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My Battle Over HD Radio Broadcasting And The Biggest Sale of My Career

A Message from Eric Rhoads, Radio Ink

Note: So you don't read deep into this story and then realize I'm going to ask you to spend $35, I'm telling you up front. Read further.

A Stink Over HD Radio Broadcasting
By now you know that I've made a stink about the HD Radio broadcasting effort from time to time. It all started a few years ago, when I asked the guys at iBiquity to send me an HD Radio unit for evaluation. Frankly, it was not a good experience. Of course, many believe HD Radio technology is the savior of radio and allows radio to compete in a digital world. But I have not been fully convinced. Radio's salvation will be the moment we return to a commitment to entertainment and localism, industrywide.
Plus, the HD Radio Alliance believes that offering more formats on HD2s and HD3s is a way to provide the same diverse choices listeners are getting elsewhere. I haven't fully bought that, either.

So Am I or Am I Not a Fan of HD Radio Broadcasting?
Though I'm not convinced the strategy for the HD Radio broadcasting rollout is the right one, I do believe that better audio fidelity, more choices, and more services for listeners are good things. I have grown accustomed to artist and song information with satellite radio, and I expect it from radio now. And HD does offer song titles and artists.

So is HD a good thing for radio? It can't hurt and might help. And, since radio groups have converted almost 2,000 stations, and since more manufacturers have committed to HD Radio products, it's not going away.

So Why Hasn't HD Taken Off, Eric?
I believe the biggest issues have to do with the need for an argument so powerful that every consumer will want to go out and get one. I also believe expense has been a problem. Most of the HD Radio units I've seen are expensive.

Of course, people don't just go out and change their car radios on a whim. It usually happens when they buy a new car. And I'm not sure consumers have been sufficiently persuaded to invest in an expensive radio just so they can try out HD, especially when they're used to radios being fairly inexpensive. All these issues have created a slow start -- though the people at iBiquity say that there have been over a million HD Radio units sold, and sales are more than doubling every year.

A Wakeup Call
Recently on my blog someone said, "Eric, perhaps you should stop complaining about others and lead this industry by taking action on your own." He was right. Leadership is about taking action if I don't like where things are going. It dawned on me that I need to take action to move the needle on HD. So I started thinking.... What can I do to help HD Radio broadcasting take off? What action can I take? How can I provide the missing leadership?

Thought Leaders
Many companies launch products quietly by identifying thought leaders, giving them the product, and allowing the word to spread virally through that leadership. MINI Cooper did this when it gave cool people in markets across the U.S. MINIs to drive. When the cool people were seen in MINIs, their friends wanted them too. The product spread virally before it was heavily marketed.

So who are the influential thought leaders and cool people? It just so happens that some of the most influential thought leaders in America are ... drumroll, please ... radio people.

A Crack in the Radio Foundation
"This is easy," I thought. Since radio people are such influential thought leaders, we should be able to start an HD movement with radio people, right? But all those spots we ran on all those stations didn't seem to move the needle much. What's up with that?

The more I asked around, the more I understood that there was a crack in the foundation. Most radio people have never even experienced HD Radio broadcasting, including most of the employees at companies that offer it. How will we ever get a movement if the radio industry, at the grass-roots level, can't experience HD? How likely is it that most radio people will go drop a few hundred bucks for a desktop HD Radio receiver? Shouldn't every DJ, every AE, every manager own an HD radio? Of course.

The Little Box That Made FM Boom
OK, I'll admit it. I was born in the dark ages, and I was around when no one had FM radios other than home stereos (of which there were very few). But the only FM stations were elevator music stations. When FM rock stations started coming on the air in the late '60s and early '70s, the unique content drove adoption (something we need to do on HD -- underground content!). But you couldn't find FM radios to buy, and you certainly couldn't find FM car radios. Or if you did, they were expensive. But a little box changed everything. Audiovox came out with a $15 converter unit ($50 in today's money) that received an FM signal and put it through the AM in your car radio. Every kid I knew had one, and that's what drove FM adoption until FM radios became more available and less expensive. That is what is needed for HD Radio broadcasting.

