6 Roadblocks to the Digital Future

It is sure not the consumer getting in the way of the coming digital content revolution.

Consumers are gobbling up Apple products, Android phones and all types of digital content as fast as they come to market.

It is more than significant that outstanding content producers are struggling to make new media pay off for them. Apple has found a way – make the cool products that consumers will scarf up even in a prolonged recession.

But Verizon hasn’t come up with a good idea nor have the other cell phone operators beyond what they fell into which was text messaging at $20 per month. And who can live without text messaging?

The digital future is more than texting, apps and iTunes.

Apple isn’t even going to go there. Steve Jobs is smarter than that. Apple will continue coming up with the products and infrastructure and will charge content providers a distribution fee. And while some publishers have complained about Apple getting 30% of their subscription take, there has always been a distribution fee.

Radio stations have to maintain towers and transmitters and engineers (except at consolidated stations where they’ve fired most of them). Newspapers have printing presses. TV isn’t cheap to produce – production takes people and costs money.

For content providers, then, new media companies and traditional ones like publishers, radio, television, music and even film – there are some significant roadblocks in the way.

1. Royalties

Unless and until the record labels work out a fair compensation structure for the use of their music, there isn’t going to be a digital revolution in content. The labels remain under the mistaken belief that they can get away with forcing content providers such as Pandora to pay draconian royalties, but as long as they persist they are actually hurting themselves.

Once resolved, I can see radio and TV personalities using the iPad as their “transmitter” as they fully integrate music into what previously might have wound up on the airwaves. The sooner a deal that is better than streaming media has happens, the sooner we can get on with the digital revolution and in fact the labels can prosper. (I'm going to spend some time on this at my upcoming Media Solutions Lab).

2. Pay vs Free

Get used to paying for Internet content because as paywalls get erected, content that is unique, compelling and addictive will be an option for consumers. There will always be free. And I expect a lot of traditional-minded media companies to offer clunky paywalls that will fail. Inside Music Media switches over to a paid subscription model probably this week if final testing goes well.

Did you hear what Apple may be doing?

Offering a new subscription plan to newspapers that also see the iPad as the future printed newspaper replacement.

The speculation is that Apple will take its customary 30% fee for delivery and a whopping 40% share of all advertising from the publisher’s apps. And yes, Apple will relent and share its readership data with partnering newspapers. For that price, why not? If you’d like to read more about the Apple speculation, click here.

3. Failure to see that all digital must be built around social networking

This is a huge mistake. Simply aggregating good content, slick pictures, video and marketing savvy sites is no longer enough. We used to call that building a website.

Today, content providers must start with a social network and super serve that network of supporters who will want to talk to them and each other. It’s a different mindset. If it isn’t optimized for an iPad – of which 21 million more are expected to be sold to consumers in the year ahead – then it’s just a website and websites are out. That’s my prediction.

4. Monetization

I am often reminded of the late management guru Peter Drucker telling one of my media conferences before his death that the Internet will be successful – in 30 years! Why so long? Now we’re beginning to see why Drucker was the modern management genius he was. There must be an adequate way to monetize the Internet.

Porn sites found a way before Google sold search ads. There are web ads everywhere these days with success defined as one or two percent of viewers actually clicking on them to connect to the advertiser’s message – a low standard, indeed.

There are three ways to monetize the Internet right now. Ads. Paid subscriptions. And event marketing -- one of my favorite because few know how to do it and yet it is perfect for social networking.

I can see bloggers holding live events that have sponsors once or twice a year so that they will be able to charge less or nothing for their content. Of course – and let’s say it together -- compelling, unique and addictive content is a must.

5. Lack of adequate WiFi and finite cellular bandwidth

Bandwidth is being gobbled up by consumers using apps on devices that are becoming hogs. A few providers are charging more for bandwidth and if that continues you’ll see a slowdown of the digital content revolution we are all expecting.

WiFi must be universally available in a car, almost everywhere. The spectrum to make that happen may be coming available, but without "everywhere WiFi" and tons of available bandwidth from cell carriers, the revolution remains stymied.

6. Misunderstanding the next generation

No matter how many times I say it, only Steve Jobs does it – take the lead from consumers developing products and/or services. In the past, media companies had a monopoly on delivery. In essence, they guessed or in some cases researched their way into business. It is scary how little billion dollar media companies actually know about consumers. They know what they think they know and that isn’t usually accurate. To the student of students, success will flow.

Often we assume the digital future as a given.

This morning, you see the challenges as well as opportunities that lie ahead to content companies looking to go there.

For those of you who would prefer to get Jerry's daily posts by email for FREE, please click here. Then look for a verifying email from FeedBurner to start service.

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

How Much New Media Must Radio Do

At first, Bruce Reese’s comments made at Kurt Hanson’s RAIN Summit in Washington, DC this week startled me.

According to press accounts, Reese, the Bonnevile CEO, said, “I’m not sure I see streaming as a big revenue source, at least for our company”.

Say WHAT?

Bonneville is the one radio company actually making significant money from new media.

Even at this very moment – after years of recession – some 6% of Bonneville’s year-to-date net revenue and 8% of its net operating income are a direct result of digital endeavors.

Insiders at Bonneville say that the corporate edict is to grow those numbers in the year ahead while spending next to nothing to do it. In other words, Bonneville is just like other radio groups in that when it comes to new media, it throws nickels around like manhole covers.

I am a great admirer of the way Reese runs Bonneville, arguably the most employee-friendly company in radio. And while I don’t agree on his choice for NAB CEO, Reese is a smart radio guy who gets it.

That’s why I am wondering aloud why Reese is publicly throwing cold water on the notion that digital media is going to be a huge part of radio’s future prosperity.

If you consider new media advertising, you’ll note that during the almost three year economic downturn radio has lumbered through, only new media posted growth numbers in ad revenue. I believe when a full recovery is felt, new media ad sales will continue to outperform traditional advertiser options even as others recover.

So what is Bruce Reese up to when he talks about streaming as more of a promotional than revenue generator?

In fact, here’s five things Reese knows that I don’t think he’s sharing with his competitors:

1. New media as a promotional vehicle for stations – as Reese claims – is a dud. An out and out loser. Streaming cannot effectively drive users to terrestrial radio because they are different animals. The widely held belief on the part of radio novices to streaming is that it will increase listenership and revenue. As far as listenership, most experts agree a 3% audience spike is about the most that can be hoped for. As far as major radio stations streaming revenue, forget it. It just hasn’t developed.

2. New media’s future is not streaming. Young people do not have the attention span for radio online. Even Pandora is enjoyed with active participation and on-demand elements that keep its 50 million plus coming back again and again. But radio stations from several decades ago garnered better “average quarter hour” so to speak than Pandora does today.

3. Until a royalty deal – a fair and inexpensive one – can be worked out for radio broadcasters wishing to use new music in short on-demand mobile programs, the music option is dead. And with the guy Reese put in as CEO of the NAB (Gordon Smith), the radio industry is not getting any great discounts for new media royalties in return for $1 billion in additional annual terrestrial radio taxes.

4. Reese says Bonneville’s KSL, Salt Lake City was making money off classified ads before Craigslist. That’s good. But only a small component of what radio must do in its coming digital future.

5. Reese said if digital media is going to work, it is going to work fast. Partially true. This area is red hot but radio people don’t have much of a touch because they don’t understand it. To be candid, they think new media is a promotional tool for radio. Oops.

Let me reiterate, streaming, mobile content, social networking and other new media initiatives are not promotional tools for radio.

That’s exactly what is wrong with radio thinking when it comes to new media.

We want to cram radio into cellphones and iPads. But the audience has changed. Listener attention spans have declined. New mobile consumer products are being purchased as fast as they can be manufactured.

Even in a recession.

Recently I cited a study that showed today’s young consumers would rather buy electronic devices than clothes.

But radio remains the same and its top executives actually think that this red hot world of new media is its promotional tool.

Now here’s the clincher.

I don’t think Bruce Reese actually believes this for one minute.

I do believe the part where he says he doesn’t want to spend much money on new media, but then again – what’s new about that?

As far as the future of the radio industry, let me be blunt.

