Radio: What's changed?

You wonder why so many look upon the radio industry as a collection of Tin Men these days?

I’m nearly certain that no maritime group or organization ever named “an excellence in shipmasting” award after the captain of the Titanic.

I don’t believe the airline industry will name an “excellence in piloting” award after the two Northwest Airlines pilots that dozed off and overshot their Minneapolis airport destination.

Even Wall Street - in its worst behavior - never named an administration award after Albert “Chainsaw” Dunlap.

But leave it to the National Association of Broadcasters to further humiliate the radio industry by naming an “excellence in broadcasting” award after Clear Channel co-founder and patriarch Lowry Mays.

The Clear Channel Foundation and one of its primary law firms, Wiley Rein, kicked in $125,000 to the dubious Broadcasters Foundation of America with that catch.

The ethically challenged Lowry Mays, in a prepared statement, said the foundation is about “helping others in the industry who have run upon difficult times.”

He could be speaking of the thousands of employees his company downsized over the past decade or he could even be referencing the ownership disaster his family conned private equity firms Bain Capital and Thomas H. Lee into.

One in his position with a cleaner conscience would’ve donated the $125,000 minus the “name the award after me” strings attached covenant.

It’s true there was a time when Lowry Mays’ Clear Channel was a radio industry leader. Whatever moves they made, others followed.

But you’re no longer a leader if no one is following you.

Was anyone stunned by the sudden Chapter 7 liquidation of liberal network Air America? I’m surprised that it lasted as long as it did. It was to a radio network what Terry Schiavo was to life support.

Air America had the wind sucked out of its sails when it chose to be a network instead of a syndicator of talk programming. It was undercapitalized, overstaffed, and mismanaged.

Whatever the case, I won the bet by predicting that of the two artificially-alive radio entities Air America would go belly-up before HD Radio. Speaking of….how many HD Radio units were sold during the Christmas shopping season? Yes, you can include Zune sales.

You have to give props to Rush Limbaugh. Ratings stunts are the oldest trick in radio’s playbook - and Limbaugh parlayed his phony attempted heart attack as a perfect roll-up to the winter Arbitron.

Rush also deserves recognition for hanging on to his showboat crown. Rival Glenn Beck pulls off an appendix scare, Rush tops him with his ticker fib. One can only imagine the medical ills these gasbags will conjure up with for the spring book.

Then there’s Howard Stern. Will he stay or go? Those that know aren’t talking - but the sure bet is that wherever Howard goes Mel Karmazin will follow - or vice versa. Their fortunes, including agent Don Buchwald’s, have been intertwined for twenty-four years and what makes anyone think that’s about to change?

Is it even worth speculating about the next half-dozen or so radio groups about to file for bankruptcy protection?

The Citadel bankruptcy is yesterday's news. Its CEO Farid Suleman is a kept man. Kept by the bankers who can’t figure out his bean counting schemes. How could anyone who made that much money for Mel fall so flatly on his face? Then again, did he actually do anything to make Mel money other than to provide an accurate bean count? When he was at CBS/Infinity was all the Farid hype just hype? ‘Fraid so.

Farid gave himself a nice Christmas present and stuck his investors with coal. He portrayed himself basking in the limelight as the radio industry’s new big time operator of the third largest broadcast chain.

Instead, he proved that he was pulling everyone else’s.

Rewarding failure stifles growth and innovation. It sends the message that wrong is the new right.

Until radio addresses that fact the bad news will continue to outweigh the good.

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Walls of the Buzzard

Radio: The song remains the same

You haven’t heard from me because there’s been little to write about.

I know. There was Citadel and NextMedia. Those were inevitable.

Citadel. It’s the tale of the bean counter that couldn’t count his own beans. There are reasons why proficient number twos make terrible number ones. Number twos believe in cutting and firing their way to a victory they never achieve.

That’s why other radio chains utilizing the equivalent philosophies will be condemned to same fate.

Are they even worth writing about when we already know the end of the story?

Then there’s NextMedia.

Its business plan was to buy up smaller market stations and sell them to greater fools for more than they paid for them. One problem. They paid some hefty multiples to acquire these stations.

They initially benefited from a bounty of takers but the company didn’t heed Kenny Rogers: Know when to hold them, know when to fold them.

There was that moment in time when they should’ve sold while the greater fools were still buying- but exit strategy disagreements ensued - and Next Media ended up holding on to yesterday.

There’s more.

Lending institutions continue to hold on to their bad assets and allow those that got them into this jam to continue running their empty shell companies.

What was that quote from Citadel’s CEO and architect of doom Farid Suleman?

“Business will continue as usual.”

