Radio's Future Shock

LA Radio will do under $1 billion for the first time since 2002.

Radio stocks are worth pennies.

Audiences decline even though loyalists whip out studies that show how many hours a day people listen.

Radio lost the next generation.

Need I go through this again?

While lots of folks were dismissing the role of Millennials in the recent presidential election, conventional wisdom took a big hit.

You know what was said -- they'll organize, even contribute online, but they won't vote. Young people never vote in large numbers.

I learned my lesson almost five years ago when I got to devote my full attention to the next generation as a professor at USC. Believe me, it wasn't pretty at first. I was a media guy like many of you. I made assumptions about the dilemma radio, TV and the record industry found themselves in, but I was wrong.

Dead wrong.

Today, generational media is as important as anything we can do to find our way into the digital future.

Even cavemen in the media business are beginning to realize that it is less about technology than sociology. They just don't know what to do about it.

The baby boom era is over.

This does not mean that boomers are irrelevant or that their contributions will necessarily be discarded. It simply says a new generation is coming of age -- a powerful new generation -- that is gaining control of the Internet, mobile space and social networks.

Look to the future and you will see:

1. A generation that is diametrically opposed to the kind of talk programming that radio airs. During the second golden age of radio (after the ascent of TV), National Public Radio and its low key approach were an asterisk at best. Not now. NPR is growing -- their morning ratings rival commercial radio -- exceed it sometimes. Imagine an NPR-type show that is local! What a killer that would be, but I'm afraid the economics are not there. In the future, to succeed at commercial talk radio (wherever radio winds up being), you'll have less Limbaugh, half the Hannity and more non polarizing fare by talent that has yet to be discovered.

2. A generation that really means it when they say they want more music variety. Boomer PDs know that the tried and true formula always was -- cut the playlist, play the hits, amp up the promotion. Make the mistake of doing that with the next generation and you'll be sitting there entertaining yourself. It worked in the past, but won't work in the future.

3. Boomers were loyal -- hell, they still are -- they're listening to the poor excuse for radio most of the major consolidators are putting on the air these days. Millennials are fickle -- and they're kind of proud of it. Boomers can stick with Jim Morrison decades after he died. The Dead long after Jerry Garcia left us. And the Beatles forever -- no matter what. Not Millennials. There is always another Coldplay in the wings. This does not cheapen Coldplay. It speaks to the unwillingness (or lack of need) of a new generation to focus on only a few groups forever. And their improved access to more variety through file sharing and social networks. Fail to understand this, and there is little chance of expanding the market to include the largest generation to come along since the baby boomers.

4. Boomers protested and took social issues to the street. Millennials work within the system and take their causes to the Internet -- to their social networks. They organize in a minute and speak loudly even when they don't mouth off. There is nothing wrong with the baby boomer generation and their tactics for fighting the Vietnam war or for that matter fighting for racial equality. Millennials are a civic minded generation -- they go about things differently. Both are good.

5. Keep your enemies close and friends closer is even more apparent with the next generation. They "friend" people on Facebook, collect friends, "spy" on them (their word not mine) and care deeply where they stand in the pecking order of friendship. Keep in mind that in previous generations, young people looked up to mentors, role models -- who happened to be sports figures, leaders, religious people and community folks. Millennials look to each other -- across the wide spectrum of Facebook, MySpace and other social networks. They are less likely to care what a radio dj says about music and more likely to be impressed with something a "friend" tells them. Radio people who want to continue in the media business have to understand that this is not bad -- it's just different.

I often say Steve Jobs got the gene that allows him to intuitively know what a different generation -- far different than his own -- wants and needs. What they will buy and recommend to each other. It's no accident that the smallest computer company has become bigger than Microsoft on the backs of intuitive decisions on iPods, iPhones and now slim computers.

For the rest of us, gene therapy is the order of the day.

That, or making it our business to understand the next generation in ways we have proven we are incapable of comprehending so far -- especially if you look at the sorry shape TV, radio, records and newspapers are in today.

This excites me.

Baby boomers are not done. Steve Jobs makes no apologies for being a 53 year old boomer. Nor does he try to be like the generation he has mastered (note the turtleneck and jeans -- a throwback to an era gone by).

But he knows that unless he wants to be as outdated as his clothes, Jobs will have to "think different" about the coming of age of the next generation. It's his business litmus test.

It should be ours as well.

What would happen if radio executives took more seriously the generational media trend that has killed them? They always blame their problems on Wall Street or the recession or the Internet or you-name-it.

What would happen if record executives moved on from lawsuits and greed that they got away with in the past but can't succeed with today?

Even newspapers -- the most outdated and irrelevant medium -- have bitter medicine to swallow. What with their decades of failure, newspapers still refuse to look to tomorrow for their answers.

It's not complicated -- it's all there.

When -- you are ready to get serious about the world of generational media.

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5 Cent Downloads & $5 CDs

Wal-Mart has loss leaders -- a product sold at low price to stimulate other profitable sales.