There is no future if radio continues to insist that the only major option going forward is some form of terrestrial 24/7 programming alone.

I’m sorry. It hurts.

But, 70 million young people have been raised on iPods and the Internet. They are getting along just fine without hit radio and the other goodies we can offer them.

Reese is shrewd. He’s already outpaced his brethren by working under the radar to advance new media. WTOP in Washington, the number two billing news brand in the country, is perhaps the best example of integrating new media with terrestrial radio that I can name and I expect that it will grow even bigger.

You see, in actuality, Bonneville is not betting the future on WTOP’s radio signals alone.

They are protecting their brands.

Putting content – separate and apart from the terrestrial signal – where consumers live today on mobile devices and online.

I don't blame Reese for not giving company secrets away to competitors.

So, after careful consideration of my friend Bruce Reese’s comments, I have concluded – if radio wants a robust revenue future, don’t do as he says.

Do as he does.

For those of you who would prefer to get Jerry's daily posts by email for FREE, please click here. Then look for a verifying email from FeedBurner to start service.

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

The Next Generation of Listeners

I recently heard former Governor Howard Dean analyze the present political atmosphere as the establishment’s last stand.

Politics is politics and I’m going to try to put that aside in looking at something he went on to say that rings true if applied to the media business.

Dean, a Democrat and former presidential candidate, was criticizing his arch rivals the Republicans and the Tea Party movement. Again, not looking to get involved in all that for this purpose, he went on to say that the next generation would reject any attempts to restrict gay rights or attempts to impede immigration.

These are certainly two super charged issues and Dean’s comments reminded me of working with college students at USC.

We often look at the world through our own eyes and experiences. Radio people think there will always be 24/7 radio and record labels apparently think they can get the same high profits for selling music that they once earned for selling vinyl or CDs.

The generation that is now coming of age – Generation Y – is reshaping everything. It is strong in numbers at about 70 million and the last Gen Y’er has already been born but hasn’t made it to college yet.

If you’re looking for a political fight, you’re not going to get it here. My mother, a Democratic ward worker in her day, always reminded us that you’re not likely to talk anyone out of their political beliefs.

But there are some things worth considering about the next generation as it pertains to media.

1. They, indeed, have more open attitudes about immigration because they have likely embraced immigrants who are their friends in person and on Facebook. As a professor I can tell you that college students care very little about racial divides that talk radio obsesses over. They see the world in one color of humanity – a characteristic of which we parents should be very proud.

2. Sexual preferences are personal decisions that are openly supported in large part by this generation. Of course, there are exceptions. There is more lesbianism on campuses, more gay relationships. Gen Y is just fine with this. Listen to their music which is the soundtrack of their lives and “I Kissed a Girl” is more than a song, it is a marker of change.

3. Number one and two above means that the kind of issues – political and societal – that are the fuel of talk radio stations will never compel the next generation to become a listener. Howard Stern, radio's famous shock jock, means nothing to Gen Y. If they want shock, they’ll kiss a girl or dress like Lady Gaga or be Rihanna. This is fundamental to content providers who want to find the next way to engage an audience. Politics, intolerance that surrounds the immigration issue and restricting sexual behavioral choices will likely not fly with them.

4. The listener of the future is also very civic-minded. I have said this many times and yet media executives make short shrift of it. The next generation cares what their stars, singers and friends are willing to do to help the environment, lend a hand to others and build a better sense of community. Look no further than Facebook founder Mark Zuckerberg who gave $100 million in Facebook stock to the troubled Newark, NJ public school system after getting to know charismatic Mayor Cory Booker. As The New York Times put it, Zuckerberg has “no particular connection to Newark … But in July he and Mr. Booker met at a conference and began a continuing conversation about the mayor's plans for the city, according to people familiar with their relationship." The Harvard dropout did have a particular interest in civic issues.

The point being that understanding our own business is not going to be as critical in the emerging digital media world as being an expert at understanding the changing consumer.

To do so would mean adapting to their interests which are polar opposite from older talk radio listeners.

Extend this further and any station playing music is competing (poorly) with an iPod unless it provides live and local people that can relate to Gen Y the way baby boomers and their parents were able to relate to radio, TV and journalism people.

Steve Jobs – who took one college semester before dropping out – is the gold standard as far as I am concerned for understanding the next generation. He’s a complex man and no personal role model other than to see how he has built at least three businesses (including Apple twice) by having a better understanding of the youth market than any one else.

Jobs may have this ability in his DNA.

I am suggesting that the rest of us can acquire it by more keenly observing this revolutionary new market than only channeling the views and policies that worked before 2000.

Success in the growing mobile Internet is directly proportional to how willing we are to see it through the eyes of a young generation that has singlehandedly redefined much of society through social media and the Internet.

Former House Speaker Tip O’Neill is famous for saying “all politics is local”.

To adapt that memorable phrase to a media industry on the verge of monumental change, “all media is live and local” and must reflect the social, political and civic differences of the next 70 million listeners and viewers now coming of age.

For those of you who would prefer to get Jerry's daily posts by email for FREE, please click here. Then look for a verifying email from FeedBurner to start service.

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

The New Listener’s Hierarchy of Needs

In psychology there is a theory called Maslow’s hierarchy of needs.

Abraham Maslow’s 1943 paper A Theory of Human Motivation identified self-actualization, esteem, love and belonging, safety needs, physiological needs.

As today’s consumer morphs and technology spurs alterations in their behavior, it has occurred to me that the media needs of humans has not only changed but their needs and priorities are changing – important for content creators and marketers who want to follow them to the digital Promised Land.

It’s fair to say in the past -- say 1960’s and 1970’s – a consumer's media need primarily included radio and television. To have a radio to be connected to their rock and roll music and news and information. And then a TV to enjoy arts and entertainment as it developed in color.

Even in the 1960’s reading a newspaper was optional compared to, say, the 1940’s when consumers bought newspapers on the street corner to read “Extra” editions to learn about the latest war news. It’s debatable whether radio or TV would be first on the 1960/1970 hierarchy of needs list but suffice it to say they were interchangeable.

I thought you’d enjoy my view of today’s consumer’s hierarchy of needs in light of the digital revolution, new media, the Internet, filesharing, social networking and the like. Keep in mind I am observing the next generation because at 70 million strong and coming of age this is a bellwether group.

So here are Del Colliano’s Hierarchy of Media Needs as of this moment:

1. Text Messaging

Take away any other device, any other connection to today’s world of communication and a Gen Y’er could probably survive. Take away their cell or smartphone with its ability to text message and you have created tremendous anxiety.

Interestingly, text messaging is not content creation such as radio formats or that magazine articles offer – it’s a way to stay connected. Moreover, I believe texting is a replacement for telephone conversations in this generation. Parents of Gen Y’ers please observe, wouldn't your children rather text you then call?

The voice call is a goner. Skype with video is a keeper. FaceTime, the new Apple iPhone feature makes mere voice calls seem like communicating by antiquated telegraph.

The customary mobile carrier texting charge of $20 is assumed and accepted by everyone even if their parents are paying the cell phone bill. In other words, without the ability to text, today’s consumer is anxious and disconnected from their peer groups. Mobile carriers fell into this one because they provide nothing but connectivity and the next generation does the rest.

Still, text messaging is your silent competitor.

2. Facebook

One could argue that Facebook trumps text messaging and I would be up for that debate, but to live without Facebook in the world today is like living on a desert island all alone. Facebook is simple and because everyone is on it, it provides a means for communication that is extraordinary.

Facebook is texting institutionalized.

Facebook also allows for the self-absorption that permeates our society today and in fact promotes it.

Example: by counting and displaying how many friends one has. In reality, I have only had a handful of best friends in my real life but lots of acquaintances in my virtual world. Yet by counting and displaying the number, it redefines what "friend" really means.

Also, sharing pictures is simply the modern way of showing someone else a picture album or making them sit through a slide show – a digital improvement to say the least.

Facebook defines Gen Y and even though its founders have opened it up to everyone on the planet (over 65’s are the biggest group of new Facebook accounts currently), Facebook is the pivotal communications point.

