At Cumulus, Big Dickey Is Watching

In case you've heard it all when it comes to stupid consolidation tricks, here's one I'll bet you missed.

Cumulus is installing cameras at some -- possibly all -- of their local stations so Big Brother can watch the daily sales meetings from Atlanta.

One indentured Cumulus slave wrote:

"The 'official' reason is to allow the executives to 'participate' in sales training - even the Execs who have never sold a commercial in their lives. The real reason is that some of the managers were preempting or rescheduling sales training sessions to allow their sellers more time on the streets, or changing department head meetings to a time that was more convenient for those involved".

It's hard to know for sure what Atlanta is thinking but Cumulus employees sure don't appreciate what's been happening at their stations lately.

This is the direct result of CSOS -- the installation of the Cumulus Sales Operating System that was first introduced in January.

Here is what it is and some of the expected consequences:

1. Starting on the first of the year, weekly sales meetings became daily sales meetings.

2. Now Cumulus sales meetings can be monitored via a computer screen usually in a conference room via Skype where available.

3. The modifying of corporately mandated meeting times is not allowed so now all meetings are subject to monitoring without any notification. Obviously this will put a damper on any exchange of ideas or discussion that might be considered a criticism of Atlanta. One employee put it like this, "Yes, Big Dickey IS watching .. and listening".

4. While corporate in Atlanta may feel that spying on meetings can reassure them that all their salespeople are present, engaged and active, I have heard that some resent being treated like kids.

5. These new age sales meetings can run anywhere from a half hour to an hour and the local sales manager, GM and/or other managers run them.

6. The main thrust seems to be to introduce a different sales topic every day. For example, one day it might be "pets and vets" where salespeople would then be required to leave the meeting, get appointments and go on calls. Only one problem. Some veteran salespeople have upwards of 50-100 actual clients on the air every month so this "exercise" is taking time away from actually taking care of business.

7. Sales employees who now must also enter their own orders into a computer (remember, the traffic people were fired), also have to write copy in many cases and make sure the spots get on the air. Not easy when Cumulus has forced furloughs on its employees until the end of June when vacations are under way. Air talent is also distracted from production by having to voice track many shows.

8. I have found that the resource sales material that Cumulus gets from the RAB seems to be appreciated by some local salespeople. The meddling and spying -- not.

9. While many salespeople have no other option but to let Big Brother watch and take up their selling time with burdensome televised daily meetings, others wait patiently for the economy to get better because the indentured servants want to move on.

I used to teach the Dale Carnegie Course. Dale Carnegie training is excellent in human relations and in sales and management.

One sales idea they had was to hold brief meetings where all attendees are standing up. Everyone on their feet. Keep it short and sweet. Of course, that was before Big Brother was watching.

Look, I've got nothing against Lew Dickey. He's always been nice to me but then again I never worked for him.

This isn't about him personally. It's about his misguided management of a public company.

I'll bet if you were in charge of hiring a CEO for your company you would look to see how much experience they had actually working in your industry or a related one.

It appears radio consolidators have forgotten what it is like to be a line employee on a daily basis -- if they ever knew.

That's how ridiculous strategies to control everything from one location gets its legs. Keep in mind Clear Channel runs its Repeater Radio from Cent Com and a few news hubs. Citadel plays syndicator.

Anyone who ever worked on the line knows that more interference from corporate is a recipe for failure.

Warren Buffett -- you know that pauper from Omaha -- must agree. When he buys a company he actually buys the management of that company and keeps them working for him. Buffett is said to meet with the CEOs of the companies Berkshire Hathaway owns only one day a year -- and he takes them to lunch at his favorite steak house.

Hell, a lot of Cumulus employees would probably be happy to buy Lew lunch if he only met with them once a year.

Buffett, unlike Dickey (did I mention these two guys in the same sentence?), spends almost all of his time doing his job -- finding companies to buy so he can increase the stock price for Berkshire Hathaway shareholders.

And Dickey is not the only control freak in radio.

What do you call Clear Channel's John Slogan Hogan and Citadel's Fagreed Suleman? At least Clear Channel has some good equipment and some systems in place.

One Cumulus employee dubbed his company Clear Channel Lite.

The "eyes in the skies" concept being embraced by yet another over the top radio consolidator speaks to why even the end of the recession will not save the radio industry from its leaders.

Loyalty is a two way street.

Consolidators have gotten away with budget cutbacks, mass firings, increased corporate interference and overworking its staff up until now because radio people are professionals who love what they do and care about their audiences.

These same Cumulus sales people who now have to endure Big Brother sales meetings are often working nine or ten hours a day. Some say they even work weekends.

Yet, these radio professionals take pride in their communities.

I know and you can confirm that they then use their own time to give back to the clients and communities that support them.

Isn't that the game plan that works best for radio?

Cumulus is the Dickey Company and the family can do with it what they want.

By all benchmarks, consolidation has failed:

By stock price.

By revenue.

By uprooting local radio for Repeater Radio.

President Dwight D. Eisenhower, also a general in World War II said:

"Leadership is the art of getting someone else to do something you want done because he wants to do it".

It appears that thought doesn't burden the minds of consolidation CEOs who have concluded that not only does local radio not work for them but local management and sales can no longer be trusted to do what it excelled at for decades --

That is, before a "private" became the "general".

For those of you who would prefer to get Jerry's daily posts by email for free, please click here. IMPORTANT: Service doesn't start until you verify an email from "Feedburner" immediately after you sign up (may have to check your filtered mail).

Thanks for forwarding my pieces to your friends and linking to your websites and boards.

Addictive Media

Guess how many text messages the average American teenager sends and receives each month?

No, I'm not going to make you go to the end of this piece and turn your screen upside down to see the answer.

How does 2,272 sound?

Probably a little low if you are a parent or teacher as the next generation's addiction to text messaging is beginning to have consequences -- like declining grades, poor health and sleep problems, sore fingers and joints, anti-social behavior -- to mention a few.

Maybe you saw this coming but most people thought text messaging was just a diversion that came with a cell phone.

AT&T and Verizon have helped turn texting into an addiction by offering unlimited usage plans. It's hard to find a youth who doesn't opt for it -- often with a parent paying for their digital dependency.

That's 80 messages a day according to Nielsen.

More than double the previous year.

They text while they are in school, at dinner, in school and in bed (the phone not far from the pillow).

My readers are more familiar than most with observing generational and sociological media habits and this one is a whopper.

Perhaps you remember when there was an outbreak of "sexting" going on where high school students were getting into trouble taking naked pictures of the opposite sex and sending them to God knows who via texting. I even saw an opinion recently where some psychologists dismissed sexting as no more dangerous than any other youthful activity.

Well, you don't need Nielsen (with all due respect) and psychiatrists telling you about the next generation -- just look for yourself.

Addicted to the cell phone.

Consumed with texting -- a means of communication that has rendered email their father and mother's way of communicating.

Smartly fostered by cell phone carriers who fell into this one quite accidentally.

Yet, unlike record labels, these cellular carriers were shrewd enough to know how to feed an addiction.

As they say at Promises in Malibu, you've got to get a taste for drugs to be hooked on them.

And digital dependencies such as text messaging started by cell phone carriers offering a taste of the habit -- use more and you pay more -- until the carriers rode in on a white horse and said for $20 extra a month, unlimited texting for all.

Contrast this to how record labels tried to sell $20 plans for all the music you could legally consume before they got their consumers hooked on their crack -- paying for music they can steal easier.

Teachers can't control texting.

Parents?

Forget about it. Most just won't.

But even as texting is the disease of choice for the traditional media world, there are other addictions that the next generation has that are also potent.

Music filesharing.

iPods and smart phones like Blackberry Storms and iPhones.

The Internet in every way possible.

Life is intolerable for most young people without their addiction to this technology.

Sadly, the radio and record industries do not understand digital addiction. They are doing the best they can to make the Internet and mobile devices an add-on to a radio or a CD.

They are not.

This new generation is the program director (watch how they use their iPods).

They are the record promo guy (using social networking and filesharing to promote new music).

They are taking on-demand to new levels. Keep an eye on how much of the video game business will migrate over to Apple apps. Electronic Arts is watching -- closely as they respond as well.

Young people don't call in their requests to a music radio station anymore. They click and play their own songs.

They don't look at the radio dj as the purveyor of information about bands, acts and musical genres as baby boomers did in their day. To Gen Y, their friends are more influential than a radio dj (or more accurately, a voice tracked radio station).

They get their news by reaching out on the web and finding it in various places.

When an earthquake or tornado happens, they can text a friend who may have experienced it themselves for an eyewitness account. Or share a photo.

This is all perplexing to traditional media as they wrestle with how to go forward and backward at the same time.

Example?

The Ad-ology survey quoted in yesterday's Inside Radio that confirms once and for all that one-third of all-Americans sit through commercials.

They'd have you believe that new technology makes it easier "to block out commercials" and touts the old fashioned way -- radio.

