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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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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Conan on TBS -- Smart?

For Conan O'Brien, getting pushed out of his Tonight Show digs at NBC has turned into quite a profitable business.

NBC paid him off -- $45 million to O'Brien and staffers -- when the network decided to reinstate Jay Leno to Conan's spot after Leno's ill-fated months in the 10 pm weeknight slot.

Everyone thought Conan was headed to Fox -- including Fox -- according to Deadline Hollywood's reporting. More talks were said to be scheduled between Conan and Fox after the NAB Convention now underway in Las Vegas.

Then the shocker.

In about less than two weeks, according to news accounts, Conan O'Brien's people decided to take an offer from TBS to bring his offbeat, youth-oriented comedy to cable.

Smart?

Obviously for O'Brien, it was.

He's getting a reported $10-12 million a year in a five-year deal that also gives Conan's production company ownership of his show with TBS taking a smaller stake in it. Not to mention the four-day workweek.

This is more than a story about a spurned TV comic who was pushed out of his Tonight Show chair and rose to get revenge.

It's about the changing audience, the unusual appeal of paid cable in a free world and, well -- the growth of the Internet.

How so?

Since leaving NBC with all that money, Conan has miraculously discovered the Internet.

He's been attracting over a million people to his online antics and has embraced Twitter like never before. See, his youthful fans are watching more cable and obviously, they are also the Internet generation.

So far so good.

Conan pulled a friendlier coup when George Lopez' current 11 pm TBS show was designated for midnight. Lopez, being the good solider (perhaps better than Conan when NBC decided to restore Leno to The Tonight Show) said he'd love to have Conan as a lead-in come this Fall.

O'Brien cannot be on live television until September under his NBC exit agreement, but he can tour and he's using the Internet to drive his "Legally Prohibited from Being Funny on Television Tour."

As shocking as the Conan announcement was to the traditional television community, you had to see it coming.

Conan's audience grew up on cable -- niche programs more so than the homogenized fare the major TV networks have been used to offering.

They reside on the Internet and as soon as O'Brien figured it out, they flocked to him.

Now it's a win-win-win.

Conan gets rich again with approximately the same salary NBC would have paid him that they already had to pay him to leave.

One win.

The audience gets a cult-figure, quirky, cable-ready O'Brien.

Two wins.

TBS gets to sell advertising and stands to make a profit from the get-go with a former big network talent who is not aging. In fact, he was too young for NBC's audience.

Three wins.

The Wall Street Journal reports:

"The defection of a big-name broadcast TV talent to cable TV comes amid a creep of programming and advertising dollars to pay TV. Cable networks have invested billions of dollars in original scripted shows, high-profile sports events, kids' programming and late-night shows".

O'Brien is quoted as saying, "In three months I've gone from network television to Twitter to performing live in theaters, and now I'm headed to basic cable," Mr. O'Brien said in a TBS statement announcing the late-night show. "My plan is working perfectly.'"

Tongue planted firmly in his cheek but absolutely true.

Here's the future:

1. Cable is a great interim step, but soon an Internet-only video shows like the kind Conan (and other genres) can do will reside only online and on mobile entertainment devices. But they can't be like traditional television. Read on.

2. The content will resemble an assembly of YouTube clips that can be viewed in one session, or individually at the whim of fans exercising their right to get content on demand.

3. Social networking will be included and I'm not just talking Twitter and Facebook. More like a separate "nation" for, in this case, Conan fans to communicate with each other.

4. New forms of ad revenue such as performing in public venues with sponsorship tours. By going to cable, Conan gets to enter the new space while being funded by the traditional advertising model of spot TV. Believe me, advertisers are more than interested in finding their way to new media.

5. Mass communication over traditional media is waning. The future is programming delivered where people now live and will soon reside -- online, on phones and iPads.

Conan saw the future and you see it, too.

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ABC Now Hiring “Perma-lancers”

Perhaps you’ve noticed the latest trend not only in the American workplace but in the media industry.

Part-timers.

Part-time workers to save radio operators money on paying benefits and other expenses that are usually customary to a fully employed work force.

You’ll see a lot of part-time help being employed when the overall economy begins to grow again but I thought you’d be interested in a dirty little trick Disney’s ABC Television has come up with to take this shortsightedness one step further.

David Westin, the ABC news executive whose career may someday be summed up to reflect how he single-handedly presided over the demise of a great and profitable news operation, has a better idea.

Westin has coined the term “perma-lancer” to reflect a new breed of employee degradation.

Here’s how it works.

Inside sources at ABC say Westin’s news operation – you now, the one that just recently mandated a one-third reduction in size – is reportedly interviewing these new “mutates” called “perma-lancers”.

These sources say Westin has told some non-union people that there is plenty of money to hire them for extended periods of time despite what the company has been claiming is the reason for its massive staff reductions.

In effect, “perma-lancers” – the term used to describe the mutation of permanent employees and part-time workers -- should more accurately be called “union-busters”.

A source knowledgeable about how ABC operates and speaking on the condition of anonymity because these plans are thought to be secret and sensitive bristle at the conflict between the truth and what Westin is putting out as PR poppycock.

The ABC News Operations Manual demands adherence to the truth – it’s right there in the first pages – and yet Westin is apparently saying one thing while planning to do the other. Obviously, not taking a page from his own book.

Firings, early retirements, layoffs – to make it seem like the economy is making ABC do it.

Creating this new breed of “perma-lancer” who looks like, acts like, works like a full-timer without any of the benefits or protection from their unions.

As one source put it, this amounts to “Union-busting, lies and a disregard for the truth. But this is, after all, the new fantasy world of Disney, the Magic Kingdom”.

It is all very sad.

ABC is a fantastic news operation and credible news leader.

But it doesn’t follow that you can expect such high standards to be maintained with a portable, expandable, retractable staff of people who exist to avoid paying benefits and breaking union ties.

And, it doesn’t stop there at ABC TV.

No wonder a recent memo (February 17, 2010) from Steve Jones, VP of ABC News Radio forbids entering award competitions.

Let’s dissect Jones’ memo:

“This year, we won’t be submitting any of our excellent work for awards consideration. Our decision was based on three factors:

1. The increasing expense associated with awards submissions.

That’s out-and-out bull. Corporate dinners and waste could easily be redirected to pay these incidental expenses.

2. The significant effort required to compile award entries. (Often, it is a multiple week process of gathering, reviewing and editing audio).

Poor Steve Jones. I don’t hear ABC News people complaining about the extra work. It’s an exercise in pride for them.

3. The difficulty of quantifying the business value of winning awards.

Just great! Business value, my butt! What’s it worth to ABC News to be the recognized leader of something – anything – the key word being “recognized”?

Jones goes on ...

