What Radio Could Learn from Vladimir Putin’s Dilemma

History never really repeats itself, but it often does rhyme with the past.

For the radio industry, today’s Internet is a challenge not unlike what the industry faced when TV began to take off in the 1950s. For Putin, the plummeting price of a barrel of oil is reminiscent of what happened in 1985 when the Saudis stopped protecting oil prices and focused instead on share of market. Then, as now, the Saudis decision is putting Russia in a corner.

Russia is dependent on oil and gas. The radio industry is dependent on the sale of radio commercials.

52% of Russia’s revenues and over 70% of its exports are oil and gas. 78% of radio’s revenues come from the sale of radio commercials.

See the similarity?

Gordon Borrell will be holding his 2015 Local Online Advertising Conference in New York City this coming March (https://www.borrellassociates.com/loac2015/) and the key note speaker will be investment banker Jim Dolan. In a comment promoting this conference, Dolan has been quoted as saying that valuations for companies with a strong digital presence will be much higher than for any company relying on legacy platforms for 50% of more of their income. (http://rbr.com/boring-in-on-digital/)

For Putin, 25 years after the last time the Saudis turned wide open their oil spigots the lessons not learned from past history have put this leader into corner. Radio has the lessons learned from the birth of TV.

Again quoting Dolan, “I think the smartest thing that legacy media managers can do is plow all of their free cash flow into digital products and services….it’s too late to knit a digital parachute when you’re falling off the cliff.”

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The Paradigm Shift in Auto Mobility

I just finished watching a webinar on “The Paradigm Shift in Auto Mobility” presented by TU-Automotive Detroit 2015 (www.tu-auto.com/detroit). It was fascinating hearing Doug Claus of BMW talk about self-parking cars. Imagine, you pull into a parking garage and get out of your car and your car goes into the garage on its own and seeks out a free parking space and parks. It then patiently waits until you summon it to pick you back up using either your Smartphone or Smartwatch technology.

Doug pointed out that car sharing vs. car ownership is where many young adults see the future. Autonomous vehicles are also on the horizon, though he pointed out that European countries have better painted roads, better road signage and better road maintenance than we do here in the United States. It’s another example of our crumbling infrastructure and how it makes us a less competitive place in the world when it comes to implementing these coming new technologies.

But the reason I attended this webinar was to hear about the future of AM/FM radio in the car dashboard of the future. What Raj Paul of LochBridge calls “Infotainment Systems.”

Raj said that each OEM (Original Equipment Manufacturer) has built a unique proprietary system. He mentioned a couple of them like Honda’s HondaLink, Ford MyTouch, Toyota Entune, Chrysler UConnect, Cadillac Cue and Mercedes mBrace2. There are also the Google Android and Apple iOS systems that are being developed. Expect that every OEM will seamlessly work with their own proprietary system as well as both Android and iOS.

When Raj put up the slide about existing infotainment architecture, you couldn’t help but notice the Pandora button on the screen. The other two symbols were apparently there to represent how Apps from your Smartphone would load into the car’s system.

The next generation integrated infotainment interface was packed with GPS maps, live traffic, navigation, routing, parking locator, gas & price locator, etc. A lot of information displayed in front of the driver. Yes, the Pandora button was once again prominently displayed on this slide, but only to indicate the accessibility of streaming audio services. I was happy to see an AM/FM button there too.

The competition for utilization of each point of access has never been greater. It makes the AM radio with push buttons for favorite radio stations seem quaint by comparison.

You won’t have to set your favorite applications, because your car will learn what you like and what you use and put that configuration up when you sit in the driver’s seat and push the button for your personal seat position. This is what OEM’s call adaptive profiling.

For radio station operators, being at the top of your game has never been more important. Advertising and promoting your brand will be critical to make listeners aware of what you offer and why they should care.

In a way, I see it as history repeating itself. For before there was radio, those early pioneers needed to tell people why they needed to go out and buy one. Then they had to program those radio stations and promote themselves to be the “must listen to” radio station and keep those listeners returning each day. Those days are back, only this time the game has changed to how do you brand your radio product and stand out in an car infotainment world where audio programming options are ubiquitous.

