Tuesday, September 30, 2008

Radio: Isolationism - NAB style.

It started last Friday when the NAB tried to pull a fast one but got outed for a clandestine maneuver in Congress to block passage of the Webcaster Settlement Act of 2008, which allows negotiations to continue between the RIAA’s SoundExchange and Internet radio over Internet radio royalty payments.

The NAB didn’t like all the attention Pandora was getting.

It later withdrew its objections when the negotiation deadline was extended from December 15 to February 15.

Under the present copyright laws, The RIAA’s SoundExchange isn’t allowed to negotiate for non-members who are eligible for royalties.

It’s akin to allowing the Paris Peace Talks to continue during the Vietnam War. You may not get anywhere – but at least you’re talking.

A few months back I suggested that the NAB and SaveNetRadio combine efforts to collectively stop the strong-arming by the well funded and lobbied RIAA.

But, true to form, the NAB will never criticize what it doesn’t understand – it’ll just try to kill it.
It has been wallowing in isolationism for many years.

Let’s travel back to the year 2002 when AFTRA did their Radio Commercials Contract, entitling voice-over talent a 300 percent increase of their session rate fee if a spot recorded for terrestrial radio broadcast was streamed on the Internet.

Radio learned about the AFTRA deal only after it had already been signed, sealed, and delivered.

When ad agencies were hit with the augmented fees because their radio spots were also carried on terrestrial stations’ Internet streams, they demanded that the responsible stations pay that freight since they didn’t authorize carrying the spots on-line.

So here’s the NAB - an organization that’s supposed to rep radio and lobby for its causes on Capitol Hill –caught completely off-guard. It was unaware of a deal that had a direct impact on – and created still another financial burden for its member stations.

The NAB’s negligence and isolationism had stations scrambling for streaming media ad insertion technology, which, six years later, remains a hit and miss affair.

Three years later, the NAB’s isolationists missed another one: The Family Entertainment and Copyright Act of 2005.

This act makes the sharing or broadcast of any pre-release U.S. copyright material a felony punishable by up to three years in prison and up to $250,000 in fines.

Today, if a radio station plays a track before its official label sanctioned release date – it’s a felony – and violating stations and management can be fined and threatened with imprisonment.

Eleven months after the Family Entertainment and Copyright Act was signed into law, the NAB hired David “Fumbles” Rehr in its cushiest hack job as its new President and CEO.
He was hired because of his alleged contacts in the Bush administration, which he later proved not to have.

The best description of Fumbles I’ve heard came from inside the NAB. He moved in with his ineptness and let it rub off on the place around him.

Harry Truman was known for that sign on his desk that read “The Buck Stops Here.” The sign on Fumbles’ desk says “Pass the Buck.”

Following the NAB convention in Austin, don’t you think it would make more sense to have the first three letters in the word convention capitalized – or at least hyphenated?

The NAB has proven itself incapable of making the right decisions, organizing its priorities, and understanding the industry it represents.

Instead, it prefers to waste time and money on campaigns that will do nothing for terrestrial radio’s survival.

Take the NAB’s effort to push for a law, which would make AM, FM, and HD reception on all Sirius XM satellite receivers mandatory. The bipartisan Radio All Digital Channel Receive Act is led by Rep. Ed Markey (D-MA).

Let’s go straight to Fumbles’ comments. "The NAB salutes the leadership of Chairman Markey and a bipartisan group of lawmakers for sponsoring this important bill that will boost the integration of HD Radio in satellite radio receivers, including those installed in automobiles.”

He neglected to mention the $10,000 the NAB has funneled to his coffers so far this year for his support of this bill. Markey has received $242,051 or 33.5 percent of his total donations from the communications-electronics industry to date in 2008.

"In addition to providing 235 million weekly listeners with entertainment and music programming, free local radio stations have a long tradition of serving as a lifeline during times of crisis,” Fumbles added. “This legislation will extend and enhance these services as radio stations embrace our digital future."

Let’s not bring up how most local radio failed to provide adequate weather and traffic information during a recent windstorm that devastated parts of the Midwest just a couple of weekends ago.

Keep in mind that this is just another grandstand play just to make the NAB look like it’s doing something for its member stations. The FCC and the DOJ already approved the merger of Sirius and XM – and the NAB has zero influence to force this issue now.

Instead of forming alliances with both old and new media, the NAB will carry on its quest to make more enemies and further isolate terrestrial radio from other medium that could save it.

It makes you wonder if the N in NAB stands for North Korea. Fumbles must make Kim Jong-Il proud.

Monday, September 29, 2008

Chris Quinn 1949 - 2008

Chris "The Mighty" Quinn passed away this past Saturday evening following a long illness.

Chris was an encyclopedia of music knowledge - and could run down facts and figures about any song in the top 40 from the fifties through the seventies.

With exception to a short stint in Los Angeles at KHTZ, he spent his entire radio career in and around the Cleveland market, including legendary stations WIXY, WAKR, WBBG, WGAR, WRMR, and WMJI.

He was a consummate radio personality. He loved music and radio was his life. Chris was also a skilled chief engineer.

Calling hours are on Thursday, October 2 from 5 to 7 PM at the Burr Funeral Home, 116 South Street in Chardon, Ohio.

Condolences to his family, his friends, and his many listeners.

Wednesday, September 24, 2008

Radio: This Old Frequency

You’ve probably read Dan Mason’s comment about AM radios in hotels.

