Sunday, December 7, 2008

Radio: Two losers join forces.


There’s no greater recipe for disaster than two floundering companies joining forces.

CBS Radio meet LAUNCHcast.

Let’s start with this question. What does the future hold for CBS Radio?

Earlier this year it put 50 of its 140 stations up for sale. But after the deadline for bids passed, CBS Radio said "only kidding" and said it wasn’t in any hurry to sell them after all.
*
A week later, CBS went on a downsizing rage, blowing out heritage morning shows and mass-firing on-air talent.

Now, let’s look at LAUNCHcast, one of the oldest names in streaming audio.

Its parent company, Launch Media was founded in 1994 by former Capitol Records executive Dave Goldberg and Robert Roback, a former securities attorney.

LAUNCHcast allows users to create their own stations or playlists of songs. But its had a life-long identity crisis.

In June, 2001, during the end of the dot-com mania days, Yahoo purchased Launch Media in a $12 million deal. Goldberg stayed on as CEO and Roback as President.

Nothing happened. LAUNCHcast remained LAUNCHcast – as identity-challenged as ever.

Now, let’s fast-forward to early 2007. Goldberg and Roback quit Launch Media and despite Yahoo’s claims to the contrary, rumors ran rampant that LAUNCHcast was up for grabs.

Yahoo closed its subscription-based music service in February and announced a partnership with Rhapsody that allows users to stream full-length songs in search results in September.

Its latest modification occurred just last month when Yahoo announced that LAUNCHcast would discontinue its four-bucks-a-month premium service, which streams music without spots, in higher quality audio.

The financially distressed Yahoo now claims they’re letting LAUNCHcast go because of “unfavorable Internet royalty rates.”

Could Yahoo’s dumping LAUNCHcast on to CBS Radio have everything to do with the fact that Microsoft CEO Steve Ballmer will acquire Yahoo once its dead weight becomes someone else’s problem?

What jumps out at me is that the last time I checked, LAUNCHcast’s audience plunge 43 percent to an estimated 2.9 million listeners in the U.S. – and, as of this very moment, still can’t be heard on Safari and Firefox browsers.

That, according to CBS Radio, will change once they take control of LAUNCHcast in February ’09. It still doesn't solve their massive listener loss.

Before we go any further with CBS Radio’s alliance with new media, shall we review their old media terrestrial radio track record post-1996 deregulation?

Though it’s considered sport at 1515 Broadway, you can’t blame everything that went wrong at CBS Radio on Joel Hollander.

We’ve witnessed myriads of missteps and blatant train wreck formats before and after his New York minute at the helm.

In just one week, CBS Radio fired its entire airstaff at one station and for the fifth time in five years changed its rock format by moving its “alternative hits” HD Radio side channel and making that the new format. Things have to be pretty grim when you raid HD Radio for a terrestrial format.

There’s WXRK in New York where, over this past week, sniper fire resulted in one casualty and a handful of demotions.

It’s true that Hollander dumped its New York-based alternative rock format for its foolhardy Free FM before it changed back to alternative, with a playlist that sounds more suited for the Los Angeles market. And they wonder why they're locked in a 1.7-1.8 Abritron share?

Then again this is a company that actually believed that the musical tastes of Detroit and Philadelphia were identical. What was that line? “Both cities – same lunch-bucket market?”

In Chicago, they fired Ed Volkman and Joe Bohannon after hosting WBBM-FM’s morning drive for twenty years. Problem? They were making too much money according to CBS Radio.

In Minneapolis, there was another massacre, which took the jobs of an estimated dozen or more.

CBS Radio also pulled the plug on its syndicated morning show, Opie & Anthony, from two of its rock stations. It seems like only yesterday that they were being hailed for their “triumphant return.”

Is it true that CBS Radio has fired over 700 employees in less than a year’s time – and admit that they’ve only begun to whack?

Now, compare those casualties to the much larger Viacom. They announced 850 job cuts but theirs are spread across its many divisions, including Paramount Studios and MTV Networks.

Did you read the CBS spin in Crain’s New York Business?

Let me quote the unnamed CBS spokeswoman who said, “We’ve been moving more toward the cluster approach. We’re working closer together and sharing resources across the stations.”

I’ll bet the CBS Radio sales departments loved hearing that motivating statement.

And you thought John Hogan had the trademark locked for “less is more?”