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Different or Better?

In education, we measure students by GPA (grade point average). The higher a student’s GPA, the more everyone believes that student is the higher achiever. In school, that measure is usually pretty accurate, but what about when the student graduates?

The best baseball players don’t always become all-stars. The best scientists don’t always win a Nobel Prize; the best known do.

Stanford’s business school once tried to learn what their most successful graduates had in common. They found two things. They all graduated in the lower half of their class and they all were very good at socializing. Being able to work a crowd, it turns out, is a skill-set that leads one to be successful.

Lee de Forest wanted to be called “the father of radio.” He even tried to use the “Miracle on 34th Street” concept having the post office make that determination. Only unlike in the movie, the United States Post Office did not deliver the mail addressed “the father of radio” to de Forest. Worse, de Forest never really understood his own Audion tube that made the radio we know today possible.

Edwin Howard Armstrong, the creator of FM radio (that is also the way the audio on your TV set gets delivered too) did understand the science that made the Audion tube work, but most people don’t know Armstrong.

Armstrong was better than de Forest, but de Forest was different.

Nielsen Audio measures better, something audiences really can’t distinguish. However, different is something that audiences can distinguish.

Think of top rated radio personalities. Were they better or different? Howard Stern? The Real Don Steele? Salty Brine? Dale Dorman? Paul Harvey? Jean Shepherd? Wolfman Jack? Etc.

I’m sure you will say they were better, because they were different. They were also all well promoted; either through self-promotion or a radio company that promoted them.

Today, every streaming audio service calls themselves “radio” and they’ve all copied the best practices of radio stations and one another that eliminate their differences; except one. Pandora. Pandora uses their “Music Genome Project” to put together their stream. Is it better than a music format that a person curates? Probably not. But it’s different.

Radio used to be filled with innovators dreaming up different. We need to let those folks back into the business and turn them loose. It’s why FM radio finally got traction and HD Radio never did.

It’s time for radio, like Steve Jobs did for Apple, to “Think Different.”

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If Radio Ran the NFL

Full disclosure, I’m not a sports person. But sports is ubiquitous in our world and in America, the NFL is the top sport. The NFL’s Super Bowls are TV’s most watched programs with the season finale of M*A*S*H being the first non-Super Bowl show to appear in the Top Ten most watched television programs.

The NFL is made up of people. Head coaches, assistant coaches, sales people, support people and of course, the players on the field. Radio is also made up of people. General managers, program directors, sales managers, sales people, support people and of course the personalities on the air.

Team brands are strongly associated with each particular team. If I say “Eagles” you immediately know that I’m talking about the NFL’s Philadelphia franchise. If I say “Cowboys” you again know that I’m talking about the NFL’s Dallas franchise. But if I say “Kiss FM” you really don’t know which radio station in which city I’m referring to. If I say “Jack” you again have no idea of which radio station in which city I’m referring to. While this may not have been a problem back in the day, today the Internet brings all radio together on one platform.

When I was growing up, each major city had at least two Top40 radio stations that would be engaged in a battle for the best. What made radio exciting at that point in time was that each of those radio stations were unique and very much in tune with their city of license.

While many radio folks would dis “Drake Radio” I fondly remember enjoying WRKO in Boston, CKLW in Windsor-Ontario, WOR-FM in New York City and KHJ in Los Angeles (via air checks). Yes they all had those incredible Johnny Mann jingles, but they all had very unique air talent and were tweaked to the city they served. They were the same, but different.

Each radio station was a special and unique culture of people. Culture trumps best practices.

Radio is starved for new ideas. They won’t come from inside radio. The next big thing is happening right now in another field. What it will take is for someone to see it and adapt it for radio.

Henry Ford is said to have seen the meat packers of Chicago disassemble a cow in a line where each worker cut out one section of the cow and adapted the model to create his assembly line for building cars.

