Radio: Ando Could Be the New Arbitron

If you’ve been watching the dust up over Ando Media’s new ratings rules for online streaming, you can see some radio people are getting themselves all worked up needlessly.

Ando has done a few positive things in spite of the fact that some radio people are getting upset and have forced them to push back a bit.

The radio industry hates change.

On top of that, radio executives are used to dictating how things are going to be. No one dictates to them.

That’s why the industry has missed the Internet revolution and is ready to miss the even more important smart phone evolution and why it prefers to judge radio listening on its own terms – not that which advertisers and publishers may demand.

Ando could be a force to reckon with in the future.

Like Arbitron, which has a monopoly on radio ratings, Ando has a monopoly on streaming metrics.

Radio loves monopolies – just look at the major consolidators.

There is also a perfect storm brewing in which I believe a lot of radio companies and individual stations will cut out audience ratings and try to go with something else.

Traditional wisdom suggests Nielsen ratings.

But the radio industry isn’t good at supporting alternative rating services – just check the history of underwriting competition to Arbitron over the past three plus decades. Nielsen doesn’t know it yet but it is likely to die on the vine like its predecessors in spite of a flirtation with a few Clear Channel and Cumulus stations.

Ando, on the other hand, could offer relatively inexpensive metrics at a time when the only thing owners will invest in is cutting back expenses.

Take a look at the Ando package.

Ando has dropped average quarter hour and cume as radio as come to know it in Arbitron parlance. Instead, it has substituted three new benchmarks:

1. Average Active Sessions (the average number of streams of one minute or more that are active within a time period).

2. Session Starts (number of streams of one minute or more started within a time period
).

3. Average Time Spent Listening (average number of hours for each session lasting more than one minute within a time period).

Plus, Arbitron’s old five-minute listening rule to earn quarter hour credit is only one minute at Ando. No doubt that helps webcasters and mobile device listening but AQH and cume is not the best way to measure online streaming.

So with Ando, cume as we know it is dead because it measure IP addresses rather than listeners and reducing the five-minute mandate to win a quarter hour to only one-minute games the Ando system toward online streaming which takes advantage of the streamers short attention span.

There is hypocrisy in the criticism of Ando.

For example, so-called Reporting Sessions are Ando's version of what radio calls cume using Arbitron's Portable People Meter – that is, drive-by listening. The radio industry has no problem trying to rig the PPM technology to confuse hearing with listening so I guess it is only fair that the online ratings being offered by Ando skew in favor of streamers.

Two monopolies fighting each other – making up their own rules and acting unilaterally. The radio industry sure doesn’t like it when Ando does it to them but Arbitron has been pandering to radio’s reluctance to join the 21st century for a long time.

Confusing hearing for listening?

Now you have two choices when considering online media.

In the end, some of these changes are good for radio. There is no reason to cling to the past and demand the five-minute rule be maintained.

No reason to insist that cume means something more than it was.

Ando is shrewdly seeking accreditation from Media Ratings Council and should they receive it there will be a whole lotta shakin’ going’ on – to quote Jerry Lee Lewis.

But wait.

Advertisers are the last people to actually demand meaningful audience ratings. Their agencies have been buying campaigns on flawed research for decades now.

In all of this it is important to note that while both Arbitron and Ando get ready to battle, smart broadcasters will look even further ahead to the real holy grail – listener loyalty.

You can have your two million listeners (or hearers) but advertisers will take a smaller more active group of loyal fans.

There may be a lot of ways to measure this and then again, measurement may not be so necessary.

There – I’ve said it.

Soon I will share with you what a major advertiser did when they skipped the middleman and went directly to the consumer.

This is the real heart of the issue.

Radio stations using Arbitron and online streamers through the new Ando service may like their chances but I believe advertisers increasingly will do it themselves. That’s one reason I’m going devote time to this issue at my upcoming Media Solutions Lab.

And, by the way, if I am seeing this development accurately, there are a lot of underemployed or unemployed radio people who will be starting careers to help advertisers take their messages directly to consumers through technology, programming content and social networking.

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

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

Music: The Coming File Sharing Crackdown

The World Intellectual Property Organization says that 40 billion music files were shared illegally in 2008 – that’s more than in 2007 but not as many as will be shared by the time the present year ends.

