INK TANK

Share This With Your Clients About Radio

WARREN BERGER

Is it possible that NPR, National Public Radio can help you sell more radio time? Well, in this case, yes. Yesterday NPR conducted an interview with author Warren Berger where he talks about the value of radio advertising.

May I suggest you listen to the broadcast (about 2 minutes) and then consider forwarding it to all your clients, with a simple... "Here is a little story on NPR which says a lot about how you can increase your business using radio."

Then provide this link:
http://www.npr.org/templates/story/story.php?storyId=103582527

Best,

Eric Rhoads,
Radio Ink

PS: We're at close to 7,000 radio stations running our Radio Recession Rescue spots to help car dealers.

A Dirty Little Secret About Performance Royalities

This past week, I attended a private BMI event at NAB honoring Vince Gill, Carole Bayer Sager, and Barry Manilow. Barry stood on stage and said the greatest thrill of his career was hearing a song of his on the radio for the first time, then hearing the DJ announce his name. He said he was in Dade County (Miami) when he heard it. That was 1974, and the song was "Mandy." I talked with him later and mentioned that I was on the air in Miami at the time, on Y100, and that I could very well have been that jock because we were all over "Mandy" (who wasn't, though?). He gave me a high five and told me that was one of the most meaningful moments in his early career.

In his speech, Barry thanked radio and mentioned that he could not have been successful without it. Did I mention that he's sold more than 76 million records? (Something I did not know is that he wrote jingles, like McDonald's "You Deserve a Break Today," "I am Stuck on Band-Aid and Band-Aid's Stuck on Me," and "Like a Good Neighbor, State Farm Is There.")

Those of us in radio who have met boatloads of successful recording artists have been told hundreds of times that radio is the reason for their success. Yes, they are talented indeed, but many talented musicians never made it until they received radio airplay.

Right now, artists are still talking about radio's value to their careers. But the raging battle over performance royalties could soon have artists running scared that the labels will punish them if they say how they really feel. After all, are the labels driving this initiative out of the goodness of their hearts, to help artists?

The split on royalties under the Performance Rights Act would be 50-50 between the artists and the copyright owner in a recording, which is, of course, nearly always the record label. Some very well known artists -- most recently Bono -- have spoken out in favor of the royalties, saying they'll help new and struggling artists.

But Congress should be asking the artists who've testified at hearings on the PRA, such as Billy Corgan or Nancy Sinatra, to talk about the contract practices of the labels, and how little money some current and former superstars have actually ended up with after label chargebacks. Perhaps they should subpoena some talent-label contracts to see what really goes on.

When the next hearings come before up before Congress, I'm sure the labels will parade more artists before the public and lawmakers. "We deserve to get paid," they will say. Well, so do we. Labels have made billions more than radio has from free radio airplay.

Though the labels want to pretend airplay is no longer important because of MySpace, Internet radio, iTunes, etc., they fail to mention the tremendous amount of music that is still being stolen -- something they cannot prevent. Because of the demographics of sites like MySpace, reliance on those sites alone to expose music could easily lead to a higher percentage of file-sharing, and much less exposure to the audiences who are still buying tunes after hearing them reinforced over and over again on the radio. Is it possible radio still has value to the labels? Of course, how could it not?

But the labels won't say it in public any more, even if the artists still do. Every Grammy and Country Music Awards show, including the most recent ones, has been filled with artists saying, "I'd like to thank radio." (Hmmm. I'll bet that doesn't go on much longer, especially with pro-radio quotes regularly turning up in the NAB's anti-royalties press releases.)

Perhaps Congress should investigate why labels still retain independent record promoters to work radio if airplay doesn't matter. Perhaps Congress should remember the efforts of Eliot Spitzer in New York a few years ago, and the DOJ investigation of pay-for-play and payola.

The dirty little secret is that radio does matter. Ninety-four percent of Americans are listening to radio every week, and that cannot be ignored.

The labels have been devastated by illegal downloads. But this desperate move to take money out of radio's hide seems so.... well, the word is ungrateful, for the wonderful partnership shared over the years and billions of dollars in free promotion. And what if they're wrong, and they do need radio? Without radio airplay, the labels could sink deeper.

The financial hardship these proposed royalties will create for radio will result in fewer music-formatted radio stations, stations and groups seeking out royalty-free deals with fresh artists, and could even lead to more radio bankruptcies. But the labels of today have proven to be greedy, short-term thinkers lacking vision.

So it was nice to hear Barry Manilow and Vince Gill thank radio, even though it was behind closed doors and to a small exclusive group of broadcasters. We may soon stop hearing any public thanks to the industry that built the record labels and their artists.

The Magic of Misery

As the saying goes misery loves company. My recent visit to the NAB conference in Vegas was confirmation. It was almost like a competition.... which person could tell the biggest horror story about how awful their business was, how their portfolio was wiped out, how much their market capitalization has dropped, how they had no money. In the days of conspicuous consumption the bragging was about how much they had. Today its about how tough things are. To some extent it seems like everyone tried to top each others stories of misery.