The great coaches of the NFL are searching far and wide for new ideas. They are bringing in academics and scientists to learn how to make their players better; both on and off the field. When is the last time you heard of radio making that kind of investment in their players? By that I mean the air personalities and the people who coach them; the program directors.   When was the last new programming idea created for radio?

Remember when a new radio station format premiered back in the day? The launch was exciting and the day it was turned on, everything was in place. The air personalities often had been practicing the format off-the-air before the day it premiered. Today, new formats premiere in pieces. You don’t get a second chance to make a first impression. Why do radio companies repeatedly do this?

This manner of premiering formats would be like the NFL getting a new stadium, a new logo, and new uniforms and on game day having everything laying on the grid iron and telling the fans we will be hiring the players in the next 60-90 days. But radio does this all the time.

Just like the NFL players on the field, the radio air talents are a vital part of the product.

If radio ran the NFL, they wouldn’t have the coach standing on the sidelines, he’d be in the huddle playing the quarterback position, just like radio’s program directors are on-the-air; often anchoring morning drive.

The reason that the NFL hasn’t adopted radio’s model for operating their game is simple. Their model has made them the most watched and listened to sport in America. Maybe radio should be adapting the NFL model for running its industry.

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Winners Invest in the Future

America got to be the leading country in the world by investing in its future and much of that investment came from the government investing in the new ideas of its citizens.

In 1825, an American painter was commissioned by the City of New York to paint a portrait of Lafayette.   The painter traveled from his home in New Haven, Connecticut to Washington, DC to paint Lafayette before he departed back to France. While in DC, the painter received word his wife was very sick. Before he could even begin to travel back to New Haven, a second letter arrived to say his wife had passed away. Grief stricken, this event would cause the middle aged painter to search for a faster means of communication.

Samuel Finley Breese Morse would, with the financial assistance of the United States government, build the first telegraph system between Washington, DC and Baltimore, Maryland in 1844. He would secure his patent for the telegraph in 1847 and be given the rights to privately build telegraph systems throughout America and the world. He co-founded the Morse code language that bears his name and is still the code used today by practitioners of this form of communication.

This kind of investment in the future has been the Hallmark of America.

Radio has benefited from many creative geniuses over the years since its commercial birth in 1920. Programmers, air talent, engineers, managers and visionary stakeholders have all played a role in making radio the second greatest invention of all time (according to the History Channel).

Growth of any enterprise only occurs if there’s a steady stream of new innovation. Innovation occurs when experimental research is conducted without thought for where it may lead. The transistor was invented in 1947, but it didn’t really see a practical application until the first transistor radio was put on sale in November 1954. It was the Regency TR-1.

The transistor radio and car radio would be the salvation of AM radio with the advent of commercial VHF TV in the 1950s. The inventors of the transistor did not envision that their creation would save the radio industry by making it available to a whole new generation who wanted to hear the latest music wherever they went.

Ironically, our government funded virtually every piece of technological development that would make possible the Internet, the iPhone and even Siri. Radio can either be like Google and Apple and take advantage of what’s been created to leverage it for their business or relegate their medium to the era of flip cameras, walkman, dial telephones etc.

Radio today invests a lot of energy in trying to hang on to the past. It’s playing defense instead of offense as it did back when television was born.

To win in the future, you have to invest in it.

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Giving Thanks

1At this moment in time, I would have to say I’m thankful for having the opportunity to fulfill a life-long goal of one day teaching at a college or university. I’m now in my fifth year of teaching broadcasting at the School of Journalism and Broadcasting at Western Kentucky University. I’m grateful for my students that write a note to say how appreciative they are for the effort I put into my classes and how they benefitted from them. And I’m thankful for those students who stay in touch with me after they graduate to let me know how they’re doing in their broadcast careers.

I’m thankful for being able to have the whole family together for Thanksgiving for the first time in five years as each of us have moved to different parts of the country but this year will all return to my hometown of Pittsfield, Massachusetts. It will be our first Thanksgiving that will have three grandchildren celebrating this family holiday spanning four generations.