That’s a piracy rate of 95%!

No wonder the record labels are beside themselves trying to stop this movement right now.

Of course, they cannot. But if it makes them feel better to sue consumers and beg governments to crack down, then you can fully understand what is hitting its stride in Europe right now.

In Great Britain and France there are legislative measures to halt illegal file sharing that has eviscerated the labels market that is $10 billion a year. It was once a lot more. And there is no sign that this trend will be reversed with or without such legislation.

It’s getting ugly.

And, Britain wants to join France to enact punishments for file sharing that could cause repeat offenders to lose their Internet connections.

There have even been jail terms meted out.

Reuters reports a lawsuit in April where four men behind The Pirate Bay, one of the world's biggest free file-sharing websites, were sentenced to a year in jail and ordered to pay $3.6 million in compensation.

There’s that – the U.S. labels version of the PERP walk (referring to the police practice of intentionally parading an arrested suspect or "perp", short for "perpetrator") through a public place so that the media may observe and record the event.

In the case of the music industry the PERP walk is winning a high profile lawsuit as they did earlier this year in which a student was ordered to pay $675,000 for sharing just 30 songs.

Then there is the new obsession by record labels to support streaming music ventures such as Spotify even though previous and similar attempts such as Rhapsody failed to gain traction.

With all this bad news for the labels nowhere does anyone mention the good news which is that the 40 billion music files that were shared last year shows the voracious appetite by the next generation for music.

It could be worse.

What if young people suddenly stopped listening to music?

Now they have done a workaround for radio stations that continue to utilize corporate playlists. It's discovery through online streaming and then downloading free music files. The old system of radio airplay and then ringing up sales at record stores no longer works. But you can't tell that to label executives.

It’s also noteworthy that as big as the iTunes store is in the legal music business today that total sales are rather insignificant when compared to pirated music. Apple CEO Steve Jobs is not about to quit his day job making hardware to be a full-time music entrepreneur.

I’ve said it before – the new price for music is free. It may not be fair but it is true.

And the labels have a right to be concerned even if they shut down innovative ways to deal with the problem.

Let me lay it out in simple terms.

Online music discovery services that charge or eventually intend to charge monthly fees fail to understand the sociology of the technology that is killing the labels.

The next generation apparently doesn’t want all you can eat.

They want what they want when they want it -- if they are hungry, they'll eat (usually for free).

Certainly this should not be a surprise to media executives, but somehow it is. In other words, to quote Mick Jagger, you can’t always get what you want.

Young people want choice.

They have proven it by demolishing the concept of the record album in favor of searching for, owning or stealing one song at a time – the one they want.

Three thousand tunes cached on a mobile device through Spotify may make label executives foam at the mouth but that concept doesn’t create much of an appetite in the general public. So, if the price of music in effect is now free at worst and 99 cents at best (the higher prices the labels charge for hit music now on iTunes has actually spurred more stealing) then how do you remain in business?

Now that’s a good question.

Maybe you don’t.

Or maybe you sell in bulk – five cents a song something like a text message – so that stealing would be not as attractive. (Actually a text message, according to studies, averages out to about a penny a message).

The labels could make the best audio copy available, all the goodies, liner notes, social networking connections – all for a nickel and no one would ever steal music again. Okay, I’m exaggerating but you get the point.

Then on top of that, make an intuitive site available to hear streamed music for discovery purposes and five-cent purchases for those who want to own it.

Look, if someone took the concept of text messaging to record execs 15 years ago and said we want you to invest in this, it’s going to be big. They would have thrown that someone out on their butts.

The audacity of charging people a few pennies to type “hey” on a mobile device.

Can’t work.

Won’t be enough people willing to pay for such silliness.

And there you have the mentality of label execs who have tried threats, fines, jail and “I got a deal for you that you can’t refuse”.

It’s not that hard to figure out.

You’re out of the manufacturing business and should be in the music discovery business.

You don’t need radio.

You don’t need promotion.

But you do need illegal file sharing – or as I like to call it, the new music radio – for discovery purposes.

Your profit comes when you get out of your own way and make it easy for a fan to sample, buy and become a customer again.