That's what music downloads and CDs need to be for the record industry -- loss leaders.

Now some could sarcastically say that CDs and legal downloads are already loss leaders for the labels -- and I'd laugh along with them.

But there's a difference.

Record labels are going to go down with declining sales in Compact Discs while downloads will never make up the loss of revenue. Thus, the present conundrum. So, in response to their dilemma, the labels are doing what ever red-blooded American business would do -- cutback.

On staff.

On music discovery.

On innovation.

During my tenure at USC I came face to face with young consumers -- the ones who admit to stealing music online -- and they repeatedly cited a willingness if not desire to buy a hard copy of the music that they love but not at inflated prices.

You can't blame the labels for not wanting to bastardize their CD sales -- CDs are still responsible for billions in revenue. But it is hundreds of millions less each year and has been declining since 2000.

There will be a point where even the labels will see that it is time to deal with the realities of today's consumer market.

Why do I say 5 cents per download?

Because if the prices are a nominal charge -- say what a text message would cost -- the labels will at least get something. That's five more cents than nothing. Imagine the cellular phone business if they had to protect billions in revenue. They would have never approached the pricing of text messaging from the other direction.

Instead, early plans called for five or tens cents per text message -- and consumers soon became addicted to texting at those prices. At that point, the cell phone companies offered competitive monthly plans -- say $20 -- for unlimited texting. Every young person takes the texting package when they sign up for a cell phone plan.

Many of my regular readers know where I'm going with this.

The big four labels are obsessed with getting every consumer to pay $19.99 a month to rent music. Fat chance. Early forays in this area have flopped.

From the other direction, charge only a nickel (or a dime, if you must) for every download and it no longer makes sense to steal the music. Of course, just as in text messaging, this will likely feed the Millennials addiction for music discovery and before long a $20 a month unlimited music downloading plan would be -- attractive if not compelling.

The labels are thinking of the problem predominantly from their own point of view. While I can sympathize, it's a weak position. On the other hand, make downloads too inexpensive to have to steal music and you've got a ready made market for an unlimited monthly fee (similar to text messaging) that actually means something to the young consumer.

Let's go back to CDs for a moment.

My anecdotal experience with Millennials indicates that they, indeed, have no problem with CDs or for that matter owning a tangible product in a digital age.

What they have a problem with is -- the price.

And if the labels argue that CD prices are getting even lower at Wal-Mart and Best Buy these days, I'd counter with -- great for Wal-Mart (they can always get consumers to buy something else while they are in the store) but not so good for the labels because until the price is $5, it's not a loss leader for them.

Of course, the labels don't think like this.

They need to -- and they need to take some chances and come up with innovative strategies that work for the consumer. Sorry about your problems, but Millennials don't care if all the record labels shut their doors. They don't need you.

But there's more...

Once the labels get consumers to buy CDs of the singers and bands they really like at a reasonable price, they can sell them up to other things. I know the labels think they've been down this road before, but they really haven't. A number of years ago when they came up with super CDs, DVDs and enhanced boxed sets for considerably more money, the strategy didn't bear fruit.

I don't want the iPod accessory unless I buy the car first.

I don't want dessert unless I've had dinner at my favorite restaurant.

I don't want a hot dog at the inflated price of $5 unless I bought the ticket to the sports event that will also overcharge me for a soda.

The labels should know all of this. That's what concert promoters do -- bilk consumers out of high priced concert tickets and then rob them blind while they're enjoying their favorite bands.
I predict even the concert business is going to have a come-to-Jesus moment over these outrageous ticket prices (think Ticketmaster's add on charges, too).

So, dismiss it if you must -- but you'll just have to get used to a declining record business.

Many of my readers have developed a great respect for generational media -- and as Morley Winograd, one of my USC faculty associates, accurately predicted the outcome of the presidential election vis-a-vis Millennials, you can predict the outcome for the record business without too much strain.

Plainly put -- give young consumers what they want and you will have a growth business again.

And they want very cheap downloads and reasonably priced products -- oh, and labels that stake their future on music discovery not compilation CDs.

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A New Beginning for Radio

Fortune did an interesting piece on the brash, young head of programming at NBC Universal, Ben Silverman, in its November 10th issue.

He's got a lot of faults -- doesn't show up for meetings, iffy business dealings, party animal behavior but he also has some qualities that are worth examining.

2008 was a bad year for radio and records.

Radio stocks dropped to below a dollar. Audiences continued to erode. Advertiser cutbacks -- partially from the bad economy but also due to many other new media choices. Top executives had the look of a deer in the headlights.

Cutbacks will continue through the holidays and into the new year.

Now we can't say that Farid and his pals don't show up for meetings and we're not saying they have iffy business dealings. As far as the party animal behavior? Nah!

