Radio: Cheap thrills

It didn’t turn out the way Clear Channel planned.

Clear Channel’s spin week spun out of control right from – as they say in Mays-ville – the git-go.

Amid the dismal radio news about declining revenues and revised lower expectations, this was the week Clear Channel was supposed to put a positive spin on the industry by acting-out a part quasi-transparency and part-mea culpa to the business community.

Wouldn't it be nice for the radio industry to have something to combat the bewilderment at next week's N.A.B. show in Vegas?

Clear Channel kicked it off Monday afternoon with a well placed, well timed, and heavily advance-promoted live interview with Thomas H. Lee co-president Scott Sperling by Erin Burnett on CNBC’s Street Signs.

THL is one of the two Boston-based private equity firms that took the Titanic of the radio industry private.  

Don't get me wrong.  Sperling's one of the best at this.  He's mastered the game face of being open, calm and contented.  He usually gives the appearance of someone who has accomplished what he had set out to accomplish in his life.

Sperling was primed – or so he presumed. Fresh from a $250 Newbury Street salon haircut and sporting a $500 Louis of Boston dress shirt and Brioni tie, he freeze-framed a confident grin on his Eric Carmen-goes-Wall Street face. He was ready to play his role of king of all spinmeisters.

But it was all downhill from there. In fact, it got ugly. It was kid sister Erin beating up big brother Scotty - live on CNBC.

Over 200,000 watched Scotty trip, stumble, and fall.

The piece was aptly titled: Clear Channel or Static Interference.

Erin dropped the bomb on him in the first ten seconds, “Is the Clear Channel deal gonna blow up or not?”

Scotty went from Eric Carmen on a good day to Eric Burdon during one of his bad years.

“We, y’know, can’t talk about, uh, uh, specifics on the, ah, performance of Clear Channel ‘cause we’re in, uh, a quiet period as we going to be releasing numbers in the near future.”

When he finally got around to answering the question, he said, “We don’t have an expectation that it’ll blow up.”

Throughout his brief appearance on CNBC, he uh-uh’ed more times than a college radio dj opening the mic for a first show.

Don’t take my word. Watch the disaster footage here.

One can only imagine Scott getting pulled over by the cops.

“Officer, honest. It’s not my fault. I didn’t see the recession coming.” 

Sperling’s moment in the sun on CNBC coincided with a Clear Channel manager’s meeting, which had shepherd John Hogan herding his flock back to San Antonio.

I’ll spare the comic relief about the Kremlin and the Politburo - and the Borg, for that matter.

Clear Channel “leaked” the alleged results of the meetings to the press in the form of two separate press releases, which were, for all the wrong reasons, so transparent they should’ve printed on Saran Wrap.

The version of the wrap-up press release – the one Clear Channel wants in the trades this morning – claims that local program directors have the autonomy and, in John Hogan’s own words, “total choice and flexibility” to do what they feel is best for their market. They will have, we are to believe, options to choose either nationally –produced programming like Ryan Seacrest, Elvis Duran, and Steve Harvey, among others, or keep their programming local.  

Hogan will have you believe it’s the opposite of “I’m only following orders.”  But it's not.

Clear Channel also promised to do a minimum 12 public service announcements per day and increase its committed-back-when-it-paid-its-payola-fines obligation to support local talent on appropriately programmed channels.  

On the former, only twelve?  Those could be rotated in the overnights.  I wonder if they'll continue to run the same public affairs programming Sunday mornings on all of their market stations at the same time? 

On the latter, this I have to hear. Certainly, Clear Channel can claim they're already playing lots of local artists at their New York, L.A., and Nashville stations.

Shall we put the Clear Channel press releases into the English translator?

Clear Channel Radio Launches Plan to Improve Program Quality for All Day Parts

Plan Includes New Channels, Premium Choice for Local Program Directors, and Sophisticated Talent Analysis

SAN ANTONIO – April 15, 2009 – Clear Channel Radio today announced a multi-point plan to raise the bar for radio programming across all day parts and platforms, including online and mobile. The plan includes the launch of new programming and makes programming and on-air talent that’s proven to be most popular with audiences, available more broadly to local program directors in all markets for all day parts.

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

“Our programming objective is to increase audience size and engagement across all day parts and all platforms,” said John Hogan, president and CEO of Clear Channel Radio. “At the same time, we face a particularly difficult economy that makes it extremely challenging for some local stations to invest in developing the highest-quality programming and talent. Despite the difficult economy, we see enormous long-term opportunity in investing in things that immediately improve the competitive situation of our stations.”