This industry continues deep in denial when it cites that only four in ten people change stations to avoid commercials and only 13% report listening to satellite radio or "recorded music to sidestep radio spots". Their argument: "That’s much lower than the number of people who use pop-up blockers (30%) and record TV shows to scan past commercials (28%)".

Again, open your eyes and look around.

Do you believe this based on what you observe and what you know? Hell, one-third may sit through radio commercials but -- do they listen to them? That's the issue -- especially if you're fighting for advertising dollars.

You just know that radio is done with a fork right in the middle of it when Microsoft, the uncoolest company on this earth, announces it is adding HD radio to its colossal MP3 failure Zune this Fall.

The Zune and HD radio -- perfect together and definitely not addictive.

Radio is not addictive media to the next generation but you don't need me to tell you that.

What is surprising is that radio is fast becoming less compelling for available older listeners who are being "treated to" repeater radio, loss of their favorite personalities, long commercial stop sets that they do not sit through and a disconnect from local radio, news and public service.

Older available listeners are fast adopting Facebook -- and statistics show that most Facebook users spend a half hour a day on it every day and you know what they are not doing when older listeners are spending time on Facebook.

Talk radio used to be an addiction a few decades ago. Today it is a mere shadow of its former self. Only a few voices in spite of all the talent that is out there. It skews old -- very old and cannot be called an addiction for anyone under 60. Talk radio is more like a babysitter for old people who want to hear the same old same old.

There is a significance here that should not be missed.

Texting is technology. The content is provided by the user.

Radio is old technology and the content is provided by -- Central Command.

Radio executives may not like it but in a world where the consumer demands to be in charge of his or her information and entertainment, the radio industry is missing a giant opportunity to provide such addictive content for phones and online.

The reason this discussion is an academic pursuit instead of the basis for a strategic business plan is because radio and records is being run by incompetent CEOs.

Hell, I thought a Supreme Court justice was one of the few people appointed for life.

Not so.

In radio, every one of the consolidation CEOs has been in it from virtually the beginning.

None had to face a confirmation hearing (although I would have paid to see that -- excuse me, Mr. Suleman, can you outline your experience for the job of CEO?).

The Supreme Court terms and radio CEOs is probably a bad analogy.

Banana republic dictators would be a better example.

What hurts about all this is that radio and even the music industry has content that can be addictive if it is recreated to accommodate new technology and changing sociology.

But we know that can't happen because the CEOs on Radio's Supreme Court are in it for life and not one board of directors, group of shareholders or venture capitalist can kick them out.

And the lenders that could force them into bankruptcy don't even want the assets back so the decline of radio continues.

New media companies feed the addiction of their consumers.

Radio and records feeds its addiction to power -- damn the consumer.

As Fagreed Suleman fights for his corporate life, you know you won't be reading a headline that says he was fired or that he resigned. He should, in my opinion, but it isn't going to happen.

Lew Dickey's father controls Cumulus and his sons are safely employed in spite of their failures.

Clear Channel under the Mays family just about did in this industry and the clueless venture firms of Lee Capital Partners and Bain Media are so clueless they employ a not ready for prime time general manager to be the caretaker of their $20 billion investment.

Addicted alright.

To failure.

For those of you who would prefer to get Jerry's daily posts by email for free, please click here. IMPORTANT: Service doesn't start until you verify an email from "Feedburner" immediately after you sign up (may have to check your filtered mail).

Thanks for forwarding my pieces to your friends and linking to your websites and boards.

It's Not Nice To Screw the Audience

I have been reading The New York Times since I was 12 years old (15 years ago).

Seriously, I don't think I have ever not had a subscription to the paper and I don't consider it Sunday without pasta and Sunday "gravy" on the stove and The New York Times in the house.

So you can imagine how upset I was -- a loyal, longtime reader -- to see The New York Times pull a Clear Channel on me.

You know the concept -- national radio instead of local.

The Times stuffed a white sheet of paper in the newspaper last week to tell me they were raising my subscription price again.

I'm sorry that The Times is having financial problems. Sorry about buying The Boston Globe and taking on all that debt but don't screw with your loyal subscribers.

In Phoenix and LA, the Sunday paper isn't even the real deal -- only the metro area Sunday Times is the whole package and even metro subscribers are paying an increase.

So, sit down and see how dumb I have been and how dumber The New York Times is being.

How's $796 a year for seven-day service without the real estate section!

That's their new rate.

How about free on the Internet -- that's my new rate.

I'm not too smart because until now I never checked to see what I was paying -- I just automatically renewed. What's worse is I read the entire paper online before I go to bed (thanks to the east-west time difference). What am I doing with a printed newspaper I don't read (except Sundays) without owning a dog?

And The Times is not so smart because they made me think too hard about what I have routinely been paying them. They are making it impossible for their audience to subscribe. Sticking it to loyal subscribers will fail and The New York Times -- hit by new media competition and sinking ad revenues -- will likely fail with it.

This is not an isolated example of how the media business has so desperately lost touch with its market. May I take it closer to home?

Satellite radio -- the one and only Sirius XM -- apparently believes it has a business model at $12.95 a month when its biggest claim to fame is that some channels -- some -- have no commercials. Certainly satellite radio never reinvented terrestrial radio for even one day. There's not a lot special on satellite radio these days.

But they still don't get it.

That's why you will soon be able to buy an Apple app to allow you to pay an additional $12.95 a month to listen to Sirius XM on your iPhone. Forget that they are not adding the app -- or charging a onetime $9.99 app charge -- they are screwing you twice if you are already a subscriber.

That is, unless you are waiting for universal WiFi and mobile access to Internet streams. Then, you'll keep your financial powder dry.

I've said this many times but it is worth repeating here -- you can't have a growth industry in the media business without the next generation. And, if satellite radio execs were ever looking and learning about their audiences, they would know that the next generation would never pay for music -- they don't like radio -- and that deal is dead.

Even closer to home...

The music industry is playing mind games with radio stations over repealing the performance tax exemption without regard whatsoever for the audiences that radio stations still have. If they had any guts at all, the stations would start adding unlicensed music to their playlists and actually do what they used to do -- make the hits. The labels would come begging for airplay.

Not once -- never -- have I seen a story about the performance tax exemption that mentions the impact on the audience.

Radio stations are serial offenders of the don't screw the audience rule.

Next to radio employees who have been fired faster than the stooges on Donald Trump's TV series, radio listeners have been taking it on the chin at the hands of Fagreed, Tricky Dickey, John Slogan Hogan and all their wannabes.

When a smooth jazz format is taken away from an audience as we have seen recently (with the exception of Chicago), the disenfranchised listeners are sent to a cheap Internet stream or worse an HD subchannel that is sitting around empty.

Most don't have an HD radio anyway (and don't want one) and they can't hear that gratuitous Internet stream on their car radio.

When radio listeners are robbed of their favorite local morning show personalities because the consolidator decides to cut costs to pay down debt, no one in our business spends much time thinking about the audience.

Hell, when consolidation occurred, radio totally took for granted that teens would always be the next radio listeners.

Look what happened.

Teens grew up without radio. They had other options (Internet, messaging, email, texting, mobile devices, iPods, social networks, etc) and paid radio back for not considering them.

Yesterday, Clear Channel's Chief Execution Officer, President John Slogan Hogan, went out and spent some money creating two new useless executive positions.

Darren Davis as Senior VP for Premium Choice which as I have said before is really Premium Chuck. I guess his job will be to beat managers into submission to get them to carry the repeater radio content they are in business to develop so local stations can fire talent.

Then there's Clay Hunnicutt who was named -- are you sitting? -- Community Engagement Director.

No, I wish it meant he'd be helping people plan their weddings. That would at least be responsive to an audience need.

Slogan Hogan who must have sat around for a long time coming up with the title "Community Engagement Director" has earned the "slogan" nickname. According to Hogan, Hunnicutt will "oversee “stations’ community engagement efforts and ensure our commitments come to life in a robust, consistent and sustainable way.”

That's a lot of horse shit in one sentence.

See, the audience doesn't need a Community Engagement Director. Radio did just fine on engaging its audience before consolidators butted in.

The best liaison with the community always was and still is the air talent - duh!

Of course when you take the air talent away and force Premium Ground Round down their throats and begin to worry that the FCC and Congress may one day figure out that national is not local, you come up with this sham.

Clear Channel is not alone.

The major consolidators are tap dancing faster than Ginger Rogers and Fred Astaire these days.

It amazes me that companies will make major decisions affecting its future and future revenue streams without taking into account -- their audience.

Apple does.

They built that company by giving its young changemakers core products and concepts they want and think are cool. Usually, Apple does not disappoint.

Does Steve Jobs have a Community Engagement Director?

I'm waiting!

Would Steve Jobs raise a price to cover his debt (which is nil, by the way)? Of course not, when Jobs mispriced the initial iPhone he turned it into a PR victory by promptly lowering the price and rebating $100 to those who paid the original higher price? Take note New York Times.

The music industry died in 2000.

Napster wasn't the issue (although it was to a bunch of arrogant label executives who were having their faces rubbed in it by a bunch of kids).