By the way, when you look at the percentage of membership to Facebook compared to say MySpace or others, number two is a very distant number two.

Social networking will define Gen Y – not the technology that enabled it.

3. Filesharing

Record labels don’t have to be ashamed that they had their ears pinned back by an entire generation that broke into the record store and stole their music.

Filesharing has helped quench Gen Y’s thirst for music discovery that was not being fed by music radio stations. You’ll remember short playlists have been a staple of radio program directors to get ratings. When you sell out the listener for the audience research company’s methodology to win ratings, you wind up with unhappy listeners.

Don’t look now but the radio industry is doing it again – pandering to People Meter drive-by ratings knowing full well that listeners can find plenty of music on their own online and at the iTunes store.

4. The iPod

Before Apple invented the iPod, portable MP3s were not a threat to the record industry or radio. Apple made them cool, portable and intuitive. Apple's iTunes store was where music lovers could buy legal music for a reasonable price – 99 cents. Now, iPods are loaded with all kinds of music from differing destinations.

They are a portable jukebox or to the next generation what a Walkman might have been to the rest of us. The big difference is an iPod user is in control of the playlist -- when the music plays, if it plays and for how long it plays.

And no commercials.

5. The Laptop and Internet

The base station for all the above needs reside on laptops and connectivity to the Internet. From there, websites will go mobile on iPads and other portable devices. The iPhone and android clones have become enablers of the needs described herein. Without a computer and the Internet, arguably the rest of today’s needs for Gen Y could not have developed.

Before we end, look at what did not make the new consumers Hierarchy of Needs list.

Radio – it hurts, but only in RADAR studies can you find tons of radio listeners. In the real world, they are casual listeners at best just as station owners have in fact become casual programmers cutting live and local programming for financial savings.

CDs/vinyl – the record or CD is dead. Music is alive. The labels don’t seem to know the difference. The need is not for CDs. It is for music discovery.

Print – No way. Gen Y and many of the rest of us have become as disinterested in print publications in direct proportion to how interested publishers are in cutting expenses and firing reporters.

Someday soon you may see iPads on the Hierarchy of Media Needs. It is the killer app. Wait until you see how many iPads Apple sells at holiday time and next year (Full disclosure: I am an Apple shareholder). Still, iPads are on everyone’s holiday gift list.

In the end, let’s not make this the last time we actually think about today’s consumer’s hierarchy of needs because understanding it allows our creativity to be inspired and energized to meet them.

For those of you who would prefer to get Jerry's daily posts by email for FREE, please click here. Then look for a verifying email from FeedBurner to start service.

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

What Radio Should Be Doing on the iPad

Okay, we’ve talked about the future of the iPad for years now. That’s right, I told you, my readers, it was on the way over a year before it was introduced by Apple CEO Steve Jobs.

Now on to what radio, the record business, publishing and TV should be strategizing.

First, this quote from The Economist that I think sets the stage:

“THE advertisement for Newsday’s iPad application starts blithely enough. A man in a shirt and tie sits in the kitchen, reading the New York newspaper on his tablet computer. He turns the device on its side and watches the live feed from a traffic camera. Then a fly lands on the table. The man quickly raises the iPad and smashes it down, shattering the glass. The ad implies that the iPad is superior to old-fashioned print in all sorts of ways, just not every way. It is a joke—but also a good summary of how newspaper and magazine outfits have come to feel about Apple’s product in the eight months since it was unveiled”.

It hasn’t even been a year since Apple’s iPad has been in the hands of consumers with so many options and already the iPad promises to be the content delivery system of the future with all its advantages and a few disadvantages. Some analysts estimate that over 20 million iPads will be sold in 2011 alone.

You’ll see the expected ego fight between media titans and Steve Jobs. I’m betting Jobs will out maneuver them. He just knows what works with this new generation -- not that his ego is any smaller.

Sports Illustrated got in early with impressive graphics.

You’ve all heard the story of Wired selling 24,000 paid apps at $5 a piece the first time it tried paid subscriptions.

But as The Economist points out, Time is starting to hold back content from its free website. This is the sign of a confused plan going forward.

HBO is going to try “TV Anywhere”. Their own Hulu. It won't work.

Nor will individual sites by TV networks or content producers who want to control the delivery system. It would be as if a TV network could have previously aired content only over its own televisions. Without diversity from -- yes, competition -- that model would never have worked.

Rupert Murdoch wants pay walls up even on local newspapers that aren’t very compelling, addictive and unique. He's laying an egg with that one.

Don’t even go where The New York Times is going in January – a metering system that will punish readers of The Times who read a lot and let the casual reader see a handful of stories for free each day.

All these ideas are worth trying, even though in my opinion, few of them are going to work.

At least there is the recognition that the iPad has already been adopted by consumers as their TV, radio, newspaper and movie screen. Perhaps you saw this coming if you were the parent of a college age student who started watching “TV” on their laptops a few years earlier. Now with the iPad, those laptop TVs just got smaller and even more portable.

Needless to say other consumer electronics companies are rushing to get into the space Apple will occupy as chief transmitter of content to cool devices. And no doubt clueless media executives like NBC Universal’s Jeff Zucker are going to continue to insist that 99 cents for a TV show is too little.

In fact, consumers think it is too much.

What a disconnect.

Sadly, the radio industry is trying to play catch up with old fashioned websites and doesn’t understand that radio will have to reinvent itself as audio, video and text rolled up into an iPad. That terrestrial radio is still a viable business for now if it is live and local but it will not be the same business on a portable consumer electronic device like an iPad.

So, with that in mind, a few observations about what radio, the music industry, television and publishing can do to optimize their inevitable iPad presence sooner rather than later:

1. Don’t duplicate -- innovate.

That is, restricting traditional media’s efforts as brand extension to an iPad will fail. I’ll say it again. Trying to cram TV onto an iPad just to deliver it to millions of mobile devices will not maximize the audience or profit potential.

New content will need to be developed for iPad delivery. However, media outlets with solid brands can use their expertise in creating new and separate content in these brand areas for iPad delivery.

2. Think of the iPad as a mini-website and you’re done.

I’m afraid that’s what media executives think. The iPad is its own experience not a small website. In fact, while you can view your favorite websites on iPads, it is the handheld experience that begs for innovation.

Sports Illustrated is on the right track. Look to the major pro sports to figure this out first. I’m betting they will get it right as well.

3. Everything starts with social networking.

The thing that scares me the most about media executives (besides their affinity to imitating Gordon Gekko) is that they are missing step one – start by building a social network.

I take this advice seriously. My new paid subscription website which will debut in about two weeks or less is built for the members and their interests first. The topics, the presentation, the two-way communication – it all matters as much if not more than the stories I write.

For media execs, take heart that social networking is the revolution that matters most and in 20 years when historians look back, they will not recognize the advent of the Internet alone or even the mobile Internet. It will be social networking that will be looked at as the digital revolution.

In present terms, to those who can differentiate between the Internet, websites, filesharing, streaming and the other distractions that confuse sound strategic thinking, will go the victories.

The iPad is a cool portable device but its real purpose is social networking enabler.

For those of you who would prefer to get Jerry's daily posts by email for FREE, please click here. Then look for a verifying email from FeedBurner to start service.

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

After FM, Where Does Radio Go?

You’ve no doubt been reading about the rush that has been going on of late as owners are porting their AM radio stations over to FM.

Bonneville was one of the early pioneers of moving AM brands to FM because, frankly, listeners have migrated over to FM. In fact, they migrated a long time ago.

It is remarkable but one thing has not changed – listeners will listen to AM radio if they want to hear what the station is broadcasting. These available AM listeners do tend to be older and the move to FM makes sense if a brand is worth protecting.

Stop right there.

Fast forward another five or ten years and ask yourself where will great FM radio brands be connecting with audiences then – online, on cell phones, iPads or still on the FM band?

While moving valuable listening brands from AM to FM appears to be a no-brainer, one has to wonder why it took 20 years for this migration.

There are several interesting points:

1. A great brand is a great brand and while an FM signal doesn’t guarantee an audience without excellent programming, being on FM is not enough without an excellent brand (not repeater radio, heavily voiced tracked stations without community presences and live and local operations).

