Mickey’s Monkey

By Jerry Del Colliano

Yesterday, KGO/KSFO President & General Manager Mickey Luckoff finally got the monkey off his back that has been hounding him for the past three years.

Luckoff fired his boss -- Farid "Fagreed" Suleman, CEO of Citadel.

I’ve got the inside story for you on what happened and why – and why now?

After all, the newly non-bankrupted Citadel Broadcasting needs KGO and KSFO in San Francisco to continue to print money – the better to fund Suleman’s new deal.

You won’t believe the details on their relationship and what it was like for Luckoff to go from ABC management to Mickey Mouse management. You’d think previous owner Disney would have been the Mickey Mouse operator but it turned out it may have been Citadel.

Luckoff spent 35 years as the driving force behind KGO’s news/talk format working for ABC, Capital Cities, Disney and Citadel. He has won tons of awards. Raised millions for lots of good causes. Attracted and kept some of the greatest radio talent on-the-air.

When I spoke with Mickey yesterday I told him he should get an anti-nausea award for not getting sick to his stomach watching Fagreed mismanage the company.

The 74-year old Luckoff is upbeat. He’s getting married at the end of the year. Will write a book about his experiences. It’s all good now that he has ended his long national nightmare.

In a moment you’ll know the proverbial rest of the story. And when Luckoff wrote his resignation letter (you won’t believe it). Plus, the straw that broke the camel’s back.

I’ve compiled a list of eight reasons why Luckoff left his employ after three and a half decades.

So here is the inside story you won’t be reading in the happy talk press this morning:

1. Incredibly enough, Luckoff has only been in Farid Suleman’s company face-to-face only a few times in the three years that Citadel has owned KGO. Fagreed, as Suleman is known for being cheap with everyone else but himself, needed Luckoff to crank out revenue to help his tanking company. Suleman reportedly single-handledly wrecked some of the other ABC properties that Citadel overpaid for but he kept hands off KGO – until now.

2. Fagreed’s meddling was the main reason Mickey Luckoff surprised him with his resignation yesterday. As Popeye used to say, “that’s all I can stands, I can’t stands no more”. Maybe it was the hubris of his new long term deal with his investment banker bosses or Fagreed’s move to new palatial digs in Miami, but Suleman's moratorium on meddling ended recently.

3. What kind of meddling? Fagreed would send VP/Programming Scott Shannon who apparently sold his soul to the company store to tell Mickey’s programmers that his station didn’t sound like WCBS-FM in New York. Of course, Luckoff didn’t want it to sound like CBS-FM because his hot talk station was in San Francisco – not that a little detail like that would bother a consolidator.

4. Farid would apparently approve hires without consulting the boss.

5. Luckoff apparently got fed up with Fagreed’s perceived concept that people are basically worthless and mean nothing to him. After all, Mickey built the franchise the other way around based on people. And he’s taken good care of them along the way.

6. Suleman reportedly started going over Luckoff’s head and talking directly to his department heads leading them to wonder, who is in charge here?

7. There is also the allegation that Suleman told suppliers not to talk to the boss – that they had to go through him. A deal breaker in the end.

8. Luckoff wrote his resignation letter nine months ago and kept it in a drawer. When he attended the NAB Radio Show last week he found it hard to keep his mouth shut about what he was planning to do. Finally, he returned to the Bay Area and he had had enough. Nobody quits Farid making Mickey Luckoff the most admired “nobody” in the radio industry right now.

Mickey Luckoff survived four companies, numerous recessions and an earthquake or two and even the Arbitron People Meter that robs from the rich news/talk stations and gives to the poor repetitious music stations.

Maybe the seminal moment was when he watched Fagreed schlep through a pre-arranged bankruptcy with creditors taking over the company only to watch Suleman live up to his name Fa-greed when he inked a $43 million package for himself.

Not interested in replacing seven-year old news vehicles.

Or giving a raise to the employees who are helping to keep his bankrupt company afloat.

Or stopping the firing of talented people in tough economic times or rehiring them when the new ownership kicked in.