Filesharing was something the labels could have owned.

Consumers don't want CDs -- they want digital music -- but the labels continue to hawk what the marketplace clearly doesn't want.

As long as Evian can get people to buy water they could otherwise filter out of their own taps -- at a premium price -- then you know consumers will be the ones to decide what they want in their lives and what they will pay for.

No young person I have ever met that has a cell phone skips the expense of the additional text messaging package. That's what they want. That's what phone companies can sell.

Record labels have killed themselves to push their favorite $19.95 monthly all you can eat package of everything that was ever recorded, but consumers clearly have rejected it.

There are big lessons here for all of us.

1. Ask and you shall receive a ton of input about what your audience wants, needs and values.

2. Decide without consulting them and you're going to pay the price in the end.

3. Take your audience for granted (raise subscription prices too high, substitute national radio for local, offer little in content for the next generation) and you eventually lose the market.

4. Innovate or die. All of us want the next great thing and that applies to the media business. One reason I can guarantee you radio is over is because there hasn't been a lick of innovation during the past 13 years of consolidation. Forget debt the consolidators can't pay. Forget the incompetent CEOs running most groups. Radio hasn't innovated anything significant since the late 1980s. That's a death wish.

5. Companies that employ happy people innovate (ever hear of an uprising of unhappy people at Apple?)

6. Companies that don't have more debt than they can pay have money to invest in people, projects and connecting with the needs and passions of their marketplaces. Again, Apple is full of cash.

7. The best way to get the pulse of your audience is to take it to the street. When radio pulls out of local radio leaving just a few employees standing in each market, how in touch do you think they will be with their audience even with a so-called Community Engagement Director?

Those of us in the radio, record, TV and newspaper business suffer from consoladitis -- that infectious disease that kills off human contact with its audience.

And those of us embracing new media must be sensitive to the fact that the Internet and mobile phone are simply the delivery systems -- not the content.

It's not hard to predict the future based on this standard of staying in touch with the audience:

Apple -- continued success and financial gain.

The New York Times -- disaster that may end or neuter a great paper.

Radio -- way out of touch with Main Street and way out of luck with Wall Street.

Satellite radio -- not a necessity outside a Lexus.

TV -- lost in the thought that the computer is the message. It's content, baby -- and where it is played presents new opportunities not just challenges.

Record labels -- as outdated as the CD because what its audience is all about is music discovery not lawsuits, monthly downloading plans or variable pricing on music that is stolen anyway. The labels would know -- if they asked -- that music is worth five to ten cents a song today. If that's not a business for them, then it's time to get into another.

Mobile phones -- carriers not content providers. As long as you need a mobile carrier to text, talk or surf, it is a business. There is very little innovative about phone companies when it comes content.

Internet streaming -- something the Internet does along with reading, seeing and connecting. It is the enabler not the innovator.

Social networks -- if Facebook doesn't morph into thousands of niche groups of like-minded people, it will have been a colossal failure when all is said and done. If it does, social networking is the story of the century (at least so far).

One more thing.

We in radio and records tend to look at the world as a different place separate and apart from our world. Talk to any radio person and see what their concept of radio is compared to what the audience's concept is.

It is becoming more important to look at the macro view.

Our recession is worse than a depression even though it is not a depression.

Prices will be revalued.

Products will be reconsidered by the public.

New models are on the horizon that several years in the future -- in my opinion -- will use the Internet as a driver of revenue by offering paid content that the audience values and desires.

Some of you may have attended a management conference I put on a number of years ago at the Phoenician in Phoenix where the brilliant management seer and soothsayer, Peter Drucker, addressed media issues.

Foolishly, some -- but not all -- attendees scoffed when Drucker told interviewer John Parikhal that the Internet will be a major force.

In 30 years!

He's a fool. He's got to be wrong, right?

As it turns out it looks like the late Drucker hit the nail on the head once again.

Drucker said if the Internet had a Dewey Decimal System instead of what amounts to primative search engines it would be a more potent force.

It's helpful to understand and elevate our thinking to have more of a customer focus -- the only true important blueprint for a successful company and industry.

And as of today, with all due respect Hogan is not Drucker. Suleman is not Jobs. And Dickey is not Tim Westergren (Pandora's guiding light).

Bottom line.

It's not nice to screw the audience because the audience always wins in the end.

For those of you who would prefer to get Jerry's daily posts by email for free, please click here. IMPORTANT: Service doesn't start until you verify an email from "Feedburner" immediately after you sign up (may have to check your filtered mail).

Thanks for forwarding my pieces to your friends and linking to your websites and boards.

Radio's Extra-Terrestrials

Radio is losing touch with its audience at an alarming pace.

I'm not just talking about the youth audience that radio all but ignored during the past 13 years of consolidation.

Even older folks -- yes, baby boomers who are trying new media and liking it.

Facebook, once the bastion of Millennials, is experiencing its greatest growth from over 30's.

Baby boomers are using Facebook to find old flames, high school and college buddies, friends lost while life was happening.

Twitter is engaging radio users -- not to learn what the next song is that radio stations are playing, but as a way to have immediate contact with people all day 140 characters at a time.

I call these people -- the members of Gen X, Gen Y and baby boomers -- radio's Extra-Terrestrials because they are going beyond radio to add communication, entertainment, information and social connection.

They are using Facebook, MySpace, Twitter, email, the Blackberry, iPods, the Internet, mobile devices and more to engage themselves in media other than terrestrial radio.

Southwest Airlines is now twittering to let customers know -- in their own wild and wacky way -- what is going on system wide minute by minute.

Tony Hsieh, CEO of the wildly successful online Zappos shoe store has a huge cult following of 650,000 people on Twitter.

Do you know where your radio CEO is or what he thinks?

For that matter, do they know what they think or do they just wait for the investment guys to tell them to hire a bunch of yield managers and everything will get better?

Precisely!

Methodist University Hospital in Memphis did a video webcast of a patient's brain surgery as a marketing tool.

Doctors tweet from the operating room.

The hottest new position in a company today is social media specialist.

You may like it or may not but this is the world we live in.

Except for radio.

True, on-air personalities and others have used Twitter and Facebook to communicate with audiences -- that's always a good thing.

The problem is that their employers, the companies they work for, are living in a world of their own -- pre-2000 where radio lives in seclusion from new technology and changing sociology. Garrison Keillor might call radio "the little town that time forgot and the decades cannot improve ... " not necessarily in a positive way.

Radio's Extra-Terrestrials are moving on, but it's radio consolidators who are looking at new media like it is alien.

There are some hard and cold reasons why this is so -- the best of which is that consolidating radio groups have run up debt they cannot handle and are on the brink of bankruptcy. The only thing saving these companies is that the lenders don't want them back.

So, you're seeing the debt get converted to ownership.

Jeff Smulyan of Emmis has coughed up a lot of his company to satisfy the banking institutions he cannot pay. Same is true of the other consolidators.

You'll likely see Citadel go down this road.

Cumulus as well.

Clear Channel will probably also have to convert debt to equity.

The problem is -- what these clueless banks will eventually own and control is a business with no tomorrow.

No longer a growth industry.

And not because radio people can't produce good programming but specifically for the reason that their CEOs won't let them. They've fired a lot of their talent and will continue to cut costs where necessary as the recession and their own mismanagement take its toll.

Our audience is becoming Extra-Terrestrial.

They look beyond terrestrial radio and it is happening at an increasing pace.

This could be a bump in the road but I suspect it is more because except for minor examples, radio does not live in the real world of 2009.

Radio groups don't have interactive divisions with real budgets. Where they exist -- and they are few and far between -- new media divisions represent a minute percentage of operating budgets.

Radio having lost 13 years through hubris, bad decisions, faulty financial management and taking on too much debt, is betting it can return to profitability by being something that has no chance of working.

A national repeater of cheap network and syndicated programming.

These CEOs apparently will accomplish this without people (or as few as possible), without understanding generational media and why it matters and without funding any meaningful Internet, mobile or new media initiatives.

I might be able to understand a radio consolidator not seeing the digital future in the headlights but it is pretty hard to imagine how they still can't see it in their rearview mirror.

Radio has no other option but to get into the digital future. But it may already be too late.

Owning radio in an era when so many other media choices are coming of age will spell disaster to the owners and the medium.

So, here are a few ideas:

1. Replace the radio CEOs. (Okay that isn't going to happen but replacing these proven losers would be the fastest lifeline to the future).

2. Budget 15% of your operating expenses to new media this year (that's 2009) through a special assessment and 20-25% in 2010. (Okay, that isn't going to happen, either. But without an initiative, the Internet, mobile, social networking and other digital projects cannot be sustained).

3. Have the CEO of each radio group run a Twitter site as if they actually cared to tell employees and listeners (not to mention advertisers) what their vision is to save the radio industry they destroyed. Hell, they only have to come up with 140 characters in each Tweet. (Stop laughing!)

4. Unload some of your stations for bargain basement prices -- hold the paper on the financing -- and use that money to ... oh, never mind.

