Tag Archives: Clear Channel

Ho, Ho, Ho…Go, Go, Go

Job CutsSadly, it’s that time of the year when radio station budgets are being finalized and staffs are being cut before the start of a new year.

Hubbard Radio’s Chicago VP/GM Jeff England recently told the trades, “As technology evolves, we have to look for ways to use it to our advantage. The difficult decision to reduce staff is an effort to remain competitive in a very challenging environment.”

General Motors

The large radio companies are faced with the same challenges that America’s large car companies are faced with, a rapidly changing marketplace.

GM’s CEO, Mary Bara, announced that General Motors would be shuttering seven plants around the globe to focus on increasing production of new electric vehicles. More than 14,000 GM workers will be out of a job as the company laid them off without any warning.

An outraged GM worker told the press, “You’re going right into Christmas. You’re looking for a celebration and that’s not there now.”

Sadly, I’ve known lots of radio people who can identify with how the workers at closing GM plants feel. I am one of them, as Clear Channel showed me the door without warning, just before Christmas 2009.

What makes these plant closings so impactful to their communities is not just the GM workers out-of-work, but the additional downsizing in the support businesses in those communities and elsewhere. As many as seven more people, for every GM worker, could see their jobs eliminated at businesses such as food services, retailers, healthcare, etc. All the businesses that broadcasting depends on for advertising.

Focused on the Future

Mary Bara, in a statement, said of GM’s decision to close some of its plants, “The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future. We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”

Is this any different than what any other industry, including broadcasting, needs to be doing?

Top Tech Trends for 2019

I just sat in on a Juniper Research webinar about the “Top 10 Tech Trends for 2019” and it was mind numbing in many ways.

I try to stay up on the latest trends, but I must admit I needed a second browser window open during their presentation to understand what the heck they were talking about. They were using terms like chatbots, loot boxes, RPAs, RCSs, etc.; like these were common everyday terms.

Here’s what I learned about tech’s future as it may impact radio and broadcasting:

  • Digital, blockchain, robots, voice assistants, 5G wireless and artificial intelligence (AI) are where everything is headed.

Intel is working with China’s Alibaba (an internet service that connects buyers with sellers) to develop artificial intelligence to enhance EDGE computing power in the internet of things. China is a huge market for American companies. In the case of General Motors, they didn’t build car assembly plants in China to ship those vehicles to America, they built them to sell vehicles in China. In the first nine months of 2018, GM sold 2.7 million cars in China compared to 2.6 million cars in all of North America.

Amazon’s digital voice assistant, Alexa, will be deployed in more devices. Currently voice assistants are in 9% of the households worldwide according to Juniper Research. That percentage is even higher in developed markets and VA’s will become a service-led market going forward.

5G wireless will enable RCS (Rich Communication Services) that will compete with services like Facebook messaging and is expected to bring people back to messaging directly via their smartphones, due to a more vibrant, media-rich platform. RCS is the successor to SMS text messaging that we now use.

Digital Advertising in 2020

Salesforce Research in their latest insights into the new era of advertising and media buying report says that:

“Consumers and business buyers receive more messages, through more

channels, then ever before. Cutting through the noise requires advertisers

to deliver hyperpersonalized messages that resonate at the individual

level. Now, advertising is undergoing a transformation — the biggest

revolution since the launch of digital ads in the 1990s — driven by data.

 

To effectively reach audiences and interact with them in a smarter, 1-to-1

manner, advertisers must connect and make sense of a myriad of data

sources. Of course, achieving this requires a shift in dynamics; advertising

and marketing can’t live in vacuums. Technology can’t be an afterthought.

The winners in this new era will coalesce the right teams and technologies

to harness data, more precisely track their efforts, and measure progress

to evolve their strategies at the pace of the consumer.

 

Dominant channels — and thus budgets — are shifting, too. Increasingly,

advertisers will rely on major platforms under the Google and Facebook

umbrellas to deliver their messages. And success isn’t measured only by clicks and impressions, but also lifetime customer value.”

