Sunday, April 5, 2009

Radio: Same old song and dance

Back to reality.

The annual Rock & Roll Hall of Fame and Museum induction ceremonies were held in Cleveland this past Saturday.

The inductions capped off a full week of revelry and promotions in advance of the main event.

I ran into music industry people I hadn’t seen for years because the only time I ever run into them are at events like this, which, these days, I don’t go all that often.

This was the first time in twelve years the induction dinner was held in the city where the Rock Hall resides.    This one’s special.  We worked hard and politicked non-stop to get that Hall of Fame built here.    The inductions will now be held in Cleveland every third year.   And I’m all in favor of anything legit that brings more money into this region than it takes out.

That used to be true about radio in this market.  Today, Clear Channel, CBS Radio, Salem, and Radio One funnel every penny they bill out of the market to service their massive debts.  There’s no reinvestment to their city of license.

Cleveland, like all Rust Belt cities, has its well-deserved insecurities. It’s a city in dire need of reinvention and has tripped, stumbled, and fallen in its challenge to come to grips with the twenty-first century.

But Clevelanders do care about its reputation, its future, and new leadership is emerging.

That’s more than I can say about the National Association of Broadcasters (NAB).

When the press release from the NAB arrived on Wednesday, I thought it was an April fool’s joke.

But it wasn’t. 

It announced three new members of the NAB board.  I’ll focus in on one name: Cumulus Media Chairman, President and CEO Lew Dickey.

Let me say it again.   I couldn’t make these stories up if I tried.

Before you ask – yes, it did mention his bachelor's and master's degree from Stanford University and an MBA from Harvard University.  It just stopped short of saying “always the smartest man in the room.”  

You know his m.o. – once you get past conscience, the rest is a cinch.

I guess it takes a narcissist to know one.   Isn’t that right, David “Fumbles” Rehr?

Stashing Lew Dickey in the NAB as a board member, Fumbles?  Correct me if I’m wrong.  Aren’t board members supposed to bring some measure of credibility to an organization or company?  Lew Dickey?  The guy who flies to his hometown to personally demotes his sales manager on a whim?

Who did Dickey beat out for the third board seat?  Farid Suleman?

Maybe Fumbles is betting on Citadel going south before Cumulus.

Or maybe Fumbles wants to know how Lew pulls off being on his own board so he can pay himself a lucrative bonus even when his company’s on a highway to hell.

Look, it’s bad enough Fumbles completely blew the streaming audio deal for the radio industry.

Could someone please tell Fumbles that only losers say, “it could have been worse” when defending a botched negotiation?

Even a narcissist like Fumbles realizes he’s death on legs at the bargaining table. So, now he’s telling the RIAA that he refuses to negotiate the performance tax fee for terrestrial radio – even after Congress told him, “Go away, kid.  Don’t bother us.  Work it out.”

Last week, Fumbles even dropped an “over my dead body line” regarding the fee to the press.  

Brilliant.   You want to write your obit, too, Fumbles?

I’d rather be proven wrong but with each passing week, Fumbles is losing what little Capitol Hill support he had for radio to keep music programming free.

Fumbles doesn’t have the fight in him.   He whines. He cries.  It’s not fair.  He’s so bewildered at this juncture that he’s even greasing the wrong palms.

Let’s cut to the chase.  Here are the facts.   We have a lot of stations that will be going dark soon.  We have a lot of broadcast companies that are bleeding red ink – and some just missed their Q1 payment.  

While Fumbles fiddles and fuddles the industry his organization theoretically represents, the RIAA is close to locking up the Congressional support it needs to force Fumbles into the ring.

Fumbles response with an anti-tax campaign puts radio solidly in a defensive mode.  With Fumbles leading the charge, believe me – radio has no defense.  And the RIAA has no shortage of offense.

Many of the panelists at last week’s SNL Kagan broadcast finance seminar admitted a loss of faith in the NAB’s ability to block the performance fee.

So what’s Fumbles’ next move?

The NAB is pitching D.C. radio stations to run promos in support of their “anti-tax” campaign. Come on, Fumbles.   Who are you playing this ruse for?  You know Capitol Hill. You’ll see a lot of under 50’s.  They’re the former 18-34’s from the last decade - the demo that radio ignored.  They’re on Blackberries and iPhones. 

I don’t have to tell you that the labels don’t need radio anymore.   They’re looking for a bailout.  RIAA head Mitch Bainwol sees himself as the cat and you as the mouse.  Radio was important to the labels when it used its playlists for its sales staff to pitch record stores and other retail outlets to buy product based on airplay. 

Been in a record store lately? How about Best Buy and WalMart?   Is it your imagination that their square footage dedicated to selling CDs shrinking?   