From January to September this year your revenues are down ten percent - to $1.2 billion and your operating income is down almost double that – a whopping nineteen percent to $420 million.

I’d say CBS Radio lost its buzz – but maybe it never really had one.

Sure, WFAN, WXRK, KROQ and a handful of others received critical acclaim when Mel brought them on-board when he sold Infinity to Viacom, which had acquired CBS.

But over the next few years neglect claimed radio piece by piece. Just like a body ravaged by an incurable disease – the toes, the feet, the knees, the legs, the fingers, the hands, the arms, the heart – and finally life. The rot spread from station to station to station.

Let’s get back to this CBS Radio-LAUNCHcast deal for a moment.

Here’s how Yahoo’s explaining the deal to its users.

It’s no secret that CBS wants to stick it to Mel Karmazin and Sirius XM and looking to the Internet to fulfill its fantasy.

In the past year, they cut the AOL Radio alliance and bought the somewhat Pandora Radio-like Last.FM, which it planned to promote through CBS. So far, its highest profile was on their short-lived Swingtown TV series by creating a special ‘70s music channel featuring the music played on and inspired by the series.

It’s not how much you own but how you run what you have. Since its terrestrial radio’s been run into the ground can we expect the same from CBS Radio when it comes to new media?

Garbage is garbage no matter how you package and deliver it.

That’s not to say that CBS doesn’t have some great radio stations, talented performers, and top-notch management. They probably just haven’t gotten around to firing them yet.

You are correct to say that according to comscoreArbitron’s September ’08 ratings, CBS Radio is in first place with a 2,212,700 cume and an average quarter hour of 200,104. Clear Channel is second with a 1,381,430 cume and a 105, 415 quarter hour. Way down in fifth place is LAUNCHcast with a 1,035,307 cume and a 121,467 person quarter hour.

Come February, those LAUNCHcast numbers will become part of CBS Radio’s cume and AQH- giving it, in a blue sky world, a weekly cume of 3 million-plus.

Let’s stop here for a moment to qualify these numbers. Arbitron’s on-line survey division, comscoreArbitron, sample approximately 200,000 persons who’ve had cookies planed on their computers – and the results are extrapolated – but – and it’s a big but – the only streaming audio stations that are included in the survey are paying a fee to Arbitron to be included. There are many stations that aren’t integrated into the survey because they did not pay for the inclusion. That number easily runs into an unrecorded 100 million-plus time spent listening.

That gives new meaning to term margin of error.

Here’s another question for CBS Radio. Considering the “fact” that it has an almost 1.4 million cume - how much revenue are you really generating from your streaming audio ventures? Just asking.

It’s time for a reality check. CBS Radio has taken to playing the victim while blaming others for the problems it originally created.

I dislike that phrase, "I'd rather be lucky than good." The trouble with luck is that it eventually it runs out. You can only get away with selling iceboxes to Eskimos forever for so long, you know.
----

42 comments:

Vic said...

John are there any well run broadcast groups? (This isn't a trick question, it is very honest) I've been in broadcasting for 30, (Until October '09 when I went to work for a large university in Southern California) and I haven't see any lately.

Accounting said...

Will is that so,anyway what is the real reason why does they never put a music on yahoo would you know?







Lensky
http://wahp.me ---WE ARE HAPPY:)

Zippity said...

John, First we had stations hooking up with Zune which has zero hipness factor with youth and zero sales at retail. Now we have CBS radio, one of the worst run chains duoing with Launchcast? Launchcast has always been a loser. It is the also ran of streaming audio and it is doesn't work on Apple and even some PCs. It really shows how out of touch CBS Radio is with the real world. Dan Mason must have photos of Sumner.

Former GM said...

***But over the next few years neglect claimed radio piece by piece. Just like a body ravaged by an incurable disease – the toes, the feet, the knees, the legs, the fingers, the hands, the arms, the heart – and finally life. The rot spread from station to station to station.***

I hope this entire industry is reading your blog. I plan to forward your CBS Radio story to everyone I know. Your description of the decline and fall of radio is perfect!!!!!! That is exactly the way it happened. We can trace similar living-quarter-to-quarter issues with any public company though no other industry did as much self-inflicted damage to itself as radio.

Your other comment:

***It’s not how much you own but how you run what you have. Since its terrestrial radio’s been run into the ground can we expect the same from CBS Radio when it comes to new media?***

That could also apply to any public company investing in other businesses they know nothing about.