“I haven’t seen an AM radio in a hotel for a year,” he said. “The first time I didn’t see it, I didn’t think much about it, but then it was 6, 7 times.”

He’s right.

I’m sure hotels have done market studies and learned that few use the radio other than to set its alarm as back-up. And we already know why they don’t have the AM band. You can’t hear most AM stations in a hotel room.

Before you say it, I’ll will. It’s true that some of the upscale and boutique hotels in Europe and Asia have Internet radios in their room – but we'll save that story for another time.

Dan has good reason for concern. CBS Radio has powerhouse AMs in a number of major markets and wants them heard.

The decline of AM radio listening is not entirely due to a migration to FM. Much of it is due to neglect.

You’ve probably heard of the recent modest proposal made by the Broadcast Maximization Committee, an assemblage of consulting engineers – and a broadcast lawyer.

They want to move all AM stations, along with public and non-commercial stations, and existing LPFMs (low power FMs) to a new frequency.

To wit, repositioning them to TV channels 5 and 6 in the U.S. once their existing occupants move to digital.

I can’t think of a better way to kill AM radio. You want to talk about a transplant killing the patient? This is it.

Questions, questions.

Didn’t they learn anything from the overwhelming failure of HD Radio?

Wonder if that broadcast lawyer’s pro bono? That one’s a joke.

Brilliant. Create a new frequency for what already exists on AM and to the left of the FM dial.

Render every existing AM radio extinct.

I can visualize hundreds of thousands of consumers rushing out to buy those “new frequency” radios.

Did I already mention HD Radio and how well those sold?

The Greek philosopher Heraclitus said you can’t step in the same stream twice, right? Tell that to the BMC.
I’m thinking about starting a new show called This Old Frequency.

It’ll be about rehabbing AM radio by restoring sound and signal strength to neglected stations.
Every week, we’ll visit a new AM transmitter site to see how well maintained it is.

We'll uncover neglected ground systems coupled with the same old pretext: our engineers have too many stations to deal with and not enough time to pay attention to detail.

Can’t hear the station inside a building? Well, how about the antenna tuning system?

While you’re at it, how about those transmitter tubes? Who was President the last time they were checked?

It seems a bit more logical that with all the existing AM radios in homes and cars we’re better off maintaining what we have. While we’re at it, are there any plans to improve the stations’ content ? Compelling content = revenue.
And how about this? If you don’t want a visit from This Old Frequency, you can surrender your AM license to someone who's willing to make the effort to take care of it. Fair enough?

See, the problem isn’t AM radio. The problem is with those who don’t know how or don’t bother to maintain them.

Friday, September 19, 2008

Rehr ended in Austin

Imagine going to the NAB Radio Show and a funeral breaks out.

That sums up Austin this year.

National Association of Broadcasters CEO David “Fumbles” Rehr’s effervescent personality lit up the Austin Convention Center like a three-watt bulb with his annual keynote address to the NAB Radio Show.

What is there left to say about Fumbles except that he’s the master of turning on the charm, then unreservedly losing interest once he’s expected to lead.

It’s another in a long series of just of the same say-one-thing-do-another long-winded speech.

I know some of you feel I’m being too hard on Fumbles when I call him a liar. Some of you feel he’s really sincere and merely illustrating the state of the radio industry through fables. Here’s the problem. Fables and out and out lies are different things. Fables are told for the good of the listener, lies are told for the good of the liar.

Let’s go straight to his comments. Specifically, what he said and what he meant.

Fumbles: It's great to see all of you here.

Translation: It’s great to see anyone here. We were ready to pin badges on the Galveston refugees at the other end of the convention center just to beef up our crowd.

We all know that radio broadcasting is at a very critical juncture.

Translation: We all know radio broadcasting is terminal.

Never before has our business faced so many challenges - a rapidly changing media landscape that makes us feel unsure and unbalanced, turbulent economic conditions that impact our bottom lines, and regulatory and legislative hurdles that threaten the way we conduct our business.

Translation: While the media landscape was changing, we continued to overpay and overvalue our properties. When questioned about revenue, we tossed out the acronym NTR – non-traditional revenue. We didn’t know what it meant but you have to admit, it was convincing until the best we could do was pull off legal payola and per inquiry programming. We were like subprime before subprime was cool. Unqualified companies were shoveled credit to by vastly overpriced and underperforming properties years before the subprime loans became routine.

This is a tough world that radio broadcasters are operating in today. But there's a greater issue that I want to address that's, frankly, more troubling. In fact, I believe it's something that could possibly jeopardize the future of this entire business. I'm talking about the negativity that's pervading the radio business and threatens to paralyze us.

It's not surprising that some of you may be feeling this pessimism. It's like a dark cloud hanging over our heads. And we feel bombarded by negative - and often false - messages about radio that reinforce these feelings.

Translation: I wouldn’t put too much stock….oops, wrong word….I wouldn’t read too much into the possible delisting of Citadel, Radio One, Regent, and Westwood One from the New York Stock Exchange.

I mean look at Sirius XM. They’re way under a buck, too – and they’re our competition…. oops, I didn’t mean to say that either, or did I?

We hear that radio is obsolete, that it's not adapting fast enough to the digital age. We hear that listenership and revenues are declining. We hear that people don't value radio as they once did. But what we're not hearing enough are the stories of radio's successes. And there are many.