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

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

Major Cumulus Staff Cuts Coming

Recently Cumulus CEO Lew Dickey proved once again why he has earned his nickname “Tricky” Dickey.

Lew fed the happy talk radio trade press red meat recently when he proclaimed Cumulus had hired 50 sales people in the past year and planned to hire 50 more.

Perhaps you saw it.

Of course what Tricky Dickey failed to mention was all the careers he ended this past year. Politically correct as he thought it might be to emphasize hiring, Lew for some reason or other just happened to leave out all his firing -- go figure.

In one account, Dickey was quoted as saying, “We hired 50
new sellers in the last six weeks, and we’ll hire 50 more before year’s end.” He credited the recovering sales market that is spurring the new hiring.

Dickey seems to want it both ways.

At the same time he says things are getting better, he tells analysts “It could be ten years, or maybe 2016 before we reach $21.5 billion again” referring to the radio industry high from three years ago.

Dickey is both optimistic and pessimistic at the same time.

Must be nice to be the boss of a family-owned dry cleaning business – I mean, media business.

That’s why Lew goes on to perform another one of his “now you see it-now you don’t” tricks. Dickey says Cumulus will key on cutting expenses at the exact same time he is managing by cutting back.

There you have it -- guns and butter at the same time.

Hiring and cost cutting all at once.

This man is a genius.

You may wonder how CEOs like Dickey get away with such illusions as part of their quarterly reporting of revenue. That’s because the analysts who are on the conference call are just like him.

Here’s what is really ahead.

Insiders at Cumulus say more staff cuts are in the works:

• No more Senior VPs . Does that mean that corporate henchmen like Gary Pizzati and Mark Sullivan will be Market Managers again?

• More Market Managers to be changed out. New hires come in at much lower compensation and fit into Dickey’s plan to continue to cut costs. Most Market Managers will likely have more than one job because it will save the company – well, you get the point.

• More cuts in market sales management on the way. Sales seems to be a big area of focus not in the way you would think. You know, the economy is down, radio is hurting, let’s get more AEs on the street selling. Not that kind. The let’s hire inexperienced people to drum up new business and give the prime accounts to a chosen few – for the purpose of …? You guessed it, saving money.

• Potentially more changes in account executive compensation.

• Almost all stations will have syndicated or non-live AM Drive shows.

• Voice tracking will handle the remainder of the day except specifically approved markets where a one-person PM drive show may be allowed. That person may also have to multi-task in promotions and/or other jobs in the stations.

And before you dismiss any of this, keep in mind that the Cumulus M.O. is to deny everything while they are implementing it.

I’ll say this for the Dickeys. They sure don’t let failure stop their plans for future failure.

They have had their way with people’s careers as well as surrenderedtheir fiduciary responsibilities as licensees in markets where they really don’t do much local programming.

Cumulus sales initiatives have done no better than Clear Channel or Citadel – in fact, Citadel lost a little less money and you know who Citadel has a date with ...

Judge Shorty Long at bankruptcy court.

I feel badly for the fine people at Cumulus. They, like their brethren at the other two nearly bankrupt consolidators, are helpless to do anything.

These employees could turn the ship around but not while the know-it-all Dickey brothers are playing monopoly.

One reader sadly wrote about a friend of his at Cumulus, “The one guy said, ‘you think you know what pressure is.... You have no idea! Not only is the pressure intense, but at Cumulus no longer does anyone have any friends.... people are afraid to talk with each other! They are afraid to use the phone! Some people leave the bldg to use the rest room. They go to their car to use their cell phone."

So, what have we learned from all this?

If Lew Dickey tells you that Cumulus is hiring, it is code language for firing (just the first letter is different)?

If Lew Dickey says radio will be in the toilet until 2016, why is he the Happy Warrior at just about every convention he attends (and that's a lot of them)?

When Dickey says the only way to hold out until 2016, he means turn his radio stations into dry cleaners. Reduce the costs, cut the hours, hire the cheapest employees, use toxic chemicals (okay, I’m lying about the last one, but the others are good).

And if you don’t believe that these Dickey brothers are nincompoops then perhaps you haven’t heard what "Other" Brother John Dickey said about Apple.

