Ink Tank

24 And Frustrated About Radio

A Message from Eric Rhoads, Radio Ink

"Eric:

Hello. My name is Art Webb and ... well, I really don't know what. Honestly, I think I just need to write. It's such a bizarre time in this industry, with so much uncertainty, and being young makes it that much scarier. The abstract of radio is what draws me to it, the theater of the mind, the absolute power and hold that radio can have in two different ways over two different people. It's a magic that's been all but forgotten, and it saddens me deeply.

My history, very quickly: Started as a board op in San Francisco for Clear Channel, moved to L.A. to work for KLSX and eventually saw myself as the Production Director/Engineer for The Tom Leykis Show before the format flip to AMP earlier this year. I have since moved to Portland, OR, where I am currently biding time as the night talent and working on various other programming endeavors for an active rock station.

Where do I go at this point? There is nowhere to move up in a industry that is shrinking like styrofoam to a flame, and I've become somewhat lost. My only saving a grace is an Internet project I have been working on for the past couple of years with a colleague who's in the same shoes I am. We feel we are doing something very creative that holds mass appeal, yet every attempt we make to get the idea into the hands of a major player, we only find closed doors. Why is that? You would think at a time like this they would be looking for something, anything, to get the train back on the tracks.

I urge you to evaluate what we have been working on at errorfm.com/press. I do think that the programmers of the future are developing their chops in the Wild West of the Internet, where at least we are given a chance to experiment and see what works. The future is so grim that I find myself doing everything I can to justify what I do. The love for it just isn't enough anymore. At this point I feel like it has to die in order for it to be saved. The question is, how long will the corporations stretch out the mass layoffs and stations being run by 2-3 people before they just bow out? This suffering is just so unnecessary. Thanks for letting me vamp, even if it is just a mess of words. And thanks for your blog, I read it all the time.
-- Art Webb"

I have TWO responses. One to Art, the other to the industry:

Dear Industry:

I cringe when I read letters like this because young people who love radio are under the mistaken belief that there is no opportunity. I say "mistaken" because I believe opportunity is out there. However, it's clear why so many young people have that impression. It's because of the behavior of some companies, because of the negative press and the "piling on" to radio (some of it well deserved), and because we don't hear enough about the stations still doing good things (I'll work on that!).

Radio is its own worst enemy. Some of us are short-sighted, with statements like "How can I invest in future generations when I'm trying to survive the present?" Yet invest we must (somehow), even if it's only an investment of time. If we cannot get young people excited about entering radio, we will continue to lack innovation. We will sound stale and repeat the success-factors from the past till they are no longer successful. We will find ourselves without qualified, well trained people to take the reins when the current generation leaves.

Engaging Youth
If we want to engage youth, we need to start by inviting them in and getting them excited. This starts with compelling, youth-oriented programming that appeals to them -- not 1970s or '80s teen radio all over again from stale, out-of-touch programmers who THINK they are appealing to young people. It  continues with an outreach by every radio station to colleges and high schools. Create internships, turn the all-night show over to experimental talent, and find ways to give hope to a new generation that thinks there is no hope. If you have a losing station in the cluster, turn it over to some 25-year-olds and let them reinvent it. (Big companies are in a great position to do this but want to play safe.) Risky? Yes. No one ever succeeded without risk.

It's Not About PR
One could say radio has a "PR problem," and we do. But hiring a PR firm to eliminate negative spin or to promote some lame pro-radio slogan changes no minds. It's like the man who tells his wife he loves her but continues to beat her. It's simply not believable.

PR starts with true positive action. In this transparent society, there is no hiding anything, no pretending through PR (though some still foolishly try it). If I were you, I'd Twitter the following message: "Our station is seeking 25 people under 25 who want to reinvent radio. Show up at the station on Saturday." Sit them down, listen to them (no matter how obtuse), and find things they can do at the station to learn the business. (Don't make them fill out forms or do mundane work.)

Energize Your Team
Next, go to your own employees (if you have any left) and ask their opinions. What can we do to stop being boring, on and off the air? Appoint someone to make it fun again. Find ways to energize everyone. If people are in good moods and energized, your air sound and sales effort will reflect it. Just because someone at corporate has a plan you don't agree with doesn't mean you can't have fun doing it.

Have some guts. Try some innovation. You've been sitting still with your mouth zipped for too long. Look fear in the face and take some risks because radio won't thrive with a bunch of lifeless drones at the helm. We may not be able to change what is happening in some companies at the corporate level, but you can make your local station thrive. Is it worth risking your job over? Only if you feel like your job sucks now.

Now for those of you who want to see how I responded to Art, here's what I wrote to him.

Dear Art:

When I was 14, I fell in love with radio and followed a path similar to yours, though you're much further ahead than I was at your age. I fell in love with the ability to be creative, to motivate listeners, and to create great-sounding radio. Like you, my frustration soared. Not only did I have a hard time finding anyone to pay attention to my ideas, I was frustrated that the radio industry was so stuck in its ways. What could I know? After all, I was just a kid with no practical experience.