Translation: Look, I know Miller Kaplan local revenue’s off 11% - big deal. National’s down 14%. We’ll get it back. So we’re a negative 12%. We don’t have to focus on those numbers. Look, our “off-air revenue” is up 10%. I know we’re comparing dollars to pennies here – but who has to know? I won’t tell if you don’t. We still have a few tricks up our sleeve to fool our lenders and shareholders.

Radio? Obsolete? Instead of talking about iPods and the Internet, let’s give ourselves credit for our own great innovations over the years….like pretending to be live and local with voice-tracking. So we get a few city and town pronunciations wrong. So we miss a few storms. Big deal. Who’s gonna notice, right? And who needs to be local when you have all this syndication. Another thing – content is a four letter word. We will not speak of content at the NAB. It’s an excuse, it’s a crutch.

Radio connects, informs and inspires an estimated 235 million listeners each week. And what we rarely hear is that number is up 3 million listeners from last year. That's a vast universe that we are touching.

Translation: In my world, the color of the sky is…well, it’s not blue, I can tell you that.

Now I want to share a clip with you that may send you back a few decades. (Fumbles plays a clip of the Buggles’ “Video Killed the Radio Star,” which coincidentally was the first video played on MTV on its August 1, 1981 debut)

That song, "Video Killed the Radio Star," was released in 1979. And it captured what many people were feeling at the time about radio.

Throughout the years, some people thought radio would fade away.

First eight track tapes, then cassettes, then music videos and CDs - every time innovation occurred, the end of radio was predicted. But this song was released almost 30 years ago, and radio is still strong.

Translation: Yes, I am aware that those aren't radios that people are listening to when they're jogging, working out, or just walking around town. I'm also aware that in the latest Boston and New York Arbitrends, that all of the rock format stations shares are in the ones except the one in each market that plays rock music from thirty years ago.

Millions of people listen to the radio every single day. People spend more time with radio than on the Internet and reading newspapers. There is an exciting world of opportunity before us. It is the beginning of a new era for radio.

Translation: I know it’s millions-less listening than a decade ago and those who are listening to the radio are listening to it less than they were a decade ago – but we can manipulate the numbers a bit, can’t we?

And many of you have already started to embrace the possibilities. But in order for us to move forward and build a successful future we cannot continue to operate as we have in the past. We must stop listening to the negativity and false messages, many of which come from our own people. And we must commit to spreading the positive news about radio.

Translation: So some groups are going to be taken over by their lenders because they can’t service their debt. How’s that a negative? What’s there not to trust about a lending institution running a radio chain? They can't do any worse than we did at running them.

Let’s look at the good side of Lehman going under. That eliminates four media-entertainment analysts – Anthony DiClemente, Vijay Jayant, George Hawkey, and James Radcliffe. That’s four less negative voices comparing radio to new media. We should be thankful Lehman tanked.

Because if we don't, we leave a vacuum to be filled by our critics and the negativity that's invading our business will continue to spread like a virus -- infecting everyone. And the result of this negativity?

The stagnation of the industry and the devaluing of your business. If you can't believe in radio... if you can't believe in all the possibilities and imagine a brighter future, then how can we expect our people - our listeners, our advertisers and our customers - to believe in this great medium?

Translation: Give me an “Amen” and “Hallelujah,” brothers and sisters of the NAB!

Right now, radio needs people who believe. And I hope everyone in this room is a believer. We need people who are bold and who will take charge of leading us into the future.

Translation: We have leaders like Mark Mays of Clear Channel, for example. He’s a believer. He said, “We need radical change.” Now that Clear Channel is private, he’s about to roll out – here’s his quote – “eight to ten initiatives” in his company to improve it. He even said “It’s not necessarily just about cutting costs” even though that’s all that company has done to no avail.

Odd, isn’t it that Marky Mark Mays suddenly comes up with these reforms now. How many years has he been running the company? The next he’ll say is that ‘Clear Channel is focused and aligned to the new realities of the marketplace,’ blah blah, woof woof.

Many of you have said to me that this industry needs leadership that to move forward, someone has to step up -- radio's corporate CEOs, big group executives, small market owners... that someone else needs to go first and all of us will then follow. That we need to let another person take the risk and all of us will wait, assess and explain why it will or won't work.

That thinking is a prescription for defeat. Instead, each and everyone one of us must be a leader. We can't wait for others.

Translation: We must silence those who speak against us. We must identify our industry’s traitors and eliminate them.

Take Drew Marcus, Vice Chairman of the Media & Telecom Group at Deutsche Bank Securities. He used to be our biggest ally. Now he claims public radio companies are overleveraged at an average six times EBITDA, while the current lending multiple is 5.5 times at best. He’s claiming our revenues will continue to decline. He said, “If EBITDA would lose another 20 percent - you would potentially have a lot of groups in bankruptcy,” He even said radio needs optimization, not additional consolidation. He betrayed us! Kill him! Okay, now I feel better. Could I get another Tab?

Each and everyone one of us who believes in radio must support each other and our efforts to move this business forward. We all know there are many reasons to believe in radio.

Translation: If we don’t believe in radio, no one will believe in radio.

First, technology is opening exciting doors for us. There has been more innovation in radio in the past five years than in the past 50. We've invested millions of dollars in new technology - HD radio and new delivery devices, and we've made huge strides toward improving the quality and diversity of content. We're undertaking an effort to increase the number of FM radio receivers in cell phone handsets.

Translation: Yes, if we get FM radio receivers on cell phones – we’ll get people to listen to us again. In our dreams.

In fact, a recent NAB study shows this platform could reach an additional 260 million consumers. Let me say that again -- 260 million consumers - there's great opportunity for us to seize.