Silverman is different because he sees things from a 360 degree perspective -- content, marketing, technology -- all of it, not just cost cutting. It's also fair to see that after two years he has had some success -- although not overwhelming. NBC Universal is going to double down and re-sign him to a new contract.

Meanwhile the record business is dying from paralysis. I mean, it would even be refreshing to see them sue everyone who owns a computer -- not that it is right and just -- so that it would show they're still alive (I kid).

Beyond that which we cannot control, I'd like to focus on the 360 radio and records executive -- someone who understands the big picture. If you are interested in being that person you might find this helpful.

Content Creation

You're not in the terrestrial radio business starting in 2009 -- even though you may be working in terrestrial radio. You'll be a content creator.

You won't be a record exec -- you'll be a music discoverer and marketer.

If we're learning anything from the misfortunes of radio and records, it is that the old model of broadcasting to radios or selling CDs with music on them to consumers is no longer enough of a business to provide sustained growth.

Going forward, content will be created for terrestrial signals, but new and different content will be created for Internet streams (and by the way, can you see why I always say radio folks have the greatest motivation to fight for fair Internet royalties -- they're going to be affected by them if I am correct). Currently radio operators cut costs, cut quality, cut local focus and then turn around and stream it on the Internet.

Not going to work. It may help attract a little more audience -- so if that's what you call success, I stand corrected. But my definition is to create a growth business. Do you see the distinction?

So, at least two different kinds of content on-air and online (more is preferred).

Then, 100 podcasts -- not of your morning show highlights -- but of topics aggregated around a target consumer group. Not mere demographics -- that is so 90's -- but a group of consumers (i.e., working women). These podcasts should not sound like radio. I am working with clients right now who are radio personalities learning the new realities of podcasting. I could go on and on about podcasting but for the purpose of this piece let me simply say -- short and sweet. Not like radio.

Then, mobile content that perhaps takes advantage of a brand that radio is defending and a strategy to channel new programming to cell phones. New content.

I'm just getting warmed up.

You get the idea. For record labels it would mean increasing the content not decreasing it as the majors are doing currently to save money. The labels should become radio stations -- not in the sense that they have djs and irritants -- but that they can refocus on becoming the distribution source of tons of content and cut out the middleman (radio).

Anyway, the labels are going to help kill radio off even more if they win repeal of the performance tax exemption.

Still, the number one purpose of a record label should be music discovery. You see, they've drifted away from this during all of the eight years where CD sales declined. These two consequences are not incidental. There is no reason to have record labels if their business is not about music discovery.

The labels will whine about how to make money, but there are ways. They just don't like them or understand them.

So, if you're with me on this -- those of us who want a future in the growth business of radio and records (that even sounds funny, doesn't it?), then we will have to be 360 executives who cover many more aspects of growth potential than traditional media.

Beyond Spot Radio

Radio shouldn't worry about the decline of spot radio, it should encourage it. (Oh boy, am I'm going to hear it now from all those folks who are working at stations telling me I'm out of touch. I'm out of touch, alright -- with the old way).

Radio got away with murder for over 50 years. Short radio commercials with meaningless production and written by the sales manager of the car dealership in your town is not sales. Not getting results -- just running spots -- is not a business when you have competition. There have been great commercials done in radio's history but far too few. After all, at $15 a spot which station is motivated to hire great talent to produce great spots?

Here's the change.

Get off of spot radio or die with it.

There I've said it and I'm not taking it back.

Hell, we're down to one radio rep firm and even that one can't drive a growth business nationally using spot radio.

So, what am I proposing?

Sponsorships.

Underwriters.

Partners.

This takes work and investment capital so count out the consolidators.

But let's move beyond their shortsightedness and look to the other side of possibility.

I'm running a station in a medium market. I isolate the ten biggest advertisers in radio, TV, print and online for that market. Notice how I am looking to local advertisers? Get ready for the pitch of a life time.

If it's Main Street Bank (assuming they survived the recent banking crisis), I go in and pitch them on a ten-year deal for naming rights to my station "Main Street's Classic Rock". That's what the station is called -- call letters are used just for legal purposes. If priced right, this one strategy should come close to covering a lot of expenses and maybe even making a profit.

Of course, if you just give them naming rights and nothing else but spots -- they should kick you out on your ass. But if your proposal has naming rights, sponsorships (not just of concerts, and dj events but seminars for young consumers on investing, etc) you're starting to get it.

Then, add in podcasts that in ten years will turn out to be a bargain -- targeted, short, sweet, good and using your terrestrial brand to access consumers. Later, add video podcasts.

Next, mobile initiatives.

You see where I'm going. And this is just the start. You're going to relieve them of a huge amount of money for the next ten years and they are going to be glad they bought in now.

Not just a dying medium -- terrestrial radio.

Not just spots -- get them off the air.

Not the cheapest air talent to be their spokesperson.

Of course, you'll also sell other sponsorships and allow different companies and organizations to underwrite your new business -- which is not radio, remember? It's content creation.