I love your blog. Keep it up.

Eskimo Joe said...

Dan Mason is CBS Radio's Chauncey Gardner just like John Hogan is C.G. to Clear Channel. How he ever got to where he is today is a mystery. He was a nitwit at Cook-Inlet. Mason somehow worked his way into Group W and CBS. I know he doesn't even know how he got there. CBS was right to get rid of him the first time. Joel Hollander was not the best replacement. How Mason GOT BACK to CBS a SECOND TIME is one of the eight blunders of the world. CBS Radio is a far worse-run company today than it was even before the mergers. The CBS radio division was never a very good company, a point you eluded to. I don't know why Jerry DelColliano and a few others rave about Mason. So he changed WCBS-FM back to oldies? Not quite. It is better than Jack but nothing like the great WCBS-FM before Hollander ruined it. What else has Mason done for CBS Radio? I will tell you. He has made a bad company worse. Until there is some leadership or Sumner forces Moonves to replace Mason CBS radio will be linked with those other "C" grade companies: Clear Channel, Cumulus, and Citadel. In ranking I would put Mason's ineptness ahead of Suleman.

Anonymous said...

john good blog on cbs radio. you nailed it about mel & infinity. we he came on board after the mergers it was his stations that got most of the attention & preferential treatment. there were many times i was in my gm's office when mel called barking in his ear. i dont want to give it away but we were one of the best run in the chain & a former group w. mason was a real jerk. he knew less about radio than i did. he bragged that we didnt need arbitron to sell time & claimed he never used a book at cook-inlet. how about the fact that mason had them so messed up they couldnt afford to buy arbitron or do research? we had a party (we paid for ourselves) when he left only to get stuck with joel hollander and his know it all brother in chicago which is all we ever heard about. then mason comes back & the nightmare continues. if i can hang on for one more year i will be okay. i'm just not sure i can with this joker running things.

Anonymous said...

That has to be a new low. Lifting a format lab HD Radio station for terrestrial broadcast. As bad as CBS radio is elsewhere you guys in Cleveland must really have it bad. I loved the quote from the market VP blaming the sales manager and consultants for the format change. Do they call him Judas behind his back?

Do they really believe they can sell this station to advertisers?

But seriously folks, why would any radio station go the exact opposite worst direction at a time when revenue is drying up? There is nothing special to sell. If I have to choice to hear automated music spewing out at random on a terrestrial radio station or my own library on shuffle in my iPod I hope I don't have to explain to this brilliant executive VP of CBS Radio in Cleveland what I would choose.

ANONYMOUS said...

GORMAN F-YOU. WHO THE HELL ARE YOU TO INSINUATE THAT CBS RADIO HAS ANY PROBLEMS THAT EVERYONE ELSE DOESNT HAVE TOO, YOU NITWIT. DID YOU KNOW THERE IS A RECESSION GOING ON. WE ARE ALL AFFECTED, A-HOLE. CBS DOES NOT HAVE A CHOICE. SHOWE ME ONE COMPANY THAT IS NOT LAYING OFF ITS EMPLOYEES. CBS RADIO WILL BE AROUND A LOT LONGER THAN YOU, IDIOT. MIND YOUR OWN FRIGGING BUSINESS, MORON.

Anonymous said...

Hi John, Good blog. I have been wondering why DelColliano and others who share most of your ideas always shy away from criticizing CBS Radio.

I don't consider WCBS-FM today to be as good as it was before Hollander changed it to Jack-FM. Nor do I think he has done anything other than lower the quality of news content at both WINS and WCBS.

I agree that CBS Radio was never a great company under any leadership.

Mel Karmazin did promote his Infinity stations more than what he inherited from CBS and Group W and subsidiaries they brought to the table. In fact he even changed the name from CBS Radio to Infinity which you left out of your blog.

Thank you for your comments about CBS Radio. At least one of you guys are taking no prisoners.

Anonymous said...

I think you figured it out. CBS Radio caught wind about Yahoo's plan to get rid of LAUNCHCast and jumped at the chance to add it to their on line stable. CBS Radio is doing it for all the wrong reasons. You are right about LAUNCHCast not being a "cool" site just like Zune is not a cool MP3 player.

Radio industry heads seem to jump first and figure out what to do later. Has Dan Mason ever listened to his own radio stations? I don't think so because if he did he would know how bad and dated they sound not to mention the commercial load from hell.