Another area for growth is HD Radio.

Translation: I know we say it every year – but this is the year HD Radio catches on. Lyin’ Diane Warren promised me that and she can lie rings around Peter “Sgt. Bilk-o” Ferrara.

Radio stations are harnessing the power of the latest digital technology to deliver content with superior sound quality and more programming choices. More than 1,700 stations around the country are broadcasting in digital - with the ability to reach over 200 million listeners.

Translation: Ability to reach doesn’t mean they’re listening….minor point. Yeah, granted the sound quality on the HD-2 and HD-3 channels isn’t as good as conventional FM – but I won’t tell if you don’t.

We're working with the HD Digital Radio Alliance to educate the public, manufacturers and the auto industry about the possibilities of HD. We're targeting auto makers and dealers with the message that your car is not "fully equipped" unless it includes an HD Radio.

Translation: And you know the track record the HD Digital Radio Alliance has for getting things done.

We've taken the "fully equipped" message to the auto shows in Detroit, New York and Los Angeles. We've launched an aggressive outdoor marketing campaign, using billboards to grab the attention of auto manufacturers driving to and from work in Detroit - and they're listening.

Translation: They’re still talking about what our on-the-payroll radio consultant did in Detroit last year when he sent a bunch of kids dressed in Devo outfits around Detroit to pass out HD Radio literature. Sure, they were robbed and beaten and some of them were never heard from again – but that’s collateral damage. It’s the sacrifice our industry must make to insure the future of HD Radio. That – and your annual licensing fees.

There are amazing possibilities with HD Radio, including more niche channels than ever before - from Latin fusion to underground rock to a psychic channel.

Translation: We are even prepared that in the event a caller asks the psychic channel about the chances for HD Radio catching on, we’ll immediately change format to the "Best of the Liar's Club."

We're also bringing a whole new generation to radio through the iPhone. We're thrilled that the latest iPhone has radio applications, giving consumers a taste of the best that radio has to offer. In fact, AOL Radio powered by CBS is one of the most downloaded applications for the iPhone.

Translation: I know that Steve Jobs is never going to put AM and FM frequencies on the iPhone – and HD Radio? Dream on. But you can listen to Internet radio on the iPhone and a lot of our terrestrial stations are streaming and maybe they’re not listening but, like I said, we can dream, can’t we?

At Apple stores, the iPod radio attachment has been one of the best-selling extras since its debut. People want to use their iPods to access the ultimate playlist... radio.

Translation: Okay, you got me. The iPod radio attachment is actually a device where you can listen to your iPod or iPhone on your car or portable radio – not the other way around. Semantics, shemantics.

Starting yesterday, every Microsoft Zune portable media player will let consumers wirelessly download or stream millions of songs on the go. Zune owners will have the ability to tag and purchase songs directly from the radio.

Translation: And you know how popular those Zune players are compared to, let’s say, the iPod and its various configurations. Why I was just in a Costco the other day where they displays of iPods and Zunes side-by-side. The iPods were almost sold out – but they had a full stock of Zunes. So that means there are plenty of Zunes to sell.

Internet streaming is another area of growth, with more than 4,200 stations already streaming their signals online. And others would like to do it, if it makes economic sense.

Translation: So what if we’re misleading everyone when Clear Channel and CBS get listed as the top listened-to Internet radio stations in the comScore Arbitron ratings. We’re trying to push that fallacy. In reality, comScore Arbitron samples roughly 200,000 persons who have their cookies planed on their computers, much like a company identifying keystrokes of employees and those results are extrapolated. The only stations included in the comScore Arbitron report are those that pay to be included. There are many more stations, an estimated 90 million-plus monthly TSL that are not counted.

Bet you didn’t know that. There’s good reason for that. You weren’t supposed to.

That's why NAB has been working to address the outrageous Copyright Royalty Board decision that dramatically increases streaming rates. The Internet is also presenting a new world of revenue possibilities, which we have yet to take full advantage of.

Translation: Did you like my ducky campaign?

A recent study shows that Web revenues barely account for 2 percent of total company revenues for most radio stations. And yet, all media local online revenues are growing at a phenomenal rate of 50 percent this year. And radio should get its fair share.

Translation: All we have to do is get Internet radio listeners to listen to our terrestrial radio stations on the Internet. I know it’s easier said than done…but – remember - we must never confuse ourselves with the facts.

We need to invest in our future. That's why we're exploring new opportunities for radio through our technology advocacy program, FASTROAD. This program is playing a key role in exploring, developing and accelerating the adoption of new broadcast technologies and NAB is proud to be at the forefront of new radio technology innovations.

Translation: Everyone’s talking about “green” so we’ve started a campaign to convince radio manufacturers to make green radios. We are only a few years away from introducing our first solar-powered HD Radio.

We're looking to the future of radio, which brings me to another reason to be excited - the Radio Heard Here campaign.

The entire industry has united behind an initiative we've put in motion to reignite the passion for radio. One year ago at this very show, we launched a major effort to reinvigorate radio.

Translation: We hired the best research teams from Critical Mass and Jacobs Media, paid them lots and lots of money, and – guess what - both companies determined that “Radio Heard Here” is the best slogan in the history of radio.

The initiative - Radio 2020 - represents our clear vision as an industry for radio's future. In April, we launched the consumer phase of Radio 2020 - called Radio Heard Here. Think of this as radio's version of "Got Milk" or "Beef, it's what's for dinner."