2. I believe even young listeners would have found the AM band if they had a reason. It was the radio industry in its infinite wisdom that assumed that FM would be for music because it is in stereo and AM would be for news/talk because it is mono. Actually, that assumption helped start the migration decades ago when young listeners actually knew what an AM station was. Ask a college kid now and you might find that you are horrified with their response. Did it have to be this way?

3. A solid FM brand does not need to be streaming on the Internet. Period. The very successful WBEB-FM, Philadelphia owner Jerry Lee stopped streaming because it was a poor return on investment (i.e., royalties). And, he was only picking up a very small amount of listening to add to his number one ratings. Over a year since Lee pulled the plug and WBEB is still number one in the Philly PPM. No stream.

4. Study a guy like Lee and I do because he was my first employer in radio. Lee in essence has become a mega millionaire many times over with essentially one radio station – 101.1 – not even a great signal. In fact, a lousy one. Lee flirted with owning WFIL-AM after its heyday and then dumped it. He returned to one FM station – over-the-air – and a license to print money even today. Even in a recession. Even while everyone scrambles around to dabble in new media. How could that be? Blaise Howard and a series of great GMs didn’t hurt. PDs like Chris Conley and Chuck Knight. Bill Moyes as a researcher spending a lot of his time successfully fending off competitors like Greater Media most recently.

I know what you’re thinking.

Jerry (me), make up your mind. Should radio be in new media or remain a pure over-the-air venture?

My mind is made up.

Radio should offer the best product and service to its listeners. Owners should invest in research – they don’t. In marketing – very little. In advertising/promotion – are you kidding, who wants to spend that kind of money. That’s how Lee has done it for decades, still does it and no one has figured it out.

Very few want to pay attention to him.

Lee, now in his seventies, is a man of many interests but he never sold out to the consolidators even when they could have made him richer. He has a passion for the process of being number one. I’ve known him a long time and I can’t say he has ever lost his interest in radio.

One station – that outperforms others by far.

So, what it tells me is that if you want to observe Lee, you can learn a lot. And you’ll also find your answer about radio’s role in the mobile media world.

Shall we?

• Terrestrial radio should by and large be live and local. You have to spend money to make money. Must do research. Must advertise. Test music, etc. The goal is to build a strong brand and defend it.

• It does not follow that streaming is the future because as Lee well knows (because he is a shrewd dude), consumers don’t listen to computers or for that matter cell phones and even iPods the way they listen to radio. In other words, a radio format doesn’t work on a telephone. Even an iPod is not a Walkman. It is an on-demand jukebox that consumers use to jump around from song to song even before it ends. Cell phones are not radios and no one can make them become one. A car radio isn't even a car radio anymore, it is an "entertainment center" that shares its time with drivers who are texting.

• The mobile Internet requires new content delivered in shorter segments that put the user in control of their on-demand entertainment. Radio is used to a hot clock and 24/7 broadcasting. The mobile Internet is waiting for the next Bill Drake to draw a mobile hot clock on a napkin at the new age equivalent to Martonis that will consist of short elements of content – video, audio, text with social networking.

Therefore, a great terrestrial radio brand works only on terrestrial radio.

And mobile Internet content – even inspired by a terrestrial brand – will only work if it is separate and apart from radio formatics that embrace short attention spans, on-the-go living and connectivity.

For those of you who would prefer to get Jerry's daily posts by email for FREE, please click here. Then look for a verifying email from FeedBurner to start service.

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

Consumers Now Spend 50% of Their Day With Media

In the 1950’s and 1960’s radio and television broadcasters and publishers could never imagine a public whose appetite for what they do would be so great that it consumed half of their waking hours.

Today we have evidence that the Internet, cell phones, Apple and social networking have created addicts out of people of all ages.

In fact, all of this growth in media consumption has happened within the last two years and far exceeds media demand for three decades prior.

There are hard cold facts to back it up.

A new Ipsos OTX study of 7,000 online consumers spanning a wide age range of between 13 and 74 confirms that among those surveyed people are now spending half of all their waking hours with media and have increased their media consumption by a whopping hour a day over the past two years.

To put that in perspective, they spend more time consuming media than working or sleeping.

What’s more, eliminate the 74 year olds from the study and focus on the younger demographics and the media consumption number would likely be over 50%.

I want to take a look at the ramifications for content providers, but first let’s just put the facts in perspective:

• 24% of those 7,000 surveyed own a web-enabled smartphone as cellphone ownership declines from 81% to 65% since last year. Obviously, you see why I have proclaimed this decade the decade of the mobile Internet. Consumers always show us the way if we will but observe their habits.

• TV, an industry that I warned is next to feel radio’s generational growing pains, is in big trouble. As of this writing, about 33% of primetime TV viewership takes place online. What’s worse is the TV industry thinks selling short ads is the answer and fails to understand what would make a more profitable subscription model work. Watching TV is now influenced by TiVo and DVRs as well as online video – an increase of 49% over last year.

• Social networking sites – the kind you and I have discussed here in this space every week – are driving the consumer appetite for all kinds of media. Traditional media execs have a hard time swallowing the concept that Facebook visits, game playing and even texting are their competitors.

One more thing.

This survey was conducted only a couple weeks into the start of the iPad era. One could probably assume that the iPad sales that ensued and the addiction that usually results will help create a nation of media zombies who are always connected and rarely engaged in what I call the analog world. This has serious sociological repercussions most of which Steve Jobs and media executives could care less about.

Light-emitting devices such as computer screens, cell phones and iPads disrupt sleep patterns which eventually lead to a decrease in melatonin that promotes healthful sleep and produces Serotonin that affects our moods. Antidepressants are often used to increase Serotonin in depressed individuals. How will such rabid media use affect society? I’m interested in this and if you are we’ll revisit the topic another time.

Back to the 50’s and 60’s.

Imagine if a radio program director back then could find a way to hook their listeners up to a transistor radio and have them communicate back and forth, never turn it off and have a direct channel into their psyche.

That’s what we have today.

We thought that Clear Channel was the ultimate neurotransmitter and that network television was the medium civilization could not live without.

But not so anymore.

Our lives may have been changed more by Apple than any politician, mentor, teacher, role model or scientific advance because Apple makes the devices we crave and feeds the need for content through its iTunes store. Other electronics firms and cell carriers then follow and the trend proliferates.

So let me lay it all out for media companies and future media entrepreneurs in content and music:

1. The new gold standard is 30 minutes -- if that. You’ll have to make your content ready to be interrupted or it will be discarded by a distracted consumer.

2. Someday soon, all content will be offered up in modules – short models (read number 1 above). Consumers will have to choose whether they want to hear a personality’s bits divided into options and then decide which ones to hear on-demand. It’s now about the sum of the parts – not the whole.

3. Commercials as we know them are dead. So are print and Internet ads, but don’t tell Google – a traditional media company if there was ever one disguised in new age concepts. Social networking will track down consumers so you had best work on that concept rather than broadcasting messages consumers will increasingly ignore. Pandora can reach you in Dover, Delaware on your mobile device.

4. Everything you do will have to contain video, audio and text.

We are moving to a world where there will be no more television, radio or publishing as we have known it.

The rules are changing.

The question is -- do you want to stay ahead of these rapid consumer changes or try to grow the status quo and put major media businesses in peril by the time next year's statistics will become more compelling?

For those of you who would prefer to get Jerry's daily posts by email for FREE, please click here. Then look for a verifying email from FeedBurner to start service.

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

Howard Stern, Digital Media Pioneer

Adam Carolla may be able to attract 400,000 podcast downloads and not make money, but Howard Stern can.

Sirius Satellite Radio listeners who have to lumber through the negotiating period running up to every Stern contract expiration are used to the game.

Talk that Stern will not be back.

That he’ll return to terrestrial radio (not likely).

Just do three days a week at Sirius for the same money and on and on.

Howard Stern is one figure who could make it in digital app-dom if he wanted to do it.

But stop!

I have not lost my mind. I’m betting he will be back with Sirius and a deal will be cut and all will be fine. However…

What makes Howard Stern an ideal candidate to marshal his audience and direct them to the digital space is his ability to create unique, compelling and addictive programming unlike other talkers of his ilk.

