The Era of Stand-Alone Electronic Devices is Ending

111It was 10-years ago this past Thursday that the iPhone went on sale. On that fateful day, I was using a company issued Blackberry Pearl. It was such an amazing upgrade from my old Motorola flip-phone that I got a couple of years earlier.

Cell Phone Evolution

It was 1983 that Motorola introduced the DynaTAC 8000X Advanced Mobile Phone System. It was with the DynaTAC in his hand that Michael Douglas told the world “greed is good” in the movie “Wall Street.”

This phone could make and receive calls from almost anywhere. But that was it.

I never had one of those phones, my first cell phone was a bag phone that sat in the front seat of my car with a wire running out of a rear window connected to a magnetic antenna on my car’s roof.

Only six years later, the Motorola MicroTAC 9800X would become the first truly portable phone. Having this phone was a real advancement as it now fit onto a belt clip and went everywhere I went. However, I was still using a Palm Pilot to keep track of my calendar, contacts and other notes and a Nikon Coolpix to record radio station events for posterity.

In 2004, I got my first Blackberry and in 2007 I upgraded to a Blackberry Pearl.

None of these phones really changed my life other than they got better at making and receiving calls, sent & received text messages and company emails could be sent and received. I still relied on other single use devices to do the other things in my life.

My 1st iPhone

One of my problems with iPhones were how big they were. I grew to love the size of my Blackberry Pearl and didn’t want to go backwards to a larger phone. (Later I would learn it was the huge cases people put their iPhones into that made them so large, not the phone itself.)

My second Apple device, after my iPod Classic, would be an iPad2, purchased in November 2011. I wasn’t sure why I needed one, but since I was teaching at a university to the next generation of broadcast students, I thought I needed to stay up with the technology.

I quickly fell in love with my iPad and realized I now knew how to fully operate an iPhone.  So, in January 2012, I purchased the latest iPhone that had just come out, the iPhone4s. The iPhone4s was actually more compact than my Pearl and I would store it in a leather sheath just as I had with my Pearl.

The iPhone4s WOULD change my life!

The Beginning of the End

The day that Apple introduced the iPhone4s – October 4, 2011 – was one day before the death of former Apple CEO and co-founder Steve Jobs. The “s” stood for Apple’s new voice assistant Siri. (Siri would not be the first intelligent personal assistant but would be the one that would start a new round of innovation giving birth to Amazon’s Alexa and the Voice Activated Devices I wrote about last week.)

Equipped with my new iPhone4s, I quickly converted my entire contact file from Palm to Apple. My calendars – both personal & professional – were converted to my iPhone and iPad. My Nikon Coolpix began to gather dust as all of my pictures would be now taken with my new iPhone4s.

Being new to the Apple ecosystem, I signed up for the iCloud and iTunes match to connect my PC, iPad and iPhone all together. I was surprised to learn that many Apple devotees didn’t use these internet connected systems. But then I didn’t realize they only came on the scene a few months before I got my first iPhone.

Very quickly my iPhone4s replaced my camera, my video camera, my Palm Pilot, my cassette recorder, my note pad, my desk calendar, and even my iPod Classic. It became my way to email, text and make calls. My landline phone was discontinued the day I got my iPhone4s.

My unlimited data plan allowed me to stay connected to Facebook, LinkedIn, Twitter and Google Search. My phone became my resource for breaking news and if severe weather were imminent it would immediately alert me of pending danger.

Would bad weather cancel classes? My iPhone4s would alert me of any delayed opening or closing.

Very quickly my iPhone4s became one of three things I would not leave my house without: those being my wallet, my car keys and my iPhone.

Noteworthy is that Apple has made privacy “a fundamental human right” and is the only consumer-oriented technology giant with a business model not based on sucking up tons of personal data in order to target advertising to consumers, writes the Economist. In fact, this online business magazine says “the end of stand-alone electronic devices, however slick, is coming to an end.”

