficiency is a rational answer to an emotional problem.

The radio business was never built on Excel spreadsheets and doing what was most efficient, it was built by creative people who touched others emotionally. Be it station imaging, air personalities, promotions, contests, community events, advertising or marketing, radio always went for people’s hearts.

The successful radio stations today still foster those emotions in their listeners and advertisers.

They’re just becoming harder and harder to find.

 

 

 

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September 29, 2019 · 3:00 am

Hope You Enjoy Your Stinkin’ Phones

Express FinalThat headline graced the cover of the final edition of Express, the free commuter paper published by The Washington Post. It was created only 16-years ago, as a free paper for commuters in the DC area to read on their daily metro commute into Washington. It all came to an end on Thursday, September 12, 2019.

“I’ve always known this day would come.”

-Dan Caccavaro, Executive Editor

The 130,000 daily circulation Express launched in 2003. At that point in time, iPhones weren’t even on anyone’s radar and Facebook was something only students at Harvard were using to communicate with their fellow classmates. The world had yet to be invaded by Tweets, SnapChats or Instagrams.

Those of us in business were getting our first Blackberry smartphones that allowed us to read our emails while away from our offices.

Flip Video

When it debuted in 2007, the Flip Ultra became the best-selling camcorder on Flip_VideoAmazon.com. It was so popular the line was taken over by Cisco in 2009. Fifteen improvements were made to the Flip video camcorders, until in 2011 when Cisco shut down the entire Flip Video division.

From its introduction as the “Pure Digital Point & Shoot” video camcorder on May 1, 2006, till it vanished only four short years later, the reasons for its demise can be traced to the same root disruption that took down the Express.

The introduction of the iPhone on January 9, 2007.

Downton Abbey Movie (No Spoiler Alert Needed)

This past Friday, Sue & I went to see the Downton Abbey movie. The theater was packed. Many of the movie’s patrons had not been in a movie theater in years, but due to this series airing on PBS and now all six seasons being available on Amazon Prime, legions of fans were heading off to their local movie houses.

“Studios ignore the maturing audience at their peril.”

-Hugh Bonneville, Lord Grantham in Downton Abbey

It’s not just the movie studios who are ignoring mature audiences, other forms of media would be well advised to sit-up and take notice.

The movie continues asking the central question raised by the television series; how does a place like Downton Abbey fit into the modern era? I’m sure It’s the same question every form of traditional media is asking themselves.

The Radio Corporation of America (RCA)

IMG_3994Following World War I, America saw a future in long-distance wireless telegraphy using high-power radio stations. In the United States, British owned Marconi Wireless Telegraph Company of America ruled the airwaves, but in order to stay competitive, it needed the new equipment for broadcast, manufactured by General Electric Company.

President Woodrow Wilson and the U.S. Navy decided that America needed to become the leader in global communications, convincing GE not to sell its equipment to Marconi, unless he agreed to give up his American based division to an all-American company.

That new company, RCA, would begin business on December 1, 1919. Its Chatham Radio, WCC (Wireless Cape Cod), became the largest U.S. maritime radio station. RCA succeeded in making America the leader in global radio communications.IMG_3974

2019 marks the 100th anniversary of the birth of Radio Corporation of America. RCA was reacquired by GE in 1985 who proceeded to breakup its assets. The RCA brand today is now owned by a French multinational corporation.IMG_3981

At one time, WCC was fully staffed with 30-people, most of them radio operators. Working around the clock, they would handle 1,000-messages a day. During the busy periods, as many as 10-operators would be on duty at the same time. The messages were all sent in Morse Code.

The radio station closed in 1997. The 100-acre site was sold to the town of Chatham, Massachusetts. The Chatham Marconi Maritime Center was founded in 2002 and operates the center as a museum and promotes the advancement of youth STEM education in the communications science.

Morse Code served as the international standard for maritime distress until 1999, and was replaced by the Global Maritime Distress Safety System. The French Navy ended its use of Morse Code in January 1997 with the final transmission “Calling all. This is our last cry before our eternal silence”. The final Morse code transmission in America was on July 12, 1999. The United States signed off its use with Samuel Morse’s original 1844 message, “What hath God wrought and the prosign “SK”. (The SK prosign was Morse code short-hand for “End of Contact” or “End of Work”.)

Commercial Radio Turns 100 in 2020

Next year, on November 2, 2020, commercial radio in America will celebrate its 100th birthday. That was the day that KDKA became the first commercially licensed radio station to begin broadcasting.kdka

Which brings me back to the Downton Abbey movie, which asks the question of great estates that I feel also applies to commercial radio stations, “Are we right to keep it all going, when the world it was built for is fading with every day that passes?”

“Hope is a tease designed to prevent us accepting reality.”

-Dowager Countess of Grantham

One has to wonder how long the style of radio that many of us grew up with will still be around. In many ways, it’s already disappeared, such as people being replaced by computerized automation. It’s much the same path that the radio station WCC experienced before it was closed down and turned into a museum.