5. Go bankrupt and let the judge oversee the sale of your assets.

Actually, number 5 is the only viable option because there is no way out of the mess these radio CEOs have gotten themselves into.

Station sale prices are not going up any time soon.

Even if the recession ends, few people actually believe it will be back to business as usual. One of the things that got us into this economic crisis is the greed that drove prices out of sight (i.e., inflated prices for radio stations). All numbers must be reset. The value of everything in our economy redefined.

You can't spend 13 years and counting letting listeners get away.

An entire generation -- the Millennials -- grew up without a love and addiction to radio. Yet they have become the media changemakers who now drive new media as they are coming of age.

Now, I'm saying older listeners are getting caught up in new media -- not all, but a surprising number. They were once considered safe radio listeners.

Even if radio CEOs are calling the trends right, they have fired most of their talent. Lots of luck competing with Electronic Arts on an iPhone when you're running voice tracked music on a radio.

And speaking of Apple apps, a lot of radio executives don't see the iPhone as a threat.

Jeff Smulyan says just put an FM chip in a cell phone and radio is back.

Not quite.

Remember the sociology.

Some 80 million Gen Yers are used to choosing their own content -- stopping it when they want, deleting it at will. Many have short attention spans. There is no need to broadcast from your towers to them when they can get all they need on demand.

So, the world continues to turn and apparently radio CEOs have better things to do than worry about being an archaic medium lost in yesterday.

Like saving their skins.

E.T. the Extra Terrestrial is the story of Elliott, a lonely boy who befriends a friendly extra-terrestrial ("E.T."), who is stranded on Earth. Elliott and his siblings help the Extra-Terrestrial return home while attempting to keep it hidden from their mother and the government.

Radio the Extra-Terrestrials is the story of the Mays family (and clones) who befriend venture capitalists who are stranded on Wall Street. The Maysian characters help keep the fact that they are no longer doing local radio hidden from their listeners and the government.

As they say in the movies, "The End".

For those of you who would prefer to get Jerry's daily posts by email for free, please click here. IMPORTANT: Service doesn't start until you verify an email from "Feedburner" immediately after you sign up (may have to check your filtered mail).

Thanks for forwarding my pieces to your friends and linking to your websites and boards.

Radio in 5 Years

In the past, radio was the best and only way to get "immediate" or at least timely information about world news. There was no CNN. No email to communicate with loved ones. Radio was a lifeline.

Today, radio is defined by ...

Scaled down workforces.

"Local" programming from out of town -- out of state and across the nation.

"Local" news from regional newsrooms to save money.

"Local" decisions made by corporate officers somewhere else.

No Internet strategy.

No mobile content plan.

No fun. No focus. No future.

That's radio today as consolidators are changing the face of broadcasting to suit their needs -- shrink the business so they can remain in business.

But it is my view that what is expedient for consolidators who currently are in over their heads with debt, is not the best thing for their companies and the industry if radio is to find a place in the digital future.

A week hardly goes by as we hear of another new misguided plan to make it easier and cheaper to run radio.

But today, I'd like to share some thoughts of what radio can morph into -- with the right leadership, commitment and vision. If you're like me, you'll consider the possibility and wish you could oust the rascals who are hunkering down instead of ramping up.

So, here we go:

1. The radio station that I envision is local. Because technology now allows radio to be broadcast from very efficient spaces, the operator of the future will open satellite offices (sorry about that word) in and around the service area. Oh, I have replaced "listening area" with "service area" because in the future a successful radio operator will service their community in many ways beyond the terrestrial signal. We'll look back on the past as being primitive when we limited ourselves to where we stored our broadcasting equipment. Of course, technology also allows broadcasters of the future to work out of a single room in a far away place, but that strategy fails to take into account the need to have direct contact with your audience.

2. A local executive manages several streams of income simultaneously. The existing terrestrial signal, any Internet streams separate and apart from the terrestrial stream, numerous mobile initiatives, an "app" division, digital publishing, music discovery, at least 50 podcast franchises just to whet your appetite.

3. The operations manager (also local) coordinates all the content and scheduling. If there are 50 podcasts a day, five days a week -- he/she coordinates studio and production time. Some content providers will be working from home. Whereas now, everything in a radio station has to do with putting out the terrestrial signal (increasingly imported from elsewhere), the ops manager of the future will balance all content all the time.

4. Account execs will morph into service reps who are trained -- there, I said it, trained -- to sell the differences and benefits of packaging various forms of digital media. They will be very professional and will look to provide ways to support local advertisers as they step into the digital beyond. In my vision, the local manager would never pressure the local "sales" manager to fax out specials to boost income by the end of the week. Instead, they would be encouraged to sell digital solutions as they develop for long-term, in-person relationships.

5. This hub then becomes a social network hybrid. If it is installed at an all-news station, for example, then everything this venture does is brought together in a real, live dialogue with people. When they want news, they go to the new social network. When they want to talk about the news, they access the network. Report news? Yes. Ask questions? Of course. Post video and pictures...now you're getting the idea.

6. Podcasting development is on my front burner. Even before five years comes and goes, I see operators with at least 50 podcasts that are not amateur shows, but moneymaking franchises. (By the way, one of my clients launches in a few weeks with such a franchise). Imagine, if you will, 50 moneymaking morning shows. In order to accomplish this, you can't be doing radio programming on a podcast. It's a different animal. Takes some learning. And you'll be doing it for chump change if you don't learn how to build a franchise through ancillary forms of income. Oh, did I mention -- I'm taking away all recorded commercials no matter how much money is offered to stick them in my podcast listeners' ears. You do the math -- 50 "morning-type" podcasts times lots of money streaming into your coffers.

7. And what of terrestrial radio? You don't need to wait five years to see how few people actually need to have you broadcast to them. In the future, they will be the program director. To temp them into listening, the terrestrial radio station is broken into 30 minutes segments -- different programming that is not -- I emphasize not -- going to be rerun or made available online. Now, a lot of radio people are having heart attacks when I say 30 minute segments but in my world you will want to train listeners to point their addiction at you over the air with content they can't get elsewhere. By these standards, most existing terrestrial stations should just pull the plug. But, if I'm competing against lost consolidators, I'll let them pleasure themselves by broadcasting to a world that needs to tune-in for something unique. Music alone is not unique. That's why we have iPods.

8. Broadcasters think Internet streams are terrestrial radio stations on the cheap. Not in my view. My music discovery stream has no licensed music on it. It is local -- featuring local artists and intelligent people talking about the music, genre and artists. But I also envision a news/talk stream that has programs as short as five minutes and as long as 45 minutes, on various topics by various experts who have earned the right to be speaking. In a day, 100 different "shows". I'd employ my podcasting standard of "not sounding like radio". The stream would be so rich, it would be addictive. On weekends, no reruns. No syndication ever. No radio stuffed into an Internet streaming format. My God, no recorded commercials no matter how much money I have to turn down.

9. My station of the future would also enter digital publishing with music, video and text onboard. Not a newspaper or present day newspaper website operation -- they aren't going to be around in five years. But a part of the social networking hub that will allow specialty publishing to thrive. I'm seeing a subscription model. Two years ago I couldn't imagine anyone paying for content on the Internet. Lately I have come to believe that we must accept that the Internet is a delivery system. That content must be addictive and compelling. And if it is, people will subscribe at a fair price. Advertising will not be banner ads -- they are as ineffective as 30-second radio spots in a six-minute stop set. If you own, Indianapolis Newsbeat -- you'll crave new technologies to expand the franchise.

Presently, we look at the radio format as the ultimate destination.

It is not.

What we will do in the future is aggregate content around brands that we either currently own or seek to own in the future. Terrestrial broadcasting (revised as I have suggested above) is only a part of the "radio station" revenue stream which in essence is no longer "radio" but multi-functioning content powered by social networking.

I could be wrong.

But I don't think the radio we are broadcasting today can be a growth business in the near future. In fact I know it when it comes to Millennials. They have moved on.

Therefore to let them go without engaging them where they live leaves you with the stuff the Museum of Radio & Television is made of -- yesterday's accomplishments not tomorrow's successes.

This all can't happen soon enough for me because I know in my mind and in my heart that talented radio people (managers, sales managers, programmers, talent, sales people, support personnel, tech types and others) are exactly the ones to reinvigorate this vision of "radio".

I have a friend -- a station owner -- who loves the concept but is constantly crying about how much money he is losing so he can't invest in the future. Of course, that means he'll succeed at losing more money.

And it may not be radio owners or top executives who can bring themselves to this very different interpretation of radio's future.

Could be entrepreneurs -- young folks, doing it all without the terrestrial signal. Still, current radio station owners who have station brands have a huge advantage.

But they also have a big disadvantage -- no guts.

Kids have guts. They eat peanut butter. Haven't had their families yet. They've got everything to gain. Less to lose.

One of the reasons I am a firm believer in content providers as opposed to traditional broadcasters is because sociology and technology are now colliding constantly. Fifty years ago they thought radio would be around forever. Now, we're wondering.

