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Should You Heed The Signs Of Change?

No one knows radio better than you. You’re in the trenches. You’re experienced. You can make most important decisions in your sleep, because you’ve faced similar situations time and again. I respect that. But in my world of chasing curiosities, I wonder about the direction our industry will take.

Will the industry look the same in one year, or in five? Or will there be dramatic differences? Will the revenue streams at your radio station come from the same places, the same advertising? Will local advertisers follow national trends? Is money shifting before your eyes, without your even being aware of it? If you listen to the Silicon Valley types who often speak at our Convergence conferences, you’ll hear them say that radio will cease to exist in its present form because we cannot deliver the customized experience consumers want.

On the other hand, if you listen to your own experience and to some industry leaders, you may hear them say that we’re stable even without big digital revenues, and all the hype about digital and streaming is a waste of energy. “Stick to your knitting,” they say. “Focus on doing great radio. Our death has been hailed with every new technology, and they’ve been wrong every time.” Who’s right? Probably both. At least for a while.

Look at the history of any industry that has been through dramatic change, and you’ll hear the same dialogue: “Things are fine. Business is solid. Customers have not gone away, we’re strong — nothing can affect us, because of our deep market share.” Many an industry believed its own defensive rhetoric. They believed what they wanted to believe. And many an industry turned out to be wrong. What about you?

What do you want to believe? There are always early warning signs. Veterans hear that others, often outsiders who know little about the industry, are working on paradigm-breaking change that could dramatically disrupt the present model. Signals of change include a lot of publicity surrounding disruptive models, as the press predicts that these new models will kill the older industry. A new generation of business owners — often the children of business owners — will claim to have a better way, one the older generation can’t see. You may have longtime customers dipping their toes in new, experimental waters.

Some established industries take defensive measures to prove they’re still strong, but more often the prospect of change is met with denial. And in radio, we tend to ignore the outsiders. We know more about the industry than they do. How many programmers do you know who say they can outprogram Pandora? Change is met with resistance. It may even appear, for a while, as though it’s not going to happen after all.

And then, smack! It strikes like a thief in the night. Though I believe radio remains strong and I know each of us has a responsibility to “stick to our knitting,” I also know radio is seeing every early warning sign. The strong adoption of new online models, advertisers’ growing desire to be more digital-centric, a generational shift in control of businesses — and even now, strong denial from within our own ranks. The first shift will be advertisers shifting dollars to digital. The second wave will be a bigger shift by consumers to new forms of distribution. It’s happening gradually now and being ignored because the numbers appear insignificant.

My guess is that it will take a full seven years before all of America is using digital dashboards that give them access to any online audio alternative in the car. This is the big push from Ford and others, and it’s a reality we need to explore. Sticking to our knitting is practical. Chances are your company demands it, and chances are corporate is not very concerned about the digital audio shift. While some companies, like Clear Channel and Cumulus, are willing to invest in businesses that may replace their existing business model, most others are not.

What about you? Though I cannot decide for you, I think employment security today involves deep study of the digital trends around you. Those who don’t get ahead of the trends will always be playing catch-up. Ultimately, you’re in control at your station, and you need to make your own decisions. Stop, look at the signals, and think deeply about what others are starting to believe. You may come to the conclusion that it’s in your best interest to start exploring what those outsiders are thinking.

Another Lost Opportunity For Radio

Like so many, I learned of Whitney Houston's death while browsing Facebook. Immediately my old programming instincts kicked in. Had I been a programmer of an AC station, I would have instantly phoned the hotline and told the jock on the air to play nothing but Whitney records for the next hour. Then I would have phoned the production director to begin work on a special. We would have placed Whitney into high rotation for a while and probably put listener comments on the air.

Mind you, I'm not big fan of Whitney Houston and the choices she made. I met her early in her career, when she was coked-up, and I have no tolerance for that. But from a programming perspective, if our listeners loved her, I'd be all over it.

The very first thing I did after hearing Whitney Houston had died was go to CNN and Fox News, and there was no mention. Then I turned on a couple of local radio stations, and again no mention. Then I went to my TuneIn app so I could check out stations in different markets, and again, no mention. Though her death had just been announced, my quest for someone being responsive was not fulfilled.

Emmis' KISS-FM in New York City and the entire Cox/Birmingham cluster were two markets that addressed Houston's death quickly, taking calls from listeners and providing updates. However, too many stations, most likely automated on the weekends, missed an opportunity to connect with listeners.

Though this may not seem like a very big deal, it is in these little moments when radio stations are made, when audiences are dazzled. Though we never liked to see this kind of misfortune, we used to love these opportunities. It makes great radio, engages listeners, and makes your station stand out over others. It was true for the few stations I eventually found playing Whitney tunes, as it was true a few months ago, when Amy Winehouse imploded.

