Year-End At Issue: Thinking Ahead

Earlier this year during our 40th Anniversary event, FMQB hosted a very productive THINK-TANK session designed to help set the tone for a new generation of thinking and leadership. The session was widely received as a success for its sharing of the minds on some key and relevant forward thinking issues. In the spirit of keeping the flame of this theme glowing, FMQB has asked industry leaders from the radio and music fields to help secure our content year with some forward thinking perspectives of their own.

Areas of discussion (among some general thoughts) are based around three central themes:

• The necessary steps your industry must take to ensure future growth and viability of your business.
• What industry leaders like you can do to help facilitate this mission.
• As partner industries, what your industry can do to help the growth rate of your partner industry in the spirit of a productive affiliation going forward.

e-QB presents excerpts from the December 2008 FMQB magazine Cover Story, YEAR-END AT ISSUE: Thinking Ahead

Dom Theodore, Regional VP/Programming, Clear Channel
We are currently in the most difficult fight for relevance we’ve ever experienced as an industry. There are so many delivery systems for music today that we simply cannot rely on that alone to remain relevant. Instead of reducing investment into content, our industry needs to step back and realize that what we do “in-between the records” is the only thing we can own exclusively, and we must make greater investments into that content now. If we want to survive and thrive in the coming years, we may need to temporarily set aside lofty cash flow goals and invest in the product now in return for bigger cash flow later. Now is the time to fund more creative risk-taking since we will not get attention without it. We need to take bold chances, make new mistakes and be unafraid to do so. Putting the “show” back in show business is our one shot to remain relevant.
Programmers need to create an environment where risk-taking is permitted and encouraged, and then inspire the staff to achieve the mission. Programming leaders also need to insulate the creative staff and content creators from the financial pressures in our industry.  Creative talent performs best with a sole focus on entertaining an audience, and great programmers know how to create that inspirational playground. Programming leaders must challenge the status quo and fight for the resources, especially now when it seems like everyone is trying to take resources away from you.
Very candidly, the entire radio and records model became broken and outdated a long time ago. It’s time for a new model. Instead of focusing on “getting the add” and playing spin games, both would be far better served by developing a true marketing partnership. Stop basing the entire relationship on airplay and instead apply a 360 degree focus on how we can expose new music through other platforms like a “new music portal” on the station’s Web site, or a personalized video message from an artist. Programmers need to develop more mutually beneficial creative marketing opportunities for new music beyond just airplay, and work with labels on marketing new music at many touch points which gives exposure to the music and also helps build the station’s brand. These kinds of win-win scenarios will move product for the music industry and improve radio’s relevance as a destination for new music, but it requires a different approach and the courage to abandon the traditional model.

John Parikhal, CEO, Joint Communications
The necessary steps the radio industry should take to ensure the future growth and viability of the business begins with low-hanging fruit: cheap and easy ways for radio to make more money.

1.      Dump bad initiatives and start good ones: HD is DOA. Spend your time and energy tapping everyone except the most senior executives, who seem to spend too much time with each other and not enough in the trenches. Stop surrounding yourselves with `suck-ups’ who agree with bad ideas because they are afraid for their jobs.
2.       Push hard for a 30-59 demo buy: For decades, radio has been driven by advertiser’s demands for 25-54. It’s so out of date. Get modern. Already, 16 million Baby Boomers are 55-59. They spend billions and radio ignores them. In the next four years, another 16 million will be 55-59. Meanwhile, 25-29 year-olds are less interested in radio than ever. Get real. And, if I hear `we can’t tell advertisers what to do’- stop acting like a victim.
3.       Encode song ID: A simple, inexpensive fix. Make sure that when you play a song, the title shows up on car radios. iPod does it. Satellite does it. But some stations won’t spend the money, even though 50% of radio listeners want to know the titles each time they are played.
4.      Tap into your 2.0 employees: Get serious about innovation. It’s usually `bottom up’. Radio has proven you can’t do it top down. The best ideas come from those closest to the customer. Put a process in place to listen to your employees who actually interact with your listeners and advertisers.
5.      Advertise: Stop acting like poverty stricken corner stores who cut their ad budgets when sales are down. Act like serious players. Let people know what you’re doing, what’s new and why you matter. You have to spend the money! Build it into the budget and don’t cut it if times get a bit tough. Yes, it’s a financial crisis now.  If you plan to be here in three years, you have to act like it now or you won’t be here in three years.
6.      Learn about your customers: Do you know that fewer than 4% of your listeners ever text a radio station? Do you know that almost 25% of those who go to a station Web site are also listening to at least one other Internet-only station too? You learn this by researching your customers. I do a lot of market research for clients ranging from radio to Internet companies. The reason for the market research is because I learned 40 years ago that if you take your eye off the customer, they take their eye (and ear) off you.
7.      Get serious about your Web site: Update at least every day. Optimize search. Make it easy to find the `listen’ button. Include a phone number in your `contact us’ information. Post lots of photos. Do usability testing.
8.      Adapt to the new world. Drop the clichéd slogans and connect with the real world. Accept that 30+ listeners are the future for at least another 5-10 years and figure out how to make themreally happy with you.