This is Memorial Day Weekend.

The White House Commission of Remembrance for this heroes holiday went to every radio station, every consolidator --you name them -- and asked for one minute of time.

"Americans wherever they are at 3 p.m., local time, on Memorial Day to pause in an act of national unity (duration: one minute).The time 3 p.m. was chosen because it is the time when most Americans are enjoying their freedoms on the national holiday. The Moment is an act of national unity in which all Americans, alone or with family and friends, honor those who died for our freedom."

The Commission wrote.

Emailed.

And received not one response.

Nothing.

Not one.

Apparently a lot of radio executives running their own show their own way these days need to stand by the white markers at Arlington National Cemetery and rethink why their stations exist.

Memorial Day.

It's more than the "500 Greatest Hits of All Time" or the "History of Rock and Roll".

Once again radio's silence is deafening.

So, I thought I'd throw these ideas in the form of a strategic planning "grenade" to shake the industry awake.

Radio is declining not simply because of new technology and not only because the next generation is wired like no one that preceded it.

But because broadcasters have lost their way.

They saw themselves as station operators, then cluster managers and group consolidators and while they were busy playing monopoly they forgot the audience.

This Memorial Day as I remember my father who fought in Europe during World War II for four years in a row without one visit home to the states, you may be remembering your loved ones as well who fought in Korea, Vietnam, the Gulf War, Afghanistan, Iraq or wherever.

When we lose touch we die.

The same is true of radio.

For those of you who would prefer to get Jerry's daily posts by email for free, please click here. IMPORTANT: Service doesn't start until you verify an email from "Feedburner" immediately after you sign up (may have to check your filtered mail).

Thanks for forwarding my pieces to your friends and linking to your websites and boards.

Monster.Hogan

I don't know about you but I wouldn't advise a child to take candy from a stranger.

And I also wouldn't tell radio listeners to find a job from Clear Channel President John Slogan Hogan.

Since yesterday when Clear Channel announced that it is going to help five unemployed in each of 21 of their markets find a job each week, my email, Facebook and text messages have been on fire.

That's one station per market -- not all stations -- and we're talking about hard hit places like Detroit.

And they're not giving away a job, just a chance that some lucky listener might be hired by someone other than Clear Channel.

This guy can't get away from less is more.

Do I smell a publicity stunt here?

That's right -- the dean of mean is offering a candy bar to find jobs for the unemployed.

Here's the headline as it appeared on the official Clear Channel news release -- "Clear Channel Radio Kicks Off Initiative to Assist Unemployed Listeners".

Say what?

Now they're really playing with our heads, right?

The Evil Empire.

The Lean Mean Firing Machine is all of a sudden becoming Monster.com.

This calls for psychoanalysis:

"Clear Channel Radio launched a new initiative this week to help local listeners who are seeking employment to market their skills and unique features on the air to attract the attention of employers with available positions".

So tell us, Mr. Slogan -- why aren't you using your airwaves to help find jobs for all those thousands of people you fired?

Well?

Thought you didn't have an answer for that one. If I remember correctly, you couldn't wait to get them out the door and in some cases your minions even escorted them out of the building -- sometimes without their personal belongings.

Sorry to bring all of this up when you're in the middle of a PR blitz, but, really.

"Twenty-one Clear Channel Radio stations across the nation will encourage listeners seeking employment to visit their websites and submit entries via an online form. Each station will choose five entrants per week to record their own thirty second radio resume where they will provide basic personal information and qualifications, and direct interested employers to the station’s website where the entrants’ full resumes will be posted".

What!

Only five winners per city per week -- my God, you're so generous. I know you've got plenty of airtime available since you're not selling advertising these days but for a San Antonio-based who-ha news release PR effort, isn't this -- well, cheap?

Even "The Last Contest" gave away more prizes.

And by the way ...

Making a contest out of helping the unemployed. It's almost as bad as "the ninth caller wins".
Except in this case they don't really win anything.

Don't puke all over your computer, you're going to be sick ...

“We realize this is a difficult time for many individuals and families and want to support our listeners who are out of work in any way we can,” said John Hogan, President and CEO of Clear Channel Radio. “Radio is all about community and serves as the perfect platform to connect job seekers with employers. We hope that job seeking listeners will take advantage of this special opportunity.”

My God, when did John Hogan become Mister Rogers? Won't you be my neighbor?

Such compassion for human beings that I didn't think the big Slogan guy had in him -- at least, not from the way he has butchered and quartered so many talented radio careers to save money.

But here's the line -- exactly as it appeared in yesterday's news release -- that is the giveaway for why the most insensitive employer of human talent can morph into a candidate for Secretary of Labor ...

"According to the U.S. Bureau of Labor Statistics, nonfarm payroll employment continued to decline in April with another 539,000 jobs lost, and the unemployment rate rose to 8.9 percent. Since the recession began in December 2007, 5.7 million jobs have been lost".

Well, I sure don't need Labor Statistics to know people are unemployed and neither does Hogan. All he has to do is look down the hall.

That curious line is in there to show the right people this Evil Empire now gets it -- to keep abusing the public interest it must act like it cares about people.

The Keystone Cops of Radio have done it again.

They have made it so by saying it is so.

This paltry excuse for mass employment is a circus.

If Slogan Hogan really wanted to help people, all he had to do is read a blog post of mine from about a year ago where I related the story of how I handled unemployment when I was a program director during a recession.

In short, my station actually went out and recruited jobs of all kinds -- then advertised them in on-air promos (really creative promos) inviting listeners to call in inquiring about the jobs for which they qualified (no email then) and apply.

If being a construction worker wasn't your thing, just keep listening and next half hour there would be a nursing job. You get the idea.

Good radio (average quarter hour) and good citizens (helping lots of people to get interviews -- not 5 for window dressing purposes).

It wasn't a contest.

Wasn't a PR show.

It was the desire of Buckley Broadcasting to serve the city of license (Philadelphia) where they operated. Corporate never got involved. It was all local.

After I invited today's more-than-interested program directors to update my constant on-air job promotion, many contacted me frustrated by how cluster mangers and regional execs would not allow them to do it.

I know -- I don't have the clout of John Slogan Hogan.

But now, all of a sudden, this least competent of all consolidation executives comes up with this zany idea to make a mockery out of a sad situation.

Damn -- Hogan wants to be me!

You might be calming down right now -- if you are a Clear Channel victim -- or you might be getting even hotter under the collar, but there is one important question.

Why an employment contest?

I lied -- three important questions.

Why issue a release like it is a mandate for action?

Why now?

The answer...

Clear Channel is scared shitless -- forgive me, but there is no other way to say it.

In my opinion Hogan doesn't care about the unemployed. He cares about the employed. Like himself.

And this is a company that is in serious trouble with the FCC and Congress. Certainly you can sense the shift of sentiment in Washington away from deregulation.

Clear Channel sure can.

Clear Channel is one weather or news emergency away from a scandal in Washington because their nationally-syndicated Repeater Radio is shortcutting local news and emergency information.

The FCC is threatening to force stations back into localism -- a direction that is opposite where Clear Channel is headed.

Clear Channel, of course, is bleeding red ink and is increasingly using its licenses as cheap repeaters of repurposed content.

The only reason Clear Channel isn't in bigger trouble is because fired employees have not professionally lobbied Congress to put the pressure on Clear Channel. If they did, Clear Channel would be all but stuck with 800 or so stations and forced to follow the intent of their FCC licenses.

They're getting away with firing people, calling syndicated radio local, making the public think three news reporters in San Diego can cover an earthquake 24/7.

But now, John Hogan has become his own bad self in Monster dot com -- not the online employment resource but Hogan the ogre.

Let's keep it real for a second.

The fact that this unemployment sham is coming from Clear Channel corporate is significant. Like Hogan and San Antonio have nothing better to do while their stations are falling apart.

This corporate intervention by radio's chief executioner into "helping" the unemployed -- all five of them -- is a strategic move to paint Clear Channel as a fit local operator that responds to local issues.

It's a decoy from issues like how the emergency-alert designated station in San Diego, Clear Channel's KOGO, is down to three reporters while it is delegating hourly news reports to "news hub" station KFI, Los Angeles most of the day, and is unmanned by reporters overnight.

No one at corporate would want to wake Congress up with this accident waiting to happen.

And the phony employment initiative that Clear Channel says it portrays can't hide what Clear Channel actually does -- recruit for jobs it doesn't have (view their KOGO recruitment piece from their website):

"If your organization distributes information about employment opportunities to job seekers or refers job seekers to employers, and would like to receive job vacancy notices for Clear Channel Communications, please provide your name, mailing address, e-mail address (if applicable), telephone number, fax number, and contact person and identify the category or categories of vacancies or which you would like information specified above to the following person at Clear Channel Communications..."

Oh, now you want us to believe that the Evil Empire is hiring!

It's simple.