You're getting out of radio -- getting rid of the radio mindset (we'll save that for our fun reunions). But we're not going down with it.

I'll bet you that a radio station can generate more non-cluttered, guaranteed revenue by getting rid of spots and adding new media and then -- voila -- the birth of a growth business.

I hope I've helped stimulate some ideas here. Believe me this is just the beginning. If you'd like to bring your best thinkers to Scottsdale where it's 75 and sunny and have me brainstorm with them, I'd be glad to.

In any case the topics to work on:

1. Content creation (vs. merely radio).

2. Harnessing generational media (as Steve Jobs does).

3. Beyond spot radio (for a replacement of all spots within 5-7 years).

4. Podcasting

5. Mobile content

6. Selling naming rights, sponsorships and underwriters (and how to make an orderly transition from spot radio to investment-driven content).

If not, my purpose is to help as many people in this proud business of ours begin to think about how to take a declining asset and turn it into a growth bonanza.

I've got a separate proposal for my friends in the record business that'll need more space so I'll get to it next week.

The record industry can be turned into a growth business by blowing it up (the majors are doing a good job of that on their own) and then rebuilding as a source of discovery in a delivery system they control.

They are pretty negative people -- they're miserable just hearing this -- so I'll need the weekend to get my courage up to confront their foolish stewardship over what could be a different but great business.

What an appropriate time for a new beginning -- not just an old accounting or the institutionalization of the status quo.

We can do this -- we really can.

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5 Generational Trends

One reason radio has fallen on hard times is because the CEOs who run it don't understand the next generation and can't see trends that they need to consider in forging forward.

Many of you read this space every day to take a look at what is happening on a sociological basis before you make decisions -- either for your stations and/or businesses and your careers.

Here are a few trends to watch:

1. Twitter

This real-time communication service is getting legs with the next generation.

The social networking system that asks you "What are you doing" in 140 keystrokes or less is something you should play around with. Works on mobile as well. You can follow people and they you.

Now don't go off half cocked like some of the out of touch corporate radio types and find some embarrassing radio use for Twitter. Just enjoy it. This will help you be part of the new world not just our old world.

Do this enough and the sum total of all your experiences begins to affect the way you operate traditional media -- it should. Check out my latest "tweet" just for fun.

2. On-Demand Video

I believe that there will be no distinction between radio, TV and print in the future.

It's happening now with the next generation. They click when they want to read. Click when they want to hear. Click when they want to watch. Again, I caution, don't do something silly like using a radio station to drive listeners to your video site. Very uncool.

Instead, put some video up on YouTube if you have never done so before. Find five more short form video sites. By experiencing video every day (as often as the next generation does) you will pick up an appreciation for the importance of seeing video on demand. Go to YouTube for the heck of it and see a short trailer to a working seminar I did a few months back on "Generational Media & Marketing". Better yet, use your imagination and type in the most ridiculous search words you can think of.

Video on demand is the new television and will have an impact on podcasting -- what will emerge as the new radio. TV networks have it all wrong and radio still thinks broadcasting to the masses is their mission.

3. Death By Promo

Can we talk? I'm about to hurt your feelings. I know that because I have also hurt mine.

Promos are dead.

The next generation doesn't believe them and probably everyone else, too. Now that doesn't stop us from doing them. Hell, I do them by instinct. Except that instinct is wrong today. Whatever we say it is, it isn't -- at least in the minds of our audience. More music, fewer commercials, best variety -- knock yourself out. They're just words.

Start thinking about actually delivering on promises instead of promoting that which you have yet to deliver (if in fact you ever deliver it). I don't blame you for throwing something at me here. But I'm telling you -- from a guy who raised his kids by doing a promo at :03 and :33 ("I'm the father whose going to make you spaghetti sauce for dinner tonight") and ("Take a bath before bed and I'll read you a book") this promo realization really kills.

By the way, if you want a good laugh, watch your local TV news and see how many times they try to drive you to their website. Now really. Do you think anyone in this world doesn't know where to find you online? Do you think anyone is going to get up and go to your site because of the promo?

In today's world everyone has a web site and everyone (with the help of Google) can find it quickly. No promos needed.

4. Facebook

For millennials Facebook is the Holy Grail. You could argue MySpace is as well and I wouldn't give you a hard time. Still, Facebook is potent and you've got to get a handle on it if you don't already have one. A friend of mine who suffered the loss of her brother-in-law a few weeks ago was taking sympathy wishes on her Facebook wall. And young people carefully consider who they list as their favorite friends on Facebook and believe it or not some consider the rankings before they break up with each other. No more, "that Jerry is a jerk, don't go out with him" in the locker room.

I was introduced to Facebook by my USC students back when you had to be a professor or student to get access. Today Facebook is open to the world and you should join. The last time I prodded my readers many "friended me" and discovered a lot of other folks as well. Come visit me. There is also LinkedIn and tons of other social networking sites you may already know about -- and a lot of other niche networking sites. Facebook was among the first. There will be more as the next generation comes of age.