Leaders today have to find broadcasters who want to encourage younger people to come into the industry. Decide if you plan to be in business in three years. If you do, then stop getting rid of your intellectual capital like human beings who actually come up with the ideas and do the work. Without fresh blood, the industry will become almost completely networked and syndicated. At that point, it’s nothing more than a transmitter business. Like the oil pipeline business instead of the business of finding oil.

Monte Lipman, President & CEO, Universal Republic
We must not lose focus of what drives our business and that’s the artists and their music. Unlike other companies, we have not cut our A&R resources. In fact, unlike other companies, we have steadily expanded our A&R efforts over the last few years because we believe the engine of our industry remains the discovery, nurturing, development and release of new artists. Developing new distribution channels and revenue streams are certainly important, but if you don’t have the artists that strike a chord with people and the music that touches people on an indelible level, then none of that matters.
Under the leadership of Doug Morris, Universal Music Group has led the way over the last decade in the discovery of new talent, development of new revenue streams and innovation in the digital arena.  Though we are the world’s largest music company, we operate with a tremendous amount of flexibility and constantly adjust to a changing landscape.
The erosion we’re currently seeing in radio usage, especially among the young, is not an isolated phase. It is part of a long-term trend we are only beginning to experience. This is analogous to the music industry. Collectively, the more we face competitive alternatives which substitute for music and radio’s core benefits, the more this trend will continue in both businesses. We need to work more closely to make sure we are super-serving the consumer in more innovative and compelling ways.

Buzz Knight, VP Program Development, Greater Media
The radio industry is a fantastic business that is in the midst of large challenges. One of the most significant steps that need to be taken in 2009 is improving the self esteem of our business. We need to be able to look at ourselves in the mirror, hold our heads high, lift our staffs up and continue to prove what we do for listeners and customers is a significant force in the world today.
We need to be more consistently willing to attack what we do with outside thinking and fresh solutions. Our playbook is solid, but we need to add some new pages to adapt to the present and the future. What we think is a successful model today is likely to shift before the year is over (if not sooner) and we have to be better “brand sociologists” in reading the tea leaves.
As leaders, we need to nurture and embrace those working in the trenches and give them greater hope and guidance for future growth and success. On the same token we have to be more willing than ever to confront mediocrity. When we build that better path to success we can’t forget about how and where we intend to cultivate new programming and on air talent.  If we remember the passion and enthusiasm that first motivated us to love this business, it will guide us on how we are willing to take fresh chances in the future.
Programming jobs need to be re-defined on two vital levels: content creation for all aspects of delivery and integration between brand and sales. We need to study the success of viral and word of mouth marketing and be more willing to bring these strategies to our radio stations. As resources are judged with more harsh criteria on ROI we need to be more open to new metrics that can give us confidence in bold actions.