Stern is too smart to do a radio show online. At least I hope he is.

Stern understands that the best way for him to make the switch is to offer his bits in separate units that can be accessed as needed or wanted on mobile devices. He was born to be on iPads and there will be over 20 million more of them sold by the end of 2011.

Wise enough to smell money from event marketing, merchandising and other non-traditional ways.

Don’t rule out subscriptions. As you know I’m betting that pay is an alternative to free going forward for compelling content. Stern could get paid subscribers for a reasonable rate. If the NFL can get over $400 for its online football package – and it does – Stern can get a dollar or two a month from his loyal fans.

Self-promotion? Who is better?

If he thought he was free to speak and act on Sirius, imagine what the Internet would mean? There could be archives where his entire career of bits can be broken down into segments that can be accessed on-demand.

What’s more, Stern is likely to be the beneficiary of viral marketing. That is, how easy would it be for a happy Stern fan to give a seven-day trial to a friend (over 21) and get them hooked?

Stern may come away with a way to do his Sirius show for a while longer, but he would be wise to get the rights to what he does, chop his past programs up and then do separate material made for mobile listening for his paid subscribers.

Do the math, 400,000 listeners times $1 a month is $400,000. Or almost $5 million from that alone for a year not counting events, merch and so on. But I think he could get more than $1 a month. He could also do commercials, but I am not a big believer in radio commercials as a revenue tool for the digital world.

Howard Stern would also have to make everything he does from now on a video podcast – let the consumer choose whether to listen or watch.

And heavily employ social networking in everything he does and I'm not just talking about Twitter and Facebook.

I can see Stern on an iPad live once a day taking messages and texts from fans in real time and collecting valuable contact information. Then making the content available always and forever to paid subscribers.

This concept will work for anyone.

Just find your market and decide whether you will do free or paid.

If the content is unique, compelling and addictive, then you can consider charging a price that the market can bear.

Digital content delivered as a list of choices not a “show” can work for small audiences or large ones. Coin collectors could appreciate an expert on that topic with all the elements we’ve just described as available to Howard Stern.

Music is problematic until royalty issues can be revisited – that may be a long time. Imagine what you can deliver to people anxious for music discovery. In fact, the labels could be in that business. But they don't have a clue about the digital future. They just keep replacing execs who are just as out of touch as the ones exiting.

Howard Stern is big enough, bad enough and smart enough to pioneer one more thing before he hangs up his headset – paid on-demand digital marketing done right for his legion of fans to support.

This is the new broadcasting that will partner with terrestrial radio. Smart media execs will pursue it.

For those of you who would prefer to get Jerry's daily posts by email for FREE, please click here. Then look for a verifying email from FeedBurner to start service.

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

Digital USA Today – No Way

If everyone knows that the future is digital, then why doesn’t everyone know how to create content for the digital future?

The latest casualty appears to be Gannett’s USA Today where a decision was made last week to cut the work force by 9% on news of declining ad revenues and circulation.

USA Today used to be number one in paid circulation but now News Corp’s The Wall Street Journal has surpassed it with 2.2 million daily readers.

Wait a minute.

Is that the same Wall Street Journal owned by Rupert Murdoch who loves printed newspapers and who is forcing paywalls onto his print operations?

Funny about that.

Whether you agree with Murdoch’s politics or his style, he’s shrewd.

The ultra competitive Murdoch is now trying to rub it in the face of Arthur Sulzberger, Jr., the New York Times publisher who has successfully grown the local New York paper into a position of national prominence. Take note that Murdoch is doing a monthly Wall Street Journal Magazine to compete with The Sunday Times Magazine (at least their advertisers), a local city section to get in Sulzberger’s New York business as Murdoch pontificates about paywalls for the digital world.

My take is that Murdoch is using the paywall to keep subscribers paying for print publications. It’s a strategy not to give away the printed content online. That’s all well and good but Murdoch is not likely to be viable in the future with any of his brands if he cannot sell them to young consumers who don’t even use newspapers to wrap their fish. I don’t think they even eat fish – yet.

Along comes unpopular USA Today Publisher David Hunke who in July ticked his real journalists off when he wrapped the front section covering up the biggest stories in an ad purchased by Jeep.

I love what Neuharth said in The New York Times:

“If such a stupid decision is ever made again, I hope that will be the result. That would leave those who apparently don’t understand what a newspaper is to try to put one out without a news staff.”

So, USA Today is now spinning its failure to create and deliver content to its former audience in numbers that it used to deliver as a call to the digital future.

USA Today says it will now focus on its digital operations and will feature breaking news on its website. Hunke is so clueless, in my opinion, that he actually said that the new online USA Today will aim to post articles of breaking news within 30 minutes of happening.

All together now -- because I’d like to think that my readers know better -- what is wrong with his brag?

Of course, USA Today will be about 29 minutes too late. Twitter is faster for getting the word out. Facebook can do it quickly.

This serves as a great teaching point about why traditional media – not just those klutzes we know and love in music and radio – don’t get it.

Let me spell it out:

1. USA Today was called “The USA in an entirely different way” when it was launched. In color, in sections, inclusive of news from all 50 states, short articles before anyone ever heard of ADD. How does it live up to its mission in its latest digital iteration when any competitor can do the same thing?

2. USA Today was a great paper for under the hotel room door or on the airplane before takeoff. They knew it and developed lots of stories about travel and aviation. Tell me again how covering breaking news online with everyone else in the world will make USA Today be born again? Of course if that's all there is, it will fail.

3. The iPad is the new TV, radio, newspaper, magazine, record store – you get the point. Content must be optimized for the iPad or that content is not likely to find its audience in this growth sector.

4. And, content must be unique, compelling and addictive or else why would anyone need it? I believe in free and also in paid, but if you want readers to pay for digital newspapers, they had better offer something not easily delivered by their competitors. Michael Bloomberg, in my view, gets little credit for how smart he really is. Way back in the day he sold specialized information to business clients that needed his computer terminals. To this day, Bloomberg is a leader in creating great content and delivering it in relevant ways. NPR is another.

Why does this matter?

The digital frontier is not a fallback position for failed traditional media companies.

It encompasses a new set of rules and standards that are separate and apart from traditional media.

For example, and bear with me on this fantasy here …

• Radio will one day be delivered in “shows” ranging from minutes to hours on the delivery system of the day which so far looks like the iPad. They will be heard on-demand. No more morning drive. A listeners “morning drive” will be whenever they want it to be.

• Audio, video and text will be included in every communication so there will really be no radio, TV or newspaper anymore. It will grow into a hybrid.

• Music discovery will be done by consumers who become the new age disc jockeys transferring files to friends and recommending new acts. This isn’t so bad. There will still be a demand to own the music once it has been consumer-tested. However, you can see that record labels do not believe my last sentence.

The only reason all of this hasn’t come to fruition right now is because technology has not caught up (like in seamless WiFi) and royalty rules (as in fair priced licensing to streamers and mobile content providers) so it is acting as a deterrent.

Maybe that’s good because executive management hasn’t caught up or caught on, either which is why you and I have a better chance of succeeding with a new age digital business than the traditional media companies who have access to all the money.

For those of you who would prefer to get Jerry's daily posts by email for FREE, please click here. Then look for a verifying email from FeedBurner to start service.

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

Radio’s Apple Store Solution

Every time I go to an Apple store, I spend money.

Don’t even ask.

I always find things to buy there and I am so willing. I'm spending down my Apple stock profits.

But I also observe a culture and an approach that is so fascinating that I got to wondering what would happen if the troubled radio industry would look up and learn.

Okay, I was actually not in the Apple store Saturday, but Sunday as well and I don’t know why I am amazed but the place was crowded both days. I mean these are the dog days of summer in Arizona and it is over 100 and, yes, very humid. Monsoon season when smart locals try to take a vacation if they can.

Still the place was packed both days with demographics we in the media business can really appreciate. Young, very young, middle age and old. All there getting involved with Apple products.

On this trip something registered that I would like to share with you. Not just the Apple store as a great and prosperous retail operation – it surely is that – but also as an approach to people, customers and the company.