The Biggest Pitch of My Career
For all the grief I give HD Radio broadcasting, I have to admit that the people at iBiquity are really willing to listen. Of course, they want to see HD become a huge success. So I scheduled a call with CEO Bob Struble and some of his top people, and I said, "I want a small, inexpensive HD Radio receiver. My goal is to put it in the hands of every employee at every radio station in America. I want something that is portable, something with mighty HD sound that I can carry in my pocket, that I can listen to at the gym, and that I can plug into my speakers or the audio jack in my car. And I want it for under 50 bucks so every radio person can own one and experience true HD."

(Long pause.)

"Eric, you want us to manufacture a special radio for you?" said one executive. "Are you nuts? Do you know what it would cost to do that?"

"Yes, and I need it before Christmas. If you do this, it will be the foundation for launching HD because radio people will have it, experience it, embrace it, and start spreading the word like never before."

(Another long pause.)

My Biggest Sale Yet
Now, I make my living as a salesman, and I like to present bold, audacious ideas. When I presented this, I was sure these guys would mock me, but I persisted, and I was able to convince them to manufacture a special HD Radio unit just for radio people. Not only that, but I convinced them to let me create my own special design and brand.

Putting My Butt on the Line
Once I convinced iBiquity to manufacture a special radio, I realized my butt is on the line. This strategy had better work, or I'll lose all credibility with them, and they'll be sitting on a few carloads of special HD Radio receivers that they can't sell elsewhere, at a cost of hundreds of thousands of dollars. Plus, I had to act fast. Here it was September, and I had to get my concept, design, prototype, and shipment in time for Christmas.
They said, "We can do it for Christmas in 2010, but not this year, Eric. Be realistic." But I was especially persuasive on this matter and got my way, and iBiquity has pulled out all the stops because they believe that an HD Radio receiver in every employee's hands is good for HD Radio broadcasting.

The Moment of Truth
I was pacing the floor, knowing FedEx would arrive any moment with the prototype. Would it live up to my expectations? When I opened the package, there in front of me was a box with the logo, branding, and packaging I had designed.

"Mighty Red: Radio Ink's Little HD Radio with Booming Sound, by Eric Rhoads"

I named the radio MIGHTY RED to make a point that this little radio had MIGHTY BIG sound. I designed it to be RED because RED is the Radio Ink color, and because it would be easy to find (I'm always losing little things). Plus, these days RED is a symbol for the best of the best. In HD video, for instance, the best video camera in the world is called RED. So why not make my mighty little radio RED because of its awesome quality?

I carefully opened the box, pulled out the radio, charged it in a USB slot, and took it to the gym. On the treadmill, I hit "scan," and the first HD signal I received was KDFC in San Francisco. BOOM. The audio was amazing. Crisp, clear, and booming. I had plugged in my $100 Sony sound-canceling headphones, which is the standard I use to judge the audio on iPods, the Zune, etc. The audio on this little radio was amazing.

The screen told me what station I was listening to and what song. I clicked up to KDFC-HD2. Classic, deep cut tracks that put a smile on my face and took me back to another day. I then went over to KFOG, which was playing a blues tune. I cranked it up, cranked up the speed on the treadmill, and my mind got lost in the sound. The audio was absolutely blow-me-away perfect. All from this tiny -- and truly mighty -- little red radio. I kid you not. This little radio is absolutely mighty and has the best small radio audio I've ever heard in my life. It's so good I'm actually excited about it and can't wait for you to try it.

Your Role in Radio's Future
HD Radio broadcasting isn't going away, and we can all have a hand in its success. If you're in radio and you don't own an HD Radio unit, you simply need to own one, need to listen to HD, need to experience it so you can fall in love with HD audio like I did with my Mighty Red. Without the foundation of people in the radio industry owning HD Radio receivers, we cannot expect to convert the rest of the U.S. to HD listeners. Yet if every person working in radio buys an HD Radio receiver, we will have the foundation we need to influence others.