This is major.

5. Social Causes

Baby Boomers took to the streets and fought for civil rights and against the Vietnam War, but millennials do not raise such a ruckus. They are non-confrontational.

When I first arrived on campus during my USC radio sabbatical I asked a group of students, why no one was protesting (as we did when I went to college). As Morley Winograd and Michael Hais will warn you in their new book Millennial Makeover this is a social generation.

Broadcasters -- new and traditional -- would be wise to get a handle on this element of a very populous new generation. It is not without note that some of the most popular bands also can be identified with causes. This is major to millennials.

I often wondered aloud to students why they don't speak up. But I came to learn that they do -- in their own way, in their own circles. This is critical if you want to take a step away from the buffoons who run traditional media and get a sense for what it's going to take to adapt.

I hope this has been helpful. If so, I'll do more in the future.

On Tuesday Millennials arguably helped push Barack Obama into office.

Unlike prior generations, they actually showed up to vote.

They used their Internet to help raise money.

They used social networks to do their own advocacy separate and apart exclusively from the official campaign.

They turned their phones into recruiting devices.

Oh, and so did that forty something guy named Barack Obama who also used the tools of the next generation to accomplish his goals.

Need I say more?

There is a lesson in this for all of us.

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Radio & TV Four Years From Now

The official end of traditional media occurred yesterday.

Or, to be more precise, it marked a long downhill process that began several years ago and ended last night.

Presidential politics was ugly this year -- and I'm not talking about the candidates, parties, attack groups. That, too.

What we've witnessed is the point of no return -- where radio, television and print handed its power, influence and soon revenue over to new media.

It's important because the radio and record businesses right now are in that same downward trend along with television and newspapers. Perhaps some lessons can be noted.

Television news channels did a horrible job of covering this long national nightmare -- the two year campaign for president of the United States.

Fox was at its worst -- pitching the talking points of the Republican party and this time around MSNBC became the Liberal Fox with vitriol and partisanship that only Roger Ailes could appreciate. This does not appeal to the next generation. It may work for now for these news channels, but it has no future with Gen Y.

ABC, CBS and NBC looked like news organizations of public companies with budget woes.

Reporters were pulled off of campaign coverage to save money -- print and TV.

Radio?

Radio abdicated its music franchises over the past year. They think I'm nuts to say politics is hot. My old mentor, the radio consultant Paul Drew, used to tell me that when an event of significance happens, play it like a hit record.

Talkshow windbags did the only thing they know how to do -- pander at full volume. Again, enjoy yourself. Gen Y will have nothing of this and they're making their move and coming of age now.

Four years ago candidates with Howard Dean leading the way learned how to raise money on the Internet. This time, Barack Obama turned the Internet into a giant social network for his movement plus he used it to raise record amounts of money that overpowered John McCain's best efforts.

Work with me here.

You couldn't find regular substantive news coverage on television. Local TV news was negligent in covering local politics -- after all, their consultants never liked news -- they think people like fluff. And the suits still hire them to give you a pet story, a health story, how-to-lose weight story instead of news. Meanwhile, look at a nation of young people enthralled, involved and in touch. Someone is wrong.

I, and perhaps others -- including our next generation -- relied on the Internet.

Real Clear Politics -- a clearinghouse for outstanding coverage of the presidential race with no bias.

NPR and PBS online (occasionally on Sirius).

Drudge and Huffington Post depending on how you lean.

Bloggers weighed in more than ever (Politico, et al) -- and it's not possible to know to what extent bloggers bring anything to the discussion (I'd be careful here). But we had a ton of insights from people other than Tom Brokaw.

My iPhone had an app from Slate Magazine that allowed me to get the latest polls and electoral vote projections in real time. I was addicted. Perhaps you experienced the euphoria of tapping, touching and feeling connected.

My favorite candidate had an Apple app that made it possible to donate money, work on his behalf and even reminded me to vote. How cool.

For those of us not in Gen Y -- getting news and views about politics -- was less rewarding this time because television, radio and print are in the process of committing suicide.

But social networking was the digital advance during this election season and that played to the next generation and those of us who soon became addicted to a form of connectivity that traditional media could never bring.

The votes are counted. We have a new president. The election is over.

What can we learn?

1. Talkradio as we know it is deader than music radio. It may be all some stations have, but it's not all that for the listener who now has so many more choices -- especially the next generation.

2. Podcasting -- what I call the new radio -- gave us a preview of what life will be like in the next four years. I listen to a NPR news podcast just before turning in each night and choose a public radio political program. No shouting, no ambushes -- and it was on my terms, my time -- I could stop it, start it, delete it -- or fall asleep although not from boredom (better than Ambien).