I keep saying it over and over. I couldn’t make this stuff up if I tried.

That means Citadel, and the other major radio chains, will continue to downsize and devalue their programming, promotion, and marketing. Instead of investing in content, they’ll pick up long-in-the-tooth Donnie Osmond or some other syndication off the bird. Live and local? Get real. The stink of human costs money. Promotion and marketing? That’s a needless and costly expense.

It wasn’t all that long ago, actually, that the only stations that carried nets and syndication in their most important dayparts were small market stations.

Maybe Farid was duped into believing that Donnie can host the 21st century version of Don McNeill's Breakfast Club.

I’ll bet Suleman truly believes that Citadel could survive as a content provider for news, sports, and programming.

It gets better. The other radio chains teetering on bankruptcy believe their eventual bankruptcies will be considered as a cost of doing business.

What about real broadcasters? They’re exercising great patience. Two words: Fire sale.

Radio: It's the same old song

Please understand that it’s as monotonous for me as it is for you to keep harping on the same old subjects day after day, week after week. You want to read it as much as I want to write it. Yes, Dickey, Suleman, Hogan, et al continue to coast and boast while their empires crumble.

In today’s agitated cutthroat media market, competency is expected and faultless implementation is tolerable. If you believe that, you’re burnt-beyond-recognition toast. The decisive competitive advantage is passion and desire. Success is achieved by creativity and understanding the marriage of art and commerce.

The reports coming from the major radio chains whiff of extreme anxiety. They can’t afford any more distressing news. The chains are doing their best to block their dire news from hitting the trades.

Look, politicians do it. Other CEOs do it. Even Tiger Woods in his own way did it until he went from nailer to nailee.

Heading off bad news at the pass is standard operating procedure, but it risks dispersion of the real negative information to an even larger group, which in due course draws even more attention to crises old media is facing.

Down slightly is the new up. Failure is rewarded. That’s radio logic. It’s also radio nowhere.

I’ve been hearing per inquiry spots on the top-rated morning drive shows since the beginning of the month. Some stations are doing commercial-free (and billing them as such) workdays.

Year end or decade end - take it any which way. It has the same melancholic ending. Radio is in far worse shape today because of mediocre leadership, an inability to plan long term and identify new competition, and a refusal to replace the dated components of radio programming.

John Hogan was wrong. Less is less is the new less is more.

Remember, radio’s dormant, not dead. Once we get the spectators off the field, the pros can get back to the game at hand.

I’ll be back in a few days.

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The early days of TV simulcasts

Lie of the Tiger

You can sum up damage control straightforwardly.

When you dig yourself in a hole - the first thing you do is stop digging.

Or if you’re Tiger Woods - know the difference between a sand trap and quicksand.

Tiger Woods is damage control gone wrong.

I have a friend who covers the PGA for news organizations.

A few years back, when everyone was talking up Tiger as the world’s greatest golfer - and a fine role model, he told me that if word got out on what he was really like - he’d be toast - and wouldn’t know how to handle it.

When Tiger turned 21, Charles Pierce did a piece on him in GQ that touched upon his penchant for hot babes and dirty jokes.

Following the GQ piece he refused to do informal interviews, claiming that he couldn’t understand “tabloid scrutiny.”

When your 21 and single and you can pick and choose from a bevy of golf groupie babes. You’re a kid. It’s expected.

You don’t know Jack if you think Arnold, Gary, Tom, Lee, Bobby, Ben, and Sam didn’t partake in the spoils of the links back in their early days, too.

Sports? Come on. That’s where the real toned and slim babes are. Even rock stars fantasize on sports sluts.

In the fifties, when it was an honor and privilege to cover national politics, Sen. John F. Kennedy had an understanding that reporters would refuse to even tell their closest friends outside the business about the bevy of beauties he was bedding.

For over a decade, Tiger knew that the PGA would permanently bounce and blacklist any reporter who’d dare tell Tiger tales.

But there comes a time.

Tiger, you’re 33. You’re married with two young children. For their sake, if not your own, you should know better than do flaunt your groupies, especially when they’re down a few notches or two from a decade ago.

Tiger, come on. You’re doing hostesses and waitresses from casinos, strip joints, pancake restaurants - and two porn stars? Tiger, you’re slumming in rock star regions! Maybe you prefer your groupies pierced?

You can’t blame Tiger for succumbing to the fantasy that he could get away with these trysts but, in the end, what happened in Vegas didn’t stay in Vegas. Or New York. Or Atlanta. Or Newport Beach. Or Bay Hill.