When Mickey Luckoff joined ABC to manage KGO in 1973 he took it upon himself to find out why some major advertisers didn’t buy schedules on KGO. He targeted Macy's and Coors (KGO was too liberal for the conservative beer company).

One day on the way back from calling on Coors in Colorado, Mickey Luckoff’s plane was hijacked.

At first the passengers were told they were going to have to land in Colorado Springs to repair the hydraulics system – a sketchy scenario to seasoned travelers.

Not long after, the pilot got on the public address system and said, “This airliner is no longer under the control of United Airlines”.

That makes twice that Mickey Luckoff has been hijacked.

The second time, by a bumbling interloper who took great American radio stations and personally led them into bankruptcy.

Both times, Luckoff lived to tell the story.

(Note from Jerry: Within days Inside Music Media will move to a paid subscription model now being tested – the kind I often champion for the media industry. Most of you have been auditioning me for up to four years now. I hope you have found my work insightful, deadly honest, entertaining and informative. I will continue on for you with gratitude to all my friends in this space – Jerry).

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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.

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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.

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NAB’s Phone-y FM Chip Diversion

Before this piece is over I will try to offer you some rational and strategic conclusions about the current National Association of Broadcasters plan to needlessly expose radio stations to $1 billion in added music royalties annually to settle with the RIAA.

I’m going to name names.

Delve into possible motivations for you to consider and then offer a prognosis for what is likely to happen.

First, an update.

Any legislative action on this issue is dead while Congress returns home to campaign for reelection.

What’s ironic is that what the radio industry is likely to observe after election day is a Congress more sympathetic to the interests of the radio industry. Of course you know that, right now, Congress is about split evenly between defending the interests of local radio and standing up for the music industry.

Here’s what is likely to unfold:

You see NAB CEO Gordon Smith stand up before the NAB Radio Show and champion FM chips for all cell phones. Now that’s a popular issue with radio execs. FM chips are already in many cell phones and would have to be unlocked.

But the Consumer Electronics Association is bandying around a new study that shows “most” consumers surveyed are not interested in having FM tuners in phones and 80% do not support a government mandate to force manufacturers to put these chips into mobile devices.

I’d say the CEA got their money’s worth out of their own study. However, I’d prefer to use mine.

Look around.

See which young (or increasingly older) mobile device user is craving an FM chip in their mobile phone. Where some carriers offer it, it is not making a big splash. Where Apple features it on the Nano – the earth has not moved.

Can it hurt radio to have an FM chip on mobile devices?

Probably not.

Will it make even a small difference in radio listening?

Not likely – for all the reasons we discuss in this space not the least of which consumers use their phones differently than a Walkman and have different attention spans than portable radio carriers of the past.

And I’m not even mentioning the tremendous tide of repeater radio, syndicated and voiced tracked non-local programming. I guess I just did.

But the NAB under one of the most dangerous CEOs it has ever had – former Senator Gordon Smith – has retreated from his public insistence that radio had better make a deal with the record industry before the evil CRB gets involved.

That went over like a lead balloon with radio people – the vast majority of whom are against the extra royalty tax even if they can’t find one leader with the balls to stand up for them and lead the fight.

The NAB knows this.

Sly Smith is going to deliver a favor to his old buddy, Senator Orrin Hatch, because in my opinion Smith has more loyalty to Hatch than he has to a radio industry he hardly knows and certainly doesn’t understand.

Sly Smith is an able opponent.

That in and of itself says a lot. Your NAB CEO is radio’s opponent.

What’s up with that?

Thus, the talk you are hearing and reading about to divert attention away from this unpopular maneuver to settle with the music industry on radio’s dime by waving the FM digital chip flag.

Radio broadcasters are desperate for help to get into new media. They erroneously think streaming music on a cell phone is the way. The NAB is fueling that desperation. This guy Smith is good – at politics.

Gordon Smith is playing the FM chip card to divert attention to what he and the NAB are really going to do.

Here are my predictions – and they are in print and available until the end of time over the Internet. I’ll stand up. Hold me accountable. So let’s see if I am reading the politics and strategy right.