Billy Mays Would Be Shouting From His Grave
Though I'm starting to sound like the late Billy Mays pitching Magic Putty, this is a limited production run. (I wonder if he was related to Mark and Lowry Mays.) We will not sell these in stores. The exclusive MIGHTY RED by Eric Rhoads was made just for radio people (and your friends and family for Christmas!) with the intent of selling out rapidly. Plus, I convinced the people at iBiquity to create this radio and offer it at a special price of $35, which makes it affordable for every person in radio. And that's important.

How Do You Want to Feel Right Now?
When you own Mighty Red, you'll fall in love with radio all over again. I did. The audio is that good, and the new HD2s and HD3s were playing songs I hadn't heard on radio in years, if ever. I'm very excited about it. And, for the first time, actually excited about HD Radio broadcasting. Now I have a tiny portable HD unit that I can jog with (it comes with an armband holder and headphones), plug into my car audio jack so I have HD in my car, or plug into my stereo at home or the office for HD audio.

If you want to feel great about radio again, and feel great about HD Radio broadcasting, buy a Mighty Red. My goal is for everyone in radio to own one, to build a foundation for HD. If radio employees embrace HD, we will have the launching pad for HD adoption nationwide. It starts with you.

I hope you'll consider buying my custom-designed Mighty Red HD Radio receiver and consider it for Christmas gifts for your friends, clients, etc. Please do it today. There may not be another chance if we sell out today.

Click here to buy, or go to www.mightyredhd.com.

Best,
Eric Rhoads
Radio Ink

PS: These radios have just arrived on the shores of the U.S. and will be released from U.S. Customs at any moment. You cannot buy an equivalent HD Radio receiver at this price anywhere. This is a special offer for the radio industry only, and once our shipment is gone, there will be no more.

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I'm A Customer Who Does Not Matter

As a favor, I do the advertising for a friend who owns a small business in San Francisco. We're not a huge radio client, but we spend just south of $100 grand a year there. Things have been pretty smooth, except for an AE I had to scold for going around me and getting my client all worked up that perhaps we should spread our schedule across wider dayparts. I had to ask him not to go around me, and ask the client to simply say "talk to Eric" next time he tried to do something that was contrary to the strategy.

Yesterday my friend asked me to stop all of his advertising for strategic reasons. I e-mailed the rep, but the message came back as undeliverable. When I called his direct line, it simply said, "There is no one at this extension. Click."

What do I do now? I happen to know another seller at the station, so I shared my experience and hoped that the word would get to someone to cancel my schedule. He responded that this person had left the station and that he would forward my request to the sales manager. Then I got an e-mail from some rep I don't know, who knows nothing about the account: “I dug into this and found where your ads were running and cancelled them. Hope you're not canceling because you did not get response.”

Maybe I'm insane, but my mere $100,000 investment seems worth a little attention.

What about:
• The AE letting me know he left — either as a courtesy to his former employer, or even to try and switch me to the station he now works for. The fact that he had been gone three weeks and did not notify me says, "You're not important enough to me."
• The station that never bothered to say, "We made a change and we're asking someone else to work with you." What a novel idea. I must not matter.
• The station that disconnected the AE’s e-mail instead of having it go to someone who could respond to my request. What if it had been an insertion order instead of a cancellation?
• The salesperson's direct line not having a message that the person is no longer there, or ringing to someone else.
• The new AE who did not bother to introduce herself, call me, get to know me, or try to reengage me. What a missed opportunity.
This is not rocket science. Clients want to be kings and queens. When they spend — or consider spending — money, they expect some basic services. They want to be appreciated and wooed.
Write these words on an index card and staple it to your forehead: THE CUSTOMER EXPERIENCE NEEDS TO DAZZLE CLIENTS. Have you designed the ultimate customer experience? Have you trained your people in every possible point where they interact with clients? Have you asked your customers what would make their experience better?
Customers don't speak up if they’re not asked — they simply get even. Most people who had the experience I had would simply go elsewhere. If I don't matter, why should I spend my money with them?
There are other stations and other options. Don't forget it. Customers are hard to get. Don't lose them because your customer experience is awful.

Loss Of Trust: How Citadel Media Just Raped Radio

A message from Radio Ink Publisher Eric Rhoads

Before I begin: In the interest of full disclosure, Citadel Media (formerly ABC Radio Networks) is an advertiser of Radio Ink.