Salesforce says that advertising and marketing are converging, and that the same team now performs both functions and shares the same budget. Companies now are over the tipping point (57%-59%) internalizing their ad spend decisions for Facebook/Instagram and Google search. 94% of companies now use Customer Relationship Marketing (CRM) data to target their advertising. The main benefactors of this change are Facebook and Google, with an estimated 66% of digital ad spend going to just these two.

Click HERE to get your copy of the full report from Salesforce.

Strategy, Tactics and Radio’s WHY

I asked the question in the fall of this year, “What’s Radio’s Why?” I asked that question because it often appears that radio is employing lots of tactics without first having a grand plan; a strategy.

GM and Ford both see a future where SUVs, trucks and electric vehicles will be their primary focus. Ford plans to eliminate all but two of its car lines and GM announced that it would be terminating many of its car models too. Both of these car companies have a future strategy, and I would contest, have found their “why.”

In order to have a profitable strategy for radio, the industry must first answer what its WHY is,  and that it fits into the needs, wants and desires of a 21st Century listening audience.

 

 

 

 

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“Corporate FM”

corporate fmKansas City Filmmaker Kevin McKinney originally released his movie “Corporate FM” in 2012, but unless you lived near a community that was screening the film or attended a film festival where it was being shown, you probably never saw it. Or even heard of it.

Amazon Prime

After re-editing the film in 2015 to reflect updates and changes in commercial radio since 2012, McKinney decided it was time to let more people access the information he covered in the film and just released it on Amazon Prime. (Here’s the LINK ) “Corporate FM” explores the consolidation of radio after the Telcom Act of 1996 and how big corporations with the help of Wall Street and private equity firms swallowed up the radio industry in America.

February 1996

I remember the day that President Bill Clinton signed the Telcom Act of 1996 into law. Clinton signs Telcom Act of 1996It was supposed to provide competition between the phone companies and the cable companies with the goal to increase services and reduce prices to the consumer.

Inserted into the bill at the 11th hour were two paragraphs that would change the radio industry forever.

In the film, Robert McChesney, Professor of Communication Studies, University of Illinois points out that commercial media lobbyists, without a single public hearing or any public debate, would insert these paragraphs and open up the consolidation floodgates for radio/TV. Politicians would later say they didn’t know what they were voting for. Even President Clinton would say that he didn’t know that those two paragraphs had been added before he signed the bill into law.

Cumulus and Clear Channel

As the McKinney film told the story of the rise of Cumulus and Clear Channel, it reminded me of my time with both of those companies.

In Waterloo, Iowa I was running the #1, #2 and #3 radio stations. When Cumulus took them over, John Dickey showed up at the stations and proceeded to tell all of us gathered in the station’s conference room what our new logos would look like, what our new jingle packages would sound like, who our new station voice guys would be, how our playlist would be compiled, who are new consultants were etc. To say we were all stunned would be an understatement.

Then later when I was working for Clear Channel (after the Bain/Lee takeover, but before it became iHeartMedia) in Sussex, New Jersey, we received a survey from corporate asking us how local decisions were made about branding, marketing, promotions, music and the like. I assume a similar survey was sent to every market cluster inside Clear Channel.

When the results were tabulated at HQ, we then received directives that no longer would those types of decisions be made on the local level. Local radio had changed.

Local Bands

Growing up, local radio was a way for local bands to get exposure and grow their audience. “Corporate FM” tells the story of how Jewel became a national artist being discovered by local radio and played on-the-air in San Diego.

In fact, it was seeing a drop in attendance at live shows that got McKinney to wondering what was happening, and giving birth to his movie about the consolidation/corporatization of the radio industry.

I know a local band here in Winchester, Virginia “Sons of Liberty.” They play all over the Shenandoah Valley and beyond. They have a CD that Rob McKenzie of Fireworks Magazine spoke glowingly about. Where you won’t hear the “Sons of Liberty” music is on the radio.

Oh, they’ve been heard on an FM radio station (98 Rock) out of Harrisonburg, Virginia on their Sunday night “Wet Paint” show that starts at 11pm. But as “Corporate FM” points out it takes repetition to have an audience become familiar with anything, and for someone to decide they like it, or don’t. Radio used to provide that type of exposure and then monitor audience reaction to see if the record was a hit or a miss. (Remember features like “Champ & Challenger?”)