If I had an endorsement deal with Tiger I’d demand a refund. Here’s Tiger projected to surpass $12 billion in career earnings next year - 90 percent of that from endorsements - and he’s throwing Ambien - the prescription drug for insomnia - a freebie?

Number two of eleven - and counting - mistress Rachel Uchitel told the press that Tiger turned her on to sex on Ambien. “You know, you have crazier sex on Ambien,” she said. “You get into that Ambien haze.”

Want to bet against Tiger selling more Ambien than Nikes in the past twenty-four hours? Didn’t think so.

How many guys called their doctors this morning for an Ambien script?

Chances are calamity started with Tiger’s wife Elin sensing the scent of other women - and ended with a damage report covering everything from a fire hydrant to her marriage.

Tiger may be one of the greatest golfers in the history of the game but a member of the 32819 zip code chapter of Mensa he’s not. You don’t call one of your eleven back door honeys and leave a voice mail saying, "My wife went through my phone and may be calling you....."

Who’s responsible for this admission impossible? Whoever talked Tiger into that “transgressions” line should be off the payroll. You don’t admit to something ambiguously - then run and hide - and, worse, cancel an appearance at your own tournament!

Now, and for the foreseeable future Tiger will be smack dab center in our public consciousness. What his handlers have to worry about is that he doesn’t end up on a lower stem that feeds off Entertainment Tonight and E! where hyperbole is shoveled out by the ton.

How about Tiger Woods, Steven Tyler, David Letterman, and David Duchovny doing a togetherness PSA for sex addiction?

Nearly everyone in radio at one time or another will be faced with crisis management and damage control. It comes with the territory.

My advice? Come clean, tell the truth and be transparent. If you’re not you’ll be hunted like Tiger - and the incident will spin out of control.

Either that or blame it on the Prophet System.
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Fleetwood Mac Attack

Radio: Smart phones and dumb radios

There are smart gifts and there are just plain dumb ones.

Let’s handicap the Christmas shopping season with two products that relate to radio.

Say you have a product that few know or care about, which features a medium in desperate need of reinvention and revitalization? Do you really believe that it’s on anyone’s Christmas wish list?

A recently released survey of 4,225 U.S. consumers by Changewave, a research network that spots budding trends and technologies, show that twelve percent plan to buy a smartphone in the next ninety days.

Last Christmas, iPhone owned the smartphone market. This year, iPhone’s 3G S is up against real competition from the Droid, the new Blackberry Storm2, a new Palm Pixi/Pre, Motorola’s CLIQ, and the HTC Hero.

I’m saying Steve Jobs has little to be concerned with on that front. His iPhone remains the superior product. It enjoys a two and a half year head start -and is numero uno in Brand Keys’ annual survey - with a 74 percent of satisfaction rating versus only 43 percent for Blackberry owners.

It’s true that most of the time the pioneers get the arrows. But Jobs has the unique ability of taking roads less traveled, which turn out to be the shortest distance between two points.

Sure, Google is great, Google is good. Let us thank them for our search - and our e-mail, maps, social networking, video sharing, and advertising - but can they make a go of it in the smartphone biz with the Droid?

The iPhone’s not invulnerable. It has its Achilles’ heel. AT&T.

Of all the iPhone users you know - is there one that has not complained about AT&T?

It remains to be seen what becomes of the iPhone-Droid rivalry. My guess is that Jobs will deal with iPhone’s AT&T exclusivity. He doesn’t really have much of a choice when his two chief rivals, Motorola’s Droid and Blackberry’s Storm2, are tied to Verizon.

Advantages? iPhone has over 100,000 apps - ten times the amount of Android, its nearest competitor. Then, again, what product apps will translate into dollars? For example, name one radio station app that will increase its listenership and sales.

This is strictly empirical. Roughly half the smartphone users I know connect to Internet radio - and none via an app. Of those that do, most listen to out-of-town terrestrial, NPR national, or Internet-only stations.

We’ll revisit this topic in next quarter.

Both Apple’s iPhone 3G S and Motorola’s Droid retail for $200 and offer an average $1,500/yr. plan.

Like Mac users, iPhone users are loyalists. If anything, I’d bet on the Droid cutting wide and deep into Blackberry’s Storm2 sales. It limped out of the box with a soft launch compared to Droid’s $100 million-plus campaign. Compared to both iPhone and Droid, Blackberry’s dated design negates any positives on the product’s attributes. Storm2 comes in $20 cheaper than the iPhone and Droid - and that sends a cheaper isn’t better message to consumers.

To some Sprint is a pariah best to be avoided. That translates to a limited market for Palm Pixi/Pre. It’s cheaper - $99 for the Pixi; $150 for the Pre - with an average $1,200/yr. plan. It’ll attract newbies and those in fear of being outsmarted by their phone. Beyond that? Not much.