1. The FM chip issue will get nowhere in spite of the rah-rah talk by Smith and the NAB at their convention.

2. The move will be on to make a deal even as Congress leans more in the direction of radio’s interests after the November election.

3. No radio leader will step up to rally the industry’s interests – they are all weak. Advantage: Interloper Smith.

4. The NAB will cloak a vote on this issue with their executive board as being democratic by asking their "duly" elected representatives to poll their constituents. The NAB will never allow a direct vote by all radio owners using a third party accounting firm (NAB represents only 50% of America's radio stations) because the issue of more royalty taxes will overwhelmingly lose with radio people.

5. Cumulus, Clear Channel, Citadel and the other not too helpful owners will suck it up and support their man Smith. These highly leveraged companies can simply throw it on top of the other expenses that they routinely take on such as Farid Suleman’s new digs in a high-end Miami office building – even as he is squeezing the last penny out of employees and firing talented people.

6. The NAB will purport that the people’s will shall be done and that the radio industry wants to make peace with the record labels and then you can start looking to pay your share of the $1 billion. Did I say $1 billion? Read on.

7. $1 billion will go up to $2 billion and beyond once the cat is out of the bag. Bank on it.

The NAB has turned on its own before – successfully.

At the last minute, they helped attach a provision of the Telecommunications Act of 1996 which was aimed primarily to regulate the phone business. That add-on that even very aware radio people didn't see coming was the legislation to make radio consolidation happen. You see where that got us.

So, I call out the NAB for being the Benedict Arnold's that they are even if they like to hold warm and fuzzy radio conventions and rally the troops around patriotism, motherhood and FM chips in phones.

And I say this sadly but with all due respect – I really do – the radio industry has only itself to blame for allowing the NAB to hijack their future (again) without even a whimper of opposition from any radio executive resembling a leader.

Shameful.

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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.

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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.

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Radio’s Believe It Or Not

I love Ripley’s Believe It Or Not.

You do, too, from what you tell me because I have adapted the Ripley format to the sideshow currently going on in the business you and I love so much – radio.

On the real Ripley website you can find video of a couple being married by a robot.

A three year old Chinese girl who drinks liquor and smokes after surviving a car accident and a coma.

And a violinist who actually plays the instrument during brain surgery.

But I’ve got all that beat this time with what radio consolidators are up to – real life stories that are hard to believe but true.

In other words, Radio’s Believe It or Not.

• A Station That Requires Recycling Trash Over Programming

It’s not just the three big “C” consolidators who have lost their way, take Millennium Radio, please.

They apparently have serious issues with recyclables going into the wrong cans at their Jersey shore offices. It resulted in the VP of Engineering sending a stern email to the staff recently attaching a Monmouth County (NJ) Planning Board brochure about recycling detailing the rules of dumping trash.

Then the employees who just launched an AM oldies station and had a lot of format-related problems suddenly got a homework assignment:

“All Shore employees will be getting a “project” in their mail boxes, this project IS REQUIRED and will have to be turned in at a REQUIRED meeting next week (time and day TBD)."

As a horrified insider told us, the remote voice tracking is not working and instead of trying to work on doing better shows or fixing the rush job of segue tones, management mandated a recycling project instead.

By the way, the voice tracking is saving a $10 an hour live, local jock for Millennium.

Maybe it’s time for management to be recycled?

Just sayin'.

• Voiced-tracked Hurricane Warnings From Past Storms

Believe it or not, that is what American-owned Inter-Island Communications “Hott 107.5” in Bermuda (That’s right, two “T”s in HOTT) apparently did. This tip came from the Bermuda Weather Service where recent hurricane Igor brushed the island and had residents on edge.

But all of a sudden the weather service started getting calls from panicked Bermudians about “another” hurricane coming “this weekend” even though the nearest tropical storm was 1,900 miles away and not of immediate concern.

As it turns out, “Hott 107.5” the top rated station in Bermuda was replaying old weather forecasts. In a nation so sensitive to hurricanes, the most popular station on the island apparently let their local listeners down so they could save money and run an automated feature.

