Checking in with one of the industry’s more unique thinkers is always a fascinating exercise for FMQB. Tom Owens has a steep radio history with several conquests to his credit, so it’s no small wonder why Clear Channel relies on him for forward thinking initiatives as he helps guide the company on the path to future endeavors. FMQB’s Fred Deane cornered Owens for some quality time to play catch up on the critical issues he’s currently confronting. Presented below are excerpts from our March 2008 magazine Cover Story.
On the Clear Channel cost-suspension initiatives over Q1 of this year… The first quarter expense reductions were part of a contingency plan formed during the 2008 budget preparations. The reductions were timed to minimize any adverse impact occurring after January investments and ahead of the spring survey period. Our key markets continue to have research resources and we are employing a shared-research template for like-kind products in the remaining markets. The present operating environment dictates difficult decisions.
On whether or not radio has been operating behind the technology curve this decade…Sometimes it does appear big industry makes important decisions at an agricultural pace. But that criticism has always been particularly leveled at industries with both a technological and regulatory component. To flourish, technology requires a marketplace and any for-profit business has to balance the need to invest with the obligation to profit. There were plenty of broadcast groups investing heavily in the Internet many years ago and later trimming the spending pending a more potentially profitable period. Clear Channel has engaged in significant Internet investment for the past decade and substantially ratcheted up its commitment when Evan Harrison joined the company from AOL to lead the effort in late 2004.
On his current role intersecting with today’s macro challenges… Two things primarily. From the terrestrial ratings perspective we have to more thoroughly leverage our compelling personalities. In the terrestrial ratings battle nothing will have a more rapid rate of audience return. Concurrently we need to grow our talent rosters through acquisition and organic development. Secondly, from the perspective of eroding PUR’s (People Using Radio), we have to more fully appreciate the importance of brand application across all possible platforms with the highly ambitious ultimate goal of one day replicating and then exceeding terrestrial audience levels and revenue productions.
On current air talent solutions… We haven’t really taken full advantage of digital interconnectivity as part of the talent solution. Clear Channel has declined in the use of talent importations since 2003, now at around 8% of all dayparts. Much like other companies employing interconnected systems we have seen a small increase in the percentage of in-market applications such as daypart repurposing, airshift extensions, weekends and overnights. We believe compelling talent is integral to our ultimate success in the new media environment.
On where hands-on programmer development weighs in with talent solutions… There is a need to focus more on organic talent development. Simultaneously, we have to raise the bar of expectation for PD’s with respect to identifying, mentoring and motivating talent. Whether this occurs in-market or at-distance it has to become institutionalized. There is no question programmers are stretched thinner than ever with multiplicities of duty. It seems almost inevitable to me that we will ultimately dedicate an organized resource whether in-house or outsourced to helping promising talent realize their potentials.
On the recent proposal by the NAB to the FCC on revised HD power assignments… This is absolutely critical to expanded HD acceptance. The correction of receptivity issues plaguing early receivers while achieving analog-equal coverage is crucial. Losing a signal entirely is certainly a consumer annoyance but because HD2 programming is frequently different from the analog transmission when the HD2 signal terminates and the radio defaults to the main channel the consumer is getting bombarded with unwanted format changes. It’s very important for us to keep HD Radio market friction to an absolute minimum.
On HD Radio improvements needed for broad consumer assimilation… There are numerous necessary improvements under our immediate jurisdiction. We need to invest more heavily in the products themselves and offer more discernable value to the consumer. The Alliance revised the advertising restrictions for ‘08 and I believe we will begin to see creative monetization employing low clutter models which might help us rationalize those investments to a small degree. We also need to improve upon the messaging of HD. The Alliance membership devotes considerable inventory to this end which should be a substantially unique advantage toward accelerating HD awareness and demand.
On PPM and where it can foresee-ably advance the radio industry… It’s very likely we will continue to question whether one fifth as many respondents with a bias toward wearing such a device for a nominal fee and a protracted period is the best we can do as an industry. On top of the uncertainty over whether detecting embedded watermarks but possibly not hearing the accompanying content is the superior notion. Putting those issues aside, PPM clearly produces a more accurate detailing of the participants actual audio exposures. This unto itself is a significant improvement over the vaguely recalled and hazily reported diary based system.
On the PPM effect on cume replacing TSL in the actual recording of listener habits… PPM confirms many intuitive expectations. The fact that listeners actually sample twice as many stations per week driving huge underestimations of cume, that certain formats benefit from exaggerated TSLs, the ephemeral nature of P1s and the real AQH impact of commercial stop sets. If you assume sales can move advertisers toward purchasing time on a cumulative audience basis it would certainly have an impact. It is probably more realistic to expect that AQH in rank or population rating will continue to play a more decisive role. While PPM averages a 30-35% market-wide AQH reduction it’s possible for stations with highly underestimated cumes to present great products and personalities with diminished clutter and refined marketing and promotion techniques, and regenerate diary level AQH.
On Clear Channel’s launch into Social Networking in the on-line space… There is the success of our twenty or so stations launching the social networks provided by CCOMR (Clear Channel On-line Music Radio). Radio was a seminal interactive media and this is one way we are seeing that key attribute modernized. It’s amazing to see the listener uptake, particularly with user generated video becoming an increasing percentage of consumed content. It is such a powerful method for extending brand value beyond what we can do with a transmitter, but also has the powerful viral component for expanding the user base. As you would expect, the advertisers have been intensely interested in participating.
On Clear Channel executive leadership starting with CEO John Hogan… John likes to see all sides of an issue articulated, debated and then decided. He has low tolerance for inaccuracy and likes verifiable information communicated succinctly. We have worked together for quite some time well back into the Jacor days. His demeanor has always been the same: professional, courteous, strong, silent, ready to cowboy-up type…reminds me a lot of Jack in Brokeback Mountain. In fact, I keep one of his monogrammed shirts in my office closet with a photo frequently cursing our star-crossed time apart.
**QB Content by Fred Deane**