Why does he believe that people will seek out his CBS radio stations any more than they have with AOL Radio and AOL is also a has been.

If Dan Mason really knew radio he would be issuing an edict to all his Program directors to improve their product immediately top to bottom. He would also give them the tools they need to do so.

Instead he allows stations to cut staff at will and basically plays whatever he is dictated to by the record labels.

That is a dated model.

Anonymous said...

LAUNCHcast, LAUNCHcrash. The dumb quota must be awful high at CBS these days.

radio, a friends ipod with commercials said...

Seth Godin Said: The music industry melted down to nothing, because the people in charge kept firing or disempowering the
people who actually could have done the right work because they cared. They systematically dismantled it because they kept trying to preserve the status quo by bringing in “yes men” rather than challenging the status quo and building something better.
http://www.hear2.com/
Sounds like radio?

Point two:
"CBS wants to stick it to Mel Karmazin and Sirius XM and looking to the Internet to fulfill its fantasy"
You forgot to mention HD, or did you? Why bring up the dead!
HD was built to compete head on with Satellite radio. Beside the technical issues, HD is missing the most important thing. Content!

Anonymous said...

CBS has had quite the checkered past with its radio division. Remember Mob guy Isgro and their L.A. CHR station and similar stuff going on in Philly. None of the people involved with CBS radio today were there then although CBS did have another bout with payola, admitted guilt and paid a hefty fine. Those people are still around.

1 hoo nose said...

John, You may be right about how much revenue CBS Radio is getting from their on-line. Jeff Zucker of NBC admitted on-line revenues are not what he expected them to be. Once again Dan Mason has all the answers except that they are all wrong.
Mediapost: "NBC's Jeff Zucker seems exceptionally bearish about the Web these days. In a lunchtime keynote address at the UBS global media conference today, he said that online ad growth at sites like Hulu.com had proved disappointing recently.

"That marketplace has really, really slowed dramatically," Zucker told the audience. "It's still a growth area, but I don't think it's what we thought it would be."


Consider, FT.com reported recently that the site took in an estimated $70 million since launching one year ago, and was on track to overtake YouTube in revenue.

What's more, the current economic meltdown could spur huge growth at Web TV sites, if consumers with broadband decide they can no longer justify the cost of paying for cable TV.

Already some cable companies are taking steps to stem defections from cost-conscious subscribers. Comcast executive vice president Dave Watson spoke this morning at the UBS conference about a new discount plan that offers 50 video channels, and additional music channels, for around $30 a month. If such discounted plans aren't enough to keep consumers paying the cable fees, Hulu.com and other Web TV sites could be poised to grow their viewership -- and, presumably, their ad revenues -- much faster than anticipated. "

BB said...

ANONYMOUS said...

GORMAN F-YOU. WHO THE HELL ARE YOU TO INSINUATE THAT CBS RADIO HAS ANY PROBLEMS THAT EVERYONE ELSE DOESNT HAVE TOO, YOU NITWIT. DID YOU KNOW THERE IS A RECESSION GOING ON. WE ARE ALL AFFECTED, A-HOLE. CBS DOES NOT HAVE A CHOICE. SHOWE ME ONE COMPANY THAT IS NOT LAYING OFF ITS EMPLOYEES. CBS RADIO WILL BE AROUND A LOT LONGER THAN YOU, IDIOT. MIND YOUR OWN FRIGGING BUSINESS, MORON.

This post is EXACTLY why terrestrial radio (and other traditional media) is dead.

Anonymous said...

Just like CBS to pick up something that another company dumped. Van Halen dumps David Lee Roth, CBS picks him up. CBS dumps him, Van Halen picks him up again and he is a superstar again.

Launchcast is a loser. There are so many better services. Is CBS trying to claim that on line listeners are tuning in their terrestrial radio streams? I find that laughable.

I was not aware of the Comscore Arbitron on line ratings either. I listen to a half dozen internet radio stations that only broadcast on line. Those dont even count?

TADPOLE said...

I thought MY CBS market was bad. I will keep that one a secret for now. At the right time - do I have stories or what. Even one about Dan Mason.

You guys in CLeveland are screwed with this Chris Maduri "excutive VP" (well pardon me).

He announces the changes then blames his valet for them just in case they don't work out.

Read: "The idea of going DJ-free came from radio consultants and WKRK general manager Tom Herschel."