3. Social networking is not an add-on or option, it is a requirement going forward. Radio and television cannot survive in a world where people demand interactivity. When every candidate slip up or send up (a la Tina Fey's Sarah Palin on YouTube) is available to the masses in ten minutes or less, access increases. When a viewer can forward YouTube clips to friends at will -- it can be a meaningful form of advocacy that will define new media in the future. In the past, news directors and producers decided what we could see and we had to see it on their screens.

4. Keep an eye on Twitter and its clones. I and those who "follow" me (and I them on Twitter) carry some influence if for no other reason than we can say we're headed to a McCain meeting or an Obama rally. Whether anyone cares about what we're doing at any given moment or not, we now have that added ability. My guess is that those of us who want to communicate in the moment will find more meaningful things to say as the years go on. We may not need to, but this is how the world is changing.

5. Polling took the biggest hit because how can you rely on pollsters who can't call people with cellphones? I mean, isn't that everyone? Zogby called it the election a dead heat a few days ago. He was wrong. Public opinion (and presidential preference) can ebb and flow freely because consumers can communicate in real time with each other unimpeded by formal news organizations. Polls are rendered less meaningful as opinions can congeal in ways that are now increasingly difficult to predict.

6. Just a few elections ago, it mattered when the masses turned to people they could trust on politics such as Peter Jennings, Dan Rather or Tom Brokaw. Today, people they trust are likely to be those in their social networks. This has major ramifications for traditional media outlets who still think they matter. I know that is a bit harsh and maybe unfair, but it is unlikely that anything said on television, radio or seen in print will rival the next phase of the digital age.

The presidential election gives us a clear view -- if we need yet another one -- of how traditional media has seen its better days.

The next generation -- the Millennials who make up Gen Y -- are coming of age. Think about it. They were raised on the Internet, weaned on mobile communications and were the first generation in the communication age to look elsewhere for their entertainment and information.

This could spell doom and gloom for radio, TV and print.

Radio, TV and print have to learn to understand the next generation that they just don't get. They need look only to their declining ratings, decreasing revenue and many digital competitors to know that they're reading it wrong.

Radio doesn't get that young people are addicted to politics (look no further than Obama). This addiction is well beyond traditional talk radio. Yet radio has done less political reporting as the years have gone on and now it's too late -- the next generation has gone elsewhere.

Television was the last bastion for politics but it's under attack by itself -- and its budget cuts. I, like many, watched the results last night on a flat screen large HD TV but many folks were happy to track the results on their laptops or phones (something I also did). The TV part may become a thing of the past. It's one-way communication.

While I'm at it -- in my opinion, political coverage was downright awful this time. The debates were boring and not substantive and the reporters did little to help the viewers get to the issues. The formats determined by the two political camps were part of the problem. The media is the other part. Reporters on both Fox and CNN who did superficial reporting were embarrassing.

If CNN is the most trusted name in news -- count out the next generation.

If Fox is fair and balanced -- how irrelevant to a young person who can get fair by balancing a laptop on his or her leg.

In four more years, we'll see --

• CNN, Fox and MSNBC in a midlife crisis trying to be the Internet, social networks and mobile beacons. They will fail.

• Radio will be a distant memory and irrelevant to the next generation on news, politics, information and social issues as it now has become on music. Radio walked out on them.

• Newspapers are getting lots of readers to their online sites while they lose paid print circulation but they really have an old reporter attitude about what their mission is. Newspapers will not be able to transfer their influence from paper to computer screen as easily as they think.

Look to Drudge.

He aggregated 35 million people to his site on election day.

He doesn't do anything (or as liberals say, other than pimp for his right-wing causes).

That's not right. He does do something.

Drudge aggregates information from all over in a fashion that makes it more manageable for web surfers to get the news they want (or he wants them to read).

That's the future.

An almost infinite number of news and entertainment sources pulled together by aggregators as a convenience.

TV, radio and newspapers used to be the one-way source -- the only source -- for such things.

Now in a world of so many possibilities including but not limited to social interaction, you didn't just see history made last night on the presidential election -- you saw the historic last traditional media presidential coverage.

And, a glimpse of what is next in as few as four short years that will retire old media and bring on the digital future.

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The Radio Royalty Pissing Match

Ooh -- I'm scared.

The NAB is promising that when the election is over it is in a good position to prevent the music royalty tax exemption from being eliminated.

Of course, the record industry through its eager beavers MusicFIRST is saying it's ready to go "toe-to-toe with corporate radio and we will win". (God, the thought of doing anything so intimate as toe-to-toe with the guys I know who run radio groups turns my stomach, but nonetheless...).

Congress -- no matter what its political makeup -- scares me.

They need lobby groups to help them think (wink/wink). And there is a growing sentiment that terrestrial radio should not be exempt from paying additional taxes to a dying music industry. Forget that radio is dying just as fast.

The folks from MusicFIRST brag that they've made more progress in the past 18 months than in the previous 80 years.

Let the pissing match continue -- just what these two farcical industries need while kids are robbing the labels blind and leaving radio behind.