The same holds true for the HTC Hero. Sprint is the carrier. Hero was the top-selling Sprint product prior to the Palm Pixi/Pre hitting retail. HTC claims it’ll have the heaviest promotional campaign of all smartphones, with its “You” campaign, pushing the Hero's personalization and customization abilities.

It’ll be a Christmas in the red for Motorola’s CLIQ. It’ll do well with the T-Mobile loyalists and young demos - don’t expect much beyond that. It has a boxed-in following, which will attract, at best, a few new consumers into their fold.

There’s also the Samsung Moment - but it’s hitting the market too late to make much of an impact during the Christmas season.

Now, we dumb down to a product that most in the radio industry have chosen to link with - HD Radio.

The only smartness connected with HD Radio comes from the crooked and crookeder Bob “Booble” Struble, whose iBiquity stuck radio with an investment they can’t get out of.

It’s a low-tech 21^st century version of Rebel Without A Cause. We have the major radio chains - and other investors - nervously eyeing one another, and continuing to play chicken with their properties while wondering whom their Buzz Gunderson will be.

By committing to HD Radio, the radio industry bought an apple for an orchard.

It’s perplexing. The economics of the radio industry are remorseless, but it’s still alarming to witness this continued cannibalism.

We don’t need more radio stations and formats - we need better radio stations and formats.

Ask anyone with Sirius XM or an Internet radio fan. They listen to the same two, three, four, five - and no more than six stations - that’s it. Most have a favorite and a second favorite. Offering more choice - especially when they're even worse than the conventional terrestrial fare - will not draw consumers to HD Radio.

Struble doesn’t always tell a Struble, which is synonym for not telling the truth. Sometimes he just talks out of both sides of his mouth.

Just a couple of weeks ago Struble released another torrent of press releases announcing new HD radio models, apps, and adapters and predictions on how well HD Radio will do at retail this Christmas. More lies - more Strubles.

The latest misadventure occurred when Struble tried to perfume his HD Radio hog with a new app and attachment.

We live in a compact, wireless world, Bob. Why would you sign off on an HD Radio iPhone app that requires one to go to a participating Radio Shack, and pay $79.95 plus tax for this bulky add-on HD Radio tuner, which you have to attach by wire to your iPhone? And, Bob, it can’t work with a car’s docking system because the iPhone’s 30-pint port connects to only one device at a time. Brilliant.

Please explain this to me. There isn’t a shred of evidence that this is HD Radio’s year at retail. If anything, you’ll sell fewer HD Radios this season than you did last - and that's even less than you did the year before and the year before that. Prove me wrong.

The time has come to recognize and own up to HD Radio as a major blunder. It’s not happening. It hasn’t in the past, it isn’t now, and it never will. DAB radio is a failure in Europe, too.

What’s taking place is simply not working.

I think you look at it a different way. Why work when you’ve forced radio to do all the heavy lifting for you?

After all, robbing isn’t the toughest part of heisting. The getaway is. That's what separates the pros from the cons.

Radio: Of golden turkeys and chucked ducks

Choices, choices. Who's most worthy of radio's Golden Turkey award?

Let’s bring out the three finalists.

Lew Dickey, President and CEO of Cumulus.

Farid Suleman, President and CEO of Citadel.

John Hogan, CEO of Clear Channel Radio.

Come on down.

Lew, Farid, and John have contributed immeasurable improprieties to the decline and fall of the radio industry. They’re the top executives at radio groups where failure is continually rewarded.

Let’s begin with Lew.

You’re Lew Dickey. You and your brother John boast of being amongst the select few mere mortals to be born with “these extra-large hard drives” in your heads. Your words, not mine. Say you’re right. So what? It’s not the hard drive. It’s what’s on it. The palpable mismanagement you’ve given Cumulus only reinforces the maxim, “garbage in, garbage out.”

You’re Lew Dickey and we can’t fault you for being so vain. Maybe you and John are the smartest men in any room. Okay, Lew, you are the smartest; John is a little slower - but close.

You’re Lew Dickey and anyone with the unfortunate fate of being involved with you and your Brainiac brother finish up in a quick spin through the official Cumulus revolving door.

You’re Lew Dickey and you and John know how to clutch your piece of the action while the company dissipates around you. On the day when Cumulus finally fades into the fog, you and John will wink, smile, look you the rest of us in the eye and paraphrase that old Connie Francis song, “Who’s Smarter Now?” as you walk from your corrupt deal wheel-barrowing bushels of cash.

And how about that Farid Suleman? Talk about rewarding failure!