Radio Rebels
At the time, nearly all radio listening was taking place on AM and only a few pioneers were trying something new on FM. These were the rebels, and, much like the rhetoric we hear about the Internet today, radio was clinging to its AM stations with arguments about why it was better, about why no one would listen to FM (there were very few FM radios), and saying FM was a passing fad and only good for elderly people who liked elevator music.

Meanwhile, my buddies and I were trying to shake things up. We were inventing new ways of presenting radio, like pioneering the idea of back-to-back music without talk or any ID between songs (which was unheard of); long sets of music; no jingles (every station had jingles); communicating like real people instead of affected, deep-radio-voiced DJs;  commercial-free blocks; few stop sets; researching music; and playing album cuts. We were laughed at and could barely get anyone to pay attention. That's why FM radio started out "underground." And, as with Internet radio today, broadcasters didn't pay attention to an entire generation as it started to shift its listening loyalties.

"No One Will Ever Buy FM Radios"
Industry pedants and broadcasters argued that since there were so few FMs in the market, no one would buy receivers. (Sound familiar?) There was no such thing as an FM in a car, and most home radios that weren't "hi-fi" and didn't have FM. You could buy an FM converter for your car, mount it under the dash and listen through an AM frequency on mono speakers. It's no wonder broadcasters didn't believe anyone would listen. But my generation did.

In my hometown of Fort Wayne, Indiana, we didn't have an FM rock station. The only one was WNAP in Indianapolis, 120 miles away. My brothers and I mounted a directional antenna on top of the house so we could listen on my dad's hi-fi, which was the only FM radio in the house. Our Audiovox converter was in our family car, and we could rarely receive the signal, but we listened though a lot of multipath because it was cutting-edge. Internet radio is really no different today.

At an early stage of my career, I couldn't get anyone to hire me other than WITB, a college station. It was the only FM rock in town, but it was on carrier current and had only a one-mile signal radius -- hardly marketable. But it was my entry point and a place to learn and develop my skills. Today those entry points barely exist, and Internet radio may be the only option for young people wanting to learn to be on the air. But it may be a better option because you can, in theory, develop and grow a world audience from your bedroom.

Broadcasters only started paying attention to FM when the numbers started to shift in some towns, and, like all good radio people, they copied successes in other towns. It took about 15 years to develop critical mass and beat AM.

So what is my advice to you?

1. Follow your passion.
If radio is what you love, don't give up. Keep doing it. You will find an outlet. Only do what you love. This industry is still worth the investment of your time, and many of the conditions you consider unfavorable will change. Everything has a cycle.

2. Continue to push the envelope.
If you try new things and they work online, they will eventually migrate to "mainstream." Or, probably more likely, you'll invent something so compelling that you won't need mainstream anymore. We received criticism for all the new ideas we had, and got resistance until we finally just did them on the air, and they worked. Sadly, most of the things we came up with in the 1970s are STILL being used today. So don't be discouraged. We NEED your new ideas.

3. Give it time and believe in yourself.
One day it seemed like I couldn't get any attention or a job. I tried every angle, turned over every rock. Everyone told me to stop wasting my time. But then, it seemed like the next day, I had someone willing to let me try my ideas. Those ideas made my station number one overnight, and the next thing you know I was consulting 25 stations. Never, ever give up. If you believe in something, push it till you succeed. No excuses. Innovation occurs when innovators persist.

4. Don't get discouraged.
It may seem like there is no place to grow, but that's not true. You may not move into your ideal gig right away, but there are plenty of creative thinkers in radio willing to take a chance on an innovator. Clue: With a few exceptions, most innovation takes place at independent radio companies and in smaller markets.

Things are bad, and if they get worse you will see more companies open to new ideas. People want to cling to proven success models, which seems practical but is not always best. You will find someone open to ideas. I'm finding radio groups more open to digital initiatives than ever. For some, it's lip service, but for others, like CBS Radio, it's innovation and action.

5. You don't need a major player.
You don't need to start at the top, with a top station or market. You just need to beat one. The best way to get a major player to pay attention is to go up against them and win. If you find an independent operator willing to let you compete against a big company's station, you will be embraced quickly.

When I was a young programmer, I went up against Bill Drake, who was winning everything at the time. Someone told me if I could beat him in his own market, where he owned a station, my career would soar. I went up against his KYNO in Fresno with a tiny FM signal owned by a small mom-and-pop operator. I'd gone from making a lot of money in Miami to making $200 a week, but it wasn't  about the money. It was about winning. We became the number one station in Fresno in one book, received lots of publicity, and suddenly I had more job offers than I could take (so I took them all, with a programming consultancy). You can do the same thing. Find out who you have to beat.

Suffering Is Necessary
Art, you say, "This suffering is just so unnecessary." I felt the same way, but suffering is what leads to action. If you suffer enough, it makes you mad, it makes you take action, it increases your determination. Stay strong. You'll wake up one day as a top programmer or running your own radio company, or perhaps your online station will have more listeners than all of them combined. The only thing in the way is your state of mind and your level of determination.