Sneak Preview

ABC Radio Networks used to air a feature hosted by WABC’s Chuck Leonard called “Sneak Preview.” The network would call affiliates of the ABC Contemporary Radio Network to get their hottest new song and then play it to a nationwide audience. I remember being at WBEC in Pittsfield, Massachusetts when we told Chuck that our hottest new song was “Tracy by The Cufflinks.” He told us he had a terrible time trying to find a copy of the song in New York City.  But Chuck Leonard did find it and it played over the ABC network to a national audience. That was how radio made the hits.

Fifty to Six

“Corporate FM” tells how in the 80s ninety percent of mass media in America was owned and controlled by about fifty different companies, but after the Telcom Act of 1996 it was down to just six corporations.

“Most radio studios are completely empty after 7pm and for the entire weekend.

They set the phone lines to “busy” so callers will believe that someone is there.”

-Slide shown in film

Big N Rich

The popular country recording artists “Big N Rich” addressed the FCC in Memphis, Tennessee. They told the commissioners that one person in a corporate office today can dictate what 35, 55, or 100 stations play.

“Let’s say an artist puts out a song with a political viewpoint and that corporate person says I don’t believe in that position so we’re not going to play that record (Dixie Chicks?). One guy can affect what 30 million people get to hear.

That’s censorship.”

-John Rich

Fatherly Advice

Dick Fatherly says “the broadcasters have become the victims, and the winners are – who do you think? -Goldman Sachs.”

Josh Kosman, who wrote the book “The Buyout of America” put it this way: “Private equity took the radio business that was doing pretty well and gutted it.”

Josh has studied how private equity has impacted all industries in America. He used a simple example to explain the difference between you or I buying a house and a private equity firm buying a business doing a leverage buyout (LBO).

When we buy a house, we put down say 30% as a down payment and then take out a mortgage for the 70% balance.

When private equity buys a radio station, they make a small down payment and then the radio station they’re buying takes on the debt for the balance, leaving the radio station with crushing new debt.

The private equity companies then charge management and other fees, making back their down payment money, and a whole lot more. So, it’s zero risk to them.

It reminds me of the guys on the Atlantic City Boardwalk who used to entice you to let them guess your weight and if they got it wrong you won a prize. The only way those guys lost is if you didn’t pay them to guess your weight. For if they got your weight right, they gave you nothing and if they got your weight wrong, they gave you a prize that was valued less than what you paid them to play the game.

“Financial deals allow the corporate owners to keep their stations after bankruptcy.

This prevents local owners from reviving local radio.”

-Slide shown in the film

For those who hold out hope that if/when the big corporate entities fail, and it will return radio to local operators once more, that slide should send a chill down your spine.

America’s bankruptcy laws now favor the debtor in the corporate world.

Conclusion

This is probably a film that many will miss and that’s unfortunate. It’s only a little over an hour in length. It’s well worth your time.

For this is a film not just about what happened to the radio industry but what is happening to our way of life, in industry after industry. This modus operandi is being repeated today.

The people in the film offer their ideas for making radio great again.

I won’t spoil that for you, so you’ll have to watch the film.

Some of the statements made by various participants have since been proven wrong from the time the film was shot. Some of the statements are also inaccurate in terms of how today’s FCC license renewals can be challenged.

In all fairness, many people are still believing that the way it was, is the way it still is. Only it isn’t. Those laws have been changed by corporate lobbyists too.

I hope you will watch the film “Corporate FM” and then post your comments here on DickTaylorBlog dot com.

Note: Don’t have Amazon Prime, you can rent this movie for $2.99

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Get Out of Your Comfort Zone

WFPG Transmitter SiteFor thirteen years I was the general manager of WFPG AM/FM in Atlantic City, New Jersey. The stations were successful. I was active in Rotary, the local chambers of commerce, community social programs in addition to running the radio stations.

We did the state’s first LMA (Local Marketing Agreement) adding a third radio station to our operation.

We had a print division that did zoned coupon mailers and produced an annual calendar for local advertisers.

I was in the zone, my comfort zone.

Success Is a Poor Teacher

When new ownership took over the radio stations in my 13th year of managing them, one of the owners was to be the “managing partner.” He didn’t have the equity stake to invest, so his contribution was to move to Atlantic City and manage the stations for the group. That meant that everyone in the radio stations were needed but me.