Clear Channel was created when consolidation was allowed to go wild. No one ever saw a crippled radio industry as a possibility. A handful of consolidators in cahoots with the greedy Wall Street investment banks bought all the big real estate but wound up not being able to pay their mortgages.

As long as people who love the radio industry play dead, Clear Channel can continue to get away with selling Repeater Radio as local, foreign newscasts as responsive and responsible, few employees as a fiduciary licensee's obligation instead of a dereliction of duty and now responding to the national unemployment crisis as if it were a contest.

If you don't like it -- and don't like being dicked around by the Dickeys, Hogans and Sulemans of the industry then do one thing -- if you do nothing else.

Have a good laugh.

Then, bombard your local Congressional representative with protests, petitions -- call the local TV news stations and raise the issue publicly.

There is a reason the National Rifle Association almost always prevails on Capitol Hill and no -- you can't count on your NAB to represent local radio operators. NAB is on the side of the bad guys.

Grassroots protests in every consolidated city.

Demand that stations be required to:

1. Air 80% of their programming originated locally by local talent.

2. Meet the public interest, convenience and necessity or else mandate that the FCC should remove license holders who don't.

3. See to it that all aspects of a radio station's operation be local including retention of local management.

By the way, do I have to say -- there is no time to waste.

When the next disaster happens in San Diego or elsewhere -- God forbid -- listeners are way ahead of the FCC and radio consolidators.

They know to pull out their phones, text a friend, go online, hit the Internet for updates.

Who is kidding whom?

Monster.Hogan is really CareerBuilder.Hogan.

His.

Not yours.

For those of you who would prefer to get Jerry's daily posts by email for free, please click here. IMPORTANT: Service doesn't start until you verify an email from "Feedburner" immediately after you sign up (may have to check your filtered mail).

Thanks for forwarding my pieces to your friends and linking to your websites and boards.

Trouble Ahead for Car Radio

Radio had already staked its claim to fame on being mobile media long before cell phones and iPods.

Once the family stopped sitting around the radio together and went to watching TV instead, the radio industry reinvented itself to survive the TV challenge.

To accomplish this, the radio industry had to lay claim on the car as its main receiver.

As automobiles proliferated -- two family cars and then cars for the teens -- radio was the one constant.

A built-in, ready-made -- always accessible audience.

Keep in mind that in the 1970's, FM radio could not grow and prosper until automakers decided to make FM receivers standard equipment in automobiles. Once that happened, music stations migrated to the better fidelity on FM and the industry continued to thrive. (There were also fewer commercials, less hype, better variety -- until we screwed FM music formats up, too).

Now, that once-sacred listening place -- the car -- is in serious jeopardy.

And I'm not even talking about the obvious -- which is that fewer cars are selling during the economic downturn. Ask Sirius XM what it feels like to lose over a million subscribers at $12.95 a month and not be able to replace them at their only significant listening post -- the car radio.

No, I'm talking about social engineering here -- enabled by new technology.

Consider the following and you'll get a grasp on how bad decisions being made by radio CEOs today about programming are playing right into the hands of its competition:

1. The car radio is now known as the vehicle's "entertainment center". That says it all.

2. The Ford Sync has been installed in one million vehicles so far. The popular new Sync -- which is still called a "radio" by the way -- is described as "audio traffic updates and directions as you drive (and) will launch May 18 in some vehicles and early June in several others, as Ford converts the popular radio to the traffic/information appliance it announced in January".

3. Starting this month owners of a 2010 Fusion, Mustang, Milan and MKZ will be able to download an upgrade to their Sync radios that will enable conversion to traffic/information appliances via the SyncMyRide website. The original Sync allowed voice activation and control of the next generation's most popular devices such as iPods.

4. New versions of Sync will allow easy access to have what the manufacturer calls voice in--voice out traffic updates and trip navigation and weather, stock reports, news. It's all free at least for the first three years of ownership. The link for the service is the user’s Bluetooth phone and the information is sent over the phone’s voice channel so no data plan is required from the carrier.

But sit down ...I don't want you to hurt yourself because the real killer is coming next ...

5. In nine to 12 months, Ford's Sync will enable Internet capabilities on a smartphone and allow the Internet's most popular radio station - Pandora -- to play throughout the car's sound system. Want Live 365 -- you've got it. Want terrestrial radio -- you can listen to a stream but who wants to do that? Terrestrial radio operators are busy importing cheap Repeater Radio into their markets. What innovators they are! Terrestrial radio is about to be had for lunch -- maybe even dinner.

It gets better -- or worse depending on whether you are Fagreed, Tricky Dickey and Slogan Hogan or an eager consumer...

6. How about reading your email by voice while you're driving. It's on the way in a future version of Sync.

7. Ford reports that "The updated Sync uses INRIX traffic data and Tellme voice technology as well as Airbiquity and TeleNav technology. Best Buy is slated to provide technical support to Sync customers who have trouble pairing their phones with the new Sync. The Sync was developed with Microsoft".

8. It's not just Ford, the other surviving automakers will also be adding the most anticipated consumer audio feature of all time -- Internet streaming. Delphi and Autonet Mobile are calling for companies to create Internet connectivity devices as standard equipment for new cars. That technology is being tested. Mobile high speed Internet access is coming.

My readers know what radio consolidators don't care to know.

Radio is outdated (after all, wasn't their idea of the digital future HD radio?)

But consumers are on the cutting edge.

Technology is now meeting consumer expectations and matching their behavior.

These clowns who run consolidated radio companies are playing with the future of the industry by trying to save their butts through cutbacks and mass firings.

They should be innovating in the mobile space because their lack of foresight has driven radio into a slow lane on the information super highway.

You know that you can't go two blocks without seeing a driver on the cell phone -- even more during rush hour and on freeways.

And increasingly we've all seen driving while texting.

Why not?

Texting is an addiction to the next generation.

Radio has become as mundane as brushing your teeth.

I've mentioned this before but awhile back when I asked a class of college students if they ever drove while texting the roar of laughter was so loud for so long -- well, I got my answer. The reworded question I asked was, "has anyone not texted while driving?" Out of 45 or so students, not one could raise their hand.

While radio geniuses are finding ways to bring the 1960's into 2010, consumers have turned them off. They now hold sacred the cell phone (and the iPhone, Blackberry, etc).

Texting is not simply an option.

To them, it's an entitlement.

It's like crack but there is no Promises at Malibu to break the addiction.

If you're following this line of thought, you can see why Steve Jobs at Apple is cooperating with the inevitable and succeeding while competitors fail.

Radio CEOs are shooting themselves in the foot.

Instead of running a station on 1-3 employees, they should be developing new mobile content and streams -- information pods and unique content that will play in the radio of the future which -- significantly enough replaces the radio in a car dashboard in more ways than one.

Yes, of course -- terrestrial radio will still be available in cars for the short haul -- but the handful of radio CEOs who see the future their way are not likely to gain market share.

Not with Pandora on board.

Or Internet streaming enabled.

Or email and voice access to the services and features they crave.

Unless, Don Imus on oxygen turns you on in 2010.

Or Ryan Seacrest can keep your hands off of switching to Pandora.

Or listening to voice tracking tell you to get out and enjoy the day while you're driving in a tornado watch that terrestrial radio has ignored.

If we know these things, why don't the radio CEOs?

For one, they are in it to thin it -- cut down not build up.

They scoff at advice such as "mind your generational media" because they can't relate to radio any other way than how they experienced it or how they want to keep it going.

If I walked in and tried to sell you the newest, best looking steam locomotive in the world for your railroad, you'd kick me out on my ass.

No one needs the best steam locomotive.

By extension, no one needs the best radio of the 1960's today -- let alone the worst version of it on voice tracking and syndication that is now being offered.

Radio is mired in yesterday.

Happy to live in the past. Consolidation as we are learning has killed off the entrepreneurial spirit that always drove radio.

If a mom and pop operator today owned 4 AM and 7 FM stations, his or her children would grow up in radio and probably pester mom and dad until they could try out this newfangled technology called -- the Internet.

By contrast, consolidated radio would appoint a national Interactive VP and then start dictating decisions from headquarters until ...

...until the budget was cut.

Then eventually eliminated.

Car radio is on the road to a major accident.

And the crash is going to come at the hands of the people in the driver's seat -- terrestrial radio.

Through arrogance, ignorance, malfeasance and mismanagement they have wrecked their strong hold on the car radio.

And for the record, I am predicting here and now that within a short time you'll start seeing some automakers give buyers a chance to leave terrestrial radio out of their entertainment systems -- an economic decision.

This accident was totally avoidable but now that it has happened it appears to be fatal.

For those of you who would prefer to get Jerry's daily posts by email for free, please click here. IMPORTANT: Service doesn't start until you verify an email from "Feedburner" immediately after you sign up (may have to check your filtered mail).

Thanks for forwarding my pieces to your friends and linking to your websites and boards.

The Challenges of Online News Micropayments and Subscriptions

The impetus toward subscriptions for access and micropayments for single use of online news is growing because online advertising alone cannot sustain the news organizations necessary to provide high quality and broad coverage.