The convergence to on-line is escalating rapidly.  The TV networks know that.  One word: Hulu.  Recording artists know that.  That’s why the acts making money are marketing themselves on line rather than rely on a label.  The only one who didn’t know that was Fumbles when he stuck radio with streaming royalty fees that it can’t afford.

Oh, yeah, Fumbles.  Almost forgot.  Who needs radio on-line when you’ve got HD Radio?

Putting HD Radio in the same league with streaming audio is like saying there’s no difference between a Yugo and a Lexus because they both have steering wheels.

Once again, Fumbles.  Brilliant.


Anonymous said...

"Before you ask – yes, it did mention his bachelor's and master's degree from Stanford University and an MBA from Harvard University. It just stopped short of saying always the smartest man in the room.”

This clown has the same shitty Harvard MBA shmirk as Bob Struble:

Yea, Harvard must crank out these slimy con-artists. Bob, I think that you should convince Fumbles to kill all online streaming of terrestrial radio stations, and put the future of this industry in your hands, over terrestrial HD Radio stations - LOL!

Anonymous said...

John, congratulations on a great week in Cleveland. You guys at WMMS led the way even if the political types try to take all the credit.

You said it yourself about judging people by those they consider friends. Lew Dickey and David Rehr are two peas in a pod that care only for themselves.

Eventually they will turn on each other.

Anonymous said...

Maybe it's just me, but I blame Fred Jacobs

Anonymous said...

There is no doubt that radio's future depends on the internet. So why did the NAB make it nearly cost prohibitive for most stations to stream on line. The more listeners you have, the more money you pay. The more music you play, the more money you pay. It works against being a growth business. Is David Rehr really that stupid or is there a hidden motive here?

Anonymous said...

He's really that stupid!

Anonymous said...

The proper way to review this is in dealing with the Copyright Review Board. Many mistakes were made, among them was making SoundExchange the sole distributor of funds. Equate that with the fox in the hen house if you will. We have to go back to ground zero and start over again. Consider that free market economy which is what radio has been for the music industry has now been adopted by internet businesses. There are new methods to monetize, side door instead of front analogy. Internet radio will play a major role in exposure of all genres of music to the masses quite similar to what MTV did in bringing avant garde filmmakers into the mainstream in the 1980s. Let cooler heads prevail and find an intelligent method to approach this matter. Please.

Anonymous said...

"There is no doubt that radio's future depends on the internet. So why did the NAB make it nearly cost prohibitive for most stations to stream on line."

Because Bob Struble has Fumbles, the NAB, Diane Warren, and the FCC so far up his ass that he has convinced them that the only thing that matters is HD Radio.

Anonymous said...

Gorman, the inductions should be in Cleveland. It has a history of great radio going back to the big bands. It was always cutting edge, right up until deregulation turned the city's radio into cookie cutter formats. Cleveland led the country in being the first city where FM penetration surpassed AM. It is time for Cleveland to show the world it still has the creative people and juices to make it happen. As a former Clevelander I want to see my city do it again.

Anonymous said...

To the jokesters who defend Fred Jacobs and his consultancy: This morning's Inside Radio reviewed the Boston radio market billing. The biggest loser was Fred Jacobs' "Radio" format. Here is Inside Radio's report: Greater Media’s WBOS took the biggest hit, falling from $8.2 million to $3.650 million as it flipped formats last February from adult alternative to modern rock as “Radio 92.9.” I listened on line to jacobs's Cleveland version of "Radio". Its the same dull format. Could someone tell Mr. Jacobs that any iPod on shuffle sounds better.

Anonymous said...

The Rock Hall awards looked (and sounded) great. Too bad Clapton could not have been there too for that amazing close.

In regards to streaming audio. I do not listen to the radio in my car. That is reserved for my iPod connection. I do listen to radio on line at home and at work and mostly to stations that only broadcast on the internet. There are so many great choices. I take it over normal AM-FM radio and satellite radio.

I'm 37 years old, married, 1 daughter. I still listen to new music and all styles of music.

Anonymous said...

I wondered what happened to WBOS, it is on one of my presets and although I never listened to it a lot, it used to seem to have quality music on it whenever I did listen to it, it really sucks now, figures the Coot programmed it. Guess i now have a free preset. Did someone mention HD radio?? What the hell is that??? Is that the krap thats making noise all over the AM band? The stuff that cuts the range on FM into half (or less)what it used to be? You mean that IBOC actually still exists? I have one question: Why?

Anonymous said...

Man, the answer is very clear to me.

The reason why David Rehr and the NAB cut the bad royalty deal for streaming audio is to sway chains to continued HD radio support.