As I set out to find a new radio general manager position, I would be faced with something new that the broadcasting industry had never had to deal with before, consolidation. Consolidation was like a game of musical chairs, only in this game when the music stopped, you were out-of-a-job.

I thought that my long period of success would be a plus in finding my next position but kept hearing “you’ve been at the same place for over a decade?” I would soon learn that this wasn’t perceived as a positive.

My Road Trip

Eventually, I would land my next GM position and move to a new state. That would lead to a series of moves every two to three years after that as consolidation kept changing the landscape of the radio industry as we knew it.

Delaware, Maryland, Iowa, Pennsylvania and back to New Jersey a couple of more times would be my life over the next decade.

While I never would have chosen this path, what I would realize was that I learned more over this period of time than being in the same place for the previous decade. That being successful and in your comfort zone is a poor teacher.

College Professor

Seven years ago, I made a career change. I went from market manager of a cluster of radio stations for Clear Channel to broadcast professor at Western Kentucky University. I was moving out of my comfort zone BIG TIME.

That first year was a lot of heavy lifting as I created every course, every lesson, every test for each of my classes.

Eventually, I grew to a new comfort zone at the university. I was on university senate and several committees. I graduated from the university’s master advising certification program and advised around 100 students each semester. I graduated from the university’s police academy and my office was a campus “safe space” for students, faculty and staff. And I was active in state broadcast associations along with founding and directing a radio talent institute on campus.

Why Comfort Zones Are Bad for You

Staying in a comfort zone feels peaceful and relaxing. Comfort zones are not challenging. They become limiting and confining. They can produce a sense of boredom.

I know I certainly had that feeling of “Is That All There Is?” during my long tenure in Atlantic City.

Change is the only constant you can depend on in the world. Nothing stays the same. If you’re not growing then you’ve “gone to seed.”

WWJD

What Would Jobs Do?

My fiancé shared with me the last words of Steve Jobs and it’s illuminating.

Jobs said that in the eyes of others his life had been the symbol of success. However, Jobs found that apart from his work, his life held little joy.

Steve had stayed in his comfort zone.

Once you’ve accumulated enough money for the rest of your life, you need to change your focus to pursuing objectives that are not related to wealth.

It is why I started this media mentorship blog in January 2015.

Happy New Year 2018

The new year is traditionally a time when we all look in the mirror of our lives and contemplate where we want to go next.

If you want to grow in 2018, decide to get out of your comfort zone.

Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.”

– –Steve Jobs

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Is Your Iceberg Melting?

94This past week was another tough one for the wonderful people who work in radio. Most people who get into radio do it because they’ve caught the “radio bug” and the work becomes their life’s passion. I know that’s how it is for me.

When I caught the “Radio Bug”

From my earliest years, I knew what I wanted my life’s work to be. I built a radio station in my parent’s basement and broadcast to the neighborhood (about a 3-block radius) on both the AM and FM bands using transmitters I bought from Radio Shack.

When I started high school, I earned my 3rd Class Radio/Telephone Operator’s License, Broadcast Endorsed from the Federal Communications Commission in Boston. I wasn’t old enough to work, so I had to get a Massachusetts Work Permit. They didn’t have a category for disc jockey, so they branded me as “talent.” (I never told them I had to take meter readings every half hour in front of a transmitter that put out 1,000-watts of electromagnetic power. If I had, they would never have given me my work permit.)

College Radio

In college, it was radio that paid for my bachelors and masters degrees. I took my college’s carrier current radio station, got an FM broadcast license and was the first general manager.

Radio was in my blood.

RIF’s

After the Telcom Act of 1996, radio began its road down the consolidation path funded by Wall Street. It was during this period of time a new acronym would come into radio’s every day lexicon, RIF’s, or Reduction In Force. In other words, people were being terminated in huge numbers.

This past week, I sadly read about another round of RIF’s taking place among our country’s biggest owners/operators of radio stations. It breaks my heart.

RIF’s from the Manager’s Perspective

We all feel sorry for those that have unexpectedly lost their job. What we often don’t read about is the perspective from the other side of the desk, what the management is going through when these decisions are made at corporate.