Translation: Chances are it will be more like Coors Beer when they translated their “turn it loose” slogan to Spanish it read “suffer from diarrhea” or Pepsi’s “Come alive with the Pepsi Generation” which when translated to Chinese read, “Pepsi brings your ancestors back from the grave.”

Those iconic campaigns were put in motion because people needed to be reminded of the value of these important products that are too often taken for granted.

Through Radio Heard Here, we're going to change consumers' and advertisers' perception about radio's future.

The effort includes: Broad-based advertising, with radio, print and online ads, and branding available for stations across the country to use. Public relations efforts, targeting the industry, trade and mainstream media and other key influencers. Outreach to industry and trade partners, educating agencies and universities on how to write and place effective radio ads. And a communications component, involving videos produced for YouTube, MySpace and others - starring you - radio's biggest fans.

Translation: As of today, there is nothing on YouTube for “Radio Heard Here.”

We've launched a great Web site for consumers at http://www.radioheardhere.com/, where they can learn more about radio, find the most played songs, see new innovations and listen to great radio commercials.

Translation: You know we don’t play enough spots on the air, especially in these days of “less is more” so you know how kids will love to go to this web site to hear those “great radio commercials.” By the way, aren’t they great?

Last month, each station received talking points and an insider's guide containing everything you need to share about radio's bright future.

Translation: In fact, just the other day, I was listening to my favorite radio station, Jack, and they were playing that “Future’s so bright I gotta wear shades” song. I think we should use that one for Radio Heard Here….oh, wait a minute. I forgot. Mike Dukakis used that in his Presidential campaign. Never mind.

You received a print advertising kit and most importantly, you will soon receive radio spots that remind listeners why they fell in love with this great medium.

Let's listen to one now.

(Immediacy is not one of the NAB’s stronger points. As of today the new spots are still not on line or available to radio.)

When we tested these spots, listeners loved them - especially younger listeners. So far the response to this campaign has been extremely positive. We are arming you with the facts and good news about radio, and we need your help to spread the word about radio's bright future.

Translation: Give me some credit. I can stall for time with the best of them.

If you have to remember four things about radio, remember these:

1) Radio reaches everyone - 93 percent of Americans listen each week.

Translation: How many of them are between 12 and 35 years old? Don’t ask. Please.

2) Radio is driving technology. With 1,700 HD stations on the air, more than 4,200 stations streaming online and 13 percent of cell phones now radio capable.

Translation: How many of those stations are being listened to and for how long? For HD Radio, please don’t tell that sing that Pink Floyd “Is there anybody out there?” song.

3) Radio offers more choices than ever before. In the last ten years, format variety increased in the top 100 markets. And HD is offering immense opportunity for new and more innovative formats. And it's free.

Translation: We’re playing the same music. We’re just divvying it up with new format names. New package, same old crap. Our challenge is how many different format names can we come up with for ‘classic hits.’

4) Radio is resilient and growing. Radio's audience has grown 15 percent since 1994. In a time of more media choices in the history of the world, radio is retaining and adding listeners.

Translation: We’re playing the same music. We’re just divvying it up with new format names. New package, same old crap.

We want to repeat these great things about radio with everyone we know. Together, we are going to reinvigorate this great business and make radio new again.

Translation: Remember the NAB motto: “If we say it enough times maybe we’ll start to believe it.”

We are also being aggressive on your behalf in Washington. Here are just a few highlights of where we stand.

First, let's talk about the performance tax. Early in the debate the record labels told Congress this was a performance "right" for artists.

Translation: Did I already ask you if you liked my ducky?

But we have been successful in making policymakers understand what this is really about - a tax on local radio stations that would benefit foreign-owned record labels. The chorus of lawmakers recognizing the immense promotional value provided by local radio airplay grows louder with each passing day.

Translation: Back to my favorite station, Jack. Their slogan is “we play what we want” and they play a lot of music. They have to be selling lots of copies of “Rock Me Amadeus.”

We now have the support of 226 members of the House of Representatives - the majority - on the Local Radio Freedom Act - the anti-performance tax resolution.

Translation: Their kids and grandkids really liked the stuffed ducky.

Compare that to the number of cosponsors on the other side - 19. And we have provided members of Congress and their staff data demonstrating how local radio airplay generates sales for artists and labels.

Translation: And I don’t have a clue why the labels already have a line item prepared for performance tax on their 2009 budget.

We have released a study that suggests the radio industry provides anywhere from $1.5 to $2.4 billion in free promotional value to the artists and their labels each year. And it doesn't even include the billions generated in our promotion of concerts, live events and other venues.

Translation: That’s a lot of “Rock Me Amadeus” sales from Jack airplay alone.

Momentum is on our side.

Translation: We all can’t do news, talk, and sports formats but if this performance tax passes, who knows? It’ll probably happen.

But we must keep the pressure on and continue to mobilize around this issue. This will be a multi-year effort by the record labels. And it will be hard fought.

Translation: I bought enough duckies in bulk to send two to everyone in Congress. Please understand that the NAB has a $100 million war chest. Spending money is fun. Spending other people’s money is even more fun.

Second, let's talk about the FCC's misguided attempt at imposing so-called localism regulations on us. Despite having jettisoned these old localism rules in the eighties, the FCC is now proposing to bring them back.

Translation: We have to give our legal ID at least once an hour. How much more local do you need to be? We mention our city of license.