Imagine, if you will, that your local radio station has spent 15 years and loads of money establishing a local personality. We all know that the personal connection to the talent on our radio stations is one of the most important assets we have. Radio's value is not its signal or its tower. The value comes from the relationship we have with our listeners.

Our Worst Nightmare
When I was a programming consultant, our worst nightmare was having to find a way to take audience away from a heritage air talent who had a lifetime relationship with the listeners. We knew that if we could get that talent to jump ship, there was often more loyalty to the talent than to the radio station itself. If we could take the two or three most established personalities and move them to our station, we could have a much more successful start -up and destroy a competitor. If we couldn't get them to come to us, we would look for ways to get them hired out of the market. That's how important a strong local talent can be.

Sounding Local
Today, thousands of radio stations around the country rely on radio network feeds of formats and talent. The big sell is that you cannot afford to hire personalities this good in most small towns. Technology has become so flawless that local listeners most of the time don't know that a talent is voicetracked or coming from a satellite network. The ability to sound local has improved significantly. Therefore, to the local listeners, the talent they are hearing is local talent.

Sleight of Hand
Last night we received a press release about how Citadel Media had shifted some talent around. What the spin didn't indicate is that these changes were because of a bloodbath of network talent firings. Today my phone has been ringing off the hook from affiliates who are either immediately canceling their Citadel contracts or talking to alternative providers with the intent of canceling. Why? As one local manager I spoke with said, "Our stations success has been built around two air personalities who have been on our air for 15 years. Suddenly, they have been replaced. Our listeners don't know these are satellite guys. They are local as far as they are concerned."

Destroying Hundreds of Stations
Imagine the impact of this decision, which was economically driven. This casual decision to remove some high-priced talent on several formats is disrupting the competitive advantage on hundreds of radio stations in one fell swoop. One format alone may have several hundred stations that had built their entire businesses around those personalities over decades. Their competitors are popping open the champagne because the toughest talent to beat just got replaced by people who don't have a bond with listeners. Of course, doing this across several formats could destroy (yes, destroy) the businesses of hundreds and perhaps thousands of radio stations. All to save a little money on highly paid talent.

Self-Destruction
This cost-saving move, which corporate executives may see as harmless, could result in loss of ALL of their format affiliates. Citadel Media's competitors are on the phone today with every affiliate. In fact, while I was talking to one manager today, he received a call from Dial Global.

Killing Trust
Look, I would not want the debt, the pressure, the bankruptcy Citadel may be facing soon. And I too would be looking to save as much money as possible. I wouldn't want to be in their shoes (though I'll be one step closer when they cancel their advertising because of this missive). But don't make material changes that kill the trust of your customers.

If you want to do it at your own radio stations and risk losing audience and revenue, so be it. But today millions of radio listeners woke up to new talent, wondering where the people who have been their friends for decades have gone. Radio owners across America just lost their heritage brands, and that has to severely impact their business. Advertisers have talent loyalties too, and this move could kill these affiliates.

How Dare You?
Where is Citadel Media's loyalty to its affiliates? Without them, they have no business. How can affiliates trust Citadel Media now, when they've raped the airwaves in hundreds of markets that built their business on the heritage brands and air talent? Farid, how dare you treat your customers like this?

Broken Eggs
Corporate responsibility must go beyond financial responsibility to shareholders. Thousands of affiliate radio stations had all their eggs in the Citadel Media basket, and those eggs were broken over a decision to make the next quarter look a little better. The ironic thing is that this move will worsen shareholder value because of affiliates jumping ship, knowing they can never trust the company again.

Undo This Decision
If Farid Suleman were savvy, he'd call all those fired talent back, apologize to his affiliates, tell them this was a terrible error in judgment and that he did not realize the negative impact to his affiliates. This, and only this, will save his format business and might prevent a class action lawsuit.

Revenue Lost
I don't make a habit of cutting my own throat. I know I'll never see another advertising dime from Citadel Media. I know Farid will probably decide not to make his annual appearance on the group heads' panel at our Forecast conference. I don't care. I'm livid, and someone has to speak up and defend these radio stations, even at the expense of losing a substantial advertiser.