The End of Single Skill Students

What I’ve seen change in just the last seven years as a broadcast professor are the needs of the broadcasting industry in terms of what they want graduating students to know when they enter the workplace. In a word, EVERYTHING!

They need to be equipped with the “Swiss Army Knife” of skill-sets.

They need to be able to write for broadcast – online web-pages – social media, take pictures, take & edit videos, record & edit audio and so much more. Where once each one of these tasks was a single skill, today’s broadcaster needs to be able to it all. Much as we require of our electronic devices.

Cutting the Cord

When my laptop died, I replaced it with a MacBook Air. When it was time to replace my desktop PC, I bought an iMac. My iPhone4s has been replaced by an iPhone7 (that has as much memory as my MacBook Air) and AirPods. And when I moved to Virginia, I “cut the cord” on cable TV and went with AppleTV.

Everything is tied to the Apple ecosystem – iCloud, iTunes Match and to each other.

What I still enjoy using are my BOSE Wave Radios (I have two of them), my Garmin GPS and my car radio.

However, I know that my students have no such need for anything other than their smartphone.

And they are the people who will determine the future of broadcasting by the choices they make.

For radio the game will be less about numbers and more about attracting and engaging with a specific audience by super-serving their needs, wants and desires to such an extent they will find you on whatever device they choose to listen on.

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The Winner Takes it ALL

108Everything old is new again. I’m sure you’ve heard the phrase. “Everything old is new again” was the title of a song in the movie musical “All That Jazz.” Part of the lyrics to this Peter Allen/Carole Bayer Sager song include:

 

Don’t throw the pa-ast away
You might need it some rainy day
Dreams can come true again
When everything old is new again

I might fa-all in love wi-ith you again

VADs

While I haven’t heard anyone call them this yet, I may be the first, I’m sure in time they will be referred to in this way, Voice Activated Devices.

You probably better know them as Amazon’s Echo, Google Home or Apple’s HomePod.

Amazon was first into this territory followed by Google and now Apple (their device will be available later in 2017). Microsoft recently announced they have partnered with Harmon Kardon to put the MS VAD “Cortana” into a smart speaker system. Harmon Kardon is a division of Samsung.

Fred Jacobs blogged about them in a recent article titled “Are Voice Commands the New Hi-Fi?” (Hi-Fi was introduced with the 33-1/3 discs introduced by Columbia 69 years ago this month – June 20, 1948.) In his article, he quoted Spotify’s Ian Geller who said voice commands allow people to “engage with music in ways they haven’t since the Hi-Fi stereo system became available.”

Fred feels that these new VAD’s are a “true moment for the radio industry – a chance to bring radio back to homes in a big way.”

The Old That’s New Again Part

As I study these new gadgets, I see a problem for radio of its own making, branding.

The radio I grew up with was very creative and prolific at branding itself with its listeners. It had to be because of the way radio ratings were conducted, either by aided or unaided recall. Billboards, bumper stickers, TV ads, t-shirts, putting your call letters and frequency on just about everything, everywhere it could be seen.

From virtually the beginning burning your call letters into the brains of your listeners was paramount.

Consolidation and PPM (Personal People Meter) would take the need to brand – or so the new Wall Street stakeholders thought – away. Consolidation did this through many signals in the hands of a few operators and the need to cut costs. Arbitron’s (now Nielsen Audio) PPM device did it by recording “listening” even when the listener was totally unaware of where the music or talk programming was coming from.

The new Voice Activated Devices now require a person to KNOW exactly what it is they want to hear when they say the activation words, like “Hey Alexa” or “Hey Google” or “Hey Siri” followed by a specific request.

Unaided recall is back.

Wi-Fi, Hi-Fi & Being Connected

While these new VADs maybe the new “Hi-Fi” for a 21st Century world, they require Wi-Fi to connect to the internet and their respective clouds.