I don’t know about you but if owners are so hell bent to do voice tracking (which will eventually kill them off anyway), they can find a way to be responsible for what goes on their air so as not to panic the public.

• HD Programming That Is Off the Air for Weeks At a Time

One of my “repeater reporters” fighting for truth, justice and exposing the sham of consolidation, took a ride within 100 miles of Springfield, MA – in all directions to check out HD radio.

This radio pro held nothing back after buying five HD radios:

“Reception sucked. Programming sucked. I don't know where two of them are. I don't care. I also spent more than a year visiting retailers every month to see what the reaction is. It isn't. I've stopped that since retailers have stopped carrying all but aftermarket stuff for the car. Even those have dwindled and will continue as carmakers integrate everything into a main control center.

“By far the best one is the Sony Tuner. The HD sucks like all of them but the analog is the best I've ever seen. Even as good as the Sony is, technically, it gets used for a few minutes every few months. There's nothing to listen to.

“Did I mention the stations don't care, either? The Clear Channel stations here often have digital down for days, even weeks, at a time”.

The shame of it all is that in spite of questionable technology, HD radio failed because the final system came to market too late and then radio operators showed potential HD listeners what they thought of them by ignoring HD programming.

• Lew Dickey Thanks the Wrong Programming Team

Nobody ever called Cumulus CEO Lew Dickey stupid – maybe dark and uncaring, but stooped? Not Lew.

He sees other major groups dropping formats left and right to switch to tight playlist hit radio formats that the People Meter just eats up. These stations get played in public and PPM wearers pick up encoded signals whether they are listening or not.

So Dickey gets the improved ratings for KCHZ, Kansas City that he was looking for and the first thing he does is issue his team this congratulatory memo:

“Congrats to Jan (Jeffries) and our talented team in KC led by Maurice Devoe on winning this important Top-40 battle in KC through product innovation. Innovation in all aspects of our business is core to our culture of continuous improvement and the only way we will build a sustainable competitive advantage. Our “I” concept is just another example of Cumulus innovation driving success”.

Innovation?

Dickey didn’t get that one past his employees who snagged Uncle Lew on this disingenuous memo.

Turns out Dickey needed to credit CBS for discovering the high cume/high rotation/PPM hit radio format.

They were the innovators – not Cumulus.

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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.

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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.

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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?

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Cumulus Sues Ex-GM for $1 Million

Here’s an inside story you won’t find in the happy talk press.

The Dickey family is channeling its mean genes in what appears to me to be a retaliatory strike against a manager who had the audacity to – well, quit and get a better job with Cox.

Kristin Okesson left the Dickey Dynasty as manager of the Danbury, CT and Westchester, NY clusters. Let’s do what they do before you see the next episode of an HBO original series – recap.

Previously on Entourage (Lew, John, Gary Pizzati) …

The Dickeys took Okesson to U.S. District Court in Bridgeport and in a court opinion handed down on April 22 of this year, the judge interpreted the employment contract at issue largely in Okesson’s favor. She wasn’t ordered to stay away from previous Cumulus customers in Danbury.

The judge did prohibit Okesson from helping a fellow employee to spring from his imprisonment and was told not to solicit Cumulus employees directly. She also had to return some items in dispute that were alleged to be confidential.

And that was it.

Until now.

Cumulus has alleged that Okesson has done Cumulus dirt to the tune of $1 million large even after henchman Gary Pizzati testified twice under oath that he could not identify any damages that resulted from Kristin Okesson’s departure.

Now Mr. Mean Genes himself is asking the judge for a pre-judgment attachment on her home for $1 million to cover the possibility – as remote as it seems – on the odd chance that Cumulus prevails in court.

As if that were not enough, Cumulus wants to seize Okesson’s bank accounts – that’s right, checking and savings even though that action could create a financial nightmare for Okesson, her husband and children.

So, on October 19 and 21st the matter will be before Her Honor Judge Holly Fitzsimmons in Bridgeport who will take testimony and then subsequently render a judgment. Certainly Okesson is sweating it out – and considering that Cumulus has not been able to identify any damage due to her departure on the record, their legal action appears to be retaliatory.