I lived through it in 2009 as a Clear Channel Market Manager.

It’s NOT FUN.

With each corporate meeting, I would come home with a flash drive that could not be opened until a specific date/time with who I would have to RIF next.

I RIF’d my entire news and promotions departments.

I RIF’d DJ’s and PD’s.

I RIF’d my national sales manager, my director of sales and local sales managers. With each round of RIF’s I got more hats to wear. The work still needed to be done, it didn’t go away with each round of RIF’s.

I hated my job.

Then my regional manager showed up unannounced and RIF’d me.

His manager showed up after he had RIF’d all of his designated market managers and RIF’d him.

The company president RIF’d the senior regional managers.

Then the CEO RIF’d the president.

It was not a happy time, but believe it or not, being RIF’d to me was better than being one of those that found themselves with more and more hats to wear, with more and more responsibility, without a penny more in pay.

There were many folks who told me to find another line of work, but they didn’t know that broadcasting was the only thing I ever wanted to do.

Except for one other thing, teaching and mentoring the next generation.

My education was in teaching. Both my bachelors and masters degrees were in teaching.  My best teachers were those who worked in the field first and then came into the classroom to teach.

Paying It Forward

My long term goal was always to one day teach at a college or university the very things I had done all of my professional life.

My big opportunity presented itself at Western Kentucky University’s School of Journalism & Broadcasting in 2010.

When I was RIF’d by my regional manager, I had met or exceeded every goal I had been given and was paid bonuses for my accomplishments. I was even named one of radio’s Best Managers by RADIO INK magazine. The issue of the magazine with me in it came out almost the day after I was RIF’d. Funny how life is: good things happening at the same moment as bad.

One Door Closed, Another Door Opened

When my last management job came to an abrupt end with Clear Channel, my broadcast professorship door opened at WKU.

Let me tell you, going from being a radio market manager to broadcast professor is a steep learning curve. But with the help of Charles H. Warner at NYU, John Parikhal of Joint Communications and others, I successfully made the transition and became successful at teaching. In fact, my new broadcasting educational work branch opened my eyes to all kinds of new and exciting learning opportunities.

I started this BLOG and a column for RADIO WORLD magazine during this time.

Those have lead to numerous invitations to appear on podcasts, Vlogs, articles, and broadcast interviews with others sharing stories of my work and experiences.

I’ve done research on the radio industry and their employment needs in the 21st Century. I’ve presented panels every year at the national conference in Las Vegas as well as been an invited broadcast expert on many panels at both BEA and NAB.

I’ve presented seminars at state broadcast associations and done training sessions for broadcast companies.

In short, I’ve been more active in broadcasting on so many levels than I ever was as a radio manager.  And I’ve loved every minute of it.

But I’m not going to candy coat what’s happening, not only in radio but in all ad supported media. It’s a revolution.  Not an evolution.

In revolutions the first thing that happens is destruction of the old. We’re still living through that period right now and it’s not fun. I get it.

Our Iceberg Is Melting

Back in 2008, many people picked up a copy of Ken Blanchard’s book “Who Moved My Cheese?”  I know I did. It’s a great read.

But maybe the book everyone in broadcasting should be reading today is “Our Iceberg Is Melting” by John Kotter. Kotter is an award winning author from the Harvard Business School.

Like Blanchard and Johnson’s Cheese book, Kotter writes a simple fable about doing well in an ever-changing world.

The fable is about penguins in Antarctica that discover a potentially devastating problem to their home – an iceberg – and it’s melting away.

It’s a story that will resonate with anyone in broadcasting today.

Read about how the penguins handle their challenge a great deal better than many broadcasters are doing today. Kotter’s book walks you through the eight steps needed to produce positive change in any group.  You will not only enjoy the read, but will be guided with valuable insights to deal with our 21st Century world that is moving faster and faster every day.

The Big Take Away

When corporate, middle management and all employees are on the same page with regards to change, it is amazing what can happen, despite adverse conditions.

These are lessons for people who already are in broadcasting, for broadcast students, enlightened colleges are already teaching the concepts, skills and providing the tools that will be needed going forward. My students know that the future is not bleak. They understand the history of broadcasting that brought us to where things are today and they are as pumped as you and I were when we were their age to craft the future of broadcasting in the new century.