“In this very challenging environment, our time and effort is better spent on delivering the best radio news service we can. And, while awards are nice to win (and we have won many of them), it’s better to know that our affiliates recognize our work as representing the best in broadcast radio journalism.”

WHAT!

Do media people have any stones? Do they have the ability to look in the mirror and see how dumb they look when they talk about representing the best in broadcast journalism in the same paragraph where they take away a credible means of being recognized?

So brace yourself.

The record industry has starved itself to death by cutting vital employees who actually make the labels have a reason to exist – find, develop and market music and artists.

We’ve explained it away by saying the label execs are just hunkering down hiding behind lawyers to stretch out whatever paydays they can still have coming.

Radio companies have relied on voice tracking and repeater radio network or syndicated programming to reduce the need for actual talent in their companies.

Now, with David “Perma-lancer” Westin forging the way at ABC Television News, the equity owners of radio properties can now look no further than a new class of employee that they will love for their affordability if nothing else.

It’s as if an airline created a new class of passenger for its flights – cargo class – where they throw people into the hold below the seating area where luggage is stowed and let them pay 50% off the cheapest ticket.

Apple stock was 218 when it closed Friday.

Apple hires people and innovates.

ABC, equity-owned and debt-ridden radio operators and other cheapskates can’t seem to make get their share price to a couple of dollars a share. They blame the same economy Apple thrives in.

One fully employs and nurtures its employees.

The other under employs and tortures.

If you know this and I know this, why don’t they know this – you ask.

They do.

But they are not looking to be successful for their shareholder investors like Apple. They want to be successful for themselves and that’s the greed upon which radio, records and now television news is hell bent for destruction.

Here’s what Seth Godin said recently in a blog post that had “radio” and “media” written all over it:

“(Andrew) Carnegie apparently said, ‘Take away my people, but leave my factories and soon grass will grow on the factory floors......Take away my factories, but leave my people and soon we will have a new and better factory.’

Is there a typical large corporation working today that still believes this?

Most organizations now have it backwards. The factory, the infrastructure, the systems, the patents, the process, the manual... that's king. In fact, shareholders demand it.

It turns out that success is coming from the atypical organizations, the ones that can get back to embracing irreplaceable people, the linchpins, the ones that make a difference. Anything else can be replicated cheaper by someone else."

It’s not brain surgery.

It’s greed.

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Prediction: Disney to Sell ABC Television

The only nice thing about living through the ravages of radio consolidation is that you get a keen sense of when the next victim is going to be served up to investment banks.

And that’s what’s happening now – in my view – by Disney CEO Bob Iger, owner of ABC.

If you’re reading about ABC News President David Westin’s radical news division cutback – 300-400 people either by buyouts or firing – you’re only seeing the headlines.

Look deeper and evidence mounts that ABC has NBC Universal “envy” and hopes to find a sucker – I mean, a sugar daddy. Sorry, I should say a buyer who will overpay for yesterday’s technology. A buyer so stupid that they are going to let Disney gut operations before any money changes hands and purchase yesterday’s technology, declining audiences and revenues.

Not possible?

Comcast did it when it agreed to purchase NBC Universal.

That’s because the Roberts family long wanted to be a major player in the content business not just cables, wires and Internet broadband.

Screw the timing. They want what they lust after and they can afford it.

Now, the writing is on the wall for Disney.

ABC Television is in play.

As one former insider told me, “ABC's version is baloney” – the facts suggest Walt Disney Company may be positioning the sale of ABC Television to focus on comic books and theme parks. Clearly they have no interest in being in the news business. As the ABC alum said, “Who needs news when you can have super hero's?” (I’m talking about comic book hero's not Iger).

Here are more suspicious moves:

• ABC lets Barbara Walters out of news. I know she is aging but that apparently doesn’t matter on The View, does it?
• ABC is gutting the profitable news division and journalists can agree that these cuts will seriously affect the professionalism and quality of news programming on-the-air.
• Iger wants more fees from cable and satellite companies for carrying the third ranked network's programming – all this as the recession and poor programming are adversely affecting revenues.

The latest “Honey I Shrunk the News Division” memo comes from News chief Westin. Here are the points as he described them in a memo to staffers (my comments follow):

The transformation will have six basic components:

1. In news gathering, we intend to dramatically expand our use of digital journalists. We have proven that this model works at various locations around the world. We believe we can take it much further.

Digital journalists are cheaper than traditional journalists. And in the future when television as we know it today no longer exists, it will be digital journalists who gather, edit, produce and air content. The problem is ABC is in the traditional news business. Their digital operation is basically collateral damage. When Westin says “we believe we can take it much further” that is code for “we believe we can get away with digital journalism on the traditional platform and save even more”.

2. In production, we will take the example set by Nightline of editorial staff who shoot and edit their own material and follow it throughout all of our programs, while recognizing that we will continue to rely upon our ENG crews and editors for most of our work.

See, I told you. One person doing the work of many people. And while it may work for online journalism, why would viewers turn to traditional ABC television news to get what they can get better from online journalists who actually know what they are doing because they are doing it for the Internet and mobile Internet?

3. In structure, we will combine our weekday and weekend operations for both Good Morning America and World News.

So far, it’s all about money – not making the news programming better.

4. In special events, we will rely upon our program staff through the day and night to cover unexpected events and marshal personnel from across the division to cover scheduled events.

This has to cause a warm spot in the heart of Darth Vader or as I call him Lowry Mays. Existing every day to do your jobs and then for special events – more existing every day to do your jobs plus special events. Ingenious. Greedy. Sounds like ABC is carving the turkey before the feast.

5. In newsmagazines and long-form programming, we will move to a more flexible blend of staff and freelancers so that we can respond to varying demand for hours through the year…

Ah ha! Freelancers. Just say that secret word and divide all the dollars in savings. If you haven’t noticed, radio is way ahead of television in the use of freelancers. No health care. No commitment. Plug them in. Move them around. Send them on their way.

6. Overall, we will eliminate redundancies wherever possible.

To me, Mr. Westin, that would be numbers 1-5 above – all ABC is doing is gutting the news division.

So there you have it – probably ahead of everyone else – because we radio and records people know a desperate, greedy media company when we see it.

Here’s what is really telling.

Michael Nathanson, an analyst for Sanford C. Bernstein & Company, happens to be a contemporary of ABC CEO Iger. In fact, they went to the same college – Ithaca – so when he speaks I’m thinking maybe he knows something.

Well, he spoke -- in a Bloomberg article – one of the few that didn’t miss the big story.

Nathanson said this about Disney’s future:

“ABC is a good question … I would ask the company if ABC fits in.”

ABC is the third-ranked broadcast network in Nielsen's.