You’re Farid Suleman. It’s all about bankrupting your company so thoroughly that its lenders are forced to keep you on since you’re the only one who truly knows how badly you screwed up Citadel.

You’re Farid Suleman and you lusted for own kingdom and got it - but you were King Midas in reverse. Everything you touched turned to crap.

You’re Farid Suleman and, you couldn’t even afford to keep one of your Pennsylvania stations on the air - so you just turned it off and fortuitously forgot to report that incident to the FCC, which you are obligated to do as a license-holder.

You’re Farid Suleman and you always wanted to be a number one and now you’ll have the dubious distinction of being the first CEO of a major radio chain to drive it into Chapter 11.

John Hogan? Have you gotten used to the mechanism and strings Bain Capital and Thomas H. Lee attached to your body?

You are John Hogan. Clear Channel led the way in voice-tracking and now, here you are - voice-tracked by Bain and Lee.

You’re John Hogan. You believe that we must flout the fact that local sales have as much to do with building relationships as ratings. Don’t confuse Bain and Lee with those facts. They plan to nationalize radio sales.

It’s Das Klear Khannel all over again.

Their radio markets are mere Klear Khannel satellite republics. There’s New Yorkistan, Los Angelistan, Philadelhiastan, San Franciscoastan, and Bostonia, and others too numerous to manage, er, mention.

Like the Soviet Union, it may work on paper - but in practice it will be a dismal failure.

Remember a few years back when you signed off on Clear Channel banning some songs written by John Lennon from airplay? You should’ve banned Vladimir Lenin, whose playbook has too much in common with Clear Channel’s.

You’re John Hogan and if your programming isn’t done locally, why should sales be trusted with those who know the market best? So you hire Chris Soechtig, the former Tampa sales director for the new position of Senior VP of sales operations to oversee the thousand-plus properties.

You’re John Hogan. Your national programmers control what everyone hears on the air. Now, Soechtig will be the counterpart for sales. We can expect those “one day fire sale” e-mails a few markets promoted to become uniform.

If it worked in Philadelphia, it’ll work in Detroit. Same lunch bucket market, right? Sorry, John. Didn’t mean to quote Dan Mason.

You’re John Hogan and you remember the old term “black dollars,” the buys agencies would set aside for urban contemporary formats, some which were on minority-owned radio stations. Clever sales managers at these stations would make sure the buys were spread to all of their properties.

It worked - and it kept many urban stations afloat during lean times.

Now, Clear Channel plans to do this nationally by creating an urban network and putting all of its African-American targeted formats under one umbrella. Buy one? You gotta buy ‘em all.

Okay, turkey of the year? It’s up to you. Lew, Farid, and John. You pick. It’s too close to call.

One more thing.

You can mark this date on the calendar since I’m making a rare, positive statement about the National Association of Broadcasters (NAB).

Yes, you read that right.

I’m thankful that the NAB chucked the duck and David “Fumbles” Rehr along with it.

So far, I admire the approach its new CEO, Gordon Smith, is taking with the Record Industry Association of America (RIAA) robber barons.

He’s not sending Congress and the RIAA stuffed ducks. He’s not making veiled threats to labels and artists. He’s not writing long-winded letters to the President.

What Gordon Smith is doing is telling the truth.

Radio doesn’t have money. It cannot afford the ludicrous performance royalty tax the RIAA wants to levy on the industry.

Radio is not in the bail out business for the labels.

I’ve said it before. There are no good guys here. When the labels were healthy, radio took advantage of them.

It wasn’t entirely their fault. Whenever the labels offered payola and other incentives for airplay - radio took it.

Radio took it whether it was illegal, semi-legal, or legal. It doesn’t really matter.

In the end, it nearly killed both industries. Music radio ceased to provide the soundtrack to popular culture and the labels pushed only music by artists and managers willing to give up a percentage of their royalties to fund payola.

Radio lost its ability to sell music and the labels have no solid replacement.

Before there is even a discussion on why the RIAA wants to siphon off of radio what it can no longer get from the consumer its labels screwed - Smith is telling it like it is. There is no money to be had.

Mismanagement on radio’s behalf, though real, is not an issue since the record industry suffers from the same disease. Smith didn’t have to say if the music’s not free, we’ll be all sports and talk.

The NAB still faces a tough battle in Congress. David “Fumbles” Rehr did nearly irreparable damage to the radio industry’s image during his brief reign. His abrasive “ready, fire, aim” statements and threats can’t be erased that easily.

Let’s be thankful for two things. Fumbles is gone and we’re another day closer to effecting change in our industry. It will come.

Happy Thanksgiving.