Check it out with Cumulus employees, some of them have already heard what I'm going to tell you.

Seems that John Dickey, also known as Fredo to some, told a stunned sales meeting a few weeks ago that these cockamamie Cumulus policies (spy meetings, sales initiatives, cutbacks) should be viewed and thought of much like what Steve Jobs is doing at Apple – always innovative, daring to be different and cutting edge versus their competitors.

Needless to say the staff was dumbfounded by this unbelievable analogy.

The Dickeys have it all wrong.

Apple is hiring.

Apple is not firing.

People want to work for them.

Apple employees love to work for their boss and Cumulus employees can’t wait to leave.

Apple's CEO is quirky and odd but at least he is successful.

Harvard, the school that brought you Lew Dickey, is renown for teaching business by examining case studies.

Here’s some homework: Read this article about Apple CEO Steve Jobs and tell me whether it is describing Lew Dickey, too.

We report. You'll split your sides laughing.

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

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

Citadel's Game Plan

Even in ice hockey, there is sportsmanship.

At the end of each playoff round, after tough competition in which sticks come up high and bodies take a beating, the players line up and shake hands – one of the marvels of sports.

Not so in radio.

Last Friday, Citadel CEO Farid “Fagreed” Suleman showed the industry why he lives up to his nickname “fa-greed” by unilaterally cutting off many non-Citadel affiliates from their 24-hour ABC format specific programming without consideration to what these paying clients were going to be left with.

The personalities that they built their local stations around were gone in another bad decision – just like that!

One of my readers hit the nail right on the head when he said,

“Farid's brilliant move of firing network people who were long-term talent on the satellite formats has caused a firestorm across the country. Most of the stations affected were medium and small markets and a lot....a whole lot... of owners are really pissed. What a stupid thing to do. It just shows that he has absolutely no understanding of the business he's running. This is the opportunity of a lifetime for Dial Global to pick up more affiliates and some excellent talent. I hear they've been on the phone with about-to-be former ABC affiliates all day”.

It’s hard to imagine the old ABC Radio Networks pulling a stunt like this in their Cap Cities days. In fact, didn’t networks and program suppliers used to solicit the business of affiliates? Now, this guy seems not the least bit concerned that he’s burning his former clients on the way to Citadel's bankruptcy.

FCC Commissioner Michael Copps is sounding like he wants to return to the days of yesteryear and get tougher with license holders and of course, the big x factor, bankruptcy, is coming to a consolidator near you within months.

This begs the question, what is Fagreed going to do next?

Here is my view of Citadel’s options and to borrow a phrase from the Drake programming book, let’s present Fagreed Greatest Hits counted down in order (is there any other way for a Drake PD to count something down?).

1. Fagreed will do more housecleaning before the end of the year. After all, he’s currently negotiating a pre-packaged bankruptcy with his lenders. They not only want controlling ownership in the new company but they want a new company that looks like, acts like and smells like a venture capitalists dream. That is, few employees, lots of cash flow and assets for them to sell off when the market gets better.

2. More dumpster programming – the kind only a bean counter like Fagreed could embrace. I hear he doesn’t like to call the paid programming in PM drive on KABC paid programming. Well, get ready for more of it. This really offends the survivors at Citadel because it is, frankly, embarrassing to them. They know how to run radio stations, but running stations are not what the next few months will be about. You may fatten up cattle before you slaughter them but in radio, Citadel slaughters its talent before they turn their company over to lenders.

3. I fear for ABC. Fagreed overpaid for these great stations and some of them actually still sound excellent in spite of the CEOs interference. But I think the jig is up. Investment banks don’t know squat about our proud heritage of ABC stations and don’t care. I think it could get ugly at these last holdouts from Fagreed’s knife. It is not impossible that you won’t know the difference from an ABC station and a run-of-the-mill Citadel repeater station.

4. Once Fagreed has whipped his Citadel and ABC properties into proper form for investors turned operators, you’ll hear an announcement that Citadel is headed to bankruptcy court with a pre-packaged deal to be blessed by a judge. At the end of one single day, power transfers to the lenders but Fagreed is doing their business right now. After all, he’s available to remain CEO of the company he ruined. This is tantamount to the inmates running the prison.