Wait until you hear what pissed them off.

You don’t leave the Dickey boys.

And boys they are apparently because Okesson has filed a gender discrimination suit against the boys club. More on that later.

Pizzati, who has apparently rethought his sworn testimony, is now also alleging that 13 Cumulus customers are spending less money with them directly due to Okesson’s departure. Apparently it’s now scorched earth because Pizzati actually fingered the 13 advertisers.

And many of them are not happy.

Okesson has about six affidavits saying the reason these advertisers are not spending with Cumulus now is because of the economy. Several more affidavits are in the mail and other Cumulus advertisers have reportedly agreed that it’s the economy, stupid. Counsel for Okesson doesn’t rule out that all 13 may actually repudiate the Cumulus accusation that Okesson is in fact a one-person recession.

Pizzati implicated the Cumulus advertisers even though he admitted on the record that he never asked a single one of them about the situation. In other words, it appears Pizzati just made it up.

Even the currently employed Cumulus sales manager in Danbury in his sworn deposition reportedly said the losses were due to the economy in essence not backing up his boss.

Pizzati claims an over $800,000 loss of business in Danbury and Westchester, the markets Okesson managed, between July of 2009 and March 2010 directly attributable to Okesson.

Then he wants $140,000 more for the 13 lucky advertisers who he says pulled back their spending because the Cumulus general manager left.

Oh, and $100,000 plus in legal fees.

Boy, those Dickeys sure get mad when a female employee leaves them before they can fire her.

As mentioned, Okesson filed her gender discrimination suit with the EEOC against none other than Gary Pizzati. Okesson is asking the EEOC for permission to sue privately for discrimination.

Okesson is alleging retaliation for filing the EEOC claim midsummer which is allegedly why Cumulus came back with the $1 million lien and strategy to freeze her bank accounts.

Let’s make sense of all this (if possible):

1. To me it is mean to act in what I think is a punitive way against an outstanding GM who was quickly hired by Cox – another thing that I think sticks in Lew Dickey’s craw.

2. It sends a lousy message to Cumulus employees many of whom don’t like working for Dickey and who want to leave as soon as they can find another job.

3. Naming advertisers – especially without consulting them – in Cumulus litigation is a breach of ethics in my opinion. The advertisers are being used as pawns to build the Cumulus case. I can tell you if Cumulus competed with me in a market I managed, I’d tell all their advertisers to be careful when you do business with them. You could wind up as an accessory to a court case as an unexpected consequence of paying them for advertising. This is just bad sales strategy in any economy.

4. The real story is the discrimination suit against Pizzati that Cumulus obviously does not want to see proceed. It could launch a lot of similar discrimination suits (and I predicted that Cumulus would spend the next few years in court on employment matters) that could be costly and embarrassing.

What has happened to the radio industry?

Why are some big CEOs behaving badly?

However as bad as this is, I can end on a happy note – and a very encouraging one.

Okesson who left Cumulus now works for Cox, a recognized excellent employer with a good record of employee relations.

Cox could have stood back and let their valued new hire dangle in the wind on her own as she spent all her money to fight what could turn out to be frivolous lawsuits.

Instead, Cox is picking up Okesson’s entire legal bill – all of it.

There are still great operators left in radio and when they put their money where their mouth is, it gives all of us great hope.

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4 Bold Media Predictions

By Jerry Del Colliano

Predictions are just teasing unless they turn out to come true.

The Clear Channel demise – predicted.

Consolidation destroying radio – predicted (during their glory days yet).

The rise of digital media and a new generation – yes, that’s one of the reasons you read me.

So, I’ve got four new ones that I’d like you to tuck away in the back of your mind. You may agree or disagree or be startled, but you’ll see why they will have such a great impact on the music and broadcasting industries.

1. ABC Television will be sold

News chief David Westin resigned recently. Some say he was tired of firing people. Others say he is leaving because new owners are coming.

I say, that, too!

Here’s some inside info:

Westin is suspected of leaking the news of his departure to The Washington Post. Then ABC rushes out the PR that says Westin was expected to leave all along. My sources say b.s. to that.