While I was at the Genius Bar, a young man walked out from the back of the store in North Scottsdale. It looked like he was going home, but no, he was in fact leaving for good to go back to school.

Spontaneously, his fellow associates broke into an enthusiastic and loud round of applause led by store managers as well. The applause was so sustained, I don’t think you or I have experienced such clapping even after making a freebie personal appearance for our radio station employers.

Then, the customers joined in and clapped. It was too noisy to even talk to my Genius, but the real genius was the Apple leader who understood how feeling appreciated is the best motivator for employees.

Not money which costs companies money, but appreciation which is free.

I thought of radio employees who have lost their jobs during consolidation over the trumped up excuse that their employers could no longer afford them. And of those poor Cumulus employees who write to me privately even under threat of execution by the Dickey family that they hate their company and can’t wait to leave.

Not so at Apple.

Employees love to work there perhaps in part because they get a heavy dose of appreciation as an on-the-job benefit. I am not naïve about all of this. I am sure there are unhappy Apple employees out there, but they are harder to find than unhappy radio people.

The young man who helped me Sunday was interested to learn of my relationship to the radio industry and proudly whipped out his iPhone to show me an iHeartRadio app. I was very impressed.

He loves JohnJay and Rich at 104.7. Couldn’t identify the call letters but then again no foul, he didn’t have a People Meter on either. I learned that he only listened in the car and didn’t care for the station the rest of the day. What this young man wanted was what radio can’t seem to get rid of fast enough – personalities.

He tuned in for the personalities that radio is firing.

Would he be surprised to learn that his favorite Phoenix-based morning show was syndicated elsewhere putting other local personalities on the unemployment line? I didn't have the heart to tell him.

When he flipped through iHeartRadio for me this nice young man said he likes to listen on-demand which he reminded me he can do. But without JohnJay and Rich, he’s pretty much out of listening to radio unless he had to.

An Apple employee knows better than anyone that as long as WiFi is not consistently available while he is in the car and while mobile carriers charge or threaten to charge more for using the inferior 3G, he can still be a radio listener.

Unfortunately, if and when he can get an Internet signal consistently without additional cost, he’d probably leave his favorite radio personalities unless they follow him. And he is through with 24/7 broadcasting – like his generation, he wants on-demand.

It reinforced my belief that morning drive is whenever consumers want it to be and radio companies are killing themselves by letting personalities go. In fact, they should be hiring more for that day when seamless Internet follows this on-demand generation around.

This Apple employee told me that he can spend an hour and a half with me because his job is to show customers what Apple has to offer – not to close sales. It is a different mindset. In fact, I wondered why we don’t go back to that in radio – showing solutions (online, on-air, on the phone, in social networks) and become experts at showing, well – solutions.

Too many radio sales groups are beating the phones to sell spots and not solutions and believing the economy will return and so will radio budgets. That may be partially true, but when those budgets increase the new media components will increase with them.

One last thing.

He loves Steve Jobs – that flawed, quirky icon who runs Apple like a personal fiefdom. Respect for the company – for the management and its policies – that’s what he and others at the Apple Store have.

They don’t begrudge Jobs for being worth billions – and growing – every day but in radio we get sick to our stomachs when radio CEO's make huge paychecks.

Perhaps its an issue of competence or lack of it.

Or maybe that Steve Jobs has inculcated in Apple the belief that he cares to take a lead in designing new products, having them well represented to customers and institutionalizes the value of respect and appreciation to those employees who do not earn billions.

Could radio learn from this?

Visit the Apple Store and you’ll lament the missing element in today’s consolidated radio – that is exactly how great radio companies operated before the “enlightened” era of consolidation.

For those of you who would prefer to get Jerry's daily posts by email for FREE, please click here. Then look for a verifying email from FeedBurner to start service.

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

6 New Mobile and Digital Trends

Have you heard about what Sears is doing?

Sears Auto Center is conducting a marketing campaign online for drivers all across the nation this summer.

Their mission: Take $1,500 for gas, food and lodging and make a video introduction of yourself with those going along with you then Tweet, blog, report to Facebook and video your adventure.

Some think Sears has pulled off a TV reality series without TV for the new age for pennies on the dollar.

Sears Auto signs have to adorn participating cars and they will use social media as content along with pre-recorded video introductions.

“Exploring My America” consists of 21 teams on week long trips to places like the Appalachian Trail, the Dixie Overland Highway and Route 66 from Chicago to LA. Each car (sorry, winners have to use their own) gets a $500 tune-up at Sears Auto Center and gets equipped with a video camera and WiFi card to help the images keep flowing at exporingmyamerica.com.

Sears reportedly received 100 video auditions by the beginning of July. Online viewers do the voting. Each week from July 11 through August 28, viewers are voting for their favorite team after watching online photos, videos and reading blog entries created on the road. The winning team gets $500.

Earlier in the year Pepsi bailed on the Super Bowl and did a community activism promotion where local do-good groups could receive some of the millions they were offering. Again, online voters determine who gets the money for their community campaigns.

Increasingly, advertisers are going on their own to use the Internet as an alternative to traditional media.

Radio could be and should be doing these promotions which sound very much like radio promotions from another day. Radio got lost in its own robo world when it relied on ticket giveaways and texting contests. It may be time for a rebirth of local radio promotions that may (or may not) reside on the station’s airwaves.

There is an audience out there that is worth harnessing and radio people have the talent to find it. Note the sports teams that are starting to treat their venues as social networking opportunities by tying them together during the game.

Broadcasters feel comfortable broadcasting 24 hours a day, seven days a week and letting the audience catch them.

It’s obvious that content providers are going to now have to catch consumers where they live and work in other ways.

Five other interesting trends to keep an eye on:

1. Now people over 65 are adopting Facebook at a faster pace than any other age group – 6.5 million in May alone and more than three times from a year earlier according to comScore. Young demographics were indeed the earlier adopters.

2. Americans have increased their time on social networking sites by 43 percent, while their use of email has declined by 28 percent according to Nielsen. Some 40 percent of American’s on-line time is spent on social networks (22.7%), online games (10.2%), and e-mail (8.3%). These categories increased from 37% a year earlier.

3. An analyst for Simba Information says Americans use e-books at a rate much slower than it thinks. But there will be an estimated ten million e-readers out there by the end of the year up from only four million a year ago. Reading books electronically could be ready to take off but don’t count the Kindle out. Apple’s iPad has eye fatigue issues (not good for serious readers). There is also distraction from mail, the Internet, video and other things with the iPad that further complicate the segment. Color Kindles are on the horizon.

4. Streaming music subscription services continue to be rolled out even though no one service has caught fire. The latest is Rdio, a social music service that offers an unlimited streaming of seven million songs to computers and smart phones for $9.99 per month. Consumers can purchase tracks for 99 cents. This product and others such as Rhapsody seem built more for the record labels than a consumer. The labels insist on doing subscriptions their way which is why it will take Apple to stream your iTunes library from the cloud to make subscriptions work.

5. Android has become the number two smart phone behind iPhone (now 34% of the market). Blackberry slipped to third place within the past few weeks and RIM’s new iPhone-acting Blackberry isn’t selling all that well. It looks like a race between Apple and Google on this category. Global shipments of mobile phones running Google’s Android system grew 886% in the second quarter from a year ago (source: Canalys) and Apple is continuing to sell iPhones as fast as they can make them. Canalys analyst Pete Cunningham says, "By 2013, smartphones will grow to represent over 27 percent of shipments worldwide, with the proportion in some developed markets in Western Europe surpassing 60 percent and 48 percent in North America."

The first ten years of this new century were devoted to the Internet.

The next ten will be about the mobile Internet.

For those of you who would prefer to get Jerry's daily posts by email for FREE, please click here. Then look for a verifying email from FeedBurner to start service.

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

Digital Overload

A recent article in The New York Times was a fascinating study of what happened when a group of scientists took off for the Grand Canyon without their mobile devices for an analog vacation.

Cell phones did not work. There was no Internet access. This trip was an unscientific beginning to what I believe is going to be required research in the future on how heavy use of digital devices and other technology affects our brains.