The company and its O&Os are estimated to be worth $5.3 billion – and to put that in perspective that’s about 14% of ESPN’s value.

Yes, from one ravaged industry to another – one small step for ABC, one giant step for new media which is starting to kill traditional media and force their clueless caretakers to take their money off the table.

In every way and even when it comes to cutbacks and selloffs, television is once again radio with pictures.

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New Media Predictions

Last Thursday my Media Solutions Lab was held in Scottsdale and I have never been more proud of the radio, music and new media businesses as I was that day.

An impressive mix of executives and entrepreneurs attended and for the better part of seven hours worked actively with me on tracking the digital future.

We had fun. Taught each other and worked in small groups. On issues, strategies and skill sets.

I thought you would be interested in a few of my 15 predictions about where the media industry is headed:

1. Advertisers will increasingly go directly to the consumer and bypass radio, television and publishing. We see signs of it happening right now with some local radio advertisers in Grand Rapids using podcasting to deliver the message. The podcasting campaigns are coming out of radio budgets. Not major yet, but a trend. On a national level, Pepsi is doing a multi-million dollar program to be based on their website and using viral social networking to do a local community outreach, once the exclusive domain of local radio. Pepsi is giving away millions in grants each month to fund “great ideas”. See more here. Smart.
2. Apps – such as Apple apps – will increasingly act like traditional media by driving commerce. Daryl Lee, president of global communications planning at Interpublic's Universal McCann, predicts mobile marketing will find a purpose: helping consumers find what they are looking for at local stores, probably in the form of apps, gadgets and widgets, not regular ads.
3. The new talk radio is texting. Gen Y does not have the need for traditional radio talk shows. They want to be part of the programming. Texting connects them in ways radio cannot. And they don’t suffer fools lightly. Today’s older talk radio listeners found their way to express opinions on AM talk stations in the 1960’s. While most remain happy with radio talk formats, younger listeners who have eluded today’s talk radio don’t appear to need a local talk station to communicate on vital issues. For them, it’s social networking.
4. Radio has 5 to 10 years left at best as an audio-only medium. Gen Y has been been raised on iPods, the Internet and mobile devices. You will want to make the transition to a medium that also includes text and video – that is, radio as a medium may decline but the content may easily adapt to shorter attention spans and new means of delivery. The secret is to keep the brand healthy not debase it by cutting it back at a time of great change. Over 230 million people listen to radio each week even in the age of the mobile Internet although for steadily declining periods of time but it is supported by largely older listeners. Recent research reveals that teens listen to 28 minutes of radio a day. Is that all?
5. Traditional broadcasting will someday no longer be needed. No one would invent broadcasting one signal to everyone to be consumed at the time of the broadcast in this digital on-demand world. Broadcasters – especially good ones – will be needed to port brands consumers appreciate to a digital format. On-demand is now a prerequisite and not an option – one-third of all Nielsen households have DVRs or TiVos and attempts by advertisers to prevent as zapping will meet with failure because it in and of itself fails to abide by the most important rule – cooperate with the inevitable.
6. The Mobile Internet will be the next "broadcasting". Before the end of the decade, the mobile Internet will be the new delivery system for media. We see how it is evolving in automobiles. Entertainment centers are being planned for cars that go way beyond AM/FM or even satellite radio. WiFi will be everywhere. The Apple tablet and devices of that genre will deliver virtually every form of news and entertainment for mobile consumption. By the end of last year, there was 19% smart phone penetration according to Nielsen and more than 50% likely in two more years.
7. We are transitioning from the free to paid Internet. Rupert Murdoch is leading the way against Chris Anderson’s concept of free. Consumers are showing they won’t pay for music but they will pay for apps. Before this decade is over content providers will shut the door on giving away all their content in return for charging micropayments so the new paradigm no longer will be “if you build it they will come” but “if they come, then they will pay for it”. This is a big growth business open to entrepreneurs and big businesses alike.

If consolidators who control the lion's share of radio properties get their way, radio will become a national platform of cheap repeater programming sold at unbelievably low ad rates. Their policies of repeater radio and diminished local footprint is the direct route to radio's demise.

The music business will accede to Apple which will offer streaming of music on monthly subscription plans that will render the labels helpless. Apple is likely to carry it off.

And, refresh my memory, what do record labels do again?

Television will become the next radio – cutting its way into fewer losses as TV audiences migrates to watching shows for mobile Internet delivery. They can't see it or don't want to, but the only reason for a network to exist is to create content. Affiliates? You know that train left when the networks stopped paying compensation.

Newspapers, ironically enough, could once again become growth businesses because they are local and because they will be forced to redesign their content for mobile devices like the iPad and for paid subscriptions. This redesign will seamlessly integrate audio and video with text making the old “paper” come alive while readers can communicate in real time to publishers, editors and writers.

But first, kick out the management.

The future requires these things:

1. Ability to understand how consumers use their content -- the sociology of programming.

2. Platforms that allow consumers to click when they want to hear, click when they want to see video and click when they want to read text -- all in the same place at the same time.

3. The replacement of P1 mentality and replacing it with the study of fans with names, faces and social networks.

4. Building social networking into everything and keeping in mind that social networking is really not Twitter and Facebook. They are just conduits to a fan-based relationship.

5. The integration of new means of montization beyond commercials (video, audio or text). That would be events, micropayments for content and solution-based marketing.

6. A totally new package of skill sets are mandatory if existing media companies plan to enter the digital green zone.

The future is evolving in front of us but we are now beginning to get a glimpse of the great growth potential ahead for content delivered by radio people even if their employers can't see the road not taken.

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The Tipping Point for Radio

Radio will be left out of Steve Jobs' new mobile tablet device that he is expected to announce next Wednesday.

Malcolm Gladwell in his book of the same name defined the tipping points to be "the levels at which the momentum for change becomes unstoppable".

My friends, we are about to witness history next week when Apple provides the electronics, the infrastructure and the consumer confidence (no small thing) to save traditional media.

A recent article in The Wall Street Journal alluded to Apple's goals. No one will know until Apple CEO Steve Jobs comes down from high to announce the next big thing, but speculation is running rampant.

The tablet could allow for cable television subscriptions customized by the user and billed to their Apple account. Music may be streamed and safely tucked away on a "cloud" for instant access anywhere on any device -- again, for a monthly fee.

Monthly fees have failed miserably in the music sector but Apple could pull it off with a cool new device that allows consumers to read books, save the newspaper industry from itself, access school textbooks, read PDFs, go online, use apps from Apple's app store, play video and movies at a whim, listen to Internet radio and Pandora and on and on.

But what appears to be left out is radio -- terrestrial radio.