It's Time for a Generational Shift
Your letter reminds me of my own frustrations when it was time for a new generation to change things dramatically. The old generation was clinging to its AM towers. Today they're clinging to their FMs and don't believe that online radio can actually compete with them.

That's a reminder that we all need to embrace young people and new ideas, and try to create an industry in which young, talented people like you can thrive. As far as I'm concerned, it's 1970 all over again, and you'll be setting the standards for our industry. Your generation will be in charge before you know it. I too was impatient, but you will prevail.

Nothing stays the same. Not even radio. I'm actually starting to see the light at the end of the tunnel. Even the most set-in-their-ways will change. New generations and fresh ideas always win. The old guard never wants to lose control, but they always, eventually, come to the realization that they cannot grow without the next generation.

Radio will be just fine. Yes, it may have to bottom out before it straightens out, and it must adopt an active digital integration strategy and be in the process of continual reinvention. We continue to ring the chime of change. Eventually, they will listen (as things worsen), and you'll be there to reap the rewards and transform radio with new life and new ideas. Never give up. We need you. Most just aren't ready to admit it yet.

Best,
Eric Rhoads, Chairman/Publisher
Radio Ink

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A Note from Radio Ink General Manager Deborah Parenti:
Mark your calendar December 8, 2009. Radio Ink holds its annual Forecast Summit at the Harvard Club in New York. Keynotes include Mike Huckabee and CBS Radio's Dan Mason. Seating limited to 200. Register at 561-655-8778 or www.radioink.com/forecastsummit.

Is RAB Hurting Our Image By Reinforcing Tired Old Radio?

 A message from Eric Rhoads, Radio Ink 
 
There is value in corporate history and perspective that can prevent mistakes from being repeated. I've never worked for the Radio Advertising Bureau, but I've been writing about radio since Miles David was the RAB's president. Then there were Bill Stakelin, Warren Potash, Gary Fries, and now Jeff Haley. I've applauded some efforts and criticized others. I don't have an insider's corporate history, but I do have an excellent memory. 
 
Unfortunately, the RAB does not seem to have learned from its mistakes in the past. 
 
The Radio-Mercury Awards were designed to do the following: 
 
1. Make creative people take radio seriously by offering the LARGEST cash industry awards program in advertising: $250,000 total. 
 
2. Because media selection often starts with the creative department, the idea of the award was to stimulate creative people to want to do radio (even if the only reason was to win a hundred grand). 
 
3. We also wanted to take away the perception that radio is a second-class citizen. So we held the awards for several hundred advertising VIPs, made it a black-tie event, elegant and well appointed and held at the Waldorf, with elegant sets, tables, gifts for attendees and entertainment. It was an impressive (and expensive) event that placed radio in a great light. 
 
Because I believe radio is in show business, I was often critical of the RAB, suggesting that "old balding radio men in suits" should not be the presenters, since most in attendance were "hip young creative types." Gary Fries listened and started bringing in young radio talent to do the awards, which was smart. 
 
My friend Roy Williams always tells me, "Eric, people don't remember you for the biggest thing you do, they remember you for the smallest thing you do." 
I'm wondering what impression radio left at the Radio-Mercury Awards last night?
 
In fairness, I was not present and am operating on hearsay from someone I trust who attended and told me this: 
 
"The ceremony was disappointing. The event, held at scenic Pier 61 at Chelsea's Piers, was poorly organized and rife with technical difficulties -- not good for a radio showcase. Usually, there are about 20 winners in various categories and almost 1,000 attendees representing all facets of the broadcast and advertising businesses. There were, perhaps, about 200 people there, and only five awards. Speeches were also tired and extolled the virtues of good production and innovation, with not a single mention about how radio is a good medium for selling and marketing products.  If innovation was important, how could they give the top showcases to 'Real Men' and Motel 6?" 
 
This is disappointing to hear. I know times are tough, and I'm sure raising the money to do the event and the prizes is impossible. But how does this make radio look? 
 
But wait, there's more.... 
 
A top award went to an ad in Bud Light's "Real Men of Genius" campaign, and the ultimate winning commercial went to The Richards Group, for an ad it created for Motel 6. 
 
Can you say deja vu? 
 
This is great radio. But it's old news. 
 
If the awards are designed to invigorate radio creative, why are we rewarding radio creative that has won before? Motel 6 has been the highlighted example of great radio since 1986, and it seems like the lights were out on the Motel 6 spots a long time ago. "Real Men of Genius" has also been a brilliant campaign for Budweiser, but it's been on the air for the last three or four years and they announced the end of the campaign last year. I believe the Richards Group owned the first Mercury Awards for Motel 6, and I think they have won on a couple of other occasions. "Real Men of Genius" has also won before. 
 
Perhaps we should institute a rule that a previous winning campaign cannot win a second time? 
 
Forgive me for being blunt.... 
 
The best image-makers and brand-builders in the world are in the American advertising industry. If radio wants to build its image in their eyes and engage young creative departments and chief marketing officers and get them energized about radio (the mission), we're not going to do it without glitz, without show biz, and with Motel 6 and Bud Light campaigns that have won before. Though I do not wish to diminish these great advertisers, and I am grateful that they are spending money on radio, if we continue to let our Radio-Mercury Awards repeat old news, we might as will kill the event, because it's hurting our image. 
 