I’m excited.

They’re excited.

The best is yet to be.

 

 

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Relevancy

82I am a trombone player. Or maybe I should say “was” as it’s been quite a few years since I picked up the horn. Growing up, I knew that was the instrument I wanted to play. Out of all the instruments in the band, trombone was the one that caught my attention and was relevant to me.

76 Trombones

Meredith Wilson’s Broadway smash “The Music Man” is one of my all time favorite musicals. Can you guess why?

In that production, Robert Preston knows to be successful in selling band instruments “you gotta know the territory.” In fact, all of the carpetbaggers knew this. In “The Music Man” the song “Rock Island Line” establishes the rules of selling on the road. In other words, you had to know how to make what you were selling relevant.

And then I heard someone say RADIO

Alan Mason is a programmer that I’ve known for years. I subscribe to his weekly “Mason Minutes” and was thrilled to see Alan promoted to President of K-Love and Air1 as this New Year began. Alan actually assumed his presidency before Trump did.

Alan’s minute recently told the story of celebrating his birthday in a crowded restaurant. You know the scene, you hear lots of conversations but you’re not really paying attention. When Alan said he heard someone say “RADIO” and he heard that clearly.

“It’s funny how our minds are attuned to filter out almost everything except what’s relevant to us. We can be in a crowded ballroom buzzing with people and still hear our own name. It gets our attention and pulls us in,” Alan wrote.

Frost Advisory

I also subscribe to John Frost’s weekly “Frost Advisory” and John must have been as taken by what Alan wrote as I because he made it the subject of his programming memo this past week. John wrote about his friend Eddie who needed to get a passport photo. He went online and found a place all the way across town. It wasn’t until he was on his way home he noticed a camera store near where he lived that took passport photos. He never noticed, because getting a passport photo had no relevance to Eddie, until it did.

Radio Ads

And that’s the way it is with radio ads. The listener never hears them until something that’s relevant to them speaks to them.

Sadly, radio programmers no longer have a say in what commercials air on their radio stations.

I was a general manager before becoming a broadcast professor and even I had lost control of what ads would be placed on my radio stations by (at that time) Google.

Google did a deal with Clear Channel and would insert ads they had sold on all of the stations in my cluster between 2am and 3am in the morning. I wouldn’t even know what they had sold until I heard it on-the-air driving into the station.

I heard ads for restaurants advertising their lunch special for that day and the restaurant was over three hours away from my coverage area. I heard ads out-of-phase air on my AM station in the cluster that were 30-seconds of dead-air. (Out of phase ads means the left and right channels of audio cancel each other out on an AM mono signal.)

Bonneville Beautiful Music

When I moved to Atlantic City, New Jersey in 1984, WFPG-FM was a Bonneville Beautiful Music station. Bonneville had strict guidelines about what content could be added to their music presentation and that included commercials.

Atlantic City’s biggest car dealer did the loudest screaming radio ads you’ve ever heard. We dearly wanted their business but not those screaming ads.

It took lots of meetings but we finally convinced the owner not to “wear a t-shirt to our black tie” radio station over-the-air presentation. We would be the only radio station in Atlantic City to have specially created ads that would perfectly fit the musical content of our format.

I don’t hear that happening on any radio station today.

Relevancy

Today, money talks and nobody walks.

Radio stations appear to take every ad that comes through the door.

When you consider the volume of ads airing on stations these days, one or two ads in that cluster than aren’t relevant might lose the listener’s ear or worse, cause the station to be changed.

WAVV in Naples, Florida is a station that marches to a different drummer. It plays music the owner enjoys and the sound is so unique it can’t be heard anywhere else. It’s why the station doesn’t stream. You have to listen to it over-the-air on your FM radio. But what makes WAVV golden in my book is that the commercial breaks are just as carefully watched over as the music. The ads are about things that listeners attracted by the music will also enjoy. Be it theater, dining, travel, clothing etc.; it’s all relevant.

John Frost ends his article by writing “We throw a bunch of stuff at the wall without using the precise filter of relevance. Start with the listener and work back. What does she care about RIGHT NOW?”