You see, the tipping point has already been reached in radio and the momentum cannot be stopped. Consolidators and their followers have killed off local programming and local personalities. They've done this with a smile on their faces (after all, remember a year ago when Clear Channel laid off almost 2,000 people and said that was going to fix the industry?).

Maybe it would be better to rename the tipping point the Dipping Point in the case of the radio industry. Turns out less was never more. Any idiot knows less is not more.

Even an alien from Mars would know that to dilute local radio for the economies of repeater radio, Imus in the Morning, syndication, voice tracking and cheap programming is compromising the industry's future.

And now, next week, radio will see just what bean counter planning earned it -- a footnote at best on the most fabulous new consumer device and entertainment platform ever devised.

Radio is not necessary to people other than radio executives.

Yes, I know -- 236 million people listen to radio every week according to Radar and big CHR stations still pull in millions of listeners (if you count People Meter metrics as listeners).

I would respond, if radio is strong at 236 million people, why was the industry declining even before the recession? I know from my work teaching the next generation -- radio has by its own hand removed itself from the soundtrack of its listeners' lives.

Radio studies layoffs and new ways to get health care companies to buy spots while consumers get their news and entertainment online and from mobile devices. And advertisers are now telling radio stations what they think of them by driving the price for commercials down to the lowest levels ever.

Steve Jobs studies sociology and then invents the technology.

Radio studies "layoffology" and then invents a breed of radio that is easily left off the next must have media device.

We've got it all ass backwards.

The Wall Street Journal article's only mention of radio is Internet radio.

Here it is:

"People familiar with Apple's plans say a central part of the new strategy is to populate as many Web sites as possible with 'buy' buttons, integrating iTunes transactions into activities like listening to Internet radio and surfing review Web sites. "

This is what we talk about in this space all the time and what I will cover at my Media Solutions Lab next week.

Innovation!

Yet, the radio industry is content to sit still and miss the next wave after having denied its way through the Internet revolution for the past decade. Why do you think every major broadcast company budgets less than 3% at best for Internet/mobile and digital operations? Isn't that wrong? The Internet will be the thing historians look back on 50 years from today -- not towers and transmitters.

Not good for companies whose money is tied up in FCC licenses and old transmitters.

One of my readers points out,

"When Google retreated from trying to sell radio advertising, radio companies saw that as a victory. I saw it as a defeat. When I ran radio stations, I embraced dMarc and then thought it was great when Google bought it. Pfft. Gone".

The Dipping Point for radio is next week -- when all the foolish, selfish, destructive things consolidators and their equity holders have done to the industry comes home to roost.

But the Tipping Point for new media also arrives on the same day. This exciting future -- creating content, marketing brands, selling things -- becomes a growth industry.

This growth industry isn't going to come to us -- we have to go get it. Learn about it. Retrain ourselves. Certainly, we must become adept at understanding generational media. (I am doing an impactful and entertaining module on generational media at my Lab next week. It will give attendees a sense of how to see the similarities and differences in generational media and what to do with them).

Radio people have all the raw talent to learn skills for the era of new media content that will be institutionalized next Wednesday when Apple speaks. The ones that sit back and refuse to think differently (as Apple would say) will most certainly be left behind.

The long-awaited digital future is days away. Let's watch it develop together and find ways to become a part of it.

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The Mad Media Meltdown

The trades are all abuzz with news that radio may, in fact, be headed for another challenging year financially. And when the trades admit it, it must be bad because they like to keep their constituents’ spirits up.

Take NBC late night.

Conan and Jay are not just a TMZ gossip story. They are a sad commentary on the meltdown that is taking place across traditional media these days. How could NBC be so stupid?

And how could radio consolidators be so shortsighted to be firing their personalities and injecting voice tracked programming and network shows when the best defense against new media is doing local radio with favorites on-the-air.

Consolidators are in financial trouble not because of the recession (remember radio has survived many recessions in its history) but because stations have stopped innovating.

As one of my readers pointed out:

“I’m so tired of hearing radio CEOs describe a better 2010 using ‘it’s going to be easy to beat last year comps’. I’ll bet the guys at Kodak said the same thing after 9|11 … the economy would get better and people would take vacation pics. The guys at Kodak could never understand the magic in pictures was sharing the experience not the chemical processed film imagery. Cell phone cams didn’t have the picture quality but they sure where (sic) convenient. Sharing become easy and quick as pushing a button. Poof … no more Kodachrome. You know the story for radio”.

In spite of what equity lenders think, it is innovation that sells not bean counters that cut expenses.

After all, NBC Universal parent General Electric mandated deep cost cuts not a bounty of innovation and we see where that has led NBC.

As former NBC President Bob Wright said the other day the only cure for the problems at NBC is a sale to Comcast.

That’s what radio consolidators routinely do now – cut expenses at the risk of diluting their local radio product.

So what do Conan and Jay, advertisers cutting back and the demise of local radio have in common?

The companies that are perpetrating these crimes are guilty of murdering innovation.

Enter Steve Jobs, as he will on January 27th, and innovate once more to the delight of consumers and shareholders as well (I am both).

Apple will likely announce its new tablet device. I am hearing there will be a seven inch and ten inch model – the top of the line unit could cost $1,000. They may be available as early as March.

Of course, only Steve Jobs knows for sure but he certainly has our attention without spending a dime because he has a proven record for innovating.

Look, Harvard has earned its business school reputation by concentrating on case studies. The theory being if you see what has worked and has not worked for other companies, that makes you an outstanding executive.

Cumulus CEO Lew Dickey is a Harvard grad.

Harvard’s got its own problems as many institutions of higher learning do these days. They take their own advice which is why with record endowments, the school has lost its financial shirt in the stock market.

Back to Jobs.

Jobs is a dropout from Reed College in Portland, OR.

As frequently is the case, dropouts learn more than graduates and make their educational time count. According to Jobs' Wiki bio, "Although he dropped out after only one semester, he continued auditing classes at Reed, such as one in calligraphy. Jobs later stated, 'If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts', he said".

Jobs could play top executive in the model of GE's Jim Immelt if he wanted to. Could have a corps of bean counters invade Cupertino, but no – that’s not an innovator's M.O.

Apple has hired its way through the recession not firing people.

It has grown shareholder value for its investors even during the worst economy of our lives (assuming you were not around for 1929).

Mel Karmazin was the media darling of Wall Street for years and all he talked about was building shareholder value.

Sirius XM stock closed at 67 cents yesterday.

Other radio CEOs did the same song and dance and some of them are now in bankruptcy, some are headed for bankruptcy and the rest are clueless as to where the future lies.

Fortunately for me, I have invested my USC pension in Apple – all of it! It has doubled in the past year. Doubled! In a recession. Now that's shareholder value!

So why can Apple do it with a one-semester Reed College dropout and Cumulus can’t do it with a Harvard alum?