If radio abandons HD radio promotion, marketing and broadcasting for streaming audio on line it will kill any chance of HD radio's success.

Rehr will push a flawed system that no one wants and in the process put terrestrial radio out of business just in time for the convergence to the net.

If there are any engineers reading this I would like to hear your opinions of HD radio. At my place my chief calls it dead weight.

Radio wake up.

Anonymous said...

The NAB convention in Vegas is coming up in a couple of weeks. I plan to attend and also plan to be very vocal and ask the hard questions that everyone has been avoiding about our business. Among them - how long are we going to chase HD radio. I have serious doubts about its success. Radio is a one to one medium. Don't confuse the issue. The fastest way to reach a potential listener is to give them what they want in the most efficient manner. I feel we already have that with existing analog terrestrial radio and internet streaming audio. We do not need HD radio and the incentives are not worth it in earned revenue. Can it be any clearer than that?

Anonymous said...

WBOS was never a good adult rock station. I didn't like their airstaff and their music was always in a state of confusion. Toward the end of their run in that format they sounded like they were confused and going after both WZLX and WAAF by playing Aerosmith and Jane's Addiction.

The really good adult rock station was The River except for their signal which you could not hear on the South Shore or even parts of downtown Boston. The solution would have been to hire the River staff to WBOS and reach all of Boston.

Now that WBOS is doing its robot radio format and poorly I might add, the River now sounds like WBOS used to - BAD. They havent started playing Aerosmith yet though their music mix is jarring and has gotten pretty unfamiliar. I don't mind being turned on to something new but in a half hour I should recognize at least one song that was played.

Boston is a city that could use a good adult rock station like the River used to be. This used to be a very good city for radio. Not anymore.

Anonymous said...

If you would rather not wait I will tell you how the movie ends. David Rehr will stall and stall until his Las Vegas NAB Radio Show and announce in his opening speech that he is declaring war on the RIAA and will use all the "over my dead body" lines he can pick up from late night television. By then Congress will be tired of him rubbing their face in it and will take action themselves and it will not be a pretty ending for the radio industry. Get wise, fellow radio people. David Rehr does not know how to negotiate. We need a healer not a divider.

Anonymous said...

Anonymous said... "You mean that IBOC actually still exists? I have one question: Why?"

The main purpose to IBOC is to jam the smaller broadcasters off adjacent-channels - that is why Bob Struble and his fucking cohorts are still pumping money into this outrageous scam. The larger broadcasters have more of the bigger 50kw sticks, which cause more interference. There really needs to be an investigation into iBiquity, the NAB, and the HD Alliance by Congress, the FBI, and the FTC for Struble's false consumer-marketing claims.

Anonymous said...

Anonymous said... "Rehr will push a flawed system that no one wants and in the process put terrestrial radio out of business, just in time for the convergence to the net."

IBOC has already trashed analog AM, and the 10db FM-HD power increase will trash analog FM. Sruble is trying to force the FCC into mandating IBOC, by repurposing the bands, and move the smaller broadcasters to the expanded EXP band (this would be a death sentence for those stations, because there are no radios, just like IBOC). IBOC is all about further media consolidation of terestrial radio - destroy the community-based radio stations, and replace their programming with IBOC's side-channels. Sound about right, Bob Struble?

Anonymous said...

obviously no one has noticed that WBOS is now in the top 10 Adults 25-54

Anonymous said...

Being #10 in any demo isn't saying much, my friend. I can program a better station on my iPod. At least the songs won't come up in the same time every day. How many songs are you rotating? 150, 200. Give it up, Buzz. Youre a classic rock guy. Stick with what you know. You too, Coot.

Anonymous said...

Congress, the NAB, the RAB, the RIAA and everyone else involved in this mess need to learn and learn quickly about the new free market. Google and other on liners are reinventing the way business is done. You have mentioned it in your blog and I hope you elaborate more. You were right to say radio was actually the template for it by playing music for free. Now the same rules apply to more and more things while radio and the music industry want to take it the opposite direction. I hope the internet radio side is better organized. I think terrestrial may be a lost cause.

Anonymous said...

Lew Dickey. You have him pegged. Never met a man who loved himself as much as he does. I think Fumbles might have made a mistake. Now Lou Dickey is there to correct his grammar and he will.

Detroit Diesel said...