To paraphrase the words of the Dowager Countess in dealing with the world’s only constant, change, and putting it in perspective; today’s broadcasters are the future of radio. The broadcasters who came before us lived different radio lives, and our descendants will live differently again. They will take over and build upon a communications world where we left off. Soon, today’s broadcasters will be the old curmudgeons keeping everyone up to the mark. I’m sure the future of communications will be an exciting time. “I think I shall prefer to rest in peace.”

“At my age, one must ration one’s excitement.”

-Violet Crawley, Dowager Countess of Grantham

 

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September 8, 2019 · 3:00 am

What’s the Purpose of a Radio Station?

WSM Tower SiteRadio is a business.

Peter Drucker said the purpose of a business is to create a customer.

For radio, that means creating two types of customers: 1) a listener and 2) an advertiser and when done correctly, a radio station makes a profit.

Making Money

For most of my radio career, radio enjoyed a revenue expansion that rivaled the infamous “internet bubble.” Owning a radio station was considered a license to print money. Bottom lines often delivered a profit of 25 to 50% or more, so, while those profits were noticed by Wall Street investors the ownership limits on radio stations kept them away. Investors were frustrated that there was no way to scale up the size of a radio broadcast company.

Telcom Act of 1996

Then President Bill Clinton signed the Telecommunications Act of 1996. It relaxed radio’s ownership rules making it possible for one company to own multiple radio stations in a single market.

Wall Street loved the change! The money poured in from eager investors, and companies like Clear Channel, Citadel, and Cumulus quickly bought as many stations as they could using other people’s money. Mom & Pop radio operations had multiple companies vying for their properties and radio station values soared.

Ownership Limits

In 1953, the Federal Communications Commission (FCC) adopted its so-called 7-7-7 rule to encourage diversity of broadcast ownership. In essence, no single owner could own more than 7 AM radio stations, 7 FM radio stations, and 7 television stations in the entire United States of America.

By July of 1984, the FCC said they sought to encourage media competition and increased the number of radio and television stations a single owner could control to 12-12-12. The FCC Chairman was Mark S. Fowler. The President of the United States was Ronald Reagan. The five member FCC was 3 Republican appointees and 2 Democratic appointees. The vote to expand the ownership limits was 4 to 1 in favor.

“Bigness is not necessarily badness,” Chairman Fowler is reported saying. “Sometimes it is goodness.”

The New York Times reported reaction on Capitol Hill to the expansion of ownership limits this way:

On Capitol Hill, there was mixed reaction to the plan to abandon all limits on broadcasting ownership in 1990, although sentiment has grown in recent years for raising the ownership maximum somewhat.

Representative Timothy E. Wirth, the Colorado Democrat who is chairman of the House telecommunications subcommittee, said, ”The 12-12- 12 rule is just as arbitrary as the 7-7-7 rule.”

Mr. Wirth said a broad bipartisan consensus in Congress favors adoption of ”objective, long-term rules that assure diversity and competition.” He said such rules would provide for increased broadcast ownership but would not completely deregulate it.”

He went to say “If they deregulate in 1990, we could end up with a handful of companies owning every broadcasting outlet in the country.”

President Ronald Reagan

Reagan loved two things, cutting taxes and eliminating regulation. Remember Reagan famously said that “Government isn’t the solution to our problems, government is the problem.” Reagan’s pick for FCC Chairman, Mark Fowler, fully embraced this vision and actively applied it to the FCC.

However, the prediction of Congressman Timothy Wirth wouldn’t come into existence until President Bill Clinton signed the Telecommunications Act of 1996. It would be the first significant overhaul of the 1934 Act in more than sixty years.

Radio station ownership in the first five years under this new act went from 5,100 owners to 3,800.

Instead of opening up ownership to new and more diverse ownership, it created an opportunity for media monopoly. The Wall Street funded radio companies could now buy out the Mom & Pops and the temptation to sell at never-before-seen-multiples was too good to pass up.

Operating in the Public Interest, Convenience and Necessity

When no one really knew what radio broadcasting would become, they did know they wanted radio to be a communications business that would serve its community of license for convenience in good times and of necessity in times of trouble. The airwaves were considered to be owned by the public, so operating in their best interests was a requirement to being an FCC broadcast licensee.

Changing Competitive Landscape

Historically, radio stations competed against one another. Most markets had such battles as, WLS vs. WCFL, WMEX vs. WRKO, WPTR vs. WTRY, KHJ vs. KRLA etc. When FM radio began to take over from AM, a station such as WABC no longer had just WMCA to beat, but now WTKU-FM too, which offered better fidelity and stereo. This new radio competition replicated in every radio market in America.

Then came Satellite Radio, followed by Pandora along with other pureplay streamers, and podcasts so that today, the radio competition landscape lines are blurred beyond recognition.

Mission vs. Platform

Today’s communications company needs to clearly define its mission and needs to earn the trust of all of its stakeholders. That means building trust between its employees, advertisers and listeners.

We need to stop thinking of “radio” as AM or FM.

We need to think of radio as being the audio leader for creating an environment for convening and supporting groups. We need to be preparing for a future that is still coming into focus.

 

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