No replacement is waiting – unusual if ABC knew in advance. Westin is staying on to the end of the year, that long goodbye not necessary if ABC knew of Westin’s plans in advance. Disney owns ABC and doesn’t customarily handle things like this.

Disney is cutting the life out of ABC News. Huge newsroom reductions, searching for ways to make news gathering cheaper through cutbacks or alliances with others. ABC News is – to put it frankly – decimated. Bureaus here and abroad – none. No investigative of documentary units – too costly, not necessary in their view.

As an industry insider poignantly put it like this:

“Reality is that Disney has decided to invest in the Marvel comics characters instead of news. At least they skipped the part about anointing Spiderman as World News Tonight anchor.”

Who would want to be president of ABC News now as they are depleting their assets?

Prediction: ABC Television Network gets sold. Disney’s chief shareholder is Steve Jobs.

2. The New York Times will stop printing

Okay, I’m cheating.

Times Publisher Arthur Sulzberger Jr. told a London audience last week that "We will stop printing the New York Times sometime in the future, date TBD." He was answering someone else’s prediction that the Times will go out of business by 2015.

When The Times publisher comes right out with it, why contradict him?

In fact I believe Sulzberger will be wishing he wasn’t printing the New York Times before then. It’s expensive. Costly unions. Gathering news isn’t cheap.

The best reason is that fewer people read newspapers every day.

I picked mine up off the front step at 2pm yesterday – having read it all before I went to bed the previous night. (Why am I still getting it? There’s a good question. I don't have a dog).

The Times will introduce a pay model next year that will fail – metering readers use of content and charging for it when they read too much. To put that another way, making your greatest fans pay the most.

Prediction: The New York Times will stop printing and I’ll raise you – they will stop metering readers. This critical misread could cost them the franchise.

3. Advertisers will spend more in new media than traditional when the recession ends.

Is that going to surprise radio, television and print. Traditional media is expecting a big gain when the economy comes back.

Let’s go to the tape – even in this prolonged recession, digital media spending has increased.

Last week Pepsi announced its experimental online campaign that replaced Super Bowl sponsorships last January is back. The Pepsi Fresh Project was considered a social media experiment. Local community causes went to Pepsi online to seek money for their projects and the public voted who should get it.

Pepsi announced it will expand the project to Europe, Latin America and Asia as well as continue in the U.S. and Canada.

What recession?

Media buyers will weep when they see that Pepsi will spend $1.3 million a month for this year’s Refresh project. They have the money to also buy Super Bowl spots but this money is being taken away from traditional media nonetheless.

Pepsi certainly isn’t alone in beefing up its new and social media budgets even in advance of an economic recovery.

Prediction: Traditional media will languish until and unless they get back in the idea business instead of selling spots.

4. Twitter will replace radio and TV for Breaking News

During the Discovery Channel hostage situation, Twitter broke the story beating all traditional news platforms. Social media is a way to get the word out fast.

When USC has a campus emergency, students and faculty receive instant text message updates. Since everyone has a cell phone, there is no need to hope that radio or television will spread the word.

During the San Bruno fires in San Francisco last week, news stations like KGO and KCBS rose to the occasion – after all, free media such as radio can be very beneficial in public emergencies. But all stations should have been responding to this local community disaster.

Here’s what a radio insider from San Francisco wrote:

“I have been part of stations who fielded calls, gave information, suspended music and aired callers and got in our Vans and went to where we could help.

“What I heard, in summation, the 2 top news stations (KGO, KCBS) did a great job even with a smaller staff than they used to have.

“All the FM stations ran tracking as usual or if they had someone live they broke in with ‘Call the Red Cross to help donate money or blood and get the info from our website now here's Rihanna’.

“I'm frustrated because I know what it could be and should be. There was more on Facebook last night. That has become the new "Town Hall" (CNN does a great job of using FB and connecting it with their site. We need to be all over that kind of outlet).

“Think of when there is an earthquake, where is the first place people used to go? radio ;I felt a rumble’, ‘I felt a roll’ now we are on Facebook in 2 seconds. BUT people still want to hear a human voice. If we link those things people will feel intimately connected”.