Just recently, we've seen how broadcasters have prepared for and covered the recent tropical storms and hurricanes that have hit the gulf and east coasts.

Translation: So radio dropped the ball in Cleveland, Columbus, and Cincinnati last Sunday. In Cleveland and Cincinnati radio had football games to carry. How could you expect radio to cover a damaging wind storm, too? Sure, I feel bad that there are still people without power in Cleveland, Akron, and Canton days after the storm – but I also feel bad for Cleveland Browns fans, too. Your team sucks. You lucked out by losing power and not having to see or hear that game.

We applaud the Texas broadcasters for their commitment to covering Hurricane Ike. You are a lifeline to your communities, providing them with lifesaving emergency and relief information. We thank you for what you do every day to serve your listeners and viewers and for the lives you save.

Translation: At least we saw this one coming. Wink, wink, nudge, nudge.

Witnessing all that broadcasters do shows how localism requirements are unnecessary, oppressive and built on an outdated regulatory mindset.

Translation: And if you ever hear of a station missing a legal ID, please let me know. I’ll make sure it never happens again. Our goal is that all NAB member stations will be local – at least once an hour, guaranteed.

Requirements, like the 24/7 manning of broadcast facilities and mandating a main studio in the city of license, ignore the realities of the broadcasting business and technology. In fact, these requirements would have the opposite effect on broadcasters' efforts to serve their local communities, especially small market radio.

Translation: The stink of human, serving our city of license – these things cost money. Don’t they realize that our untrained and high turnover Tin Men sales staffs can’t sell time?

Collectively, broadcasters are the number one provider of public service. And we don't need the government to step in to tell us how. NAB is driving that message home in Washington each and every day.

Let me give a few examples.

We filed extensive comments with the FCC. Broadcasters and their public service partners are telling the FCC the many ways they're serving their communities. To date, 161 members of Congress have written to FCC Chairman Kevin Martin, ranging from expressing significant concern to outright opposition. We even got the U.S. Chamber of Commerce involved on our side.

Translation: Like my good friends in Congress say, "Never underestimate the value of a cash bribe."

And there will be more to come.

Translation: Never underestimate the value of our $100 million war chest.

At an event on Capitol Hill in July, we unveiled the 2008 National Report on Broadcasters' Community Service, featuring a new Web site - http://www.broadcastpublicservice.org/. The site highlights state and national statistics and stories recounting broadcasters' unrivalled public service. We won't let down our guard in this fight. And with your help, we will be successful.

Translation: When it comes to public service, if I may quote John Hogan, "Less is more." We can sell that time. Maybe. At least stick a bonus spot in its place.

We're engaged in more issues than ever before, and we're on the offensive.

Ladies and gentlemen, now is the time for us to embrace technology and seize all the amazing opportunities it presents. And we can't let this moment pass.

If we join together as leaders and put aside our personal agendas, we will build a successful and vibrant future for radio.

Translation: In business as in war there is nothing more dangerous than uncertainty – and I have no idea what I'm doing here.

Teddy Roosevelt once said, "It is not the critic who counts, not the man who points out how the strong man stumbled, or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena; whose face is marred by the dust and sweat and blood; who strives valiantly..."

Translation: Or as Joe Schwartz of Cherry Creek Radio, a small market chain, said, “The definition of insanity is doing the same thing over and over, and expecting different results.”

Each of us must be that man or woman in the arena. We must ignore our detractors and we must be persistent in our cause. We must unite behind consistent messages and relentlessly work to spread the positive news about radio. And though we will occasionally face setbacks, we must keep our eye on tomorrow.

Let us fight back the temptation to look to the past and doubt what's new. Let us instead look forward with optimism. Let us stand together in the arena. With courage, conviction and belief we will create an unstoppable tomorrow.

Translation: As GE Commercial Finance’s Garret Komjathy put it, “the light at the end of the tunnel is the proverbial train.” And in answer to a question about an entrepreneur buying radio stations today, Komjathy said, “My guts tell me to tell the guy to get his head examined.”
Thank you.

Translation: Fooled ‘em again.

God bless you, our great business, and this great nation.

Translation: God save us all.

Wednesday, September 10, 2008

Radio: The N.A.rehaB.

I’ll give credit where credit is due.

David “Fumbles” Rehr gets his for hiring grief counselors to the National Association of Broadcasters (NAB) convention in Austin next week.

He’s also stationing counselors at key locations throughout the convention center, nearby restaurants, and at the Driskill and Four Seasons.
Fumbles, even assigned a personal grief counselor to every station broker. How solicitous of him.
Okay, I admit it. I made the whole grief counselor story up .
I still feel that Fumbles still fell short by not turning next week’s NAB Convention into a communal radio industry intervention.
Fumbles, lure everyone in, lock the doors, and don’t allow anyone to leave until they agree to rehab.

We’ve suffered through a dozen years of our industry experiencing numerous behavioral problems that have ruined many eminent broadcast companies and precipitately ended careers. Employees, colleagues, and company executives are trapped in a terminal cycle of despair and lack of growth.
The collective denial of these tribulations and the ambivalence about getting much-needed treatment further blurs the reality of how the industry is viewed by both consumers and clients.

Though the NAB Convo bills itself as featuring top-notch management, programming, and sales sessions – most of those that could effect change and progress won’t be there.

The NAB calls itself a trade organization that advocates on behalf of radio and TV and networks before Congress, the FCC, and the Courts – but, in reality, it doesn’t have much juice with any of them.