Ron Cerrito, SVP Promotion, WB Records
As the Venture capitalists of the industry, we need to build relationships with our artists that allow us to participate in all aspects of their careers that develop as a direct result of our investment and our resources. It’s amazing how the dynamic changes when we work with multiple rights artists. It immediately begins to feel like a true partnership and creates a super productive working dynamic.
As leaders, we have to expand the role and mindset of our departments to think from a big picture point of view. Our people understand they can contribute with ideas and initiatives that cross the boundaries of the traditional radio relationship. Finding new ways to market our artists with and through radio on-air and on-line are showing results. But we have a long way to go. I look at radio as a future distribution platform in various forms, as well as the number one way to push new music to the masses over the air.
Both the music and radio industries need to find ways to market artists together with features on-line, on-air and physically in the market place. This is more important as we move into the PPM world where it’s less about recall and more about sticky marketing and branding of the content more than just the call letters. We should be looking at ways to license music for use with local advertising campaigns to help build familiarity faster on new music. You can already listen to your favorite local station globally on your mobile handset. Soon that portability of streaming your favorite station from another market will be in the dashboard of your car. As a music entertainment company, we need to figure out what we can do to tie in the local concert dates and in some cases make local content for broadcast and webcast. Remember the networks’ battle when cable exploded. Their strategy was to brand live and local programming elements.

Alex Tear, Director of Programming Operations, Pittsburgh, Clear Channel
One of the key “necessary steps” is to make sure we invest in the future with programming talent.  This next breed must be “bionic” and we must contribute to their rise.  Stop being selfish and throw over the ladder, we may learn a thing or two.  They are sharp and in touch with all the platforms that many people are just now growing into at an agricultural pace.  This includes investing in talent as well.  Seek them out! Don’t wait for them to send that hot package and beg you to listen to them.  Stop being a god.  Don’t just hire “radio talent.” Find, nurture and accept talent that entertains and connects at all levels in any medium.  Stop being a radio person and move out of your shell of disciplined :15 & :45.  Focus on what the people want.  You have been deprogrammed to be a radio person, stop now.
Partner and use all mediums to reel in and connect with your target audience.  Tie it all together and magic will happen…true magic, not magic tricks.  Some have drifted from the core objective. Remember, it’s all about our customers, not us.  Rule #1, there are no rules!  I know that has been said many different ways and some people get paid a lot to say it with no accountability.  It is tougher to do then it sounds. We do have a basic set of known parameters that are constantly evolving. We need to continue our experimentation and continue to case study each other to improve our approach.  The art of PPM manipulation has begun and know this – don’t over think!  If you have a compelling product now, it will shine even more with PPM.  If you pick up any consistent habit in `09, make a pact between you and your team to frequently ask yourself “What’s in it for them?
In our quest for excellence and in our effort to optimize the best customer/listener experience, we must partner with one of our primary content providers: the labels.  Constant communication and awareness of each others’ objectives to unify for a win-win approach is more important than ever.  The power of our platforms combined can accomplish many great things.  I believe the music industry also understands that radio has evolved into multiple delivery platforms that can benefit them greatly.  The days of rolling your eyes when a promotion person/label wants to connect with you on a project should be put to rest.  The true “hype” label people are gone.  Label reps have rented a clue in their approach to their consumers and radio in a real way.  They continue to better understand the powers of our platforms and we must continue to educate them.  If we continue to respect and tap into each other to reach our key objectives, we will get a two way positive result that no other medium can accomplish.

Peter Smyth, Chairman & CEO, Greater Media, Inc.
We all need to embrace change and technology. I believe it is vital that we continue to grow and move forward. We need to listen to what our audiences have to say and embrace their tastes and habits.
I believe that it starts at the top. As leaders we need to “walk” the talk as we move forward and share our vision with the men and women in our companies. We must also put into action new thinking and embrace the new reality that we are competing with the limitless content of the online world for people’s attention as we continue to explore new ways to retool the way we do business.
Both the radio and music industries must work together to find fair solutions to the streaming fee issue and the artist royalty questions.  We will kill the economics of both industries if we continue down the current road of confrontation.