I'm wrong.

Lew Dickey has a Bachelors and Masters Degree in English Literature from Stanford University and an MBA from Harvard. Stanford is not chopped liver either.

Smarts only work when you know how to use them.

Back to NBC's mess.

How can NBC fail strategic planning by putting Jay Leno on in prime time while saving money on dramas, screw up their affiliates' late local news lead ins as a result and water down the one part of its schedule that prints money – late night? (And did I mention that they are going to lose Conan, the younger target demo talent to a competitor and pay him to leave?)

Can you say no inno? No innovation.

So it’s going to be a grim year – in fact, a depressing future for anyone who cannot learn to innovate. And that requires raising your consciousness as well as bringing out the talent of others.

That requires new skill sets.

Most folks in the media business have plenty of the old and cannot even identify the tools they need to access the future.

Yet Pixar produces hits.

Apple invents new businesses not just electronics.

Zappos sells shoes online by mastering the art of innovating great service.

Radio does what these days?

Oh, cut costs and dilute local programming.

Record labels do what?

Cut expenses instead of doing a full court press to find new music and learn from young people who actually know more than they do about the music industry’s future.

Newspapers do what?

Shrink the size of the paper. Try to force readers to buy it while giving away the content online for free (in return for running ads that don’t equal the expenses it took to gather the news).

No inno.

My readers tend to understand that the demise of traditional media was not necessary. It could have been saved.

Yes, radio could have evolved as it always has and found a place in the new world order of mobile devices -- perhaps not as a 24/7 broadcaster as much as a major content provider and marketer.

The music industry could have morphed into the digital world and pioneered the one thing people cannot live without – music. Ok, food and water, but you get the point.

Don’t let what killed them, kill it for you.

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The people who are attending my Media Solutions Lab next week here in Scottsdale are going to get a full dose of innovation – who does it best, how it can change the future and how they can acquire the skills to be more like Apple than NBC.

Want to attend?

Register for my Media Solutions Lab here.

Pissing Away the Audience

There was a real good piece written by Scott Harris for AOL recently that is so scary it ought to make anyone in the media business think seriously about the repercussions of how they are making decisions.

The article reports that television’s version of cheap content – The Jay Leno Show on NBC – is not only a ratings failure but there have been some unforeseen consequences.

Everyone is talking about Conan O’Brien’s hair when People Magazine spent $7,000 on Kate Goselin’s new hairdo – the better to put her face on the cover.

And how Jay Leno lost 45% of his 10 pm (eastern) audience on his 5-day a week show.

Now, my readers are smart – real smart. So let me ask you, what happens to a performer in today’s entertainment business that loses 45% of his audience?

He gets his old job back -- in Jay Leno’s case the 11:35 pm start of The Tonight Show.

Conan gets the boot – even though he is apparently being forced out. I don’t know about you but I kind of liked the way Conan told NBC to go to hell after pulling the plug on the show they signed him to do many years ago.

I am fascinated by the human condition called media mismanagement.

Why are so many smart people – and they certainly are not dumb – making one lousy decision after the other?

Arbitron CEO Michael Skarzynski lies and his company fires him. Media executives lie all the time and they get big contracts. The real deal is that the Arbitron board had it in for the turnaround artist who they chose to lead the company through the People Meter challenges.

The board wanted him out. Plain and simple.

Jeff Zucker, the NBC “genius” who has turned the number one broadcast network into number 4 can relate.

He hoarded Conan, found a place to keep Leno from leaving for ABC or Fox and now that it didn’t work, he takes absolutely no responsibility for his strategic mistake and causes a bad situation from going from bad to worse.

I didn’t see Zucker apologize to Ed Ansin, owner of Sunbeam's WHDH-TV in Boston when he took on NBC last spring by refusing to carry Leno at 10 although the network later threatened him with disaffiliation if he stuck to his position.

Zucker’s bosses want him in – he is just like them.

And then there is Steve Jobs who answers to no man or woman – does what he wants and gets that power by earning the right. Nothing succeeds like success.

Except failure.

Lost in the debate over Leno and NBC and what Fox will do is that these companies don’t control the future. They are weaker than they were five years ago.

They are all actively or through poor decision making pissing away their audiences.

Cable television seems to be the beneficiary of cheap programming decisions that Zucker made when he stripped Leno across the schedule five days a week to save major production costs.

Now, there is new research that shows NBC’s Jeff Zucker’s poor late night strategy is helping his cable competitors. It’s as if network television viewers just said to themselves, hand me the remote and started exploring niche cable channels.

As some media watchers predicted, 'The Jay Leno Show' has, in fact, turned out to be one of the biggest mistakes in television programming history. Fans of Leno at the 11:30 hour have failed to migrate along with the former Tonight Show host, leading to a shocking 45 percent drop in ratings for NBC at the 10PM time slot over last year in the key 18-49 demographic, according to Media Life Magazine.

Yet, despite this, ABC and CBS have combined to post only a .1 ratings increase during this same time-frame. So if NBC's former viewers aren't watching 'Leno' and they aren't watching CBS or ABC, what exactly are they doing with all that extra free time? Reading a book?

Cable channels are seeing a 1.6 ratings increase over last year in the time period for 18-49 year old viewers. You can check out which cable shows are leading the charge here.

It’s not clear whether NBC or the other networks can someday get these viewers back. They may be lost forever to DVRs and bad programming decisions.

And Zucker will soon be working for a cable company when Comcast takes over NBC Universal. You and I should be so lucky as to have the nine lives this guy has.

Does all this sound a warning for radio? You may never get the audience back that you are voice tracking and cheap-programming to death.

Forgive me for talking programming when the radio industry is all obsessed with cost cutting, avoiding bankruptcy and suing people.

Yes, Lew Dickey is reportedly uttering the “s” word more often these days and His Eminence Fagreed Suleman, fresh from saving his ass from the unemployment line, has filed a lawsuit against Mitch Dolan alleging it was Dolan who drove Sean Hannity from Citadel’s ABC.

Oh, really?

ABC execs say that it was none other than the Ultimate Bean Counter himself who spearheaded the Hannity contract renegotiation's. The ABC execs cringed at the thought. And you saw the results. Hannity bolted to Clear Channel’s Premiere after working out a deal to stay on Citadel’s WABC, New York.

I always say, when you screw up, sue somebody – it’ll make you feel better.

Anyway, the radio industry has a serious case of putting its head where the sun don’t shine because while they fire popular local morning personalities, import network repeater radio shows, cut local news and services and try to trick listeners with vanilla flavored voice tracking, radio listeners are going elsewhere in droves.

I know Nielsen or Radar or somebody will issue a report any minute saying everyone listens to radio – not to worry.

But worry.