From Broadcast Law blog:

Congressman Boucher to NAB - Accept Performance Royalty - How Much Would It Cost?
The week, Congressman Rick Boucher, a member of both the House of Representatives Commerce and Judiciary Committees, told an audience of broadcasters at the NAB Leadership Conference that they should accept that there will be a performance royalty for sound recordings used in their over-the-air programming and negotiate with the record companies about the amount of a such a royalty. He suggested that broadcasters negotiate a deal on over-the-air royalties, and get a discount on Internet radio royalties. Sound recordings are the recordings by a particular recording artist of a particular song. These royalties would be in addition to the payments to the composers of the music that are already made by broadcasters through the royalties collected by ASCAP, BMI and SESAC. Congressman Boucher heads the Commerce Committee subcommittee in charge of broadcast regulation, and he has been sympathetic to the concerns of Internet radio operators who have complained about the high royalty rates for the use of sound recordings. Having the Congressman acknowledge that broadcasters needed to cut a deal demonstrated how seriously this issue is really being considered on Capitol Hill.

The NAB was quick to respond, issuing a press release, highlighting Congressional opposition to the Performance royalty (or performance tax as the NAB calls it) that has been shown by support for the Local Radio Freedom Act - an anti-performance royalty resolution that currently has over 150 Congressional supporters. The press release also highlights the promotional benefits of radio airplay for musicians, citing many musicians who have thanked radio for launching and promoting their careers. The controversy was also discussed in an article on In the article, the central issue of the whole controversy was highlighted. If adopted, how much would the royalty be? I was quoted on how the royalty could be very high for the industry (as we've written here, using past precedent, the royalty could exceed 20% of revenue for large music-intensive stations). An RIAA spokesman responded by saying that broadcasters were being alarmists, and the royalty would be "reasonable." But would it?

Last month, the House Judiciary Committee held a hearing on the broadcast performance royalty. The hearing demonstrated the seriousness with which the House Committee viewed the prospect of a royalty being imposed on over-the-air broadcasters, with several Congressmen issuing warnings similar to that conveyed by Congressman Boucher, warning broadcaster representatives to sit down and work out a royalty with the recording industry, or Congress would impose one on the broadcasters which they might not like. At the same time, broadcaster representatives emphasized an issue that, while important before, has become more crucial now -the economy and the financial health of the broadcast industry. With broadcasters suffering from the poor economy, a royalty could be crippling to many. But on the question of how much the royalty would be, RIAA President Mitch Bainwol echoed the line from the RIAA spokesperson in the Bloomberg article, saying that it would be "reasonable." When asked what that meant, he said the it would be a bit more than is currently paid by broadcasters to ASCAP, BMI and SESAC (approximately 4-5% of revenues), saying that something in the area of 6-8% might be normal in these sorts of situations.

That range of numbers - the first numbers that I have heard from a representative of the recording industry - is somewhat surprising. Two weeks ago, the recording industry was in the Court of Appeals arguing that a Copyright Royalty Board decision setting a royalty of 6-8% of revenues for satellite radio was too low. In the Internet radio world, SoundExchange asked for more than 30% of gross revenues, and ended up with a per performance royalty that most webcasters have said works out to 75% or more of their revenues. Yet the recording industry is saying that 6-8% would be reasonable? It will be interesting to see if that number is repeated in other forums as evidence of their reasonableness, or if this was a one-time statement of this individual, not adopted by the industry as the benchmark for what they seek.

The back and forth at the hearing may provide some indication as to the next steps in the process of trying to impose these royalties. There was significant discussion of an independent study to assess the impact any royalties would have on radio operators and musicians. While no party publicly objected to a study, there has seemingly been no follow up to authorize that study since the hearing. And, as the recording industry said that the study should not slow the adoption of the royalty, one questions why a study would be authorized if Congress was planning to go ahead and authorize a royalty before the results of the study were available. Why let the facts get in the way of legislation?

While Congress heading for their Spring recess, look for more action on the royalty in May after they have returned.

Anonymous said...

No, being in the top 10 25-54 for BOS is a major accomplishment, something that never happened as a AAA -- in fact in the recent PPM it's 9th. And for those counting, WZLX is #3. Would love to hear your iPod one day, though.

Anonymous said...

Couldn't agree more with "Happy Jappy" up above! Well Put!

John Gardner said...

A Triple A should be in the top ten in Boston. It's a young, educated city. More than a few AAA artists live in and around Boston, too. KCTZ in Minneapolis has been in the top ten 12+. I don't know what is the most shameful about WBOS. The fact that it is a billing disaster or a ratings disaster. Up until a few months ago the River would have easily been top 5 25+ if they had a full market signal. You can't pick them up downtown or on the south shore. Now The River sound like WBOS used to so I expect it will go under a 1 share.

Anonymous said...

Who cares? WEEI will have the number now. GO SOX!

Anonymous said...

"Translation: We will be firing more announcers and replacing them with more voice-tracking and syndication – in all dayparts."

Tuesday, April 28, will be the big day.

Anonymous said...

John, where have you been? It's been nearly 2 months since your last post....