5. Once power changes hands, Citadel stations will be run like windmills generating electricity. There’s not much to them, but their new owners will expect the free cash flow to keep coming. After all, the massive debt will have been erased – eaten by the lenders – and there will be no excuse for not making their numbers.

2010 will be the toughest and ugliest year for radio -- sorry to say.

Citadel will go bankrupt first. Then Regent is likely.

Clear Channel has more trouble than you know – or they are admitting. It appears some of the companies biggest lenders are trying to take control of the Evil Empire’s outdoor division – putting a squeeze on their cash flow that could make them say “uncle” – at least that’s what those nice folks on Wall Street trying to do.

The New York Post reports:

“According to sources familiar with the matter, Leon Black's Apollo Management and Blackstone Group's GSO Capital are quietly buying up shares in Clear Channel Outdoor, the financially struggling company's publicly traded outdoor unit, in order to crimp the parent company's ability to keep using the outdoor unit as its personal ATM”.

Clear Channel is entering its fourth restructuring of debt – unsuccessful in their first three.

The Post reports that Apollo and Blackstone may be buying up Clear Channel Outdoor shares to gain a leg up on negotiations over Clear Channel’s debt.

Clear Channel Outdoor owes Clear Channel $2.5 billion in a loan that matures
next August so if creditors can seize control of CC Outdoor that may influence the parent company.

The Post reports:

“Just this week, the company in a filing said it may make a fourth attempt to pare down its debt, either by buying it back or swapping some of its loans. In the filing, the company suggested those deals could be "material" in size. Time is not on the company's side: Clear Channel this week reported that the debt-to-cash flow ratio on its senior loans rose in the third quarter to 8.8 from 8.1. A ratio of 9.5 violates the terms of those loans, and given the state of the radio sector, some speculate the company could default”.

Finally, Cumulus, also has considerable debt obligations and a slightly longer window in which to turn their company into a pre-packaged bankruptcy kind of player.

Clear Channel, Cumulus, Citadel and the other nearly broke radio companies are sadly playing good and talented radio people for fools as they protect their own necks.

But the ones who are in for the biggest surprise are the top management folks at these major companies.

Let me put it bluntly.

Turning radio stations into real estate not local radio is actually hastening the demise of their own businesses.

While you won’t read this elsewhere I’m going to give it to you straight -- the stations that are now being run down for the last time are going to eventually be sold by lenders – I mean operators or whatever they are – and they are not going to like the multiples.

Write this down – 2 to three times streaming cash flow.

As we used to say in Philly, you heard it first on WFIL.

Thank God for fees because without the many fees these snakes in the grass will continue to earn, they would be stuck with empty buildings, lost sales franchises and vanishing listeners.

That may not sound like good business to you and me but it’s standard operating procedure for investors who often make their money not by succeeding but by failing.

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

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

The Citadel Blood Bath Begins

Citadel CEO Farid “Fagreed” Suleman yesterday did what we said he was going to eventually do – turn to the “Nuclear Option”.

In advance of the anticipated bankruptcy of Citadel on or before January 15th, Fagreed started to blow up what’s left of his company after years of mismanagement on his part.

And, this is only the beginning – sad to say.

Here it is -- unfiltered -- keeping in mind that I read a trade press story yesterday playing up the “hiring marquee talent” instead of all of Fagreed's firings. While I can appreciate good spin on occasion, it’s the holidays, talented people are getting fired, stations are being gutted and lies are being told.

1. Citadel started massive layoffs in Dallas and elsewhere yesterday. Talent, program directors and more will likely follow. PDs Richard Lee and Peter Stewart are out. Watch how many more Citadel tries to slip under the radar because under their repeater radio scenario no PDs will be needed on the local level. Just “traffic cops” as I was saying yesterday to direct repeater programming onto local stations. (Someone please, contact FCC Commissioner Michael Copps who is aiming to tighten what it takes to hold an FCC license. So much for getting the FCC off our backs if it results in this mess called consolidated radio).

2. Live and local morning shows will be a thing of the past on most Citadel stations. In their place, Repeater Radio – syndicated non-local, less expensive options.