I’m grateful for my two sons that each have distinguished themselves in their chosen careers and are wonderful fathers.

I’m thankful for my two older brothers that always been there for me through ups and downs, thick and thin.

I’m grateful that a career in radio that I started in the 10th grade in high school would allow me to pay for my college education, graduate school and raise a family. It’s a career that was all I ever wanted to do besides one day pay-it-forward through teaching the next generation of broadcasters.

I’m thankful for all the wonderful people I’ve met on this journey called life, people who were only strangers until we said “hello,” and then became friends for life.

One of my mentors, Zig Ziglar said: “You can get anything in life you want, if you will just help enough other people get what they want.” I’ve tried to live those words every day.

As we approach Thanksgiving Day 2014, remember you may make a living by what you get, but you make a life by what you give.

Today, I’m giving thanks for you.

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It’s Christmas Time – Hammacher Schlemmer’s “Last Minute Gift 2014 Catalog” Arrived

Hammacher Schlemmer (2)Growing up, I always thought I was blessed to have been born in the month of October. Why you ask? Because in September the Sears “Christmas Wish Book” would arrive in the mail and I would carefully comb through its pages to make out my Christmas list for Santa.

Doing this in September was a good way to let the members of my family know of my “needs” since my birthday was right around the corner. Sometimes, I’d get an item or two on my birthday from the Wish Book and I’d update my Santa list.

Well Sears ended its catalogs years ago. That’s the bad news. The good news is that Hammacher Schlemmer still publishes theirs and I’m on their mailing list.

So what’s hot for 2014? How about a high definition camera drone. A gravity defying clock (not like I’m planning a trip into space anytime soon). There’s the instant transmitting paper to iPhone pen. The hands free hair rejuvenator (Hmm, I wonder).

There are a lot of different ways to amplify or clarify people’s hearing. Makes me wonder if the Hammacher Schlemmer customers are all going deaf.

There are lots of things to connect with your iPhone or iPad; even a piece of electronics that will transfer your records or cassettes into the digital format for use on those same devices.

But what really got me excited was that my Hammacher Schlemmer “Last Minute Gift 2014” catalog featured not one, not two, but three different radios.

The first was called “The Best Emergency Radio” and Hammacher Schlemmer says it earned their best rating because it had the longest playback time and clearest reception.

The next radio I came across was the Bose Wave Sound Touch Music System. I have one of these radios by my bed. I love it. Paul Harvey sold it to me over the radio during his page two on his news and commentary broadcasts. (Yes, radio sells stuff!)

The third radio featured was the Longwave Shortwave Radio. You can listen to AM/FM and the world using this beast.

If you count the device that converts your cassette tapes and albums to digital, you actually will find four radios in this 2014 edition of Hammacher Schlemmer’s Christmas catalog.

What you don’t find is an HD Radio. You also don’t find a single TV for sale from Hammacher Schlemmer.

HD radio was introduced the same year that Steve Jobs stood up and introduced the world to the iPod; 2003. In 2014, after four hundred million iPods had been sold, Tim Cook quietly announced the iPod was over with the introduction of the iPhone 6 and 6+.

I tried to find the number of HD Radios that had been sold in that same decade of time and the best number I could come up with was maybe seven million.

Is the HD Radio a solution to a problem the customer never said they were having?

The main application of HD Radio technology by the broadcaster has been to feed an FM translator with programming. Did you know that’s how radio broadcasters first used Edwin Howard Armstrong’s FM radio? Only back in those days, when FM was in the 40 MHz band, broadcasters were trying to avoid paying AT&T their high charges for dedicated phone lines. FM radio was an inexpensive way to get audio from one location to another and re-broadcast it over AM radio. The Yankee Network was built on Armstrong’s FM radio technology.

Hammacher Schlemmer is a catalog made up of cool merchandise. What does that say about the future of HD Radio? Just askin’.

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5 Reasons Radio Works

1Since I got into radio, the thing I’ve probably heard more times than I can count is “radio doesn’t work.” It wasn’t true then and it’s not true now. So why is this question even still around?