The NAB Conventions have become an assembly of the politically correct of broadcasting preaching to the choir.

In NAB-speak the word digital means HD Radio.

Technology means something we need to keep up with but can’t afford.
Research is something we’d like to do - but like technology it's not in the budget.

Innovation is equated with failure. We'd like to innovate but it takes too much time.
The radio industry is locked in denial of radio hemorrhaging listeners- especially younger demos – its future.
If the real estate market is about houses whose owners can’t find buyers, the radio industry is about stations that can’t find listeners.

For that matter, it’s also about radio chains that can’t find buyers for the stations it’s trying to unload. Just ask CBS. When they made their announcement to dump dozens of stations, didn’t you expect the NAB would serve as the backdrop to announce their sale?

Yesterday, CEO Les Moonves insisted, “We’re not desperate to sell. We don’t need the cash.”
In other words, we’re just continuing to downsize and cut budgets because we like doing that kind of stuff, not because we have to. CBS = Cut Budgets Severely.

Fumbles, denying you have a problem doesn’t make it go away. That’s why the NAB has to get into the intervention business – to save radio from itself.

One addiction the NAB can’t kick is keeping company with the same rogues that have fed misinformation to the industry for well over a decade.

Every industry plays some form of follow the leader. That’s a given.

Radio’s quandary is that there are no functioning leaders – just followers –walking in a lethal circle – one penguin following another, and all going nowhere fast.
You see them every year and every year the radio industry slides down a few more notches. Coincidence? I think not.

It’s the same names, the same topics, best acronymed as SOS/DD.
I shouldn’t say there are no radio leaders. There are many with the insight to comprehend and envision its future – but the NAB won’t offer them the dais to really tell it like it is.

Do you seriously believe Fumbles and his cohorts want to change this system?

Of course not. His meal ticket is predicated on the rampant dumbassery that’s permeated this industry. And it’s only the rampant dumbasses that make out at these convos.
No one listens to the keynote address. Fumbles will deliver his well-written, crafted and timed short-sentenced cliché ridden speech using all the right buzzwords in all the right places. The crowd will applaud him unconsciously.

Rehr, who used to shill for the beer industry, is your archetypal middling salesman. He says whatever his audience wants to hear exactly the way they want it delivered. He always agrees with his audience on every issue.

If he headed the Audubon Society, he’d be delivering bird calls like a seasoned ornithologist.

(Free advice: Fumbles, lay off the Radio 2020 hype. No one – not even your most ardent believers – buy into that one.)

When David Pogue, the New York Times’ Personal Technology writer speaks, he’ll hit a nerve, which will quickly be dulled by the wave – no, more like tsunami - of denial that will sweep over the audience and override his message.

Invest in talent, creativity, and new technology? Who’d be dumb enough to take a chance on that? And how would that read in an annual report? That’s Silicon Valley geek stuff.
Fumbles will go out of his way to make certain his convention doesn’t confuse anyone with the facts.
Listeners care about radio as radio cares about them, which is to say, not at all. Remember that oily consultant who liked to say, “The masses are asses?” Well, as I like to say, even asses know when they’re getting kicked.

For those few fun years, post-deregulation, the NAB’s theme song was Pink’s “Get this Party Started” which quickly morphed into “Life in the Fast Lane.” The king of the convo was the CEO that acquired the most stations in time for NAB bragging rights. It didn’t matter whether the company could afford it or not. The business plan was buy now and figure out what to do with ‘em later and the finance plan was “buy now, pray later.”

Now you see some of those same people walk around the convo dumbfounded with eyes that look like they’ve been zapped by a lightning bolt and seared of life.

It’s definitely, positively, without a doubt intervention time for the NAB.

Fumbles must have tire tracks up and down his back from the amount of traffic his “Radio Heard Here” blog is generating.

Rehab is for those who believe in wasting money on HD Radio instead of building a lucrative Internet and streaming audio infrastructure and organizing a direct fight against the RIAA’s plans to impose a performance tax on music played on the radio.

So far, the best Fumbles has come up with for the NAB to challenge the RIAA is his duck campaign.

I have a friend who is with one of the four major labels. He’s not part of the New York-L.A. crowd. You won’t see him hanging out with the stars at the trendy joints or the MTV music awards. He’s in the financial end – and assured me that radio will have to pay a performance royalty for music in 2009.

Fumbles, while you were sending your cute little stuffed ducks to decision makers you think are your friends on Capitol Hill last November, the RIAA was up there, in person – and in full force working anyone and everyone on the royalty tax. It'll be your personal Murder Most Fowl.

It’s never going to happen, you say.

You keep telling yourself that hoping that you’ll eventually believe it.
You’re about to pull another defeat out of the jaws of victory.
While radio’s foes have the ducks in a row, you’re stuck with a dead one.

And that’s why you and your believers need rehab.

Saturday, September 6, 2008

Radio: The HD Radio Alliance's blame game

Welcome to the fantasy world of HD Radio where the alleged 1,700 or so stations broadcasting in a second-rate digital system were just told by the HD Digital Radio Alliance that they will now be on their own.
Next year it’ll be up to the stations to do their own creative to supplement the national promo spots they’re committed to run by the Alliance. That’s their way of telling radio, “Don’t blame us for our failure.”
That was the edict proclaimed by Peter “Sgt. Bilk-o” Ferrara, President and CEO of the HD Digital Radio Alliance, which calls itself the “joint initiative of leading radio broadcasters to accelerate the successful (their prejudiced description) roll-0ut of HD Digital Radio.”
Let's listen in as hacki di tutti hacki Bilk-o delivers the Alliance’s definition of “Mission Accomplished.”
It’s purely Presidential.