Hundreds of radio stations may be destroyed over this, millions of dollars in advertising may be lost, entire businesses may be destroyed because of this decision, which could impact the incomes of hundreds or thousands of radio station owners. This decision was simply irresponsible.

Best,
Eric Rhoads
Radio Ink

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A Message from Deborah Parenti, VP/General Manager of Radio Ink:

Important Independent Broadcasters Panel to Be Held at Forecast
If you own a small or independent radio station, we invite you to join us at Radio Ink Forecast, less than four weeks from now in New York. The panel, Independent and Optimistic: How Small Radio Companies Succeed, sponsored by Arbitron, will discuss the secrets of successful independent operation in today's media and economic worlds. A panel of leading independent owners will discuss what it takes to keep revenues pumped and cash flowing at their stations and how their ability to act -- and react -- nimbly works to their advantage. What are their plans and strategies heading into 2010? Find out as leadership, independent-style, addresses the issues facing all broadcasters.
Moderator: Bill Stakelin, President/CEO, Regent Communications
George Laughlin, President, GAP Broadcasting
Steve Newberry, President/CEO, Commonwealth Broadcasting
Gary Rozynek, President/CEO, Maverick Media

To register, call 561-655-8778, or register online at www.radioink.com/forecastsummit
Attendance is limited to 200 people. Please book your seat early.

The Sky Is Not Falling ... Everywhere

A message from Radio Ink Publisher Eric Rhoads

 

OK, I'm guilty. From time to time I've made blanket statements that could make a reader think the sky is falling in radio. Though, frankly, I've also highlighted many a success story in my editorials, and not everyone in radio is faltering.

For instance, I received this e-mail moments ago. I have removed the name and market at the request of the sender:

Good morning, Eric.

I continually read, almost on a daily basis, the shortfalls that most radio companies are experiencing. Cumulus, Entercom, Beasley, etc. Not all radio stations experienced down third quarters or are having down years. In 2008, my four local sales representatives did more business than 2007. The only shortfall was national, and that was due to massive budget cuts.

Our single, standalone FM in [city removed] delivered a third-quarter increase of 5 percent. 2009's August was the best August in the 40-year history of the station. September was up 12 percent, and October was up 12 percent. November will be up also. Our 2009 fiscal year will be up over last year. We have five cluster operators to sell against. I do not know if [city removed] is an exception to the rule, but I do know that seven car dealers went under this year and numerous retailers and major chains closed stores, including a major employer that closed and put 400 people out of work.

Anyway, I'd better get to my point. Buyers also read this news. As you know, most buyers are very opportunistic and expect rate reductions, assuming all radio stations are suffering. I am constantly battling buyers, local and national, explaining that not all markets and stations are experiencing 15 percent to 20 percent shortfalls.

Many times this has been greeted positively. I want them to realize that the investment they are making in the radio station is in the best interest of the client and is very important to the station. I think they also enjoy talking to someone who doesn't sound like they are getting ready to jump off a bridge. I am sure buyers have heard sellers beg them to buy their stations.

Thank you for listening.
 
I'm sharing this letter for a number of reasons:

1) I hear from radio stations every day that are making it through this recession and growing their business. Most, but not all, are in smaller markets where they have never been completely reliant on national business. Most adhere to the principle of strong community involvement, which seems to act as an insurance policy when times get tough.

2) I know that several hundred advertising executives using radio and several hundred clients are part of our 600,000 monthly readership. Though I think it's critical to always tell the truth and never sugar-coat anything for their benefit or for the benefit of the industry, I think it's also important to make sure we're not only spewing the negatives for the sake of drawing attention. There are many successes worth talking about.

3) Sure, radio is changing and evolving, and radio operators need to adapt to the new digital environment or suffer the consequences. Many are, but many others resist. But radio isn't going to die just because some think the only future option is streaming or podcasting. We must not forget that most Americans listen to the radio every week, including young people. It's easy to be seduced by what's new, what we love. I'm Mr. Gadget. I buy every new gadget the day it comes out. But radio is so ubiquitous and has such a deep listener bond that it is not easily replaced. (But let's never get arrogant or overconfident.)