While many of us today take access to a broadband connection for granted as our parents did a landline telephone line, many people in America were not so fortunate. Poor people or people in very rural areas depended on assistance from the Federal government to connect them up to a wired telephone line because private companies found doing so very unprofitable. The Universal Service Fund (USF) was established to provide the funding. Everyone who had a phone would pay a tax to help wire America.

As the need for internet broadband became as necessary in a 21st Century world as a phone line did in the 20th Century, the tax would continue to provide this telecommunications service in the United States.

To read about all of this more detail, click here

Various Ways to Listen

Public Radio in America is leading the way with directing people with the many ways they can be heard. A good example is WBAA AM & FM from Purdue University. Their “How To Listen” tab on their website informs the listener how to listen to their stations over-the-air, streaming online, via their App or via a Voice Activated Device.

This last VAD page also tells listeners how to listen to NPR One using voice commands, such as “Alexa, play NPR One.”

BRANDING Your Radio Station is IMPORTANT

Using a VAD is a return to the days of unaided recall for the radio industry. The need to brand your radio station is critical in a Voice Activated Device world.

How is your KISS, FROG, HOG, JACK etc. different than other such brands all over the world? How will your VAD know which one you want to hear?

Might the return of unique and one-of-a-kind FCC assigned call letters come back into fashion?

Coleman Insights just released a study on Public Radio that shocked programmers with the fact that fewer than one in four radio users can call to mind any Public Radio station.

It’s a Winner Take All World

When the elephants fight, it is the grass that suffers is an old African proverb. It means that the weak get hurt in conflicts between the powerful.

Today, the powerful are Microsoft, Google, Amazon, Apple and Samsung. Each one having their own voice assistant it hopes will dominate the field.

Our 21st Century technology is altering the structure of competition in America as never before. It encourages more monopolies, a “Winner Take All” world.

Natural monopolies are not new. Utilities are an example, but they were heavily regulated. The natural monopolies created by the internet crush competition and that could negatively impact the American economy. Internet innovation moves fast, the Federal government moves very slowly and regulation won’t stop them from occurring.

You can’t order from Amazon on Google Home. You can’t access your favorite iTunes podcasts on Amazon’s Echo. Each device requires a subscription to their music library, unless you request over-the-air radio streamed into your VAD.

War Chests

Apple as of May 2017 had cash reserves of $256 BILLION. In fact, Apple, Microsoft and Google own 23% of all U.S. corporate cash outside the finance sector according to Moody’s.

iHeartMedia is still wrestling with over $20 BILLION of debt. And Cumulus maybe even worse off.

Their challenges are not those of the entire radio industry and money is not always the determining factor in innovation. A perfect example is how the Wright brothers beat Samuel Pierpoint Langley in the race to create powered controllable flight. Langley had the financial support of the United States government and failed while the Wright brothers succeeded using their own resources from their bike shop.

Crisis

The Chinese language uses two symbols to represent the word crisis. One symbol means “danger” and the other means “opportunity.” 109Radio has been here many times in it’s almost 100-year history before.

Smart operators are already speeding down the path of opportunity.

Are you one of them?

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What Does a Radio Look Like?

107When I was growing up, there were lots of examples of what a radio looked like. The instant we saw it, we immediately knew it was a radio.

My first radio was a Zenith Royal 50. It was red & white and came with a brown leather carrying case and a single ear phone. It opened up the world to me.

In high school & college my radio was a Grundig 2440 table radio with a 100-foot copper wire antenna running across my parent’s backyard from my second floor bedroom window. Another wire would run out that same window to the ground.

Once I got my license to drive, the radio that would get the most use would be the AM radio in my 1969 Chevrolet Biscayne.

My home radio of choice would be purchased after many years of longing and being brainwashed by the radio advertisements delivered by the one & only Paul Harvey during his daily news & commentary broadcasts over the ABC Radio Network. It would be the BOSE WAVE Radio.

When I bought my new MacBook Air, it came with a free pair of Beats Wireless Headphones.

100My new iPhone7 uses the Apple AirPods.