Translation: If we have fewer announcers on more stations we’ve automatically increased the surviving air talent’s audience size – and it will allow us to put smaller markets on full automatic pilot. Farm teams  We're dealing with the here and now.  Forget tomorrow!

Local Clear Channel Radio program directors will have total choice and flexibility in choosing the Premium Choice programming elements. They can elect large portions, single pieces, or none of the offered programming. All of the Premium Choice elements were determined in full consultation with the company’s most experienced and trusted programming and operations managers.

Translation: I’m sorry. Did I leave out the words “in your budget?” Sure, you can go 24/7 with whatever you want provided you have the budget to do so.  And you don't!

“These improvements have been part of the company’s long-term strategy to strengthen its competitive position,” added Hogan. “We’re accelerating these pieces because of the undeniable competitive opportunity presented by this market,” he said.

Translation: Our sales and collections are so bad we that have to do another trimming of the herd now.  We haven't forgotten about downsizing our traffic and billing ops.  We're just waiting for the next three-day holiday.

A primary element of the plan is “Premium Choice,” an ongoing, rigorous analysis that identifies Clear Channel Radio’s most effective content across music genres and on-air talent and presents significant expansion opportunities for both. Content and talent are selected for the program based on the evaluation of new PPM-based audience-measurement reports and data produced by Clear Channel Radio’s proprietary talent performance tool.

Translation: Think of the stink of human as money wasted.  If you put our Premium Choice (sounds like an off-brand coffee) and Localism on the scales of justice - come on - do I need to tell you which way the scales will tip?

Over the past two years, the company has rigorously evaluated all of the programming at every station across every day part. Based on tests of the programming elements, audience growth and ratings have grown dramatically.

On Air with Ryan Seacrest increased audience share in San Francisco by some 86% within three months of beginning its broadcast there; and the show increased audience share in Denver by some 46% in the same timeframe.

Similarly, Steve Harvey has improved ratings in all 10 markets into which he’s expanded.

“Alongside music artists, on-air talent contributes enormously to the quality of an AM or FM broadcast,” added Hogan. “Now, local talent can be rewarded for extraordinary success.”

Translation: Being live and local? It's so overrated.  Radio listeners?  Screw 'em. They can't tell the difference.

Clear Channel’s performance analysis tools evaluate a wide range of variables connected to a broadcast program and/or specific on-air talent and identifies properties with significant potential to succeed in other markets. The company believes it is the most sophisticated tool of its type in broadcasting. The performance analysis tool and the Premium Choice program will combine to build the careers of lesser-known talent that consistently outperform their peers.

Excuse me, I have to reboot the translator.

Translation: I’m still trying to figure out what this one means. Anyone speak Hoganese out there?  

The press release continues....

* Creating new channels, by genre and by personality

Also central to the plan is an expansion of the programming currently being created for the company’s online and on-demand broadcasting platforms. The new channels will focus on either a specific music genre or specific on-air personality.

Launching imminently in the genre category are Country Road and Soft Rock. They join existing channels including erockster, Pride, smooth jazz, slow jams, and others.

In the personality-driven side, new channels for Kidd Kraddick and Lex & Terry are on tap, joining already successful channels focused on AT40 (Ryan Seacrest), Elvis Duran and JohnJay and Rich.

As with the existing online and on-demand channels, this new programming will be available directly to audiences during a testing phase via the three platforms: Clear Channel Radio’s local-station Web sites, the iheartradio mobile broadcast application for iPhone and BlackBerry, and the company’s HD2 multicasts.

Translation: Our Format Lab was a stiff. We’ll just continue to pretend it wasn’t and fill up our on-line and HD radio channels with recycled programming. Do we think people will use their i-Phones and Blackberries to listen to Clear Channel stations? Don’t ask.  

* Important opportunities for new, local and unsigned music artists

The third element of the program is the expansion of the company’s already industry-leading programming showcasing new, local and unsigned music artists. Select AM and FM stations will add to existing new-music shows (e.g., urban, some country and some rock), and some stations will also develop customized shows.
 
In addition, the company will expand its highly acclaimed NEW! program for new, local and unsigned artists available to its highly successful mobile broadcasting application, iheartradio. More than 15,000 new, local and unsigned artists have been promoted to millions of online and on-demand listeners through the program. NEW! is currently available on hundreds of local-station Web sites.