4) I don't want cheerleaders with empty promises, and neither do you. Still, you don't want me or anyone else telling you how ugly radio is every day. Enough already. This is a great industry, one that I'm proud of. Sure, there are problems. Yes, we need to address them. Yes, we can find isolated instances with almost any company and make things out to be bad all over, but it's simply not true. Negativity sells, but, just like we don't need overly optimistic voices, we don't need overly negative ones. People love bad news, but it's not good for our industry to always focus on the negatives. Let's not spread the negativity and keep your mind away from negativity.

Radio can't create more jobs in every town, and it can't solve the world's problems. But one thing it can do is play an important role in our individual communities. We can help businesses sell products, and that helps our communities. We can look for positives to share. Not empty cheerleading, but honest, upbeat news in our communities should be celebrated by radio stations that have the ears of those communities.

This letter helped me see my responsibility. I hope this helps you see yours.

Best,
Eric Rhoads
Radio Ink

Please don't reply to this e-mail. To comment, click here. 

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A Message from Radio Ink VP/GM Deborah Parenti:

Radio Ink Forecast. Almost 50 Percent Sold Out. Four Weeks Away

The industry's premier event for owners, CEOs, CFOs, station owners, and radio investors. Keynotes include Mike Huckabee, Ron Insana, and a special industry call to action from Dan Mason, President/CEO of CBS Radio. To register, call 561-655-8778 or go to www.radioink.com/forecast.

Great Sales Teams Require Great Coaches

Although our salespeople are encountering reduced or nonexistent spending accounts, we as managers cannot accept lower performance. But beating on our sellers for better performance can have an adverse effect on their motivation. Is there a solution?

Like great athletes, most great salespeople are highly competitive. And, similar to athletes, a strong coach can play a role in inspiring salespeople to success. Here is my list of the attributes of a great coach.

1. Great coaches see things in their people that others don’t see and work to pull those qualities out.
2. Great coaches contribute the time, patience, and continual reassurance to develop these attributes.
3. Great coaches communicate effectively. They know how to send the right message in the right way at the right time. They set clear, measurable goals and expectations. They react swiftly — and fairly — when correction is required. They continuously monitor progress and provide corrective actions and ideas.
4. Great coaches adapt their coaching style for each individual’s learning style and needs. It might entail a gentle nudge, a push, encouragement, appropriate scolding, disappointment, or a challenge. They pull the best out of each individual.
5. Great coaches know that one size does not fit all when it comes to incentives. One is motivated by recognition, another by money, another by a dream or wish.
6. Great coaches know their team members’ limits, strengths, and weaknesses. They do not set their players up to fail. They know when to intervene, or when to lend a sympathetic ear. They create a success plan for each team member’s growth.
7. Great coaches are mentors offering experience, perspective, and advice. They are not know-it-alls. They are willing to listen. They lead by example and make people want to emulate their behavior. They inspire confidence and trust.
8. Great coaches foster dreams, hopes, and vision. They help their players picture a better future and continually correct the course with that vision in mind.
9. Great coaches have a sincere desire to help each person grow and achieve their goals. They help players stretch to reach the impossible.
10. Great coaches do not lead by fear and rarely lash out — so when the do, they are taken seriously. They are trusted partners in the success process. They are empathetic, but not sympathetic. They set firm boundaries.
11. Great coaches understand that failure of the athlete is failure of the coach. They are a friend, teacher, and guardian. They stand up for their people and they do not push corporate pressure downward. Instead, they absorb it, while understanding that negative pressure locks up some team members. They demonstrate personal character and don’t ask you to do what they are unwilling to do.
12. Great coaches are realists who are willing to face reality. They are not falsely positive. They listen carefully and seek outside ideas and perspectives.
13. Great coaches do not over-manage. They let people make mistakes and grow from them. They are not hung up on titles or formality.
14. Great coaches see change as opportunity.
15. Great coaches put values and ethics above everything else.
16. Great coaches cultivate leadership and make it fun. They know that a happy team yields higher results.