Whatever is on the lips of the public should be on radio stations immediately. Super Bowl wins, storms, national emergencies, local kidnappings. Radio can be responsive. Scratch that. Radio SHOULD be responsive. Unfortunately, a lot of stations can't be responsive.

Pre-recorded programs and pre-planned playlists are where radio falls apart when topical opportunities arise. Those stations could take days to respond and start playing Whitney Houston songs or talking about Super Bowl scores. Though some will tell me that I need to stop living in the past and accept the current way of operating radio stations, I still think these lost moments are a loss for radio.

Frankly, someone needs to be in charge and ready to respond at a moment's notice. A program director, assuming one is employed at these autopilot operations, needs to drop everything, grab access to the station automation system from home, break in with the announcement, and play some Whitney Houston music. Maybe it makes sense 90 percent of the time to operate on cruise control, but when that ice hits the roads or hail is about to pound your listeners' homes, radio needs to break in and be topical or local.

Call me old-fashioned, but this is one of places radio shines best. Sadly, too many did not shine this time, and that's a lost opportunity for radio.

Collaboration & Convergence

Radio companies have always operated as separate, competitive entities -- every company for itself. Though there has been cooperation on initiatives like legislation (as broadcasters support the NAB) and advertising/training (reps and stations working with the RAB), it's been rare to see radio companies working at a deeper level of collaboration.

But that changed at the end of 2011, when Clear Channel and Cumulus Media announced their collaboration on SweetJack, designed to help radio grab its share of the multibillion-dollar direct-couponing market.

This is a monumental change, and it will result in a complete transformation in how our industry thinks of itself and operates. It's a courageous move, competitors working together -- something we in radio have always been opposed to. Yet when radio's two largest players synch up on something like this, it sends a signal to the industry that it's OK to collaborate. It's not only smart, it's probably critical. Radio will be stronger linked arm-in-arm than with each competitor trying to survive alone.

It's crucial that each of us look at our own limitations and ask ourselves where our weaknesses lie. Who possesses strength in those areas? What would business look like if we found ways to collaborate? After all, no one can be good at everything, and the combination of multiple strengths contributed by different parties will move your business forward exponentially.

Collaboration with competitors may make sense in your town. That might mean collaboration with other radio stations -- but there could also be opportunities to work with other media, or with other companies that have valuable tools and services to offer, in partnerships that make both partners stronger.

Seeking convergence is the other tool that will take your business to the next level. Watch for tomorrow's Radio Ink Daily Headlines -- we'll be featuring a video and an audio interview with Tom Davis from Williamsburg, VA, who has truly figured out how to converge with other models.

We may not be seeing revolutionary change in our business, but we must see gradual, evolutionary adaptation to the world our advertisers are demanding we operate in. Though your primary cash flow stream shouldn't be messed with, I believe broadcasters small and big must seek convergence to deliver what customers need.

Radio stations are becoming so much more, in so many towns. In reality, we've always done it: Radio converged to create shoppers, magazines, events, all of which have become valuable revenue streams. Digital convergence is really no different.

Think of it this way: Iron and carbon become steel. You have a powerful tool that reaches a lot of audience. Why not use that tool to draw revenue back from those that are trying to take it away? Why not control other forms of media that you've melded into your own operation?

Who says you're in the "radio business"? Seems to me your job is to help clients sell or brand products and make the experience for your audience the best it can be. Period.

Collaboration and convergence are a lot alike. One is partnering, the other is finding ways to create new solutions, even if it means becoming other media -- video, print, online -- for the good of your advertisers or listeners.

"Don't do business with competitors" is something radio has heard for decades. But those days are in the past, and collaboration is critical to future success and growth. Same with convergence. We used to sell people on how bad newspapers or television were, and now many of us are in those businesses in some form.

You may be a "radio person" first, but you may wish to consider broadening your scope and becoming a "media person." Look how much Clear Channel has changed in one year by not considering itself a radio company. Who would have thought Clear Channel would be partnering with Ryan Seacrest and investing in the creation of cable shows? You can bet this is the beginning of a giant Time Warner-like media empire, as I discussed in a previous note. It is smart, and it is good business.

What about you? Where should you be converging and collaborating? If you imagine the possibilities, you'll see a new world open before your eyes.

Eric Rhoads

P.S. We're in the midst of crafting what may be the smartest Convergence conference ever. We always try to stay three steps ahead, and I think you'll find we've done so yet again when we announce our lineup.

After two years of holding Convergence at Microsoft, we wanted to reinvent again and started thinking about where so many of the great ideas of our time have emerged from. We determined that Stanford University has been ground zero of the digital revolution for the past 20 years, so we'll be on campus at Stanford this May.