"When we began putting the pieces in place for the Alliance in the fall of 2005, there was little attention being paid to HD Radio and the industry lacked a plan to make it a reality. There were only a few HD stations on the air, no automakers offered an HD Radio and no national retailers carried receivers," said Bilk-o. "Today, it is gratifying to know how far we’ve come in three short years. While there is still much to do, this has been an unprecedented effort with unparalleled success within the radio industry. It’s a testament to what broadcasters can achieve when the industry comes together with a clear purpose and mission."

The Alliance committed radio to an estimated $680 millions of dollars of free advertising for digital radios, which translated to little interest in the product and no retail sales to speak of.

Now, everything is fair game. The gloves are off. The Alliance is leaving the future of HD Radio in the hands of the station owners.

I want to nominate this as the new slogan for the HD Digital Radio Alliance: We broke it, you bought it!
Though they have not been able to produce a single document to back their seemingly illusory sales figures, the Alliance claims that 330,000 HD Radio receivers were sold in 2007 – calling that number a whopping 725 per cent increase over the alleged 40,000 sets purchased in 2006.

Stop me if you heard this one before.

The only thing the Alliance has delivered on is a steady stream of b.s., exaggeration, and outright lies.

Prove me wrong.

How many non-radio people do you know that own one – even with those 75-80 percent of retail price discounts?
Even the hard core techno-geeks passed on this debacle.

Consumers don’t buy into new technology blindly. They buy products they feel will in some manner improve their lifestyle. HD Radio isn’t one of them.

When you create new technology that people can use, the money always follows. Just ask Sergey and Larry at Google and Steve Jobs at Apple. Just don’t ask iBiquity President and CEO Bob “Booble” Struble.

With exception to trustafarians, most of the wealthy people I know and know of got that way by breaking rules to give consumers something they wanted so badly that it becomes a need. HD Radio is needless.

Content? Most HD Radio formats are automated dreck. Granted, there's a few good experimental formats on HD Radio – but how can they be effectual if no one is hearing them?

Design? Most HD Radios look like a cross between a police radio and parking meter. *

Radio Shack is slowly – or perhaps not so slowly - phasing out their HD Radio commitment.
Show me one retail outlet that’s added space to their HD Radio display.

You can’t.

Wal-Mart never committed to retailing HD Radio in the manner Bilk-o claimed they would.

It was nearly impossible for retailers to sell consumers on HD Radio.
The few retail outlets that did carry them had difficulty picking up the digital signal in-store.

History will look back on HD Radio as one of the greatest scams leveled on the radio industry.

Booble, who operates in the shadows of the company that landed the U.S. digital radio broadcasting deal in the U.S., may be the bagman – but it's the station chains that are stuck holding the bag.

He eats the radio industry for breakfast, and lunch and dinner. And then he hands it the tab.

It may not be as bad the Great Depression, but it’s a feast of burden in the radio industry.

Broadcast stocks bear an uncanny resemblance to penny stocks. Time buys are scarce. Rates are being discounted. Programming and talent has to be outsourced or voice-tracked. Those still employed are doing triple and quadruple duty, with no attention to detail. Now add the backdrop of the needless expense and time consumption created by the HD Radio folly.

The Alliance also made a not-so-unexpected announcement that effective January 1, 2009; Bilk-o will step down as President and CEO of the Alliance to become its Strategic Advisor. That’s a fancy way of saying “consultant.”

His explanation for exiting? Tell ‘em in your own words, Bilk-o: “Because the Alliance is moving more and more into becoming a marketing organization for HD Radio.” Pause for laughter.

The real reason for his exit is his health. He’s hemorrhaging something far worse than blood. It’s credibility. It’s character.

Bilk-o's replacement was also bred at Clear Channel Radio. Meet Diane Warren.

She's the Alliance’s Executive Vice President and oversees its futile marketing campaign. Also like Bilk-o, she’s been with the Alliance since its creation three years ago.

And what does Bilk-o say of his replacement? “I feel that my skill set is not as strong as Diane’s.”

Did he just call her a better liar?

Here’s what she said. “In 2008 we will have sold the one millionth HD Radio receiver” and “As we look forward, we’ll remember 2008 as a breakout year for HD Radio.”

A million HD Radios will be sold this year? She's good.
For the sake of space and time, we’ll skip the fact that Sgt. Bilk-o said the same thing about 2007.

Ms. Warren also came up with a dramatic and unaccredited claim that interest in HD Radio has “exploded” with 80 percent of HDRadio.com’s visitors going to the site for the first time. You can tell she’s a former Clear Channel exec. She declined to provide actual numbers.

In what we will come to know as Diane-etics, Ms. Warren offers this unsubstantiated claim: The number of HD Radio stations has increased from some unknown time when there were 300 to over 1,750 today – and that’s not counting another 800 multicasts, though we’re not certain if she counted each multicast twice.

That’s Diane-etics – not to be confused with Diane’s ethics.

Have you noticed that on CBS Radio there’s been a whole lot more streaming audio promotion and a lot less HD Radio?

Maybe they’re on to something.

The radio industry will be able to get back on track a lot faster once it concentrates on programming radio stations people can hear.

My message to the radio industry is paraphrasing Smokey the Bear: Remember, only you can prevent HD Radio liars.