Wireless headphones outsold non-bluetooth headphones in the first half of 2016 (just a year ago). I wrote about this evolution in headphone technology this past March 2017 in a post about the MAYA principle.

Things Forecast to Kill Radio

Radio still dominates in the automobile.

Over my radio career I lived through so many technical innovations that were forecast to kill radio, especially in the car.

There was the 8-track player, cassette player, CB Radio, CD Player, CD Changer, iPod, thumb drive, iPhone and streaming audio.

In each case we would learn that all each of these innovations did was replace a previous innovation by that percentage of the audience that wanted to curate its own music or programming. It never really replaced what over-the-air AM/FM radio delivered.

Hotels Eliminate Radios

I’ve just recently stayed in two different major hotel chain hotels that were either recently remodeled or newly constructed. The analog TVs have long been replaced by HDTVs, and showers now replace bath tubs, LED bulbs replaced the old filament ones, but the big surprise was the complete elimination of the radio.

They have been replaced by something called “CubieTIME.”CubieTIME

This device will tell you the time and you can set an alarm to awake you at the appointed time you wish to start you day. But those little radios (that never could pick up crap in more recent times) are gone.

Atlantic City Maid Checklist

For over a decade I ran the beautiful music/easy listening radio station in Atlantic City, New Jersey. Most of the casino hotels had a standard checklist of things a maid would do when preparing the guest room for the next patron.

One of those things was setting the radio to a pleasant volume and tuning it in to 96.9 FM for the soothing music of WFPG (the radio station of the World’s Famous PlayGround).

Today’s Kids vs. 1980’s Technology

In my recent college capstone class, I asked the students when they got their first cell phone. All the students said when they were in elementary school. The smartphone, not a radio, was what they wanted next as they were growing up.

The technology we grew up with and enjoyed is alien to today’s youth.

This short video brings home how things have changed.

You can view it on YouTube here: https://www.youtube.com/watch?v=7v75QpvISUs

What Icon Represents Radio Today?

The big question for the radio industry today is what iconic symbol represents the medium today? Not a radio tower. John Hogan, former president of Clear Channel, said during all of my years working for the world’s biggest radio broadcaster that we were no longer about tall towers in big fields. Most radio sets look like something from the 20th Century or older, not the 21st Century world of today.

Should it be a microphone? A pair of headphones? A computer? A smartphone?

I think I will just turn on my RADIOradio while I ponder this question.106

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Radio & the Consumer Driven American Economy

99This week produced some conflicting economic data. The stock market was setting new records and the unemployment rate dropped to 4.3% but the number of people filing for unemployment benefits beat analysis estimates. WTF?

The Surprising Threat to Radio

It’s estimated that two thirds of the American economy is driven by consumer spending. Don’t get hung up on the percentage, but know that a lot of our economy is driven by the buying and selling of stuff that is consumed.

Some things, like a Whopper are consumed quickly and other things, like the car you drive, are consumed over a longer period of time. Much of our spending is discretionary.

Radio is a strong driver of putting thoughts into people’s heads about things they should be deciding to consume. Radio is the word of mouth medium with the big mouth.

So what threatens radio today? Consumers are not spending.

Radio’s Role in Consumerism

Broadcasters can’t change the attitude of an apathetic consumer for the most part. Other factors in the world create consumer attitudes, uncertainty being one of the biggest.

Uncertainty causes consumers to hunker down and make do with what they already have. And today’s world is filled with lots of uncertainty that is being stoked 24/7 by the cable news networks, talk radio and social media.

Radio is excellent at directing consumers to different businesses, products and services when they are feeling confident and want to part with some of that discretionary cash.

Barron’s reports that year-over-year growth in U.S. retails sales peaked in mid-2011 at 8.3% and has since rolled back to 4.5%. The four biggest performing stocks are Amazon, McDonalds, Comcast and Home Depot.

A World of Debt

Radio people are very aware of the huge debt problems impacting iHeartMedia and Cumulus. But they may not be aware that American household debt in the last quarter reached a record $12.73 trillion and Barron’s says that just surpassed the debt American’s owed at the height of the housing bubble.