An old fashion pissing match that I promise you will lead to no good.

The labels want a two-tiered approach that may win some friends on Capitol Hill. One level of punishment for small market, public radio and don't forget religious broadcasters. And a bigger penalty for Clear Channel, CBS, Citadel and the rest of the fat cats. (Is it right to refer to radio groups as fat cats when their stocks are worth under $1?)

Sit down for this.

MusicFIRST, who I refer to as MusicHEARST -- as in transporting dead bodies -- was quoted in Inside Radio Monday as saying "We will close the corporate radio loophole and the music community and radio will have a bright future together."

My God, I feel like I'm back at Woodstock.

Peace.

Love.

Nudity.

Royalties.

Okay, three out of four ain't bad.

Where is Jimi Hendrix when we need him?

Look, I have a decided bias here in favor of the radio industry. Don't get me wrong, some of my best friends are in the record business -- if you know what I mean.

It's not about deserving more. Not about helping those poor starving artists (after the labels help themselves). Not about -- what's fair for everyone else is also fair for radio. I'm telling you that's not my issue here.

What's eating at me is that for those 80 years (using MusicFIRST's math), the arrangement was good enough for the labels to swallow their tongues. Now, all of a sudden --when the labels can't figure out the digital future -- they want radio to pay up for all the free promotion their artists still get.

I'll give you that radio has lost a lot of its influence among the record buying public -- whatever that is. It's like the labels know that radio is losing it anyway so now's the time to hit them up for additional fees on the music they play.

In past pieces I've argued that radio stations should consider playing only artists that have no license agreements. My mail runs negative every time I say it. Some are afraid that would ruin radio. What? How could you ruin radio any more than playing the labels' same few songs over and over again?

As they say in kindergarten -- let's take a time out.

If I'm radio right now, I'm pouring my money into defending Internet streamers in their pissing match with the labels. That's radio's future business.

See, if radio is getting screwed after 80 years, Internet streamers are getting screwed after eight years. How fair is that?

If I'm radio, I'm coming up with a plan to use non-licensed music on-the-air -- listeners will eat it up as scary as it sounds. And for those of you who ask what should oldies stations do -- my answer is, something different. If you want oldies, get an iPod -- at least until the labels are brought to their knees. Oldies are 99 cents on iTunes -- the royalties are built into the price.

Of course, smart young people go to bit torrent sites and get their music for free -- what are you going to do about that, MusicFIRST?

Both sides can argue the merits of their arguments until the Congressmen come home, but the real issues in the debate are:

1) Why was the royalty tax exemption just fine for radio for 80 years -- not a peep out of the labels? Now they've got an urgent need to close the corporate radio loophole.

2) Why are Internet streamers being forced to pay outrageously high fees in a business that is just in its infancy?

Are you beginning to see the labels logic here?

I'm not.

But I see their motivation.

The record business is dying. Radio is dying. Why not stab your former hit making partner in the back while preventing your future online partner from getting started?

Makes sense in the record business.

Hey, remember -- these labels couldn't make a simple decision to buy Napster and nip it in the bud when it started the downloading revolution -- so what do you expect from them now?

If you think all of this doesn't make any sense -- welcome to the club.

Eventually a low royalty tax will be imposed on radio.

Stations will suck it up.

The labels will raise it.

Stations will complain but pay up again as they continue to go bankrupt.

The only way a tax on radio or the Internet is fair -- is if the labels have to pay the stations and streamers for the free exposure. Then, I'm open for your cockamamie tax.

But while radio and the Internet continue to promote the labels' music for free -- the royalty exemption that will be repealed soon - is not about being equitable. It's about biting the hand that feeds you.

Tell that to Congress. Let's go testify. Let's make a compelling case for what happens when you corner a dangerous animal and it strikes back.

Congress should keep in mind that further diminution of radio's ability to be a viable entity is not in the public interest and they should vote accordingly.

Now, let's vent our frustration.

All together now...

Go to Limewire and download some music for free.

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Music Media Makeover

We have more ways to communicate, stay in touch and interact easily and intuitively than at any other point in time.

But we don't seem to communicate more effectively than if we had only books, television, radio and hard wired telephones.

We email, text message and use our voice plans to the max but no one can say with certainty that we actually communicate better.

Technology has given us virtually everyone's attention in the modern world, but increasingly many of us are driven to distraction.

We have access to more content than ever before -- at the touch of a mouse or a brief tickle of computer keys on a Google search.

But we haven't increased our understanding of anything in as exponential a way to coincide with technological advances.

Tons of info -- not as much emphasis on what to do with it all.

We multi-task instead of prioritize failing to learn productivity's greatest lesson -- 20% of what we do is responsible for 80% of our results.

What to make of the present Internet, mobile and social revolution that has debilitated traditional society and its media while presenting a tantalizing view of what the future could bring.