3. Citadel will be adopting what it calls a new approach to on-air talent. They call it “Marquee Talent” from Citadel-owned major market stations voice tracking shifts in other markets. I call it “Cheapee Talent” -- not local and amortized by the more stations that carry it. You can decide if they are marquee talent when you see their ratings – in local markets!

4. KSCS, Dallas jock Jeremy Robinson to do non-local Repeater Radio in the evenings. KSCS will run the Citadel Media national show. Race Taylor WPLJ, New York to do PM drive nationally in addition to his local shift. A few examples of radio on the cheap. More work for less money. More national and less local. More desperation from the folks who brought you Citadel bankruptcy – the mini series.

5. Now you know why Citadel Media President John Rosso took over for Jim Robinson. Citadel Media will be the cost-cutting programming arm of Citadel so they can crank out national programming so Citadel can cut more live and local programming.

6. Mike McVay gets an expanded role as consultant to programming targeted at key advertiser demos. I like Mike and he’s really a good and talented guy, but this makes no sense. Citadel is targeting nothing but bankruptcy and running on empty. What’s there for Mike to consult? A repeater format?

7. “Timeless” soft rock format will be discontinued in February. They say it’s less attractive to advertisers and affiliates are bailing. I say, Citadel doesn’t need “Timeless” as a Repeater Feeder to its other stations so it’s outta here.

So, what we see unfolding is that Citadel has begun its long farewell.

Fagreed keeps his job and benefits, but he wastes more talented people to cut what will not even amount to 1% of his deficit – thus the term “nuclear option”. Even with the cutbacks the savings are statistical aberration even!

Citadel is hell bent to get into shape – that is, bankruptcy fit. Ready for the prepackaged bankruptcy that is most likely going to be announced by Christmas or shortly after. They are not looking to develop programming or target new advertisers.

There is a recession, and advertisers are spending on new media and cutting back on everything else.

No, it’s about self-preservation.

Fagreed is negotiating with lenders that Citadel owes $150 million on January 15th and wants to come away with continued gainful employment.

I’ve called just about every shot with this guy and with this company and each day we see more evidence that Citadel is not and does not intend to be an operator.

Citadel is planning to become a holding company for station facilities, real estate and licenses.

When the pre-packaged bankruptcy gets approved, the lenders who Citadel can’t pay are going to become the owners and caretakers of these assets.

In Shakespeare’s The Merchant of Venice, a Shylock is a moneylender who lends money to his rival, Antonio, setting the bond at a pound of Antonio’s flesh.

When the bankrupt Antonio defaults on his loan, Shylock demands the pound of flesh as revenge for Antonio having previously insulted and spat on him.

The Merchant of Venice is a comedy but what is going on at Citadel right now is no laughing matter.

Except in our modern day version, the Shylock is the investment banks and the rival is Citadel.

We already know that Citadel’s lenders are after a pound of flesh. They want control of the Citadel assets including the valuable ABC properties.

But now, when Citadel defaults on its loan and has to get on bended knee to negotiate and then accept a prepackaged bankruptcy that puts ownership in the hands of the Shylock, Fagreed Suleman wants to make sure that he isn’t the one who is going to offer up his flesh as payment for the mistakes made while running Citadel.

That’s why he’s offering up everyone else as a sacrificial lamb.

For Citadel it is now the final act of a tragedy in which so many talented people who know what they are doing were led by into bankruptcy by an empty suit who now must avoid the wrath of the lenders (perfectly depicted by “Shylock” Al Pacino) who are coming after him.

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

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

Beasley Edict: One PD Per Station

You want good news?

I’ve got it.

Beasley Broadcasting, a small family-run group of stations publicly traded, has decided that having one program director for each of its stations provides the kind of focus necessary for the station, its people and their audiences.

This is major and is bucking the trend of bean counters who are moving in the opposite direction.

Natalie Conner, VP of Beasley’s Philly operation recently broke the news to her staff and portrayed the move as emanating from corporate.

Conner said, “I wanted to let everyone know about a few corporate changes that have recently occurred in our structure across Beasley—all markets where there had been one PD running multiple stations, corporate now feels the best interest in the greater good for those stations and staff is to have a more focused direction from one PD and one PD only per station”.

Conner runs Beasley's “Wired 96.5” and WXTU in Philadelphia. Now each station there will have its own program director.