There were five scientists in the group – some believers and some skeptics, as the article pointed out.

What they were searching for is the answer to the question, does heavy technology use inhibit deep thought and cause anxiety? Can getting away from being connected – such as camping out in the Grand Canyon – help?

There is no doubt in my mind observing young students at USC that depriving them of mobile connectivity causes extreme anxiety. Young people often sleep with their phones, waking up to respond to text messages at times and then returning to sleep even if that sleep is of poor quality.

Students are smart. At the peak of their learning ability. Yet many are tired and as students in bygone eras did, turn to caffeine to stay awake.

Study of the impact of heavy digital use on the brain is the focus of the National Institutes of Health which now has a division to support studies of the parts of the brain involved with focus.

Broadcasters, mobile streamers, content producers and musicians will surely have an interest in their findings.

All of us from the content providers to the end users are experiencing increasing anxiety from digital overload. How simple and perhaps therapeutic it was to only have a radio to listen to on the way to school or work. Now, we text while driving, get the traffic and weather from our phones, check email and other things while making the same commute.

In the 60’s, a listener might curl up with a radio and listen to Jean Shepherd on WOR from 11:15 p.m. until midnight with no other distractions. Now, 45-minutes is a long time to commit to any kind of content.

We cannot begin to understand the most important thing of all unless we study the consumer - how is the end user able to receive that which we create?

Back to the Grand Canyon.

These five scientists experienced a form of withdrawal that ended on the third day. They called it "Third Day Syndrome". I recently experienced some of this myself on vacation at the beach. Those first few days were brutal. I sat there looking at the ocean doing everything I usually do at a desk with digital devices nearby. What a waste of a view.

Here are some observations from the Grand Canyon digital experiment:

1. At least one scientist arrived at the conclusion that he may be turning to his cell phone in moments of boredom. You and I may experience the same thing. I am wearing out my pockets pulling my iPhone out and pushing it back in. Am I bored? Students told me they liked to hold their cell phones in their hands. Made them feel better – more connected as they could glance down for messages and respond in kind.

2. Sometimes the cell phone was used so the user could be anti-social. That’s interesting as mobile devices allow us to be connected by Facebook and Twitter to other "friends" who are not in our company. Could we be shortchanging those around us?

3. It was observed that clear thoughts were the benefit of getting away to enjoy nature without the use of digital devices.

4. One scientist said he could now understand why teenagers decided to text while driving even putting themselves and others in danger.

5. Maybe digital stimulation leads to poor-decision making. Ever since I have owned my iPad and used it to read books at night, I have been getting lousy sleep. I Googled the phenomenon to find that others are having the same problem. Turns out the light emitted from the brilliant iPad screen even at the lowest settings disrupts sleep patterns. I went cold turkey for two weeks with better results. Now I ordered a Kindle for late night reading as much as I like the iPad better. Kindle digital “paper” does not produce the overstimulation of the iPad.

6. Most wanted to eliminate the digital overload to the point of seeing an improvement but not necessarily beyond. This may be the most interesting side effect of all. I, too, want as much digital stimulation in my life without getting brain weary, sleep deprived, rude to others or distracted.

In the end, consumers will have to learn to manage their digital lives better than they do now.

This adds an extra dilemma for content providers who are still new to the game.

But it also presents great opportunities.

The next Jean Shepherd could tuck you in with a 20-minute monologue developed for nighttime digital use whenever your "nighttime" is.

Radio will be used the way toothpaste is now used.

Squeeze your favorite morning personality out of your mobile device and use it on-demand in your “own” morning drive. Hopefully, you won't also spit it out like toothpaste.

For those of you who would prefer to get Jerry's daily posts by email for FREE, please click here. Then look for a verifying email from FeedBurner to start service.

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

A Radio Station That Does Digital Right

Bonneville is considered one of the best operators in terrestrial radio.

My readers, in a multi-month poll last year, far and away voted Bonneville the best, probably in part to the excellent way they treat employees.

I know Bonneville along with a few other radio groups is big into the digital future. The only disappointment is that they are not budgeting the kind of money it deserves. Their instincts, however, are awfully good.

Take, for example, KTAR-FM in Phoenix.

During the recent immigration law dust up here, KTAR-FM’s news and talk format didn’t just deal with business as usual on-air. It created an instant KTAR-TV stream.

Out went the nationally-syndicated talk shows – at least for the day, bowing to good local sense – but News/Talk KTAR also did a TV stream for four hours of live coverage available on computers and mobile devices (iPhone and Droid). In fact, I saw them claim to provide more on-camera coverage than local TV stations and that may well be.

But there is a greater point.

KTAR integrated social media to get the conversation going with their audience.

Phoenix is one of the markets that is going to lead other Bonneville stations in the digital area. WTOP Washington is also blazing the way.

Of interest is the multi-billion dollar advertising jackpot awaiting them. This segment expects to grow many times larger within less than five years. Online video is more than 10% of all Internet ad spending now and growing by the week.

As you’ve seen me write in this space, radio will have to redefine itself, getting away from only audio to audio, plus video, plus social networking.

And it is important that the programs being developed by radio stations are not just related to what’s already on-the-air. It’s about finding a new audience.

My wife, for example, goes to AZ Central online for all her local news here in Scottsdale first thing every morning. Then, to the Philly newspapers to see what crime and mayhem, snow and humidity we bailed out on eight years ago and being a Delawarean, she checks in with The Dover Post online when it updates every Wednesday.

You see, it’s all about local – really. Local today and where you have resided previously.

Many TV websites hardly make mention of their TV content on the web counterpart. That is because the web offering is not an extension of the TV content. It’s its own destination.

Yet foolish traditional media minds keep driving TV viewers to their website until a viewer is sick to their stomachs almost as if the TV viewer must be a fool to watch the TV show when you can watch what you want on-demand on their website.

The danger in doing digital offshoots of traditional media content is that the add-on (let’s say, a TV stream for a radio station) can only have limited growth if it is mainly targeted at terrestrial radio listeners. Yes, target them, but also use the web’s wonderful viral magic in finding new fans. After all, that’s how this blog has grown in the past four years – virally. That’s how I found you!

I’m often asked by readers to cite radio operators who are doing something noteworthy in the digital area. There’s not much out there that’s remarkable.

I mean, terrestrial streams hardly account for a few percentage points in the ratings and have questionable benefits.

Radio companies are now selling cheap ads on the Internet – that is, cheaper than the too-cheap ads they are already selling on-air.

$10-15 ads being hawked for Imus, Laura Ingraham, Neal Boortz, Dr Laura, Lou Dobbs. It’s all wrong and headed down.

Let’s straighten a few things out:

1. You’re worth what you think you are worth and that goes for adventurous Internet experiments. When I converted Inside Radio to a daily fax, I didn’t know how much to charge for an ad at the bottom of a faxed page of content. It had never been done before. If I thought no one would buy it, what’s the use of doing it. Instead, I figured $1,000 an ad ought to be a good business and it took eight months to find the first advertiser who turned out to be John Tyler at Satellite Music Network. But John wanted an ad a week, a three-year contract and page one. As soon as I signed him, I raised the price to $2,000 for page one. And demand drove it even higher. The message: charge premium prices for digital. Please re-read that last line.

2. Digital is not a terrestrial radio add-on, it’s what you want to put a nicely priced ad on. I can promise you, anyone who doesn’t heed this advice will miss the Internet revolution part two – mobile content.

3. Look to consumers to see where they are listening and watching and then follow them. Your programmers and talent and marketing people can lead you. For those of you who enjoyed the growth of radio, you’re going to enjoy it all over again when radio companies create new separate content for the mobile space.

If I stood before the programmers, managers and marketers of Bonneville, CBS or Emmis at a brainstorming session, I would inspire them to use their radio know how as they step into the digital future.

Offer the best live and local programming on your terrestrial signal and create new and separate content using our unique skills for different social groups.

Where content and marketing must be created together in real-time.

Where listeners live and how to understand their changing preferences.

And the wisdom to know the difference.

For those of you who would prefer to get Jerry's daily posts by email for FREE, please click here. Then look for a verifying email from FeedBurner to start service.