You lose these listeners and you’re not going to get them back and erosion has been going on since before consolidation in 1996. Radiio average quarter hour listening as been declining since the early 90's.

I’m going to address this at my Media Solutions Lab in a few weeks. Where are radio listeners turning as they listen less frequently to radio?

We may find them spending more time online – depending on their ages. Or perhaps, listening to music. (I took my car that has no satellite radio in for service and I already miss the 30 gig hard drive that has Jerry Del Colliano’s Philly, Soul and Rock and Roll channel. And no commercials. No liners other than ones I do behind the wheel. Voiced tracked radio has lost me and I love the radio industry).

You may be surprised to find ex-radio listeners (and I mean older ones, too) devoting time to podcasts, webcasts and – are you ready – things that their Apple apps bring them.

Christmas Day the iTunes store sold the most apps ever after the iPod Touch became the big Christmas present of the year (praise be to my Apple stock!).

Apps.

Not radio.

Not TV.

This decade will bring great change to the media business and while we may laugh at the corporate CEOs that have ruined our great industry, for those who want a chance to survive, we have to do a better job understanding both technology and sociology.

Consumers have changed and the next decade will be about knowing these consumers better than we have ever known them before.

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The Leno Lesson

So NBC screwed up.

Programming execs tried to plan for the future five years ago but the future is never predictable. Just try to remember what life was like five years ago and see if you could have predicted the ways things are today.

Ironically, the announcement that Jay Leno’s abysmal 10 pm eastern weeknight version of his old Tonight Show, was broken by the most trusted name in news.

TMZ!

I’m being a little sarcastic here, but not that much.

In a world that sees The National Enquirer and TMZ taking all the risks and usually being right, who could have imagined years ago that CNN, ABC, AP – somebody traditional – would be cutting back so much that they forgot to search for the news?

If these traditional news sources are missing fluff stories such as entertainment news, you can only imagine what they are missing on the health care debate or homeland security.

George Stephanopoulos put his foot in his mouth prior to the weekend when he let Rudy Giuliani get away with factual errors. To his credit Stephanopoulos later apologized and took full responsibility for the botched interview.

Back to the Leno mess.

NBC thought it could see the future from their 30 Rock offices and predicted Leno would be too old to attract desirable demographics by 2009 so they came up with the masterful plan to retire Leno as they knighted his heir apparent Conan O’Brien to takeover The Tonight Show.

Of course, NBC affiliates knew better but hey, who asked them?

The Boston affiliate balked at running Leno at 10 pm and he was whipped back into shape with the threat of having his NBC affiliation yanked.

He turned out to be right.

You see, the media industry has it backwards. Media execs think all entertainment trends start in their offices. They need to get out more often, it seems.

Now Leno is going off at 10 pm as local affiliates are tired of losing the late local news ratings to such a weak lead in. And with Comcast coming in to take over operating control of NBC Universal (and who could have predicted that five years ago), Comcast was attracted to NBC's
content not necessarily the savings NBC U parent GE absolutely needed.

The latest NBC screw up in the making is to put Leno on for only a half hour at 11:30 eastern presumably on the strength of his monologue and one guest. And Conan at 12 midnight to attract younger demos. This is the media version of being half-pregnant.

If NBC is trying to push O’Brien out, that was unforeseen as well since they signed him to a long, lucrative contract to be the next Jay Leno. Conan could wind up on Fox or, less likely, on ABC. What a mess.

One thing is certain – Leno will be on for at least a half hour and maybe the entire Tonight Show again if O'Brien bolts. Conan O'Brien's fate will become known after he negotiates with NBC and its competitors.

Lessons anyone?

1. You don’t separate talent from their audience when they are still getting ratings and generating revenue and The Tonight Show was number one in both. Attention radio consolidators: this means you, too.

2. No one can see the future – just future possibilities. That’s why five-year business plans are out and contingency plans should be in. What NBC should have looked for is options. Options if Jay lost his ratings. If his audience got too old and it affected sales. If Conan got restless and threatened to leave. Attention radio consolidators: Warren Buffett buys the management of the businesses he likes and keeps it in place. Good management is always studying contingencies.

3. When you fail to let consumers have their way, your reward is to go down by having it your way. It happens all the time in the media business. NBC has a bigger mess than it would ever have had if it programmed to the audiences’ liking. Radio CEOs have severed the ties between local radio, and its news and personalities in the name of Wall Street and look where it has gotten them? Bankruptcy.

4. Even the mighty Apple CEO Steve Jobs isn’t foolish enough to deliver products to the marketplace the way he necessarily wants them delivered. Becoming consumer driven is a forgotten skill of media companies. They used to know how to please audiences, but have been distracted by trying to assuage their own egos and pay homage to the lenders that prop them up.

The Leno lesson is quite clear to those who will listen.

Or to put it in the lingo of the fabulous Texas journalist, the late Molly Ivins, “You’ve got to dance with them that brung you”.

NBC needed to dance with their affiliates.

NBC programming "genius" Jeff Zucker needed to respect the power of a Tonight Show that was number one in ratings and revenue. He could have readied contingency plans but not act on assumptions.

Radio consolidators paid inflated prices that Wall Street banks were all too happy to fund, but they needed to go with the management, programming, sales and marketing people and policies that made radio a business that attracted large investors.

One more thing.

While the newspaper business was trying to figure out how to deal with its nemesis, the Internet, a brash LA attorney, Harvey Levin, started his own publication – TMZ.

While the Times and the Journal negotiated cost savings by cutting their newsrooms, Arianna Huffington launched her own cost-effective online Huffington Post – now an online news alternative for millions of readers.

Five years ago, who knew?

Proving once again that the future occurs in the present and is not predictable in any way, shape or form.

The only thing that is predictable is that any fool who sees the future and takes his or her eyes off the consumer will lose.

Can you say radio?

The record business?

Newspapers?

And now TV?

Thank you, NBC for giving the Harvard Business School another case study for how not to run a media business.

The question is -- is the lesson written off to pop culture or are we going to study it?

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Paid Content Is Coming

Are you watching what happened over the holiday between Rupert Murdoch and his News Corp in their battle with Time Warner Cable for rights fees?

Murdoch wanted Time Warner to pay fees for Fox Broadcasting Network to keep the bowl games going and American Idol flowing.

Time Warner huffed and puffed and then gave in to what they later described as a fair deal.

Fair deal?

No problem.

The very next day, Time Warner Cable subscribers got hit with the first of what I think will be many rate increases to absorb the costs of the new deal with News Corp.

This sets a precedent for other television networks and it goes beyond the deals that niche cable networks have with cable companies. ESPN subscribers have long been subsiding the sports channels. Murdoch just got his share of it.

Rupert Murdoch should not be easily dismissed for the mission he is on.