Unless the program director is given the authority to approve every element that goes on the air and insure that each goes through the relevancy test, your product is compromised.

Is what I wrote relevant to your radio station?

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Tall Towers in Big Fields

55I worked for Clear Channel for five years. As best as I remember, not a meeting went by that John Hogan wouldn’t say “we’re not about tall towers in big fields anymore.” And as I watch radio companies all across America selling off their radio towers, I think that day has come to fruition.

Introducing the iPhone7

This week on September 7, 2016 the iPhone7 came out and the big news was that it eliminated the headphone jack. The radio industry was in shock. How would NextRadio be heard without the wire that connected the ear buds to the phone since that wire acts as the antenna to receive FM radio through a smartphone with the FM chip activated. Except Apple never activated the FM chip inside any iPhone.

PPM & the iPhone7

Then only two days later, Randy Kabrich published a concern that may be even more important to the radio industry, and that was, how would PPM* work with the new iPhone7? Randy posted this picture with his article iphone7-with-ppm and you really should read all that Randy has to say on the subject with his article on Tom Taylor’s NOW here.

Change is the Only Constant

Jim Carnegie, who founded Radio Business Reports, used to continuously preach to the radio industry you can’t hold back change. If you are to survive you must embrace change.

In the case of wireless headphones, the tipping point has been reached. More wireless headphones are now sold than wired ones. So I don’t think Apple was going out on a limb by eliminating a 19th century technology. I also fully suspect that AirPods will soon become the new “IN” thing.

What Should Radio Be Focused On?

MediaLife Magazine published a really interesting article on the seven important trends that radio should be focused on. You can read the article here. I will give you the “Reader’s Digest” version with some of my own thoughts.

The Future of Big Radio

Radio is best when it’s LIVE & LOCAL. The consolidation of radio has not been the successful business model that investors on Wall Street bought into. Of course the concept of “increasing shareholder value” and radio’s operating in the public interest, convenience and necessity were at odds with one another from day one. I would agree with MediaLife that radio’s future will be via locally managed radio operators.

The Future of Local Radio

Johnny Carson used to say: “If you buy the premise you buy the bit.” In this case if you believe in the demise of big radio, then you will also believe in the rise of local radio. I know right here in Kentucky many locally owned and operated radio stations that are fully engaged in every aspect of the lives of their listeners and they are thriving.

Radio Goes Digital

With radio company after radio company selling off their radio towers, the writing appears to be on the wall that all radio will be delivered digitally and via the internet. Gone will be towers and transmitters and FCC regulations, fees and fines.

Convergence of Media

I remember writing a paper on media convergence when I was in college. That was long before the concept of a world wide web. With the internet all media becomes identical. What difference is there between a newspaper, a radio station or a television station when each of them can do the same thing? What will separate them is the quality of their content.

NAB, NAA and IAB et al.

The coming convergence will really play havoc with media associations. When what once were separate and distinction constituencies will now also converge into a media association.

I remember being in Washington, DC when Senator Gordon Smith came on board at the NAB President. I shook his hand and asked him about the NAB inviting the satellite radio and internet radio operators into our big tent. I said better to have them with us than against us. He nodded and said that was certainly something to think about. (I think he may have just been being kind.)

Radio’s Opportunity

The History Channel did a program on the “100 Greatest Inventions” and number two on the list was RADIO. Number one was the smartphone. The smartphone really replaces many of our other devices. My digital camera lays somewhere gathering dust as my iPhone has been my digital camera since I got it. CD player, iPod etc, have been all replaced by my iPhone for playing my own music collection. My iPhone is my radio and TV too. Newspapers, magazines, books, are also easily accessible on my iPhone. I know I’m not alone in finding that their smartphone has become a very important part of their life. My iPhone is the model 4S. It’s ancient in the eyes of my students. That’s why the new iPhone7 with the 256GB storage, stereo sound, wireless AirPods, water resistant and all the rest has me thinking it’s time to upgrade.

For me, the big change is the size of the phone. I like the size of my 4S. It was just a bit smaller than the Blackberry Pearl it replaced, but the technology leap it offered over the Blackberry was incredible. I’m sure that the size thing is only in my perception and once I advance to the larger screen I will wonder how I lived without it.