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

Would You Pay for Twitter and Facebook?

A new USC Annenberg Center for Digital Future study found that 49% of respondents in their most recent survey used Twitter, but no one – 0% of those polled -- said they would pay to continue using the micro-blog site.

Director Jeffrey Cole said, "Such an extreme finding that produced a zero response underscores the difficulty of getting Internet users to pay for anything that they already receive for free”.

Of course, if someone asked me when the first pay road was built if I would pay to travel it, I would have said no.

My mother refused to pay for cable television because she believed TV should be free – you know, over the airwaves. It didn’t mean that she didn’t value television but just didn't want to pay for it.

Twitter will remain a free service because the beauty of Twitter is to form a social network with a group of people of your choosing and beyond.

Taken literally, paid social network services will not work on the Internet. I wonder how Facebook would have done if the same question were posed. Somewhat higher than 0% I imagine, but I don’t think the numbers would have been impressive as 500 million people now use Facebook.

I keep hearing Peter Drucker in my head when he told radio executives that the Internet was going to be a major deal – in thirty more years. Without a pay model or an effective ad revenue model, Drucker will turn out to be right as he usually is.

The USC survey of 1,981 Internet users also found that half "never" click on Internet advertising with 70% saying they find it "annoying." Although 55% said they would rather see web advertising than pay for content.

And on and on …

You can see why media companies are reluctant to bet the ranch on the Internet and digital beyond when an obvious revenue model has not emerged. One could argue that no one listens to radio commercials in six-minute stop sets and that would be a fair comeback.

But the issue going forward is how do you monetize the space that consumers clearly claim as their favorite way to get entertainment, information and stay connected.

When Rupert Murdoch ordered his News Corporation publications to put up a paywall, The Times of London lost at least 65% of its online readership. I am surprised that it wasn’t more because a lot of the information in daily newspapers is available for free elsewhere. As long as this is the case, it will be hard for newspaper publishers to charge for that which is readily available at no cost.

Publications such as Newsday construct paywalls to keep their print readers from defecting to online where they don’t have to pay for the content. So the theory is that some publishers – perhaps even Murdoch – feel the paywall will be a success if for no other reason it will hopefully stem the loss of paying print readers from becoming online freeloaders.

Then you have Wired and other niche publications that are finding their subscribers with apps that allow readers to access their favorite publications where they like to read – on iPads, Kindles and mobile devices. This area shows real promise.

The New York Times thinks a metering system that will start charging you after a certain number of stories in a given month will work. But a meter will punish readers like me (and perhaps you) who read The Times extensively.

There are a few significant points to consider:

1. Online advertising is not that effective – click through rates are awful and that low standard allows media buyers to prostitute any digital publication’s rate card.

2. Search is a good business for the few, the proud and the monopolies such as Google and Microsoft.

3. If all that is available to businesses is the “freemium” model postulated by Chris Anderson then even the 30 years Peter Drucker predicted for the Internet to come of age as a business is too optimistic a date. Ad revenue from banner sales and the like will not be enough.

What is more likely is that there will always be free but there will also be paid. There has to be paid for the Internet to become a growth conduit.

To be free, advertisers will seek eyeballs and that business has been clearly established. Perhaps, as the USC survey seems to indicate, readers will continue to prefer free even if they have to put up with videos starting in the corner, ads creeping across the screen and other distractions. But don’t confuse these tactics for effective.

The idea of joining advertising with content may have run its course.

TV shows with commercials.

Radio formats with stop sets.

Maybe in the future it behooves Coke, Nike and maybe even Main Street local businesses to use YouTube videos, social networking and a lot of creativity and skip the non-paid content. They are doing it already. In effect, the ad becomes the content.

Paid content – the kind radio talent can produce – could be a strong attraction. Think about it – most listeners get ten (at most) different formats in the average radio market and some of them are really not all that different. What would it be worth to you to have exactly what you wanted to hear? There may be a price you would be willing to pay for something unique, compelling and addictive.

Unique, compelling and addictive.

My standard for paywalls.

Twitter and Facebook for free – they can channel those eyeballs into revenue and better them than us. It’s a tough business selling on the cheap.

But my very favorite magazine on my iPad – well, that’s worth something.

My favorite music media blogger on my digital device of choice – we’ll soon see.

For those of you who would prefer to get Jerry's daily posts by email for FREE, please click here. Then look for a verifying email from FeedBurner to start service.

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

The Promise of Cloud Music Streaming

Talks are on again between the record labels and Spotify, the European streaming music service looking to expand to America.

Billboard is reporting that after previously failing to persuade the labels to license music for the Spotify service using the “freemium” model, the major labels are all ears to see if Spotify can convince them to do a deal for an end of year launch.

The labels never really cared for Spotify’s free model and Spotify is desperate to get started in the U.S. because Apple has its stream coming in the not too distant future and services like Spotify have not done well.

Spotify is so desperate that they claim to be open to a short-term deal with the labels. That’s a deal I wouldn’t make. But they have no choice. The labels are playing hardball.

The hardball matches their hard heads that may also get in the way of allowing Apple to offer music on the cloud. There is considerable debate as to what is going on with Apple and the labels over this issue. You’ll note that Apple relented on its long-held one-price (99 cents) for all downloads policy and the labels got their way – or as I like to call it, fewer downloads for less revenue.

Apple’s stream – the one I believe Spotify fears most – is likely to make a consumer’s personal iTunes library available anywhere at anytime through various mobile devices. That is, the music is there for the taking.

The real question is whether Apple needs a new agreement with the labels to do this. Right now, the labels are so destructive you cannot point to one single strategic decision any of them have made in recent years that was good for them individually or collectively.

Spotify has more than 7 million users around the world with only 500,000 of them paying about $15 per month for the premium version.

Rhapsody, which also has a more traditional subscription service, is down to about half a million subscribers at this point and declining.

This is not exactly a boom waiting to happen.

Unless, Apple can convert many of their iTunes users into streaming fans for a monthly fee.

Look to the way Apple handles the consumer cost of being connected to the Internet on the mobile iPad platform.

AT&T again, but iPad users only need to subscribe to the service month-by-month. No long-term commitments or discounts. I get an email telling me the next month’s AT&T iPad service is about to kick in and I have time to cancel anytime if I’d like. This may be part of the Apple strategy with streaming audio.

Pay as you go.

Don’t pay and you can’t access your music library on your mobile devices, but you still own what you bought and can listen on other devices.

I think Apple is up to other things, too.

I would not be surprised to see the iPad become a Crestron or TV remote that eventually works with Apple TV. Now that move could make Apple TV go from a Steve Jobs admitted hobby to yet another big business.

So, we would be able to watch TV on our iPads but also communicate with Apple TV and watch our television shows and movies on-demand right there on a big HD screen.

Apple TV right now is burdensome. I don’t like it. Takes too long to download content. But with a stream, all that changes. Buy “Gossip Girl” and have it available for your viewing pleasure anywhere and on any device that can access that stream.

You own it, but you store it on the cloud.

That’s the future and it explains why Spotify is so terrified of not being able to launch in the United States in a timely fashion.

A bigger issue is whether Spotify is necessary at all?

My view is that Pandora survives anything Apple comes up with because it uses a well thought out music genome to identify a listeners musical preferences. That in and of itself is cool and will never go out of style.

For everyone else there is choosing your own music and storing it on the cloud.

I can tell you from working with young people that while they like their iPods, they are also bored with their iPods. Ask and they will tell you.

If this isn’t a wakeup call to the radio industry to reinvent itself, I don’t know what is.

Consumers need another music service like coffee drinkers need another Starbucks.

Pandora is golden.

Apple’s cloud will eventually be a smash hit.

Now who is going to entertain people on mobile devices with short-form, personality and expert-based content?

Music.

Talk.

Information.

It is likely not going to be a radio company because they can't see this, but radio is the perfect incubator for new media content.

I’ll bet you some former radio employees will jump into this void and see the next growth business ahead – mobile entertainment not just music available everywhere on-demand.

For those of you who would prefer to get Jerry's daily posts by email for FREE, please click here. Then look for a verifying email from FeedBurner to start service.

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