Murdoch is vowing to shut down the free content flow that is financially killing The Wall Street Journal, his newspaper empire and other sources of content. He's threatening to do a deal with one Google-type business to act as a gateway for all such content in which he will be paid.

I'm really in to this issue and I've added it to my upcoming Media Solutions Lab agenda because I think all that free content that Internet and mobile users have been getting for is about to become paid content. The party is over.

But here's a slice of reality.

Young people who constitute the next generation expect their content to be free. They steal music, get around paid firewalls with the greatest of ease and are cheap enough to throw nickels around like manhole covers.

They want what they want when they want it. Period.

But I sense a change.

Publishers are on the ropes.

The record industry has tried for ten years to cram a CD into a computer. They've fought for the sanctity of the album as a creative work even though any consumer could tell you such albums come few and far between. Spotify and other streaming music services that look to charge monthly fees for instant "cloud" delivery to mobile devices have not set the world on fire.

Radio groups have given away their content only to find that about 3% of their Internet listeners to terrestrial streams listen online -- a lousy business at best. They don't get it.

TV networks are trying to embrace Hulu and other schemes that give them a cut of the ad revenue but even if they succeed, the pot of dough is not enough to pay off.

A few years back I invited a Warner Music executive speak to one of my music industry classes at USC. She frothed from the mouth in describing how the labels would love to have ISPs (Internet Service Providers) act as a toll collector for their customers to pay for every piece of recorded music every offered.

The students were non-plussed. She said the $5 per month charge would mean a record industry bigger than it had ever been selling albums.

They, on the other hand, didn't want everything that was ever recorded for one low, low monthly fee -- they just wanted what they wanted when they wanted it. Hey, we raised them and the branch didn't fall far from the tree.

Now, I want you to watch this trend develop.

I'm watching it as a publisher.

Would you pay $99 a year to read this blog?

No?

Would 10% of you pay $99 a year for Inside Music Media because if the answer is yes, it constitutes a big business for me. At only 10% of the free circulation.

And for those who do not, consider the issue of micropayments that will become part of our lexicon as the years go on. In other words, you don't pay for this publication for one reason or the other, but you break down every once in a while to access a story you absolutely cannot resist ("John Hogan's Plan to Sell 300 Top Radio Stations" or "Lew Dickey's Private E-Mail Revealed" -- you get the idea). That's $9.99 for the month.

But what about you?

If you are an ex-radio content provider or marketer and you start a publication, site, blog, podcast and get to charge a reasonable amount to people who become addicted to your product or service. In the past there was no real reliable way to collect such payments.

But days before my January 28th Media Solutions Lab Steve Jobs will announce the much anticipated Apple tablet, the reinvented iTunes infrastructure platform and new, cool mobile entertainment devices to make your future brighter. Learn more here.

There are estimates that Apple could sell between 1-10 million tablets in the first year alone. Suddenly, if you are a collector of antiques, you can get the content you want from an expert site acting as an app for a small price.

Actually there is nothing new to this model, that's how it's always been in the past. Want to read Sports Illustrated -- get your money out.

And there is evidence that consumers -- even and especially the next generation -- will spend for applications if they are priced right. That is juxtaposed to their stealing music and enjoying free content for which providers have been previously afraid to charge.

Chris Anderson, author of "Free", doesn't see it my way or Murdoch's way. Anderson thinks content will have to be given away free and then providers can charge for enhanced services or other things. That model hasn't set the world on fire so far.

Murdoch is old and stubborn but I think he's reading the tea leaves right.

The Wall Street Journal cannot exist on declining print revenue or even increasing online ad sales. The Journal is probably the only major publication that has had a paid model from the very beginning and because of the nature of the genre, they get millions of dollars in subscription payments.

Of course, providers are going to have to make their content bullet-proof -- not the stuff a lot of local newspapers pass off as news.

And local radio stations could be in this business while adding video and audio.

And, you -- can be in this business, too even if Lew Dickey, John Hogan or Farid Suleman decided to let you go.

Apple's new platform means democracy.

So keep an eye on this and I'll keep you ahead of the curve and for those of you who are attending my Media Solutions Lab in late January, I'll be very specific about the challenges and opportunities that will become available to you.

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Inside the Media Solutions Lab

By Jerry Del Colliano

Today is the FINAL DAY to save $300 off the registration price for my January 28th Media Solutions Lab. Lock it in here.

Happy New Year to all of my readers with the wish and hope that you will be able to take advantage of the many major changes that are coming in the new year.

Many of you have asked me to say more about my upcoming Media Solutions Lab at the Westin Kierland in Scottsdale, January 28th -- where we will spend an entire day focusing on these challenges and opportunities.

You already know that my Media Lab is about the future -- we've talked about it from time to time. And there are 14 modules of content -- and yes, we'll cover all 14 in seven exhilarating hours. You can take a peek at the learning modules right here.

But the real magic of this format is built around you and me.

You are obviously not like other people in that you come here regularly to get the straight scoop on both the mistakes being made by traditional media companies and the promise of new media as it emerges in its early stages.

Sitting on the sidelines is not an option.

Record labels and radio groups are fighting to defend the status quo but they are fighting a losing battle. The Media Solutions Lab is for smarter radio people who are willing to take a fresh look at what's ahead and most specially for radio people, music execs, traditional media professionals of all types.

So let's see if I can take a moment to paint some vivid word pictures about an event the nature of which you probably have not seen before.

You will likely arrive in Scottsdale the night before the January 28th (Thursday) Lab. The WestinKierland is a great property and worthy of even a longer stay, but if you're on a budget I've found a list of other nearby hotels that may be better options -- compare hotel rates here. You'll be just around the corner but you'll love the meeting space, I promise.

The next morning, we'll have a continental breakfast waiting for attendees at the Westin so put your credit card away -- and if you've ever attended one of my old Inside Radio conferences you know this will be first class. In addition, we'll have lunch for you as well as breaks, refreshments and snacks -- it's all included.

I want to meet each one of you personally before the day is done -- and I know some of my friends will want to follow up with me after the event once you put together your own personal action plan.

We'll start no later than 9 am and work in an atmosphere of approval and acceptance. You'll tell me "you look better in person than in your pictures" and I'll probably give you an additional discount and you'll add, "your wife is so sweet, why did she marry you?" Okay, I'm lying about the discount part. My wife is sweet - that part is true.

I'll start with a look into the next 12 months -- what will happen, what is unexpected, what opportunities exist. We'll talk.

Remember, this event is not being recorded (you will not be permitted to record it as well) nor will it be available in any other form after the event. It's face to face, interactive. You've got to be there. You'll know why after just a few minutes.

Then, we'll hit on a number of topics that I've planned for you.