If the RAB's purpose is controlling and promoting radio's image with advertisers, this event, preceded by the news that there was no local radio good enough to win, is not building confidence that we're doing things right.
 

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The RAB Should Know Better

The annual RAB Mercury-Awards will be presented Wednesday, and no award will be presented in the Station-Produced category. According to the RAB, the judges said the station submissions were subpar, and not of high enough quality for awards. There will be no awards in the PSA, Political, or Student-Produced categories, either.

I smell a rat.

Though I trust Jeff Haley and the RAB, I have to admit that my first thought was that not presenting these awards will save money. Times are tough at RAB, and I wonder if the participating groups who always come up with the money said, "Cut it back this year, Jeff." Of course, in this case I wonder if they said it after the awards were launched. Or the judges may be thinking, "Why stroke local radio anyway? The awards were really designed to get creative juices going at the agency creative level so they would understand what could be done with radio."

But I still smell a rat.

To say there is no local advertising good enough to receive an award raises two giant problems:

1) If you hold the Olympics, the best athlete wins. Period. There is nothing in the rules that says that athlete has to beat the record of previous winners. If an award was promoted and people entered, the award should be presented. Even though the official rules say the judges are free to decide not to present an award in any category, that is not how anyone understands a competition like this or how they expect it to work when they pay their -- non-refundable -- entry fee.

2) If the RAB is designed to promote radio, who in their right mind would EVER make a public statement that there were no local radio spots good enough to win an award? Translation: Don't count on local radio to produce good spots. This is a PR nightmare for radio. I can see this plastered all over Advertising Age: "Radio Industry Can't Find a Good Spot at Any Local Radio Station."

Let's assume that the RAB was willing to award this money and the judges really did say there were no spots good enough to win.

That probably is the case. And that would signal two different giant problems:

1) The awards were not promoted well. My guess is that this is a big part of the problem. As I travel the country, I hear loads of very high-quality local spots. The RAB recently laid off its longtime PR person, and perhaps the new staff simply did not have the "corporate history" to understand what is necessary to promote these awards and get enough entries from local stations. Of course, it's also possible radio has its head down and simply cannot focus on entering contests at the moment, nor are they willing to spend a few bucks on an entry fee.

2) Radio production quality has suffered. This is a very real possibility with cutbacks across the industry. And, frankly, the industry has often seemed not to value the importance of high-quality local creative. I recently bought ads and asked for a two-voice spot, one female. I was told, "It's not possible. We cannot provide you with a female voice on the spots." This was a major-market, top-tier radio station.

No matter what the problem, this is an embarrassment to radio. I hold RAB and its CEO in high regard. But something like this should not happen.

Is The RAB The Next To Fall?

A message from Radio Ink's Eric Rhoads

With last week's loss of Radio & Records magazine, the entire industry may be a little skittish when they see any signal of perceived weakness. Last week we reported that the RAB is launching $210 personal memberships in an effort to raise revenues. Yesterday, the RAB laid off industry icons Mike Mahone and George Hyde, along with nine other staff members. I naturally find myself asking, "Is RAB the next industry icon to fall?"

I can't help thinking about the health of the RAB in this environment and wondering if the radio industry will continue to support it when faced with a difficult financial decision. From my perspective, the RAB serves many masters, because the needs of its wide base of membership range from small-market to large-market to radio networks. Everyone relies on RAB for something different. For some it's training, for others, data and support services, and for the industry as a whole, it's the promotion of radio. But I have to wonder if that is all about to change.

Do The Big Guns Need RAB Anymore?

Though I have no statistics at hand, my guess is that the "big groups" make up a significant portion of the annual RAB budget. Big groups have a different mission for RAB than small, independent broadcasters. Most big groups are pushing RAB to "promote national business" and "get more advertisers using radio." Let's call that role national promotion, which has been important to companies that are heavily reliant on national advertising.

Big groups tend to have their own training organizations, so we have to be curious about whether there is value in RAB training for them. But Clear Channel recently closed Clear Channel University, headed by Kim Cutchall. This either means Clear Channel people are so well trained they no longer need it (not likely), that the company cannot spend money on training at the moment, or that they'll increase their reliance on the RAB to fill that void. My guess is it was about cost-cutting.

So if a lot of the bigger groups don't rely on RAB for training, then their big need is for national promotion. But, again, in the case of Clear Channel, which owns Katz and Premiere Radio Networks, and which just hired some big-league media executives to promote radio nationally and internationally, we have to assume they feel they have national promotion under control.

So will Clear Channel continue to write an annual check to the RAB? At this moment, when no amount of national promotion is likely to convince non-spending companies to spend money on advertising anywhere, I have to wonder: Does national promotion play a significant role, during this brief moment of economic crisis? Will RAB be a redlined expense item for bigger groups?

That leaves the smaller markets and independent stations, which seem to rely heavily on the RAB for training and support services. If the bigger groups don't use the training and don't wish to invest in national promotion, the writing may be on the wall that RAB should become a smaller, narrower organization with the sole purpose of offering training and support services. That, of course, would alter the RAB's operating budget substantially (though training and support are probably its biggest expenses.)