Radio stations that program Adult Contemporary, Gospel, Urban, Lite Rock, Classic Rock, Country and Oldies have raised over $250 million over thirty years for St. Jude Children’s Research Hospital. The hospital says their “Radio Cares for St. Jude Kids” is one of the fastest growing radiothon programs. Who wants to be the first person to tell them the sad news “radio doesn’t work?”

In 1986, a budget hotel chain’s ad agency hired a home builder in Homer, Alaska to voice their new radio campaign. Tom Bodett was “discovered” by The Richards Group when a creative director heard Tom on NPR’s “All Things Considered.” Tom Bodett would ad lib “We’ll leave the light on for you” as the closing line. He’s been their radio spokesperson ever since. The Blackstone Group paid $1.9 billion for the chain in 2012. Who wants to be the first person to tell them the sad news “radio doesn’t work?”

A single store jeweler in Springfield, Missouri became a major jewelry retailer. It was the advertising strategy and creative copy of Roy H. Williams, aka The Wizard of Ads that would see his agency’s first client double and then triple in sales volume each year. Roy used radio to build the customer base of Woody Justice’s jewelry store. At the time Roy began working with Justice Jewelers, the gross sales volume of the average jewelry store in America was less than $650,000. I lost track after Woody crossed $11 million in sales. Who wants to be the first person to tell Woody the sad news “radio doesn’t work?”

It’s the fact that radio does work that SiriusXM radio was born. It’s the fact that radio does work that we now see every Internet pureplay call their stream radio. Pandora Radio, Spotify Radio, Rdio, Radio Tunes, iTunes Radio, TuneIn Radio etc.

There are more FCC licensed broadcast radio stations on the air today than at any time since the birth of commercial radio in October 1920 with the sign-on of KDKA in Pittsburgh, Pennsylvania. Even more amazing is that radio still reaches over 92% of persons 12-years of age and older every week in America.

Radio works just fine. The difference between using radio to get results and not, depends on the person who creates the message. The skilled writer who knows how to write persuasively and talk to the heart of the listener is worth their weight in gold.

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Is an FCC Commercial Broadcast License Still a License to Print Money?

1AM radio stations once were considered a license to print money. Then in 1952, the TV era began and having a VHF television license was an even bigger license to print money. So is having an FCC commercial broadcast license still a “license to print money?”

SPOILER ALERT: The answer is no.

The reason is, as Warren Buffett might put it, having an FCC commercial broadcast license was like having a moat around a castle. It protected others from easy entry into the broadcasting business. The problem just about every business today is having is that those “moats” also known as barriers to entry are being filled in by new technology that didn’t exist back when the business was born.

To publish a book, a magazine or a newspaper once meant you needed a printing press. To broadcast to the public you needed an FCC license for either radio or TV. Today, you can “publish or broadcast” to the world without anything more than your Smartphone.

The owning of an FCC commercial broadcast license was once a long-term competitive advantage, but we live in a time of a communications revolution; not an evolution. Those days of bringing 30, 40, 50 or more percent of the revenues to the bottom line are gone. It’s not just the media world that’s facing this creative destruction. Many traditional industries are also dealing with massive disruption to their business models.

The irony may just be that those “moats” that once were the greatest asset of a company may now be the greatest liability. So what’s the answer? I think it starts with defining radio’s mission in today’s world. What does winning in radio today look like? It’s not a great Nielsen Audio rating when all ratings are so compressed. It’s not being the tallest midget in the streaming world either. And it needs to be about more than just about the bottom line. Companies that make their mission something of real substance often are the ones that also deliver “insanely great” bottom lines.

Radio leaders need to clearly state how they will measure “winning” and then focus everyone in the company to achieve that goal. It also means not trying to do it all, some things will have to go. This is a critical point as many “leaders” shy away from a selecting a singular strategy preferring to throw everything at the ceiling and hope something sticks.

Radio, no matter how it is delivered, can still build strong and enduring relationships with its audience, like the relationship that William “Luther” Masingill built with his radio listeners in Chattanooga, Tennessee.