What is significant is that Beasley corporate has arrived at the right decision to have one person tending to the content at every station in every market from now on. This will no doubt improve the Beasley group but it also stands in stark contrast to the mistakes being made by many other larger companies.

In fact, the trend as I see it for 2010, is the polar opposite of Beasley’s one station-one PD edict.

Looking ahead you will see:

1. More clusters looking like a ghost town with a skeleton staff of live talent. Everything else will be Repeater Radio imported from out of Dodge or voice tracked to save money.

2. When stations are not local, today’s radio corporation feel they don't need a PD at every station so you can expect one person running several properties. This has been going on since consolidation began back in 1996 and will continue, but it may get worse.

3. A corporate person acting as a “traffic cop” directing programming to different clusters in markets, regions and nationwide without respect to whether that programming is local. Don't confuse this "switcher" with an in-market program director.

4. The demise of the local morning show. With Clear Channel, Cumulus and whatever is left of post-bankruptcy Citadel, mornings will be turned into “more music” marathons with the customary long commercial junk heaps. They like this concept because it plays to the People Meter misconception that more music gains more listeners. What it really does is game PPM’s vulnerabilities and produces hearers not listeners.

5. Lack of localization. 2010 will be the year that did in local radio in most markets. Where an independent operator continues to invest in local personalities, news and community commitment, they will continue to do well. For everyone else, there’s MasterCard. Charge the future to vanilla programming that doesn’t really fit where listeners live.

The other day a school principal was taken hostage in New York state. It made the national news. Coverage was everywhere on the Internet.

Here’s an email that a radio pro in that market sent to me that says it all:

“About 3 hours ago in Dutchess County, NY, a gunman stormed a high school in the next town over. He held a school administrator hostage at gunpoint. As soon as I heard, I started scanning the local radio dial.

Cumulus coverage: F (I'm not sure they even knew).

Clear Channel: C- At least they did a few taped break-in's with luke warm information. They still didn't stop their syndicated programming.

Pamal/K-104/WSPK: A+. Much to my surprise, this 50K watt top 40 station stopped all programming and did nonstop coverage for 2 1/2 hours. They interviewed the town supervisor and continuously broadcast news to scared parents, where to stage, how to communicate with their children and live reports with area residents. I was shocked. The last station in the world I would have ever expected to go live and nonstop was K-104. Yes, they are a corporate group, but they took their responsibility seriously.

Maybe there is hope for some radio stations?

There is always hope for local radio.

Locally run.

Locally programmed.

Locally sold.

That’s why Beasley’s decision to put someone in charge of the product 24/7 for each station is sending the right message.

It would be nice if everyone followed their lead.

Beasley is not usually a trendsetter positively or negatively. Here’s how the group ranks in the current Best & Worst Radio Groups poll -- click here.

But, every time you see radio done well – aimed at the community whether it’s WCBS-FM in the big town or a small station in Oklahoma, it is not surprising that their approach always works.

What hasn’t worked is the cost-cutter version of radio that has driven listeners away and hasn’t even succeeded as a publicly-funded business.

Do you think maybe the real smart people are the ones with their egos in check and not the ones who lined their pockets turning radio into a commodity?

They're the ones headed to bankruptcy.

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

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

Register Now for Jerry's Next Media Solutions Lab

Preview MODULE 1 of 14: The Most Useful New Media Secrets for 2010

Music: Keep an Eye on Spotify

By Jerry Del Colliano

If you haven’t heard about the European music streaming site Spotify, I think you'll be interested.

Spotify is headed for the U.S. sometime after the new year. In Europe it is getting rave reviews and making lots of friends.

But when Spotify tries to monetize its operation through monthly consumer charges, a very popular service may become less desirable.

The question is what makes Spotify different from the dearly departed Yahoo Music Unlimited, MTV Urge or Virgin Digital – all three of which failed miserably competing with Apple’s iTunes story.

Spotify launched in late 2008 and it is serving up both free and premium options for on-demand music.

With Spotify, a consumer gets access to over six million tunes. The free model is ad-supported. There is a mobile version for iPhone and Android devices in Europe so you can see how the scene is being set for the launch here and a way of caching 3,000 songs.