Stuck In the Mud?

I've had my issues with the RAB over past years for being a little behind the curve, but I actually think Jeff Haley is doing a great job and plays an important role at RAB, which is to transition radio into a digital media world so it can stay relevant. But do RAB members want to go there? Do they believe in this vision? Is Jeff too far ahead of the curve for radio?

Though radio should buy his vision, and though it is CRITICAL to our future, I wonder if he is getting the genuine support he should have. One has to believe he is having to continually sell old-school broadcasters on the value of becoming a digital media industry, and is probably frustrated by the lack of understanding by many.

The only issue I believe hurts Jeff is that he, like former NAB president and CEO David Rehr, is not from radio. This may hurt him when he tries to rally the troops to get behind him because he is not "one of us." At the same time, his perspective is probably better because he's not stuck in the mud of our past.

Is RAB Relevant Anymore?

Though I do not speak with any inside authority or information, I cannot believe that everything is fine at the RAB. Like any prudent operator, Jeff probably cut a million dollars out of his annual operating budget with the terminations yesterday. That's not fun, but it's good business. His revenues have to be off.

Though the RAB conference was one of the best and most relevant in recent years, it could not have been more than a break-even attendance. One has to assume cancellations are coming in as stations faced with renewals try to preserve cash. So should we let the RAB fade away? Should it pick a single-focused mission of national promotion or training, but not both? As my father told me during the last big recession, "It doesn't really matter if you become a shadow of your previous self, the most important thing is to stay in business. You can always add services back when things improve." That is how I feel about RAB.

I feel that RAB remains a critical focal point for the radio industry, and I believe its loss would not only hurt radio on many levels, it would hurt the perception of radio. Imagine the headlines: "Radio industry is in such sad shape it allows its industry promotion agency to die."

Radio's Beating Heart

No, we must not let the RAB die. Though Jeff may have to pare it back to a fraction of its previous self, though he may have to shed most of the services and may have to cut rates dramatically to keep members, we must keep it alive. There is tremendous value in the collective brain trust of its board, which benefits radio. There is benefit in the ability to provide leadership to the industry. And radio faces tremendous PR challenges and we still need a promotion arm.

The RAB is, in my opinion, the beating heart of radio, and we as an industry must support it and keep it alive in some form. It can always return to its past glory and more services at a later date.

Is it Time for a Merger?

Recently, at some industry event, I cornered a couple of executives and suggested that perhaps it's time to merge RAB and NAB. Clearly the organizations have differing missions, but in a broader sense, their missions are the same: Keep radio healthy. (Though NAB has to keep TV healthy too.) Though I would prefer to have them as separate organizations, I wonder if it's time for them to merge? They can gain tremendous efficiencies in duplicated backroom and support services, plus savings in real estate.

RAB already does the radio agenda for the spring NAB show and there is discussion about rolling the RAB conference into the fall NAB Radio Show (especially now that R&R is no longer part of the show). Plus, the NAB needs a leader. Why not Jeff Haley? Or if that doesn't fly, why not let RAB either be a division of NAB, or, at least, subcontract services from NAB and have Haley operate the RAB while NAB operates the engine behind it? Sure, there are politics, TV interests, etc., that may keep them apart, but it makes logical sense. Stations could pay slightly increased NAB dues but eliminate RAB dues and save money. And the industry wins because we keep RAB alive and healthy.

Every expense is examined under a microscope today. Sometimes it's difficult to quantify the value received from organizations like RAB, yet there is tremendous immeasurable value, and we as an industry should not let RAB become a casualty of this economy. It plays a necessary role for radio, and we should do anything in our power to keep it relevant and alive.

Eric Rhoads

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Dancing On The Grave Of Radio & Records?

R&R Founder Bob Wilson

Today the industry learned that Radio & Records magazine will no longer publish as of Friday. People have been calling me, saying things like, "Eric, you must be gloating that you outlived R&R." But, in fact, I'm sad about it.

I saw my first copy of R&R when we launched Y100-Miami/Fort Lauderdale in August of 1973, and it was the dream radio trade publication. Before R&R, all we had was BROADCASTING magazine, which was paying more attention to television than radio, and the Gavin Report. But R&R reflected the life of radio, with its pictures, its columns, and its buzz. Bob Wilson, the founder, became an icon in radio because he was REFLECTING radio, which was the key to R&R's success. And R&R has been a part of our lives for 36 years.

I never looked at R&R as a competitor because their primary focus was on the programming side of the industry and mine at Radio Ink has always been management. So we were always friendly, and Bob Wilson, Dwight Case, and Erica Farber always took the high road. It was more cooperation than competition -- I even put R&R publisher Erica Farber on the cover of our magazine because she deserved to be there for her industry leadership, and we just honored her with our MIW Legend Award.