I had decided not to go to NAB this year because I assumed it would be dead. But like a true radio addict, I could not stand the thought of a radio conference going on without my being a part of it. So, at the last minute on Tuesday morning I flew to Vegas and spent the last couple of days there. I'm glad I went.

Though everyone I encountered was talking about their misery, I found it somewhat comforting. Misery loves company indeed, not because we relish the idea of topping one another with our recent horror stories, but because there is comfort in knowing first hand that you're not alone. Though I knew that without going to the NAB, any good therapist will tell you it's good to talk things out. As I talked with dozens of broadcasters I felt more confident than ever that we will get though this train wreck they call an economy. Most encouraging for me were the little bright spots of hope I'd hear from various stations about ideas that are working, about areas where their business is actually improving, about a March, which for some exceed March last year. Many stations told me their business was had not crashed like so many others and was holding up.

There were actually a lot of radio people at the NAB this year. Maybe not quite as many as normal, but the ones who were there mattered. They were there because they had no intention of giving up, they were instead investing in their stations, their growth, and their future. The value of an event like this is you can gain a lot of perspectives and a lot of information in a brief period of time.

Somehow those two days at NAB energized me. Time with fellow broadcasters was invigorating, encouraging, and gave me tremendous hope for this industry. I left learning an important lesson. There is tremendous value in spending time out of your environment, learning from others, and discussing business with people, who are facing many of the same issues. I wrote a note to Tom Elmo, my chief of staff saying "next time I get the bright idea of not going to a radio conference, kick me in the butt and tell me to go anyway." I always get more out of going to these things than I expect. Not only did I leave encouraged, I also did a lot of business, made some important contacts and deals, and learned about some products, which are significantly valuable to radio. All that in two days. Imagine if I had stayed a week!

What's my point? Everyone is cutting back and reducing spending on conferences and by so doing they are missing out on opportunity, education, fresh ideas, contacts, and a chance to become reinvigorated. Sometimes the best thing for your business is to get away from it. When I get in the zone I don't want to stop. Yet I reach a point where the ideas stop flowing. Today my staff has been inundated with fresh new ideas, all because I got away and spent time with others outside of my office... and I wasn't going to go. Yet the return on my investment far exceeds what I would have saved by not going.

Eric Rhoads
www.radioink.com

Every Media Executive Should Read This

Those of us in old school media don't think like new media people. This article by Jeff Jarvis is a perfect eye opener about how newspapers have been thinking. Frankly, much of it applies to all media, and to radio. I consider this a must read. -Eric

The following blog post by Jeff Jarvis can be found at:
http://www.buzzmachine.com/2009/04/07/the-speech-the-naa-should-hear/

I've reproduced it here.

The speech the NAA should hear

The Newspaper Association of America is meeting in San Diego this week and they’re preaching up at their own choir loft with angry, self-righteous fire and brimstone about their plight. Today, Google CEO Eric Schmidt will address them, but he’ll be polite because that’s the way he is and because there’ll be a few hundred aging but armed publishers with blunderbusses aimed at his heart. They need to hear a new message, a blunt message from the outside. Here’s the speech I think they should hear:

You blew it.

You’ve had 20 years since the start of the web, 15 years since the creation of the commercial browser and craigslist, a decade since the birth of blogs and Google to understand the changes in the media economy and the new behaviors of the next generation of - as you call them, Mr. Murdoch - net natives. You’ve had all that time to reinvent your products, services, and organizations for this new world, to take advantage of new opportunities and efficiencies, to retrain not only your staff but your readers and advertisers, to use the power of your megaphones while you still had it to build what would come next. But you didn’t.

You blew it.

And now you’re angry. Well, gentlemen - and that’s pretty much all I see before me: angry, old, white men - you have no right to anger. Instead, you are the proper objects of anger. The public should be angry with you for the poor stewardship you have exercised over the press and its service to society. Your journalists are angry at you for losing their jobs. Your pressmen and drivers and classified-ad takers are angry at you for the same reason (and at the journalists for paying attention only to their own plight). Your advertisers were angry at you for using your monopolistic power to overcharge them and for providing inefficient platforms and bad service for so long. But they’re not angry anymore because they left you for better advertising vehicles and better prices in a competitive marketplace.

But you’re the ones who are acting angry.

Yesterday, you delivered a foot-stomping little hissy fit over Google and aggregators. How dare they link to you and not pay you? Oh, I so want Eric Schmidt to tell you today that you’re getting your wish and that Google will no longer link to you. Beware what you wish for. You’d lose a third of your traffic overnight. If other aggregators (I work with one) and bloggers (I am one) and Facebook all decided to follow suit, you’d lose half your traffic. On most of your sites, only 20 percent of the audience in a day ever sees your homepage and its careful packaging; 4 of 5 readers instead come in through search and links. In the link economy - instead of the outmoded content economy in which you operate - Google and aggregators and bloggers are bringing value to you; they should be charging you for the value they bring. You should rise up today and give Mr. Schmidt a big thank you for not charging you. But you won’t, because you’ve refused to understand this new business reality.