Prediction: A human voice can be on mobile Internet devices and that’s the new breaking news.

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Hits Without Radio and Radio Without Hits

By Jerry Del Colliano

In the past week, there have been two examples of what happens when an artist decides to market without radio airplay while another tries to get airplay she believes she deserves based on Billboard progress.

Both are fascinating and revealing and I thought you would enjoy hearing about them.

The Bed Intruder Song.

The story of a crime that happened in "singer" Antoine Dodson’s family.

Dodson did an interview with a Huntsville, AL TV station after an intruder broke into his family’s house and attempted to rape his sister.

The video interview became popular because of Dodson’s dramatic delivery style in which he talked to the audience as well as the person who attempted the rape. Dodson used colorful language and raised the ire of TV viewers who complained to the station. The station defended Dodson and said that censoring him would be worse than his graphic style.

The video went viral in the form of the Bed Intruder Song some have called the one awesome use of Auto-Tune ever. Auto-Tune is software that can make speech sound like singing. The Gregory Brothers turned an angry rant into a pop song that has sold about 100,000 copies on iTunes and is 94 with a bullet on Billboard for the week of September 18.

The YouTube video has been seen over 20 million times before some genius took it off -- I am scratching my head here.


All of this with little to no radio airplay. The subject matter is a deterrent to over-the-air radio but still – this is an example of a song taking off without a record label, promotion teams and radio station airplay. It’s all viral.

Then, there’s the dilemma of singer Arika Kane.

Her fans are really mad that she can’t get any airplay on Sirius XM Heart & Soul channel for “Here With Me”. I don’t believe I’ve ever heard of artists having a public spat with satellite radio over airplay let alone caring.

Kane’s fan club has a page all set aside to petition Sirius XM for their decision. The reason the fan page alleges Sirius XM “banned” the song was – well, you read it:

“Specifically, BJ Stone of "Heart and Soul" has confirmed his personal decision not to play Arika Kane’s records. According to the program director, the reason for the ban against Arika Kane’s record is because he believes that a White artist should not be singing an urban song”.

Sounds a bit sketchy.

Nonetheless what kind of media world are we living in when fans organize to get airplay on satellite radio and unlikely hitmakers like the Gregory Brothers don’t need a record label or radio to promote their record.

It’s the new world of radio and the labels.

In the previous iteration, the labels discovered the stars, oversaw the recording of their material, promoted it to radio and radio played the hell out of it -- for free.

In the new world, the labels can’t afford to take chances signing future music stars so they divert their attention toward suing customers, intimidating college universities and trying to get a new royalty tax imposed on radio.

That is – the labels have taken their eye off the ball.

And radio is failing to respond to the major generational change that indicates that young people crave music discovery as opposed to very short listed hit music stations. They can’t see why an iPod is more attractive to a Gen Y’er than a radio station that plays the same things over and over again every hour and a half.

It’s always worked before.

You may be surprised to know that program directors will go to their graves insisting that the repetition they got away with for decades still works in an age when young people carry their own music collection in their pockets.

This should be a wake-up call for everyone.

Listeners are now disc jockeys and they don’t need radio’s People Meter. They have their own. It's called an iPod.

The long held belief that repetition of a handful of songs will please this growing on-demand audience no longer applies. Yes, repetition of music certainly has its place, but radio must wake up and understand that they are not the only source of new music as they were before the digital age.

Meaning?

They can’t add two or three songs and play the hell out of the rest of them when their audiences have other places to go to seek new music, fresh artists and learn about their favorites.

That used to be the role of radio. We keep talking about the day the music died, but the music hasn’t died. It just keeps getting repeated.

What died is the personalities that live local radio stations offered with music loving djs who gave people of all ages a reason to listen to radio.

The difference between hit radio stations and your iPod is that your iPod has the music you like. You can play it over and over again or not.

Today I have offered you more evidence that digital age consumers are going on without radio and the music industry.

It doesn’t have to be that way. But it will be until some people wake up.

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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.

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