No One Goes Backward

History shows that once people adopt something new, they never go back to the way it used to be. We may wax romantically about the good old days, but if we had to trade another time in history for life without our smartphones and wireless internet, I seriously doubt we could make the trade.

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*PPM is a Nielsen’s Personal People Meter. It’s a device used to measure radio listening in the top 50 radio markets in the USA.

Note: Randy Kabrich blogs here: http://blog.kabrich.com/

 

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Day of Reckoning

20There’s an old saying “Nothing lasts forever.” Do you remember flying on TWA or Pam Am? How about shopping at Woolworths? Broadcasters will remember names like Group W Westinghouse Broadcasting, or Taft Broadcasting, or Nationwide, or RKO General that would put the successful Bill Drake Top 40 format (with the non-stop innovations & promotions of 93-KHJ’s Ron Jacobs) in major cities across North America. They’re all now a memory.

In a time of limited radio signals, radio could control its inventory and increase stakeholder ROI by raising rates as it increased the size of its audience. That’s now a memory.

Next came the Local Marketing Agreement (LMA) to soak up all those Docket 80-90 FM signals that were squeezed into the FM band but found themselves economically challenged. More signals meant a new way to make more money. That’s now a memory.

LMAs were “training pants” for the Telcom Act of 1996 that would unleash a consolidation of radio and television ownership like the world had never seen. Companies would rush to acquire as many radio signals as they could as fast as they could. And do what with them? They would figure that out later was the common response. Owning more stations was a way to make more money, until it wasn’t. That’s now a memory.

You might have thought that would have sent a message that there are limits. It didn’t.

Today the game is translators. And the number of radio signals continues to grow, all seeking funding through advertising, just like every other form of media out there today.

So is the ad pie growing? Not according to Adam Levy at Motley Fool who saw advertising drop nearly 4 percent in the second quarter of 2015.

When the advertising pie isn’t getting bigger, two things usually happen: 1) budgets get cut and people lose their jobs and 2) more spots are added to the hour. Unfortunately, all through consolidation and the Great Recession radio companies have been doing both. They are like the Federal Reserve wondering what you do when you already have cut the interest rate to zero to stimulate the economy. Not a fun place to be.

Suggested Solutions

 Not to be all doom and gloom on you, I think there are some things that can be done to turn things around. The first thing is to focus on something and own it. Steve Jobs would put it this way “Just get rid of the crappy stuff and focus on the good stuff.” The way Jobs took Apple from near extinction to the world’s most valuable company was by his relentless focus on creating a small number of simple and elegant products.

Seth Godin calls it finding and serving your tribe. Radio needs to give up the quest to be all things to all people and learn to be something some people can’t live without.

Some stations can be the national brand in town, but everyone can’t. Likewise if people can get what you do someplace else, then why do they need you? This is the secret of “less is more.”

Radio stations need to have the agility to make decisions on the front line. Top down management is out, front line management is in. Mary Berner, the new CEO of Cumulus gets it. She has been reported in the trades saying “Cumulus will rely less on top-down management and more on letting managers do the job they were hired for.”  She also understands that while IoT (Internet of Things) is the future, it’s not the place Cumulus needs to focus on today. It’s about changing the culture and the way the company operates first. Getting the programming right and improving sales of those radio programs next.

I remember when I starting working for Clear Channel and hired to turn things around in my market, the company had a big push on selling the web and developing that component. I told my sales manager after the conference call ended that was not going to be the case for us. First we needed to get the programming and radio sales on fire and then – and only then – would we begin tackling our web based program. It worked too.

The hardest thing sometimes is not doing things, but figuring out what to stop doing. Jobs was good at this at Apple. You need to invest some serious thought about what you need to stop doing in your radio property. Again, less IS more if done right.

And the last suggestion I have is directed at colleges and universities. We need to be focused on the business model of radio and putting more of a focus on the business side of radio and radio sales. Radio owners and operators I talk with aren’t clamoring for more DJs or news people like they are for more sales people and innovators that will create the next revenue stream for their property.

In the end, your audience size won’t matter if you don’t have a business model to monetize it.

 

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