Most recently, iheartradio has seen astounding success on both the iPhone/iPod Touch and BlackBerry platforms.

Engagement among users with the iPhone/iPod Touch is dramatically better than with most AppStore applications. Weekly unique users continue are up by some 43% and the application saw more than one million downloads in just 20 weeks.

And earlier this week, the company disclosed that its BlackBerry App World version rose to the #2 position among all BlackBerry applications, achieving the #1 position among media apps of any kind. The BlackBerry version is on track for astounding success, having been downloaded more than 250,000 times in less than a month.

Also coming soon to iheartradio: traffic-on-demand expands to 10 markets and the company’s highly regarded NEW! program. Since its inception, NEW! has showcased more than 15,000 new, emerging and unsigned music artists to millions of listeners.

Translation: No, we can’t qualify any of those figures – but you have to admit that they look impressive.  Would you like to see the hat I pulled them out of?

“This year is a level-setting year in which we’re taking responsibility for the health and success of our company,’ concluded Hogan. “We will continue to actively evaluate economic and market conditions and our competitive position. We’ll also continue to make adjustments throughout the year so we are best poised to take advantage of the upturn as soon as it occurs.”

Translation: We're going out of business.  We're just not there, yet.

Clear Channel could’ve saved the expense of drafting this press release by just using a quote from Pete Townsend, "Meet the new boss, same as the old boss."

Even better: Business as usual - with fewer employees.  File under: Musical chairs.

Do you smell smoke?
----

The Buzzard turns 35

Radio: NAB - Changing crimes

I just realized what world leader David “Fumbles” Rehr of the National Association of Broadcasters (NAB) reminds me of.

North Korean President Kim Jong-Il. 

Like Kim Jong-il, Fumbles runs the NAB like a one-party state. 

When that North Korean test missile fizzled out over the Pacific Ocean, didn’t it remind you of the present condition of the U.S. radio industry? 

Consider the similarities. 

Most of North Korea suffers from food shortages and lack of electricity.  Its archaic industry is at a standstill.  It has isolated itself from most of the world. 

Most of the radio industry suffers from revenue shortages and lack of time spent listening.  Its archaic formats are lackluster.  It has isolated itself from most of its listeners and clients. 

Let me put it another way.  A house united cannot stand.  

When you never disagree or appraise an optional viewpoint, Fumbles, you suppress any opportunity to move forward.

Fumbles, you’ve been reprocessing the same old promotions and campaigns over and over since you joined the NAB after the beer lobby sent you packing for doing the same thing,

How many new campaigns for HD Radio must you launch before you realize the product is terminal?   

How many variations of that Radio Heard Here campaign must you introduce before you realize that no one except NAB members ever see them?

So, what’s it going to be, Fumbles, when you address the NAB in Vegas?   Will you reprocess still another variation of your same old song and dance? 

Even your GOP buds are beginning to recognize that, in actuality, you’re a political Bolshevik in drag who refuses to face the challenges of the 21^st century. 

Is there anyone that truly believes the NAB cut a good deal for radio’s streaming audio fees? 

If you think he did, let me know.  I’ll call you back in 2012 – unless you don’t plan to be in this business.by then. Thought so. 

That’s the dilemma with Fumbles and his closed-door negotiations with the RIAA’s SoundExchange. 

Did the labels really bushwhack you, Fumbles – or did both of you agree that those outrageous per song, per listener costs will be someone else’s problem in the future? 

The NAB cut a pact that evokes the one the UAW and the Big Three cut many years back when both sides shook hands and concluded that those pensions and payoffs would be someone else’s quandary in the future. 

Fumbles, you’ve managed add more devalue to every radio station in America – well, at least the ones that haven’t gone news and talk or fire and brimstone. 

Yes, I hear your tough talk, Fumbles.  We’ll charge the labels to play their music. Keep saying that and you’ll be reliving 2001 – the year radio’s pay-for-play playlists starting losing touch with popular culture.  That’s when the kids – and a sizable number of adults - abandoned radio and went elsewhere to find their musical soundtrack. 

You see, that’s the problem with popular culture.  The artists and labels that consent to paying the most money to get their songs played aren’t necessarily what listeners want to hear. 

Add social networking to the mix and you’ve got a no b.s. zone that pay-for-play radio can’t penetrate. 

Here and now, when the great convergence to the Internet escalating, do you think it’s wise to stop streaming when that’s the method of delivery more radio listeners? 

And how about those three deadly words, Fumbles: Performance Royalty Fee. 