Will consumers pay $15 a month for the premium package?

They haven’t been willing to sign on for these types of ventures previously -- at least not in large numbers. After all, young people live in a world of bit torrent sites, illegal piracy and buying what they absolutely must own for 99 cents or less.

Why pay more?

Why pay anything at all?

Well, the major labels love the idea for Europe which ought to tell you that there is something wrong with Spotify’s paid model.

The labels haven’t been able to spot a trend since the 33 1/3 RPM record – and even then, they were probably trying to hold on to the 78. (I kid the labels here, but really, they are so out of touch with today’s consumer that their wish for a monthly cash stream in return for a monthly music stream seems to be more fantasy than reality).

Remember what I always say -- observe the sociology not just the technology.

Talks are going on between Spotify and the U.S. labels as if the U.S. labels really have a negotiating position.

Here’s the thing with streaming.

Streaming is the new music radio.

Every label, artist and writer should want their music streamed on these popular free services because it is the new age way for consumers to discover music.

Radio got out of the music discovery business when top 40 became top 25 and when playlists were cut sharply to game the Arbitron ratings diary system.

You see broadcasters doing the same thing again as Arbitron rolls out its Portable People Meter that records drive-by listening from encoded signals picked up by respondents who carry the PPM device.

Someday when all this fuss dies down and smart programmers get together to analyze how they let radio give up its music discovery monopoly, they’ll find that they were more concerned with playing to Arbitron than to listeners. That’s why PDs argue that if they cut their playlists, they succeed – even today.

True – they succeed with Arbitron.

They don’t score with music loving consumers who are continuously abandoning radio for the digital frontier.

Back to streaming music services such as Spotify – they allow consumers to sample music without having to buy it.

Isn't that what radio used to do!

Spotify needs to sell advertising to make its money but may not be able to sell enough of it to satisfy the greedy record labels. Spotify does a good job in tastefully inserting ads, but in the end if their model is built on getting consumers to pay $15 a month for access, I’m saying chalk this one up, too.

In fact, Spotify has only been able to convert 10% of its European customer base to monthly streaming fees. Its policy is to convert so-called “freemium” customers to premium.

And to that I say, good luck with that, too.

We’ve been there before.

Rhapsody had fewer than one million customers willing to pay for streaming. The new fangled Napster about three quarter of a million when Best Buy bought it. That’s scary, too. Best Buy owning Napster.

One thing Spotify gets right – real right – is how important mobile access is to its strategy. No streaming music service will make it if it is tethered to a computer or laptop.

The deal is to get mobile users who, after all, buy applications for their smart phones, to pay. In the past mobile subscription services have required syncing between the home computer and mobile devices if for no other reason than to attest to the fact that the consumer still has a paid license. Since the music is streamed instead of downloaded, Spotify avoids the problem.

So consumers can cache more than 3,000 tunes on mobile devices but they still have to check in and verify that they still have a license.

In case you’re wondering what "He" would do (“He” being Steve Jobs), it is significant that Apple is not standing in the way of Spotify when it wants to use an Apple app to go mobile here in the US.

That should tell long time Jobs-watchers something significant.

Jobs understands that streaming is the new radio – why else do you think Pandora is on its way to being number one in online stream just barely behind CBS Radio and ahead of Clear Channel (see the Ando Media chart to the left).

Let’s put it like this.

In the past, consumers discovered the music on their radios and then went to record stores to go buy what they could afford – singles, albums, whatever.

It’s really no different today except that streaming services help consumers discover music – radio still has uncomfortably tight playlists everywhere – and then they can buy what they want from the iTunes store or a traditional CD if they want.

Radio has so many ways it can be in the music discovery business if it wanted to and we’re going to get into that at my January Media Solutions Lab in Scottsdale, but for now consumers are continuing to have their way with the record industry and broadcasting interests.

Watch Spotify because of its significance as a music discovery streaming system that consumers need and want.

Not a replacement for the CD, legally downloaded music files, pirated bit torrent site downloads or essential monthly consumer expenses such as text messaging packages with their mobile carriers.

Don’t mistake it for a replacement of the profit that record labels lost because they insist on having it their way instead of letting consumer’s get theirs.

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

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