Bloggers will probably say that R&R was old media (a newspaper), which is what killed it, and I'm sure that played a role because it probably didn't respond rapidly enough to the digital threat of All Access, the first online site for the programming side of the business. The idea of perishable news that has to be printed and mailed in a digital world is simply antiquated. (It is the reason you have never seen news in Radio Ink. We have always focused on "how to" educational management content that is evergreen. We do our news online, not in print.) But the primary reason R&R died is because its new owners followed the path so many large conglomerates take. Good people were cut to make balance sheets look better, employees who once thought R&R was the greatest place in the world to work were now working at a place that wasn't much fun, and top management were probably not allowed to do what they do best. R&R lost its passion and enthusiasm and became the "bastard child" of Billboard.

Once a powerful publication with more than 100 employees, R&R was reduced to about 40 people after Nielsen Business Media took it over, and it's sad to see 40 good people lose their jobs. R&R always bred good people, and I've hired several of them over the years.

The R&R casualty is also a result of the state of the industry. Advertisers like the record labels have reduced spending, as have the companies that sell products and services, because of reduced radio industry spending.

I've never been one to dance on anyone's grave, and you won't find me doing it now. Instead I'd like to honor the good women and men who made R&R an institution for over three decades. As the sun sets on R&R, each of us in radio should let them know they've made a significant difference in the lives of everyone in this industry. We salute you.
Eric Rhoads
Radio Ink

HR 848: The Day The Music Died

(Chris Farina/The Detroit News)

Rep. John Conyers (D-MI) held "town hall meetings" in Detroit today pitting local radio broadcasters against some Detroit musical legends. Guess who looks bad? Not the musicians. Not Conyers. Yet radio took the bait. How is radio to look good when the cards are stacked against it? Detroit, depressed in many ways, still has one shining moment from its heyday... the legend of Motown. And who better to take on radio than Martha Reeves and her fellow artists, whose hit records made Berry Gordy and Motown rich. Poor Martha has nothing to show for it. It must be radio's fault, because she got nothing from those big bad radio stations who made her a star. Can you say "photo op"? Can you say "tug at the heartstrings"?

The NAB is telling us they only need "four more votes" to turn this performance royalty around, but you and I both know that the tide can turn in a second if any congressional representative thinks he or she can get more votes by shifting loyalties or succumbing to pressure from others. Meanwhile, YOU, the broadcaster, have been complacent. Very few radio stations have met with their congressional representatives about this issue, and very few are even running the "anti-royalty" spots on the air.

Meanwhile the labels, masters of smoke and mirrors and the best promoters on earth, are working every angle and pouring millions into winning this battle. They have only one promotional equal: radio. Where are you? I was told last week that the House Minority Whip has had many recording artists pass through his office in the past three months, and yet, according to him, he has seen NOT ONE person from radio or the NAB in his Washington office. Not one.

Answer these questions honestly:

1. Do you think music radio can survive a tax on gross revenues for labels and performers?

2. Do you think we should be paying a tax to a recording industry where 75 percent of the major labels are under foreign ownership? And with only 50 percent of that royalty going to the artists?

3. Do you think radio makes the careers of unknown artists and should be legally paid for doing so?

4. Are you outraged over this?

5. If you're so outraged, how many PERSONAL phone calls and meetings have you held with your local representative? None? What about emails? None?

Don't Count on NAB

If you're counting on the NAB solving this problem for you, let me ask this. Did NAB win the streaming royalties battle? Did NAB win the battle to keep the XM-Sirius merger from happening?

The ONLY chance of winning this battle now, and every time it comes up, is if YOU meet with your local congressional representative personally to discuss this issue and how it will impact your business, your city, and the voters (your listeners).

NAB cannot solve this alone, and NAB is currently an organization without a leader and appears to be in disarray. Do you really want to leave it up to them?

I don't mean to be an alarmist, but the performance tax will devastate this industry. We can barely hang on now, and these oppressive taxes will worsen radio and cut back on any chance of local service to our communities. which we will be unable to afford. We will become a sea of non-music stations, more talk radio, and the music listeners will lose out, forcing them to iPods and streams (if Internet radio can afford its own royalties). Few stations will be able to afford to play music. This is not some little problem we can adjust to. This is a significant problem that may take radio out of the music space.

This is the fight of radio's life. I know you're busy trying to stay in business, but imagine how things will be after performance royalties, when you have even less revenue to work with. You need to pick up the phone today and schedule a meeting. This is serious, and the day we lose this battle will truly be the day the music died.

Is This The Breakout Year For FM Talk?

Pioneers are the people with arrows in their backs. Talk radio pioneer Walter Sabo told me more than 15 years ago that FM talk would become a hot format, but it was a tough sell. He suffered a lot of criticism and resistance because companies that owned big talk stations didn't want to cannibalize their successful AMs. After all, AM had been dead for years until it was born again with talk radio. Sabo's vision from back then has yet to come to full fruition -- but it may be just around the corner. Here's why:

There is a 50-50 chance radio will lose the performance fee issue this year or next and will have to pay some percentage of revenues to record labels. With the current state of radio, taking dollars off the top line may be economically impractical, especially if the rates are as far out of line as some anticipate. Music radio could become a shadow of its former self, and we may see a proliferation of FM-based talk formats. Though there will likely be multiple traditional talk outlets doing politics, I believe a new breed of FM talkers will succeed by offering variations on talk lifestyle formats with younger demographic targets.