In recent weeks Rupert Murdoch announced News Corp. will begin shifting its newspapers to an online paid model in the next 12 months, starting with Wall Street Journal and then progressively shifting papers such as the New York Post, The Times of London, the Sun and The Australian to a paid model. Dean Singleton followed by indicating MediaNews Group will begin doing the same for its papers, including Denver Post, San Jose Mercury News, Detroit News, St. Paul Pioneer Press, and Salt Lake city Tribune.

Clearly charging for online news is likely to reduce online consumption because of elasticity of demand, but—setting aside the extent to which demand for online news will fall if a price is imposed—moving to a paid model will also creates two common, industrywide challenges.

First, it forces each publisher to bear costs of setting up their own payment system. Secondly, it imposes a heavy burden on consumers. The latter burden results not from having to pay for news, but from the fact that online readers typically do not use only one online news source—unlike the market for print newspapers in which readers typically subscribe to only one paper.

It currently appears that each online newspaper or their corporate parent will set up their own payment systems. The options being most discussed are subscriptions for use or electronic wallets from which to make micropayments for occasional use.

These factors will have a particularly negative affect on the heaviest online news users—voracious and promiscuous readers who seek news from multiple news organizations. If each newspaper sets up its own payment system, for example, these readers will have to have separate payment accounts for the New York Times, Washington Post, Los Angeles Times, Wall Street Journal, The Guardian, and dozens of other publications they wish to visit.

To deal with this challenge the newspaper industry should seek to create a joint venture or cooperative to solve the problem. Companies should work together to developing a single system that is usable across sites and one that can be extended to handle payments for other types of online content. Such a system would simplify and encourage payment for content, but also develop a new revenue stream by turning the payment system from a cost center to profit center by charging companies for its use.

Free is clearly not the right price for news, but the movement to a paid model will not be as simple as transferring the existing subscription and single copy payment models for print newspapers to their online counterparts. Seeking payment online creates new challenges and opportunities that will require new thinking about how payments are made and more cooperation across the industry.

Radio Station Blowout Underway

Louis: This is it! This is the sign!

Janine Melnitz: Yeah, it's a sign, all right - "Going out of business".

-- From Ghostbusters

Sooner or later it had to happen.

Citadel, Clear Channel, Cumulus and the other big consolidators weren't just driving down their share prices. They were also killing the value of radio stations.

Of course, we really haven't been able to know just how low prices were really going to sink because so few stations have been sold in this bad economy.

We had the CBS Denver sale -- three stations to Wilkes Broadcasting for $19.5 million. The multiple on that deal was about five times cash flow. That was back in December.

Three or four times cash flow is more reasonable today in an industry stinging from huge declines in advertising revenue.

A few little deals here and there have occurred since but nothing has happened to raise the multiple.

Now we've seen what I believe is going to be the start of a radio station blowout -- companies unloading stations for whatever they can get to raise cash.

Why?

They are in financial trouble.

Look at what just happened in Pittsburgh.

Sheridan Broadcasting which has owned WAMO for 36 years was forced to sell WAMO AM/FM and WPGR-AM for a paltry $8.9 million -- combined. Three for less than the price of one in the old days of consolidation.

In fact, even though WAMO-FM is not a great facility licensed to nearby Beaver Falls, Sheridan probably could have netted $15-18 million just two or three years ago when most groups weren't looking to sell anything.

Sheridan promptly fired 35 full-time employees and put the station on death watch until the new owners could take over.

And the new owner is Joseph Missions -- you can see where this is headed. The formats will change to religion as apparently the only companies with ample money to buy radio stations are religious groups.

Sheridan also owns American Urban Radio Networks -- and I wouldn't be signing any long-term leases, buying cars or otherwise living if I worked there either.

The handy work of the three blind mice -- Hogan, Dickey and Suleman -- is catching up with the radio industry. They got caught moving the cheese! Just like in the Hanna-Barbera cartoon Mr. Jinks -- radio people are soon going to be saying "I hate those meeces to pieces!"

No ... not Pixie and Dixie.

Trixie and Slixie (Dickey and Hogan).

Now if I'm reading this right, you'll be seeing troubled radio groups in short pants start peeling off some assets for sale at whatever they can get. You can bank on it.

They have to because they have made such a mess out of a very good business.

Unlike consolidators, find an operator with no debt service and they're feeling the down economy but they are still cranking out lots of free cash flow. Remember, that's what radio used to do the best before the industry started charging up its credit cards.

Hey, Jerry Lee at B-101 in Philly owns his station. He did almost $30 million last year. Let's say he wears Brioni, has a private jet, five homes and a craving for Beluga caviar -- he's still rolling in dough. Recession? Depression? Not at the Lee household.

No debt.

And a lot of small market operators who are my readers remind me that they are still making money by operating local radio stations without debt. Sorry I had to use that dirty word -- local. I know Fagreed Suleman, Tricky Lew Dickey and John Slogan Hogan think national radio is going to be the new local radio.

All of this doesn't help our industry embarrassment which is how poorly we treat the people who have made radio the asset that Wall Street money had to have in the first place. Now, each day -- more radio people are thrown under the bus. Look at the trades -- it's a business story. But it's more -- it's a commentary on the human condition -- sad to say.

So, here's what's ahead --

1. More station sales for multiples of below 5 times cash flow to willing buyers.

2. Sellers are going to go to closing faster than that guy on the Imodium commercial has to find a bathroom. Why? Well -- because each day the sale remains in the hands of the desperate seller income is likely to drop and the vital financial statistics upon which the deal was crafted could lower the already low sale price.

3. Loyal employees will see their careers end the moment the ink dries on the desperate seller's agreement of sale. Signed, sealed and kicked to the street -- no matter how many years of service.

4. The new "radio" industry will slowly begin to take shape. People buying in to use radio stations to espouse causes, sell their own products or gain influence. The price is right -- low and going lower.

5. For all you radio freaks out there waiting for prices to drop low enough so you can "put a group together and buy one" -- be careful what you wish for. Your fantasy of the radio industry is like mine -- the glory days of yesteryear. But the radio industry is a perilous place to own stations. Consolidators have killed the sector. Plus new technology and changing sociology has occurred while Fagreed has been jet setting all over the country. Owning a radio station in this type of industry is like owning a GM dealership just about anywhere. The U.S. auto business is done -- being part of it makes you done as well. There is no comeback when the industry has been killed by the greedy predators that ran it into the ground.

6. Fagreed would sell large chunks of Citadel if anyone would pay him near what he wants or needs. You think John Slogan Hogan wouldn't take less for more? Tricky Lew Dickey would love to find a buyer for his underperforming properties so he could start taking his half day furloughs. That's not how it will happen. Listen to this. You'll see them chip away here and there -- selling off whatever they need to bring in money. It's like a coke addict desperately pawning things of value to continue feeding their habit.

7. Then, in another year or two the desperate consolidators will in effect be selling off "sticks" because they won't have a lot of local programming on their so-called local stations. This is going to be like playing Monopoly -- easy to cash in. The only problem is soon there will no longer be a Park Place.

Look, I know that Sheridan is a minor player -- and not an influential consolidator. And it may be early to call the trend. But there are ominous signs ahead that says larger groups may have to hold distress sales.

Revenue is critically off -- forget auto advertising, just look to Main Street. And don't confuse collections with billing.

The economy has not recovered and no one can say when it will. We do know that boom times may not be following this recession.

Another indicator is that groups have made just about all the cuts they can make.

I mean, how can you fire more people when you have the minimum number of bodies running your Repeater Radio station?

If you have no more economies of scale ...

No more employees to fire ...

A prolonged recession that shows no sign of letting up ...

The loss of powerful American advertisers like GM, Chrysler and maybe even Ford ...

Who do you call?

Pricebusters!

Ladies and gentleman, sharpen your pencils -- the radio station blowout we've long feared looks like it may now be underway.

For those of you who would prefer to get Jerry's daily posts by email for free, please click here. IMPORTANT: Service doesn't start until you verify an email from "Feedburner" immediately after you sign up (may have to check your filtered mail).

Thanks for forwarding my pieces to your friends and linking to your websites and boards.

Life After Radio -- 8 New Ideas

At my daughter's graduation from ASU's Walter Cronkite School of Journalism and Mass Communication I got that sick feeling -- you know, the one I often get in this space when I describe the demise of the radio industry.

The school's impressive dean, Christopher Callahan put the best face on things that he possibly could but he was wise to warn the graduating students that in spite of their excellent education, they face an uncertain future.

The guest speaker, a local TV anchor was not as delicate with the young graduates' feelings and hopes.

She spoke of being fired twice -- once when she was pregnant -- and the level of despair that she felt then -- not even now. She said she felt like killing herself! If it was despair then, imagine what it is now when a capable media person can't find a job because there are none.

My daughter is looking for a career in sports -- media, public relations, news -- as long as it is sport-related. She'd be happiest working for the Atlanta Braves -- her favorite team. She is quite a knowledgeable sports person and an outstanding writer. Boy, did she pick a year to graduate.