Peter Gray, VP/Top 40 Promotion, RCAMG
Music companies must take steps to accelerate the `impulse buy’ nature of music. Although it’s long been considered an impulse buy, it was always with conditions – a stop at the mall, a drive by the record store, etc. As technologies evolve and best practices rise to the top, we need the world to know that music (whether a first listen or old favorite) can be purchased out of thin air both easily and efficiently with the touch of a button. I’m not talking about early adopters logging onto iTunes. I’m talking about everyone in the country snatching songs out of the air. You hear it, you press a button on your phone, Blackberry or the dashboard of your car, and you own it. This may be down the road a ways from critical mass, but we need to be preparing for it NOW.
The best contribution any of us can make is to keep delivering the one thing that makes this business a business – HIT SONGS.
Broadcasters should get a taste! When we live in a completely wi-fi world, and hundreds of millions have access to music purchasing technology through their device of choice (phone, car, computer, etc), the broadcaster responsible for the purchase should get a cut of the sale.
If I’m in a 7-Eleven in Tarrytown and hear a song I like on Z100 and it prompts me to push the `buy’ on my Blackberry, the instant the sale gets tallied, the songwriter, performer, publisher, copyright holder and BROADCASTER all get paid. Now multiply that times millions of tracks in thousands of markets, and perhaps radio has a new revenue stream that eases the tension of a tough ad revenue market and gives them a more vested interest in artists and their music. If we’re all in this together, let’s cut in our very best partners.

John Boulos, Roadrunner Records
We need to sign and market the strongest music possible and avoid releasing mediocre music.
We need to be more creative in the process of setting up our music so that when it finally hits the marketplace it is familiar and the consumer already has a feeling for and knowledge of the music.
I believe we have to spend more time working on real marketing plans that help connect the listeners with artists and radio stations. We need to brand our artists better with radio. This will take time and creativity. But we must get away from the ‘hurried’ approach to marketing our artists with radio and come up with a way for listeners to know they will hear the best music on radio first with the most ways to connect with their favorite artists via their favorite radio stations.

Greg Thompson, EVP Promotion, Capitol Records Music Group
We need to continue to provide a level of expertise on artist development, brand building, and the monetization of music.
As leaders in our industry, we need to push people to think outside the box, challenge conventional thinking and force people to look towards the future and more importantly, what consumers today (not yesterday) want when it comes to the consumption of music.
Radio is and always will be the great barometer for what is the most popular music to consumers in the U.S.  It also becomes a filter for most Americans to learn and be part of their favorite artist and music that resonates as a soundtrack to their lives.  The partnership between radio and music companies to bring the public artists, concerts, music and events that touch lives, gives us an invaluable consumer experience.

Kobe, APD, WBZW/Pittsburgh
As broadcasters we need to be even better now and in the future at scratching the itch of our listeners. All of the different forms of competition, Myspace, on-line chat, satellite radio, iPods are very indirect and one way mediums. We provide the real human experience. Radio needs to be that “real person” on the other end of the line in a world full of automation and high technology.
We need to encourage PD’s and MD’s to be independent thinkers, tailoring their stations’ needs to the needs of their audience. The same ideas won’t work at every station in every market. The jocks also need to provide entertainment that relates to real life and that connection must prevail across all of our content. Our listeners don’t have to wait anymore now on how to find information about their favorite celeb or artist. They can get it on-demand on-line. So we need to give them entertainment, not just information about the entertainment.
Assessing a broader look at radio’s cross partnership opportunities, there needs to be better synergy between radio and other forms of media in general. iPods are competition to radio, but where do people first hear the songs they purchase on-line? On the radio. Radio doesn’t have to be the red headed step child of TV, the Internet or social networks. We can work hand in hand with these and several other forms of cross media to make their product better while also enhancing and extending our brands. A good example is CBS’s partnership with AOL. AOL’s radio player is driven by CBS radio properties all across the country. It’s great exposure for CBS stations, and it provides proven brand names to legitimize AOL Radio. More partnerships like this in the future can be very successful, along with the ongoing partnership we have with the music industry.