Because many believe they see this coming, there will be companies, perhaps those with less successful music stations, that will want to establish a beachhead now, before everyone comes to the realization that music formats will be less profitable.

The generation that grew up with music on FM is now favoring talk programming, and the generation behind them is entering the age when talk becomes more interesting. Younger, hipper FM-talk presentations like "real radio" and new variations for younger audiences will be embraced in every market. And with PPM results showing how much listenership National Public Radio is taking, it's clear that a large chunk of all listening is talk-based. Commercial radio will begin to engage strategies to take those audiences away from NPR.

According to BIA, in 16 of the 20 top U.S. radio markets, lower-ranked AM talk formats generated more revenue than higher-ranked FM music formats. Meanwhile, Arbitron says the combined spoken-word formats -- news, talk, sports --  add up to the most most-listened-to format in the country, comprising 17.5 percent of radio listening.

But 80 percent of all radio listening takes place on FM. So imagine what could happen to talk stations on FM. If the total of all the talk in your market is a combined 10 share or less, there is an average of seven points to be gained by an FM talker.

Of course, the talk format has more available inventory before it's not considered annoying. Music stations may find they need to reduce inventory in order to compete. And in almost all markets where an FM talker competes with an AM talker, the FM is outperforming the AM. Typically, there are multiple choices for similar music formats, which further dilutes opportunity. But FM talk takes over in most of its markets rapidly, often within one or two rating periods.

For those of you who fear that putting on an FM talk station could cannibalize your AM talker, the evidence is to the contrary, especially if you're doing a talk format designed for FM. For instance, when Walter Sabo launched WTKS, it took no audience from traditional AM talker WDBO and shared no cume. Most of its cume is shared with the alternative rocker in the market and with WOCL and, formerly, with  WMMO. The same held true at NJ 101.5, which shared audience with classic rocker WAXQ-FM.

If I were a betting man, I'd bet that spoken word, which saved AM radio, may in fact be the format that soars on FM in every market. New iterations of talk will emerge as this soon-to-occur phenomenon takes radio by storm. Can you say "opportunity"?

Eric Rhoads

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As Radio Thinketh

From the 5/4 issue of Radio Ink Magazine

 
“This recession is killing my business. I can’t come close to what I did last year. I don’t know what I’m going to do. I’m afraid I might lose my house.” I’ve heard these words every day for the past several months, and I’ve been guilty of saying them myself. But then I read a great book by James Allen, titled, As A Man Thinketh (So He Is). The title says it all. What are you thinking?

My father raised me with a can-do attitude. During a recent visit, we ran into an impossible situation at 11 p.m. the night before Easter. I played through all the scenarios and finally realized I could not solve the problem that night. “Have you thought about this — or this?” my father asked, offering different solutions. “Yeah, but they would never do that on a holiday weekend,” I answered.

Then I began to adopt his thought process: “If you believe you can solve this tonight, you can. If you don’t, you won’t. I guarantee there is a solution if you decide to win and are willing to work until it’s resolved.” It was late, I was tired, and I had mentally given up. But my dad had laid out the challenge. Though it took several phone calls, some driving around late at night, and a bit of creative thinking, the problem was solved by 2 a.m. The incident was an important reminder of the impact our thinking plays on our ability to succeed.

I once had a friend who accused me of “buying into all of that positive thinking stuff.” He was one of the most negative people I know. No matter how much I tried to make him understand the power of his subconscious mind, he had more reasons why it was a fool’s game. His career crashed, no one wanted to be around him, and he died 20 years prematurely.

Some things may truly be out of your control, but you can change your behavior and your belief systems. It will impact the people around you, and the way they think and react; if your influence is convincing, you can impact the decisions they make toward your business.

Last week I spoke to a promoter who had sold out a conference for car dealers despite a competitive conference having been cancelled a few weeks earlier. He said his decision to succeed impacted how he came across in his marketing, his phone calls, and everything he did. “If they smell fear, they won’t support you,” he said. “The first thing I had to do was remove my fear and decide to succeed.”

You can succeed while the other stations in your town are planning for failure. How can you influence the attitude of advertisers? What lengths are you willing to go to beyond the point where others would have given up? How much is your acceptance of failure creating your own failure? What can you do to exceed last year’s numbers? You may have to invent new ways, but belief is the starting point. Though I don’t recommend detachment from reality, there is value in avoiding negative influences like the news and focusing on changing the business atmosphere in your local community.

Immerse yourself in the great positive-thinking classics, listen to audio books, take a seminar. Seek ways to free your mind from the bonds of negativity. You’ll notice a significant uptick in your own belief systems, which will impact your actions, your ideas, and others within your sphere of influence.