Luther, as everybody knew him, for 74 years signed on at 6am sharp on the same radio station. He was America’s longest running broadcaster and was on the air both during Pearl Harbor and the attacks of 9/11. Luther broadcast over the same station, with the same call letters, in the same time slot and delivered the same audience ratings success for decades. His philanthropy, both public and private, could fill an encyclopedia sized work. The people of Chattanooga knew how to get a hold of Luther even when he was not on-the-air because his name and phone number were listed in the phone book. I was at his induction ceremony this past summer as Luther was inducted into the Tennessee Journalism Hall of Fame, but Luther was not. The managers from his station, who accepted the award on Luther’s behalf, said that Luther couldn’t be there because he reported for work at 6am that morning as he always does. Luther never even took a sick day from 1940 until 2001. Sadly, Luther passed away on October 20, 2014 at 6am sharp at the age of 92. Luther is the best example of radio’s long-term competitive advantage; it’s “moat.”

The people who work inside our radio stations are what can make all the difference to the future of the radio industry. The students at college radio stations and in broadcast programs, if given the chance to perform with a clear mission of what “winning” looks like, will create the radio of the future.

Radio needs leaders who put the people inside the radio station first. Leaders that inspire and empower their people and that clear away obstacles to making that mission a reality. If radio leaders take care of the people who take care of the listeners and the advertisers, they will insure not only their success, but the success of the radio industry.

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Radio’s Fear of Failure

1Reggie Jackson once said “The only way I’m going to get a Gold Glove is with a can of spray paint.” Reggie, a Hall of Famer, is also the strikeout king. Reggie struck out (failed) at bat 2,597 times.

Steve Jobs, while revered for his successes, was also not short on failures. The Apple integrated business model, combining software and hardware, was not the success that Microsoft enjoyed with a modular approach. NeXT wasn’t “next” either.

Think about your own life. When did you really learn the most? When you were successful or when you failed? I think you will agree with me that failure is a great teacher.

No matter how carefully we plan and execute our business plan, the nature of business is constant change. Business models come and business models go.

Radio went through this once before when TV was taking off in the 1950s. Radio saw its content leave for TV. Jack Benny, Milton Berle, Bob Hope, Bing Crosby, among so many more, all left radio for television. The prediction at that time was that radio would be dead in a couple of years. And there was good reason to think like that, because those very talented individuals were all the stars of Vaudeville. When they moved to radio, Vaudeville did indeed pass into the land of memories.

However, radio had people like Todd Storz and Gordon McLendon; innovators. Where once network radio ruled, the independent owned and operated radio stations would begin to break new ground. Top40 and talk radio among so many other innovations would come into existence. They would capture the imagination of a new generation of listeners. One of those they would inspire to dream of a radio career was me.

After over 42 years in commercial radio, today I teach a new generation about broadcasting. My goal is to light a flame of innovation in their minds to create the future of radio when they graduate. I believe they can do it too. What gives me pause is if they will be given the chance.

Today’s big radio operators are so busy minding their debt, they are afraid to innovate. I’m not just talking about the content that radio programs, but the business model that has allowed radio to support itself and the Internet technology that it uses as if it were just another transmitter to broadcast on.

This is not the radio world that attracted me back in the 60s and I’m not for a moment suggesting that we return to those days. The plate spinner of Vaudeville was good entertainment for its time, but it would not hold the attention of today’s audience.

My concern is radio got stuck in a time warp and it can’t get out.

People, like Steve Jobs, that drive great companies have the ability to never stop innovating and adapting their ideas until the world wakes up and sees them as being visionary.   They also aren’t afraid of competing against themselves. The iPhone and iPad did away with the need for an iPod. But that didn’t stop Apple from building and sell both of them. (The iPod quietly was sun-set with the introduction of the iPhone 6 and 6+, but only after four hundred million had been sold.)

Radio needs its new generation of dreamers to be sure. I just hope that they are given the chance to fail until they one day are called “radio’s visionaries.”

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