You blew it.

Your Google snits don’t even address your far more profound problem: the vast majority of your potential audience who never come to your sites, the young people who will never read your newspapers. You all remember the quote from a college student in The New York Times a year ago, the one that has kept you up at night. Let’s say it together: “If the news is that important, it will find me.” What are you doing to take your news to her? You still expect her to come to you - to your website or to the newsstand - just because of the magnetic pull of your old brand. But she won’t, and you know it. You lost an entire generation. You lost the future of news.

You blew it.

You had a generation to reinvent the business but you did too little. I by all means include myself in that indictment because I spent my career in our industry: Guilty. I didn’t raise loud enough alarms (it felt as if they were too loud already) or accomplish enough change (not nearly enough). I blew it, too. But no last-minute hail-Mary passes will make up for our failings. Having not taken advantage of the last two decades to reinvent the news business, you’re not going to manage a rescue in two months, before the creditors come calling. That was your worst hail Mary: stoking up on debt and hoping to milk these cows for years to come. Mad cash-cow disease, that’s what too many of you had. Your other desperate moves: suddenly fantasizing that you can fix everything by going behind a wall (to tell with Google and its billions of readers!) and charging us because you think we “should” pay. Since when is a business plan built on “should?” I haven’t seen a sensible P&L justifying this dream from any of you. If you have one, please stand up show us now….. I thought so. Other desperation moves: fantasies of white knights from foundations buying you and letting you stay just the way you are…. government subsidies (do we even have to discuss the danger?)…. switching to not-for-profit, as if that suddenly takes away the need to sustain the business still… misguided, self-righteousness thinking that Google or cable companies owe you money, as if you have a God-given right to the revenue and customers you lost….. No, none of this will save newspapers and in your subconscious, at least, you know it. You know the truth.

You blew it.

So what can you do? Two years, even a year ago, I would have said that you had time to build the networks and frameworks and platforms that would support the ecosystem of news that will come next. I would have said you could retrain your staff to take on new responsibilities: organizing and supporting that ecosystem, curating the best, training people to be the best. I would have advised you to offer your staff members the opportunity to join that ecosystem, setting them up in business. I would have told you to take advantage of the efficiencies the web allows (do what you do best, link to the rest, I used to say). I would have argued that we need to invent new forms of marketing help for an entire new population of businesses-formerly-known-as-advertisers. I did say that. But the financial crisis only accelerated your fall. It didn’t cause the fall, it accelerated it. So now, for many of you, there isn’t time. It’s simply too late. The best thing some of you can do is get out of the way and make room for the next generation of net natives who understand this new economy and society and care about news and will reinvent it, building what comes after you from the ground up. There’s huge opportunity there, for them.

You blew it.

: LATER: When Eric Schmidt did take the podium at NAA, as reported by PaidContent’s Staci Kramer, he expressed some nicely ironic befuddlement at the AP going after them when Google has “a multimillion-dollar deal with the Associated Press not only to distribute their content but also to host it on our servers.” Then he did chasten the publishers:

But Schmidt came down harder on concerns about intellectual property and fair use: “From our perspective, we look at this pretty thoroughly and there is always a tension around fair use … I would encourage everybody, think in terms of what your reader wants. These are ultimately consumer businesses and if you piss off enough of them, you will not have any more.”

RIght, pissing off customers is not a business model. Not anymore.

Radio's Recession Rescue

Two things quickly.....

Radio Show's Its True Colors With Amazing Support
1) About two weeks ago we invited radio to run our ads encouraging consumers to buy cars. To date we estimate that over 6,200 radio stations are running these ads (about 50%) plus they are being run on several radio networks, group wide by several radio groups, and even on about 1800 internet radio stations. Local radio stations are telling us they are already hearing from car dealers and dealer associations with with their "thanks" to radio for the effort. I personally spoke to a Mercedes dealer who told me, "I've heard the spots on the air and I believe they are actually starting to make a difference."

Each station can play a role in turning the economy around. I encourage you to keep these spots on the air for several months. If we can use our air time to help sell more cars than we are helping car dealers, which have been our largest advertisers. Of course this will help the economy, and will ultimately help radio. If your station or group is not running these spots, I encourage you to do so. You can access the spots at http://www.helpfromradio.com.

Thanks to Dick Orkin, Christine Coyle and Sandy Orkin at the Famous Radio Ranch in Los Angeles, who wrote and produced these spots.

Spanish Language Spots Now Available
2) When we released the spots we heard from many Spanish Language stations asking for Spanish spots.  Jose Cancela of Hispanic USA, Inc. in Miami offered to write a series of Hispanic spots, which were produced by Juan Manuel Diaz at ...Citadel Media en Espanol (formerly ABC Espanol). These spots are now available at http://www.helpfromradio.com

Thanks to everyone for your support. This is a huge success and radio will be recognized for its contribution.

Best,

Eric Rhoads
Radio Ink