Eric Rhoads,
Radio Ink

Why Larry Wilson Matters

A little good news can go a long way these days, and the news of Larry Wilson buying the Paul Allen stations (KXL and KXTG) in Portland, OR, is very good news. Unless you've been living under a rock, or perhaps have entered the radio industry since Larry Wilson left, you already know that Wilson was the founder of Citadel Broadcasting, which he sold for over $2 billion. His legacy was a great company, great management, and great success market by market. Wilson was known for how well he cared for his employees, and the company events he held at his ranch in Wyoming are legendary.

Larry phoned me almost two years ago and told me he was waiting in the wings for the right opportunity to get back into the business he loved and missed. But it was also clear he wanted to get back in because he believes radio is a great business and a profitable business. He came to our Radio Ink Convergence conference to study how radio and digital fit together.

A little over a year and a half ago, Larry and his acquisition team invited me to dinner to dig more deeply into my insights on radio in a digital world. Clearly, Larry gets it. He understands the huge opportunity I've been trying to get the radio industry to embrace: Radio, when fully integrated into the digital world, becomes a much more powerful medium. It was just a matter of time before Larry's methodical search for the right properties would be the start of Larry Wilson 2.0.

On Tuesday Larry announced he's buying the first of many stations he plans to acquire with no debt, only equity. He promises to not fall into the trap of overpaying because if you buy right, you can operate well and flourish. I have a hunch we're about to watch a wild ride.

Larry Wilson is a beacon of hope for this tired and bloodied industry and its thousands of employees who have been on their knees praying for someone who values employees, talent, promotion, localism, and reinvestment in radio --values that others tell me are "unrealistic" and "not possible" in this day and age. But they are values that will be be shown to improve profitability when properly managed.

Clearly, we have many great companies in this industry who already value these core principles and who follow them religiously to this day. But many of today's industry icons look down on them as the rare exceptions. Because Wilson was a major player, his re-entry provides hope that he will again build a large, successful company based on those ideals.

Everyone knows that Larry Wilson does nothing small. The name of his new company, Alpha -- as in "alpha dog" -- says that Larry and his equity partners are serious about the radio business and the huge opportunity there is to succeed if you are not underwater and saddled with debt.

Wilson's biggest challenge will be buying properties right and having patient capital to get through this recession. Meanwhile, if he's investing in his stations while others are shrinking, it's a giant opportunity to grab market share. A year or two from now he will either look like the smartest guy in the room -- or the most foolish. Only time will tell.

I, for one, am happy he's back, because his very presence will increase confidence in the radio industry from other financial institutions and will probably signal other true-to-the-core broadcasters who have been waiting in the wings that maybe it's about time for re-entry.

FYI, I phoned Larry today and recorded a brief podcast.

Eric Rhoads
www.RadioInk.com

The Newspaper & Radio Bailout.

Newspapers are folding at the rate of two per month. The New York Times Co. supposedly only has $25 million in the bank, is closing other papers in major cities, and barely saved the Boston Globe this week. Congress is paying attention, and John Kerry and John Conyers have been holding newspaper hearings this week, talking about how to save the newspapers. Will a bailout for the dying newspaper industry be next?

Newspapers are dying because they have become irrelevant to a generation that no longer wants to wait for the news when they can get it by Twitter within seconds. Warren Buffett said recently that if someone were to suggest the invention of newspapers today, people would laugh at the business model. Write the news, cut down millions or trees for paper, build massive printing plants to print it overnight, have a distribution model that pays people to fold and bag hundreds of papers and burn thousands of gallons of gas to go house-to-house throwing papers out of their car windows so people can walk out into the cold or rain in order to read news that is 12-24 hours old. Or those could just turn on their full-page Kindle DX reader, due this summer, or look on their iPhone or laptop and use Google Reader to get news customized to their liking about any subject in the world.

Why would Congress want to save an industry that is based on Gutenberg technology? Is it possible that no amount of money invested in that business can turn it around? Do they really believe the Internet generation can be convinced to sign up for home delivery? Yes, probably. Because most people in Congress don't understand the world today, and they don't want many of these supportive voices to disappear.

If and when we hear of newspaper bailouts, those of us in radio shouldn't be tempted to shout, "HEY, WHAT ABOUT US?" Has it crossed your mind that when newspapers become nationalized like the car companies and banks, their businesses will be beholden to the direction of the government? Somehow the ideas of freedom of speech and government news-media ownership don't make good bedfellows. We don't want someone at the government pulling strings and saying, "Let's pull that story or we pull our money." Can you say "BBC"?

Could a newspaper bailout happen? Count on it. And when other troubled media see it, they'll be waving their arms to get their piece. And if by chance those in control of radio happened to be more concerned about their balance sheets than worrying about a little issue like freedom of speech, well, a bailout for radio could happen.

Newspapers are sunk because they were clinging to their comfort zone (sound familiar?). They were way ahead of radio by embracing the Internet early, but they still missed the boat on what is happening with interactive advertising. Radio needs to understand the plight newspapers are facing could happen to us too if we don't adapt rapidly, become willing to shed our tired old business models and comfort zones, and invest in seducing the next generation with vigor.

No, it won't pay for itself out of the box (which is why its being ignored) but it might just keep us from going to that great transmitter farm in the sky.

A radio bailout would be a fate worse than radio's death.

Eric Rhoads
Radio Ink

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