Student loan debt is now over $1.4 trillion, which is about $620 million more than U.S. credit card debt. Student loan debt rose six percent in the past year.

American credit card debt rose by $3 billion in February 2017, its highest level since 2008 according to The Motley Fool.

Market Watch says that U.S. households now have surpassed the amount of debt they had in 2008. Plus Americans are struggling with their auto loan debt with these sub-prime loans hitting their highest delinquency levels in December 2016. A pattern that Market Watch says was seen prior to the 2007-2009 great recession.

An Inconvenient Truth

During the 1960s and 1970s, the American economy expanded over 11%. In the 90s it couldn’t get above 9% and in the most current expansion it hit 5.9% and recently was only 3.6% according to Barron’s.

Many Americans no longer see consumption as being the “American Dream” but now are saving as much as they possibly can despite interest rates on savings sitting at anemic levels.

Income inequality is also playing a huge role in the current state of American consumerism. 76% of the wealth in America is now held by the top 10%. Only 1% is in the hands of the bottom 50% of American families in today’s America. CNN Money reported in December 2016 the wealth inequality in America is getting worse. “The rich are money making machines,” said CNN.

A 2016 study by Gallop senior economist Jonathan Rothwell found that the bulk of our national spending is eaten up by just three items – healthcare, housing and education.

What’s the impact on ad supported media in a world of enormous debt and haves vs. have-nots? I wrote about this after reading Thomas Piketty’s book “Capital in the 21st Century.” That article was called “The Future of Ad Supported Media” and you can read it by clicking on the link here .

Survival of the Fittest

What all of this is telling us, Spending is OUT and Frugality is IN.

A broadcaster friend of mine was sharing that in his PPM market TV ad time is now selling at “radio rates.” When the pie isn’t growing, media companies are forced to begin taking more from someone else.

Radio is the best value for the money when the economy goes soft.

I started my radio sales career at the beginning of the early 80s recession. I was very successful and it saw me enjoying a four plus decade long radio career before becoming a broadcast professor to pay-it-forward to a new generation of broadcasters.

As Warren Buffett says, “It’s when the tide goes out, that you know who’s wearing a bathing suit.” In other words, when the business changes from taking orders to really selling, we will learn which companies have trained their sales people to not just survive but thrive.

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When TV Disrupted Radio

97I grew up with TV.

Essentially, we were “born” in the same year.

I don’t remember a time when TV didn’t exist.

TV was supposed to put radio out-of-business. It was the “great disruptor.”

Why TV Didn’t Put Radio Out-Of-Business

While I loved my TV shows and even remember planning my life around TV GUIDE and the new fall shows, I still fell in love with radio and wanted to be a radio personality since elementary school and my first Zenith transistor radio.

Radio for me was never about Jack Benny or Groucho Marx or Amos & Andy or radio dramas like Orson Welles “War of the Worlds.”

Radio was exciting execution, engaging personalities and the best of new music from all genres.

Radio was addictive because it was so engaging.

Disruption Knows No Loyalties

It’s reported that as this decade began only 67 of the original Fortune 500 companies were still in business. Welcome to the 21st Century of Disruption.

The reality in today’s world of accelerating change is that the very success that rockets a company to raving success usually becomes the dagger that runs through its heart when the market environment shifts. Then new firms take over and former leaders fade into the history books.

The business truth is eventually every business sees its model fail.

Radio’s New Business Model after TV

Can you imagine a more difficult time than when TV swooped in and stole all of radio’s programs and talent? It was a time when people said things like “The last person to leave, please turn off the lights on your way out.”

It was a dark time for radio.

But not for all.

Only those who couldn’t see their way past the way it had been.

New broadcasters were quick to develop new formats.

1965 saw the birth of BOSS RADIO in Los Angeles with Bill Drake & Ron Jacob’s 93-KHJ.