The student speaker at the ceremony was the best -- an impressive person I've gotten to know named Jill Galus.

Jill's a hard worker -- who can't get enough internships to satisfy her. Interested in news reporting or anchoring, she worked tirelessly on the school's daily TV news program.

I share all of this with you not only out of pride from this father but because at Daria's graduation, Jill was the speaker who had the best message. I think it applies to those of us in the radio and music industries right now.

She said whatever the future, we're ready for it.

Can we say the same thing?

Youth has a way of not being deterred by reality, but this thought should be adopted by all of us looking to continue in whatever succeeds radio and the record business.

I've long promised to write this piece about life after radio, but now I'm emotionally compelled to do so.

I, like you, wish it could all be as good as it once was when radio was king and the record industry kept the hits coming.

I knew it was over when I joined the University of Southern California faculty after selling Inside Radio to Clear Channel. The students didn't like radio and didn't need the record labels. They still don't.

And without retelling what you already know, it should suffice to say that the radio industry let the next generation get away on the watch of a handful of play-CEOs intoxicated with power.

Labels became obsessed with the one thing that they could do -- sell plastic and before that vinyl products. They couldn't -- and still can't -- come up with an encore. They don't get it.

This morning, I'd like to give you the tip of the iceberg on opportunities that could be available to talented radio and record industry people -- the ones suffering at the hands of leaders who have proven to be incompetent.

Those of you who subscribe to this letter know that I really believe that radio people have precisely the skills to grow what's next -- the digital beyond.

Many radio people are being humiliated on or before they are eventually fired. Left without health care. Without a chance for employment since most of the consolidators -- all of whom are in trouble -- own most of the stations. Their kids are in college, but no one ever talks about that.

They have parents who need assistance. They have no retirement plans to speak of (this is radio, remember?) and that sorry state of affairs is sometimes offset by the nine-month severance that Clear Channel offers its fired (the ones who have worked for them for more than three years). Little consolation -- as there is no place to work after the nine months of severance is spent.

Inspired by Jill Galus' thought of whatever happens, we're ready for it, let me share with you some of the reasons I can be so frankly honest about the demise of an industry I have loved all my life and still not beaten down by it. Perhaps you will feel the same way.

Here are a few ways that these talented people can take advantage of what consolidators have repeatedly rejected -- the digital future.

For those of you who are talent or work in programming, here's something I'm betting is going to be big --- real big ...

1. Radio personalities, newspeople, off-air production and support folks and writers doing podcasts on a daily basis. I'm not talking about radio moved over to podcasts. I'm speaking of a new relationship with your audience. Anyone can do a podcast for the hell of it. I'm talking about a franchise that can be monetized through ancillary forms of sponsorship. The audience can grow through social networking. You become Clear Channel! Maybe I should reword that. You own the franchise. As it grows you make the money. Only your audience can fire you not a Dickey or a Fagreed. I've told you about a podcasting development client I have (former number one radio morning team) ready to go live in mid-June with the next iteration of radio. No music. Their mouths to your ear bud. Think Jean Sheppard. Treat yourself here.

If you're a hardcore 24/7 radio person who wants to keep cranking out continuous content ...

2. Internet streaming of non-terrestrial content. There will be a market for unique programming not a jukebox. Today's jukebox is already loaded and running. It's an iPod. Internet streams will work when they have special programming done by qualified people who have earned the right to be on. There are plenty of problems here not the least of which is the expense of succeeding with music programming. A reader wrote to me the other day to say he had to take down a stream that gets 500,000 listeners a day because he couldn't pay the music licensing fees -- another reason to fight the evil record labels. This is no time to throw cold water on what could be a hot new industry. In the meantime, stream what others have dared not to do. Use social networking to build and maintain the audience. You own it. I can build an Internet station in a week -- and make it better in a month. You can, too.

A little twist on Internet streaming that is an automatic money maker ...

3. Build Internet stations for local restaurants, businesses and retailers. You own them and license them to the clients. It's professional and designed to be heard in the store by their listeners. Live 365 will do. Again, keep in mind the licensing fees and proceed with caution until that issue is finally resolved, but pitch companies on more than music in the store. Before opening, the programming is for the employees. When the doors open, it works in real-time for customers. After hours, it's for the janitor or stock people. It's very affordable and I have a friend who does this and shows the client how to get their "investment" money back by selling sponsorships to their suppliers.

If you're a newsperson, writer, community affairs executive or interested in new ways to dispense information in a digital world ...

4. Pick a town or city and become the "news source" for it -- town meetings, crime, anything that goes on in that locale. Put it up on a website and, better yet, add an Apple app that people in that location can carry around on their phones to touch and connect with what's happening close to their homes in real-time. Monetize the app, the website and ancillary income streams that come from owning the franchise for Hoboken, New Jersey or Newport Beach, California or Ames, Iowa. Newspapers wouldn't do it -- they once did regional editions loaded with feature stories. Radio barely does any news. Own a town and get rich with your production, reporting, social networking and Internet skills.

Really adventurous? How about the new digital "newspaper" that everyone will read ...

5. It's not news websites -- that's no business model. It will be blogs -- special information on something that attracts a valued audience. But instead of monetizing it by selling ads (something I think has peaked even when the recession ends), sell a subscription. That's right, I am nuts. I believe people will pay a reasonable fee for that which they crave -- remember I said crave not like. In the past, if you are an expert on gardening, you would have done a radio show, TV or newspaper column. Now, you'll do a blog. And if it has passionate followers and you price it right, you'll make money and build revenue with your audience. Keep in mind I'm projecting this trend -- it's coming because it has to come. The Internet is a delivery system not the content.

Say you're a die hard that is waiting for WLS to be sold for $1 million and you and a few radio buddies come up with the money to buy it. Forget about it. But, there is one more thing ...

6. Work for a family -- a mom and pop. I worked for Rick Buckley in Philadelphia and interestingly enough Rick is still here and survived consolidation -- funny about that, isn't it? Local operators know radio. So, if you want to buy a small station make sure it's real small -- and do local radio. Not 24/7 music programming -- anyone can get music just about anywhere. The only operators that are even making it today are local mavens who have no or low debt and who do local radio. Look, radio will never be the growth business it once was but the one thing that could give it a breath of life -- consolidators won't do or don't know how to do -- local radio. I wouldn't invest a lot. Go LMA someone's station and show them what a pro can do.

Sensing television is about to become radio -- dead on arrival? Consider this ...

7. Video -- short video -- is the future. Apple is going to come out with a new tablet pad sometimes referred to as an iPad that will continue to revolutionize the industry. There's a business here for talented producers. Informational shows, short-form dramas, entertainment series -- it's what's next after YouTube and what's just between here and Hulu, the website owned by a few entertainment companies to monetize online viewing of their TV shows. Except this idea is to create your own franchises -- deliver it to whatever technology is available including computer screens, Apple TV, iPods and iPhones and whatever is next.

One of my favorites -- music discovery ...

8. Every iPod is a modern day jukebox or oldies station, so innovators are going to have to move beyond that. Radio doesn't -- it just plays the same short playlists over and over. But there is room for knowledgeable people who can discover new acts, new artists, new songs and bring them into the pipeline. You won't be making money on selling CDs (although you may make some money from old world technologies). Music discovery will be a business all to itself and it's fair to say the labels will sit this one out. The key is to go out and find the talent, sign them to royalty-free music agreements and then use whatever technology comes along to deliver it to the end user. It's in effect, the anti-record label.

There's more --- much more -- and I'll share it along with my frequent updates on Lifestyles of the Rich and Infamous or what I call radio CEOs as they bumble their way through tough times.

They are on the road to destruction.

They have wantonly released a lot of talent and kicked them to the street.

They will never adopt even one of the eight ideas that I've listed above -- and I'm fine with that.

When I'm not writing this I'm doing that. I hope you will, too.

Once you get a taste for the potential, you'll be reinvigorated like never before.

One more thing.

I've always thanked the real Evil Empire -- the mighty Clear Channel of 2000 not Hogan's Weirdos of today -- for suing me for $100 million. I mean that. Because I sued them back -- for $125 million. And they eventually decided to buy my company and settle the suits all in one.

What was better was that they insisted on a non-compete. The options in my opinion weren't pretty but the one thing I could do was -- teach. So, I spent great years as a professor at USC thanks to Uncle Lowry.

It turns out he should have sent his own sons off to learn about the next generation with me.

If he had, Clear Channel would know what they paid me to learn -- that what radio consolidators are doing is dead and the content that radio people have the potential to do is very much alive.

My continued affection and admiration is directed to radio and records people who work hard because they love what they do in spite of the maniacs that they work for.

The future starts here -- now.

For those of you who would prefer to get Jerry's daily posts by email for free, please click here. IMPORTANT: Service doesn't start until you verify an email from "Feedburner" immediately after you sign up (may have to check your filtered mail).

Thanks for forwarding my pieces to your friends and linking to your websites and boards.