I often write about the shortsightedness of media executives as they try to make consumers experience media the way they did when they were young. The results are obvious. Record labels clueless about the future and sinking fast every six months as revenue tails off. Still their leaders can find no answers other than lawsuits, CD reclamation projects and fantasies of all-you-can-consume music for $14.99 a month.

They clearly do not understand nor are they willing to accept the new influence of Gen Y.

Radio executives who insist that what they do must be consumed the way they want their listeners to use it -- not the way consumers with many more modern options choose to enjoy it.

Radio execs seem willing to take their businesses down for the count rather than "go to school" on this enigmatic generation that they fail to understand.

Growth can not be possible for records or radio if these businesses do not include the next generation.

A few weeks back -- perhaps you noticed -- Randy Michaels' Tribune Company (LA Times, Chicago Tribune, et al) gave Associated Press its contractually-required two year notice that the Tribune Company is not renewing. This is fascinating since newspapers have been shrinking their newsrooms and local reportage. It wouldn't be too harsh to say that if newspapers are anything today they are AP regurgitators.

There are rumors that CNN may get into the wire service business. With all due respect to CNN, that's not an increase in quality.

Money considerations continue to drive our ability to put forth a better product in an age of total digital access.

Radio operators are falling all over themselves to become "network affiliates" of anything other than programming developed and paid for by them. The result is and will continue to be a weakened radio product that is driven by budgetary considerations not the potential of improving quality programming. You don't have to be a genius to predict what's going to happen as a result.

The budget cuts won't be enough.

The audience will continue to decline as operators let their brands deteriorate.

Advertisers will jump ship.

And we've made so many miscalculations for so many years you can actually see the next failures in real time as they are happening.

For example....

Television is mortally wounded as a destination boob tube for couch potatoes. That's right, TV should have aiming at the YouTube consumer. Today's generation is more vitally linked to YouTube than the boob tube. In fact, how many days go buy that you don't click on a YouTube video you've discovered or someone sent you?

So television is beginning its long goodbye -- the one nearing midpoint for radio and records and the last days for newspapers.

You can see the mistakes, as I said, in real time.

Offering over-the-air TV shows online free in return for pre-roll commercials. What a money loser.

They don't know the next generation well enough to know that simply rerunning TV programs is not the great digital beyond -- it's an extension of their programming strategies that used to work.

How can so many smart people let this happen, you ask?

Plainly put, we don't understand the next generation -- the Millennials (Gen Y) born between 1982 and 2003.

The largest generation ever -- bigger than baby boomers.

The first generation to hijack its own media, its own communication, its own type of digital socialization.

A generation less consumed with conflict than economic reform.

Less likely to embrace the histrionics of talk radio, read dead words in printed newspapers or be entertained by corporate types that confuse them for baby boomers.

Let me repeat that -- the baby boomer media executives that are not succeeding by anyone's standards today (Wall Street stock value, audience ratings, advertising revenue, critical acclaim, social acceptance, etc) are confusing these millenials for themselves -- baby boomers.

It may be true that slightly older Gen X'ers are more closely allied to baby boomers in many ways, but Gen Y is another story yet.

In my sabbatical from broadcasting, I underwent a great transformation as I taught the next generation of college students. So impressed with the importance of knowing the next generation better, I concluded that media companies would be wise to embrace generational media. As most of you know I then opened a private practice in generational media and I often refer to Apple CEO Steve Jobs as the most intuitive example of being from one generation and understanding the needs and desires of a younger one.

While on the USC campus I discovered Morley Winograd, a professor and head of the Institute for Communication Technology Management at the Marshall School. He was a senior policy advisor to Vice President Al Gore and director of the National Partnership for Reinventing Government (NPR) from December 1, 1997 until January 20, 2001.

Along with Michael Hais, former VP for Entertainment Research for Frank Magid Associates, he has written a book called Millennial Makeover: MySpace, YouTube, and the Future of American Politics (Rutgers University Press, 2008).

As my readers know, I am happy to call out media executives for making a total mess of the communications business.

But I'd also like to assign some homework -- to the willing.

There are plenty of books about the next generation but this one may be a compelling starting point for those who actually want to do something about the things I rant and rave about in this space. I think you'll appreciate this recommendation. So go to Amazon and order it. I know some may think I'm just promoting a USC professors book, but it doesn't need me -- it's a hit.

In the months ahead I intend to share with you some strategies that traditional (and new) media should embrace in light of this different world we live in. Not just different technologically. That's part of the problem. Traditional media execs think it's all about technology. That's only part of the story.

Technology has allowed a new, populous generation to emerge in a trendsetting position.

Don't you think as a next step it would be good to get to the bottom of how to succeed in the digital future?

The difference between succeeding and failing is knowing the difference between technology and sociology -- and how they converge -- to offer a blueprint for music and media success.

For those of you who would prefer to get Jerry's daily posts by email for free, please click here. IMPORTANT: First you must check your mail or spam filter to verify your subscription immediately after signing up before daily service can begin.

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