So this is the guy that takes the fall. It is so CBS. I can't begin to tell you.

I like this one too:

"The format has been well-received in Hartford, Conn., and Philadelphia, Maduri said. "

It has? What station in Philly is he talking about? Clear Channel's is called "Radio". I don't know Hartford. What station is he talked about there? Anyone know.

This is the best one:

"He stressed the changes are not for economic reasons but to improve the station and make it unique. "We feel that's a better radio station for Cleveland," he said"

Look, no offense to Cleveland. We know that city is in the shittoon with your steel mills and car plants closing. This Maduri guy says it has nothing to do with the economy to the press.

These guys must be shining Dan Mason's shoes to keep their jobs in Cleveland.

Gorman, I don't know what you are doing in that city but we need you where I am (tell you soon) quickly. Our guy is not as bad as Maduri but just as dumb.

Anonymous said...

we call d.m. 'ambien' because when you talk to him it is like talking to someone whose mind is half asleep like a sleepwalker.

he is the only person i know who you can have a conversation with and know he has forgotten every word of it by the time its over.

Anonymous said...

Mason doesnt even realize that he is doing Karmazin's dirty work for him by getting rid of Opie and Anthony. whatta jerk.

Anonymous said...

We compare notes with our Clear Channel bretheran in our market. Clear Channel wins hands down as being the worst place to work and everyone fears another round of cuts. We come in a close second more so because of the politics and a jerk of a manager who thinks and calls himself the Godfather. The workplace is toxic. At CC they have a lecherous manager who talks to your chest. Here we have one who has an icy cold stare and knows it. Radio used to be fun. Now it is just plain dumb. For a woman in this business, it just is not worth it anymore.

Anonymous said...

John Hogan, Dan Mason, Sam Zell, what's the difference really?

Anonymous said...

Hey John you must have really pissed off CBS Radio. I got this from Audio4cast this morning and it quotes a radio trade.

They are trying to do the spin about CBS Radio and AOL Radio as a great partnership but did not mention anything about the limitations of surveying how successful the partnership really is.

Another thing. Do you know anyone that listens to terrestrial radio on their iPhone? I sure don't.

Here is the story:

AOL is happy with CBS RADIO

Posted: 09 Dec 2008 10:07 AM CST



In an article in today’s Radio Business Report, Kevin Conroy, Executive Vice President at AOL, says that their association with CBS RADIO, which began in March, has been very successful. Conroy elaborates on the elements of the relationship that made it so, and has some words of advice for the industry.


AOL CBS widget

With the partnership, AOL gained the benefits of CBS Radio’s core competency in radio, while CBS gained the benefits of AOL’s successful online platform with more than 10 million unique visitors per month. Together, they developed some platform extensions which improve the listener experience and will further expand the listener base. Those include a media player with increased functionality and listener choices, widgets and tool bars that expand access to social network sites, and what Conroy refers to as a breakthrough app for the iphone.

It’s been a groundbreaking year for both companies and for online radio, according to Conroy, who says the lesson to take away from their success this year is “ that by carefully watching market trends, being willing to rethink your business, focusing on your core competencies, and delivering what consumers want most, you can achieve a remarkable turnaround against seemingly insurmountable odds.”

It’s an excellent message. AOL and CBS did indeed put aside what could have been perceived as head to head competition, and instead created a partnership that focused on building a better listener experience. That’s made AOL and Kevin Conroy happy, and I suspect it’s made CBS happy as well…

DelColliano rocks! said...

You guys who complain that Jerry DelColliano goes too easy on CBS - you are wrong. Read his www.insidemusicmedia.com today. He slams the Cleveland CBS station for firing their airstaff and replacing them with an automated rock format. He doesn't mention Mason by name but as Gorman likes to say "fish stink from the head".

Anonymous said...

From RBR.com. Right, I believe you, Les.

No rush to sell CBS Radio stations

CBS Corporation CEO Les Moonves told the UBS 36th Annual Global Media and Communications Conference in New York that the company is still considering offers for the radio stations it has put up for sale in 12 markets. In fact, some potential bidders are even interested in buying all 12 markets. But Moonves says CBS is not forced to sell in the current depressed market, so it may sell some stations now if it can get good prices and sell the others later when things improve. As for the radio business, he calls it "challenged" but still a viable business. Yes, radio ad sales are down, he noted but not down as much as at the CBS O&O TV stations.

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