Mark Abramson, VP Promotion, Roadrunner Records
One of the most important things any business can do is build a reliable and trustworthy brand name.  Build that and people stick with you.  Music (and radio) is very much an example of this.  We need to go back to building artists and not just songs.  This business has sped up faster and faster and not shown the patience to develop bands properly.  With modern technology we can actually do more of this for less allowing a great opportunity to rebuild ourselves.  We need to bring the band in as a partner to their own careers, use their own art to cultivate a base.
First we should be signing bands that have something going on. Bands need to build themselves first.  Secondly, we need to slow down our pace and allow songs a chance to breathe and grow.  With all the distractions, it takes longer for songs to connect and we can’t move off them as quickly.  You can see it with research. What used to take 150-200 spins to connect now takes 250-300 spins.  Also, we need to offer up more and more and more to the fans like behind the scenes video views, live tracks, promo videos and b-sides. You see it with bands giving free downloads or VIP packages with concert tickets.  These packages always tend to sell out because instead of being overpriced they offer value and connection with the band.
What we can do to help radio is to assist with more content for their Web sites and stations.  If we can help radio be the cool place to go for entertainment locally then they will thrive and be a better partner for us.  Radio needs to be the local connection. The music is an aspect of what they do but not the be-all to end-all, and if we help them to be on the cutting edge then it works for everyone.

Guy Zapoleon, President, Zapoleon Media Strategies
Remember December 31, 1999? We all believed when the clock struck twelve things would be different and we’d be headed into a new world as we headed into a new millennium. Well, it’s taken eight years but so many things have changed our country and the world since the 90’s. The economic downturn is the worst since the late 70’s/early 80’s. Every industry is laying-off thousands of workers and unemployment is at an all time high. I look at the world (and radio) like President-Elect Barack Obama does: hope and change.  The good news is the radio industry has already gone through a lot of the same economic challenges most industries are experiencing now. Many people in radio have lost their jobs over the past ten years since consolidation began. I’m sure we haven’t bottomed with cuts as radio along with other industries will have to absorb another body blow in 2009. Owners really have two choices, either continue to squeeze the lifeblood out of our business to get more profit until it is DEAD, or do what it takes to reinvent radio for this millennium and create Radio 2.0.
Radio is a lot further behind these days with respect to today’s youth and the premium alternatives for music and entertainment. We have to be extremely careful about the next moves we make for survival. Moving forward we have to remember not to cut the radio business to the bone. For radio to have a future, it has to catch up to its competition as an entertainment medium. Radio has the existing audience and is a known entertainment brand, but it’s going to take extreme focus and substantial reinvestment in the product to catch up to the competition.

The bottom line is the fix isn’t rocket science. The solution is simple.

1.       Radio 2.0: Create a Web Presence: Reinvest and remember radio must be re-launched as an Internet brand.
2.       Only The Best People: Nationwide CEO Steve Berger‘s slogan. Radio is a people pleasing business and it needs great people.
3.       World Class Brands: Take your best minds and talent to create the very best music brands that put anything on the iPhone, iPod or Internet to shame. Two companies have begun the process: Clear Channel has iHeartRadio for the iPhone, and the CBS Radio Player is available through AOL.com.
4.       Be User Driven: Seek to have a better understanding of what entertainment consumers reallywant from your brand on their iPhone, ipod and the Internet.
5.       Be Innovative: I have a “crazy” childhood friend, multimillionaire Allan Jones who has his little radio station www.WorldWideWoop.com with my cousin Jeff Rentfro. They broadcast live on a chat room and listeners can talk and make requests, and maybe this has some resemblance to radio’s future. It’s a couple of non-radio guys taking risks, something that our business needs to get back to.
6.       Time: Innovation requires time so radio operators can’t swamp their programmers with so many duties where there’s not enough time to think, be creative and invent.
7.       Create a Catch A Rising Star: Create a program internally in your company that rewards innovation. Find mentors for these people, watch and coach their development.
8.       Schools: Bring your rising stars and the beginners that show potential and teach the skills they need to target tomorrow’s audience.
9.       Recruiting: Look and hire the best and brightest air talents and programmers outside of our business.
10.   Jobs: Find a way to keep the best and keep enough entry level positions so that young talent (programmers and salespeople) have a place to start. Otherwise radio will have no future!