At the same time 1010-WINS in New York would pioneer the all news format and everyone would know the phrase “You give us 21-minutes and we’ll give you the world.”

These new broadcasters would be the ones that inspired me to want to be a radio guy.

The Transistor Radio

Radio took advantage of the transistor radio. The youth of my day would all want a transistor radio of their very own and radio owned the youth generation.

The Car Radio

As we grew older and bought our first car, the car radio was a MUST HAVE accessory.

Movies like American Graffiti would romance the glory of the young and their radio.

The Internet of Things (IoT)

Today’s 21st Century finds radio with a new disruptor, the internet. It’s not a new product but an ecosystem.

Amazon and Walmart sell many of the same products and are quite competitive on price. The big difference is Walmart is a brick and mortar ecosystem and Amazon is internet based.

For radio to compete the industry needs to have a vision for how its product fits into a complex network of components, systems and user experience.

That’s the 21st Century radio challenge. (TV faces the same challenge.)

Today’s radio must seamlessly fit into a listener’s life on any platform the listener uses.

Disruption will crash and burn any business model that wants to hold onto the past.

Disruption will clear a path for those who are innovative, nimble and responsive to a changing marketplace.

For those broadcasters, the opportunities are limitless.

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Radio’s Best Feature

96The one constant in life is change.

What makes our world different than the world we grew up in is the rate of change in technology.

Adoption rates for technology over time according to the U.S. Census,  shows us that it took about 45 years for 25% of Americans to adopt electricity, 35 years for 25% of Americans to adopt the wired telephone, about 32 years for 25% of Americans to adopt radio, 25 years for TV, 15 years for personal computers, 12 years for mobile phones, 8 years for the internet and about 5 years for 25% of Americans to adopt smartphones.

Nearly nine in ten Americans today are on the internet and 77% of Americans now own a smartphone according to Pew Research.

K.I.S.S.

Most people who have any sales training at all know all about “KISS.”  Some say it means “Keep It Simple Stupid” and others will tell you it means “Keep it Short & Simple.”

But either way the message is the same, keep things simple.

“You have to work hard to get your thinking clean and make it simple.”

-Steve Jobs

Quite possibly our biggest challenge in the 21st Century is to keep up with the rate of accelerating change.

The More Things Change, the More They Are the Same

I’m sure you’ve heard this phrase uttered more than once in your lifetime. Every generation has thought that the rate of change was beyond their ability to cope.  A couple of centuries ago Henry David Thoreau told his contemporaries to “Simplify, simplify, simplify.”

Technology – especially information technology, the basis of our social networks – is speeding up exponentially. The famous Moore’s Law predicted this for computer chip development.

Exponential growth rate is an evolutionary process.

In his book “The Singularity Is Near” Raymond Kurzweil showed how civilizations advance through building on the ideas and innovations of previous generations, a positive feedback loop of advancement.

Each new generation is able to improve upon the innovations of the past with increasing speed.

Kurzweil wrote in 2001 that every decade our overall rate of progress was doubling, “We won’t experience 100 years of progress in the 21st Century – it will be more like 20,000 years of progress (at today’s rate).”

Only 17 years into the 21st Century and it feels like Kurzweil nailed it with his prediction.

It Still Takes 9 Months to Make a Baby

While it’s true so much of our world is uncontrollably speeding up, we are still human beings and we still pretty much move at the same pace biologically as we always have. Technology doesn’t transform our human nature.

Our need for love, touch, companionship and community will always be part of our humanity no matter what technology brings.

Radio Reaches 93% of Adult Americans Every Week

The latest Nielsen Audio research reports “radio leads all other platforms when it comes to weekly reach (93%) among adult consumers – and with new insights available to compare radio to other platforms on a regular basis, it’s clear that radio is an integral part of media consumption for millions of Americans.”

Great radio makes a human connection, engages its community and is a companion.

Radio’s best feature in a world of complex technology is that it’s simple to use.

It’s that simplicity I believe that makes it the #1 media favorite.

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