Here's a sample of a few topics (only a few) right here:

Reinventing Radio

I've got some surprises for you. There is a way to prolong the life of terrestrial radio but few operators are doing it. No consultant can tell you what you're going to learn here but you will see how to revitalize your fan base. You'll learn about the misinformation that is being put out about how to program to the People Meter by consultants and researchers who want your business, but the real answer will become apparent and you will learn how to put your best programming foot forward. You'll also learn if and under what circumstances a terrestrial brand can be ported to the digital world.

Think Like Apple

Why is the media business thinking like label execs and radio consolidators? They don't really understand what happened to their businesses. In fact, they are failures not worthy of following. Apple CEO Steve Jobs understands the changing media market. He's no kid and you don't have to be one either to acquire the skills he has and you'll need to operate in the digital future. We'll have some fun together learning how to let go of the less useful tools we've been accustomed to using and grasp a chance to acquire new age tools with people, ideas and marketing.

Earn Podcasting Revenue in 30 Days

I always wonder why some of my talented on-air friends are not running toward podcasting. They should be. It is the future for talent, personality and information. You can be your own Clear Channel -- I'm sorry, I just insulted you. I mean, you can be your own company. And don't think podcasting is radio on a mobile device. It isn't. And if you don't believe me -- why do you think so many podcasters have a fan following and no revenue stream. We'll fix that for you.

Avoid The Webcasting Trap

I know ... I know ... royalty fees are killing webcasts. No, actually radio groups are killing it. They dump terrestrial programming online -- pick up a mere 1-3% more at-work listeners and call it a success. No wonder WBEB, Philadelphia owner Jerry Lee pulled the plug on streaming B-101.1. But wait -- there is a better use for webcasting. I'll set up a few parameters and then you'll brainstorm with me. While we're at it, I'll show you the brainstorming format I developed when I was a professor at the University of Southern California. I'm sure you'll use it with your people once you get the hang of it. Oh yes, you'll come away with ideas -- so many -- that it will be hard to keep you in your seat.

A Growth Alert -- Advertisers Are Going Direct to Consumers

Advertisers have figured this out -- but somehow broadcasters have not. Of course advertisers aren't going to abandon traditional media all of a sudden but what you can expect them to do is spend increasing amounts of money building promotions, websites, podcasts, social networking outreaches and other mobile things without the middleman. And if you think this is just about the youth market, you would be wrong. This is about all ages, all markets. And I'm going to show you a way to be the one who creates the content for advertisers without traditional media. I'll bet I won't be able to get a word in edgewise once I light this fire.

New Media Businesses You Can Start

I can't think of any better red meat to throw in front of my attendees -- after all, they care about their future and want to be part of the media revolution ahead. I'll start with a few ideas and you'll build on them. Only the people in my meeting room will have the advantage of seeing a future for businesses that require little to no investment other than sweat equity -- and who works harder than media people?

How To Start a Business for the Apple Tablet

We're going to devote some time to this topic because I believe the Apple tablet is going to be the iPod/iPhone of the decade to come. A mobile commerce platform through the iTunes store that Apple is revamping right now. I'll give you the latest on what the device is, what it can be and how you can start businesses for it whether you are running a radio station, group or you are currently at liberty. Steve Jobs may make his announcement two days before the Media Lab -- you'll be at the right place at the right time to get a leg up on this important mobile platform.

The New Publishing

While newspapers fret over lost circulation, you'll use those skills you picked up in an earlier session thinking like Apple. Did you see where even newspaper websites are now losing readers? Publishers can't seem do anything right, but they could. And you can as well. Look, you're not going to go buy a distressed newspaper -- let Sam Zell do that. But I'll show you a zip-code inspired way to create your first, second, third (and so on) cash flow stream. Your expenses will be in content -- not delivery. Perfect for ex-radio execs who want to use their programming and marketing skills. Hint: the new publishing will be inhaled, heard, seen and read. That's it, more to come.

How to Get Paid for Being You

I'll tell you how I'm going to do it -- and I've been quite an innovative entrepreneur over the years. There is a debate that is relevant about free vs paid. Rupert Murdoch thinks he can get paid for the online content of his newspaper empire and I agree with him. Chris Anderson ("Long Tail" and "Free") says the best you can do is give it all away for free and then charge for paid additional content. I disagree (I never much liked his long tail theory of the music industry, either). So how does this affect you? Got an idea, a talent, a skill, a topic -- if it is good enough someone may pay a fair price to access it. It's happening now. This flies in the face of everything we know about young people and the Internet. Then again, buying Apple apps flies in the face of ... well, you get it. And so does the monthly TV package Apple is reportedly considering. This could be a business for you or your company.

Mobile Content

There is nothing bigger than the cell phone/smart phone business. It can't be about just texting and applications forever. Over the next ten years content will be integrated more and more into mobile devices but that doesn't mean radio or newspapers. I'll frame the discussion and we'll have at it. Hint: without understanding the sociology of mobile media, there is little chance to create thriving businesses based on it.

Social Networking Beyond Facebook

In fact, people are getting pissed off at the blatant commercial uses of Facebook and Twitter. Facebook has tightened its controls for users to keep out unwanted riff raff. Hey, social networking is being redefined and I'll show you some of the ways you can use it. In fact, this is one area you had better be skilled in for over the next ten years social networking will drive everything.

Reinventing You

Look, you can't believe that the media business is ready for monumental change without acknowledging that you need to change as well. Acquire new skill sets, discard less useful tools. I am writing a book about this topic so you will be getting an advanced look at some of the ways we can reinvent our careers -- even before the book is available for purchase on -- The Apple tablet!

Leave with an Action Plan

Once you decide what you want to take from this day, I want you to leave with a plan of action to make changes, explore new opportunities, acquire useful and additional skills. Leave with this and you'll want to pay double for admission -- okay, I lied again. But I think you'll agree you got more than your moneys worth.

If you want conventional industry meetings, you've got many choices.

Want to hear Lew Dickey again or another Wall Street banker imitate a funeral director -- well, we're not going there.

My abilities and yours together is what makes this day special and rewarding.

One more thing.

I know it isn't easy for the people who need this day the most to afford it. But please consider that sitting out the future even for another year is not an option.

If you register today before it expires in 2 days, you'll save $300 off the regular price and lock in the discounted early bird savings -- the lowest price the registration will ever be. Divide the "early bird" price of $495 by my seven hours of working with you and you're paying $70 an hour -- and that's before meeting space, breakfast, lunch, refreshments and breaks are considered. And you can pigeonhole me in the hallway and talk one-on-one about your ideas and plans.

I am so excited about this I hope you will accept my invitation and meet me in person January 28th at the Westin Kierland for my Media Solutions Lab.

Here's how to register.