Fumbles, you gave the RIAA's Mitch Bainwol a free meal and he’s sticking around to lick your plate dry. 

Though the Internet is getting the credit for the new free market system it was radio that invented it by playing music it didn’t own as programming content following World War II.

It’s time for a NAB insurrection – and, Fumbles, it’s about time you know your close.

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.

Radio: In search of truth serum

Do you often wonder what alternate universe the radio industry exists in these days?

Let me introduce you to Scott Sperling, the co-president of Thomas H. Lee, one of the two equity firms (Bain Capital being the other one), that ponied up $17.9 billion to take Clear Channel private just moments before radio stocks fell into the incinerator.

Last Wednesday, he told Reuters that Clear Channel and another Thomas H. Lee media investment, the Hispanic network Univision (a $12.3 billion deal in 2006) are "inherently great businesses" and that the recession in the ad market would reverse.

Now let’s visit with BAI Financial Network VP Mark Fratrik, who researches broadcasting and related communications industries.  Last week, he revised his original radio revenue forecast he issued last December.  Based on his most recent studies, he now foresees 2009 radio revenue to be worse than he initially projected with no improvement in 2010.

So whom do we believe?

The BAI study is little more in-line with the latest study from Pulse Research, which in a study prepared for the Cable & Telecommunications Association for Marketing (CTAM), shows that over seven out of ten or 71 percent of US households believe that the economy is heading toward a depression. 53 percent of US households are doing less shopping, 52 percent are eating out less, 51 percent are taking fewer vacations, and 50 percent are attending fewer concerts and theatre performances.  The study also showed that most are not willing to give up broadband and cable TV.

(I’ll buy the broadband part – but not cable.  Just this past week, three people – unsolicited – told me they were downscaling their cable channels – and one intended to drop cable service entirely due to increased use of Hulu and other TV on-line, on-demand services.) 

We're also hearing that in the future rounds of Clear Channel cuts even some of their hard-core, brown-nosing bum-kissers will be getting the axe.    It’s not just the billing and traffic departments that are living on borrowed time. Hell hath no fury than a woman scorned or a loyal-to-a-fault Clear Channel manager being told that the elevators are at the end of the hall.

That’s like calling sewage perfume.  You can actually call it anything you like but you can’t prevent its stink.

 The more I hear and read comments like “we have to contract before we can expand” from Clear Channel execs and their private equity suckers, the more I’m convinced that the last batch of Kool-Aid they make will be for themselves.

Lyin’ Diane Warren at the HD Digital Radio Alliance churned out still another press release, this one announcing a “major milestone.”  According to the Alliance statistics (yes, a flag was just thrown on the field) there are now “1,000 multicast stations” broadcasting and 100 various                      HD Radio models “now available at retail.”  The Alliance also announced still another new ad campaign (yes, another flag on the field), which will be carried at no cost “on over 700 stations in the top 100 media markets.” They called it “extending the broadcasters' commitment to promoting the technology to 42 months.”

Allow me to translate Lyin’ Diane-speak into truth: To be precise, that's 1,000 HD stations that few will ever hear and 100 receivers on warehouse shelves gathering dust. 

The new campaign “will combat the mistaken perception by many consumers that they already own an HD Radio.”  No, I couldn’t make this up if I tried.  An unidentified spokesperson for the Alliance adds that the new flight “will continue educating consumers that they need a new receiver to enjoy the HD experience,” and will word-up their slogan, which will go from “It’s time to upgrade” to “If you don’t have an HD, you’re not hearing HD.”

True genius.

Let’s, of course, not confuse iBiquity and the HD Digital Radio Alliance will the facts.

Sure, iBiquity’s failed miserably in new product development resources and expertise. They followed that with a series of flawed marketing research, sales, distribution, advertising, and promotional resources and skills. 

Have you seen any HD Radio marketing assessments other than Alliance’s own?  Did you see even one independent, impartial market evaluation since the deficient product was introduced?   But I digress. 

How about radio still hawking those Internet radio ratings, which claim CBS Radio and Clear Channel to own the lion’s share of on-air listening?   

The only one buying that hype is the radio industry.   No one that counts in new media believes that misleading hype.  Read Ken Dardis’ current Audio Graphics for specifics.

As long as hypocrisy is in the forefront of radio pitches, the medium will continue to loose ground.

We live in a transparent world.  You can’t avoid it.  The consumer is in control.  Facing up to the reality will be your first step forward.  Deal with it.