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Friday, September 16, 2011
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Radio: Still on Top (!/?)


This disclosure is needed, out of the box: I am not attending the NAB/RAB RadioShow. It's a "by choice" decision that comes from having been at many of these shows and always walking away with a feeling that what is presented is meant more to bolster radio industry spirits than to educate attendees.

"...he's lost on the definition of 'mobile,' as it's used today..." There are two items to place before you today, both relative to "RadioShow." These are the speeches given by NAB President and CEO, Gordon Smith, and RAB President and CEO, Jeff Haley. Each man's prepared text is at NAB.org; let's look at them to understand how much is not understood by either.

We'll consider Mr. Smith first. As a former senator, he understands the power of persuasion, of telling crowds what they want to hear. As a former politician, he's adept at bending truths to fit the moment.

With not enough time, or desire, to go into everything said, let's begin in the middle of Mr. Smith's comments, with his "Yet, we succeeded in stopping this bill from passing...." He refers to the Performance Rights Act. I'm not sure where his information is coming from, but there's nothing "dead" about PRA. It is just waiting in the wings for a more apropos time, when Congress isn't jousting over such a poor economy. When RIAA decides, it is going to jump back into this ring, with support from all other music-based media that are making payments for the use of music. It will be very much alive again at that time.

Another passage from Mr. Smith's prepared text reads: "Research notes that investors are taking a fresh look at the sector [radio] -- thanks to cost-cutting, lowering debt leverage through restructurings, new online and mobile initiatives, and the resurgence of local automotive and retail ad spending." Perhaps Gordon Smith did not hear Marci Ryvicker speak but, from what I'm hearing, her words don't reflect that same optimism. I'm not sure he understands either that cost-cutting is a major reason why the radio industry has lost respect of audience and advertisers (to the degree reported in multiple press).

On streaming, he says this: "Of the top 50 radio operators, 80 percent of their AM/FM stations simulcast their radio content online through a website or stand-alone app." A few sentences later comes this: "And while more stations are streaming, many report that it hasn't necessarily translated into more revenues." I'll take time to say that the former is excatly the reason why you have the latter.

If you want to grow an online audience by leveraging your existing programming, placing a broadcast signal in a stream is the wrong way to go. The broadcaster's stream is for content not found on air. Until the radio industry understands this, it will continue to hear that streaming "hasn't necessarily translated into more revenue."

Finally, there are these words from Mr. Smith: "If you take a look at new cars hitting the market, you can see that our digital competitors are succeeding." Later he speculates: "So radio is confronted by the dilemma of choosing which path to take - does it focus on building its traditional business model or invest more dollars in streaming?" My response is to do both, but do them in a different way. What's being done today is not working.

Next, let's comb the words of RAB President Jeff Haley. All that's needed here is a swift brushing, as much of what's said is far off-target. An example comes from the middle of Mr. Haley's speech: "American Idol is as much a derivative from the radio business as it is anything else." Other than morning shows discussing the previous night's program, and Ryan Seacrest being referred to as a "Radio DJ" (which is like calling Dick Clark - in his heyday - a radio DJ), please point to how this enormously successful television show (imported from Britan) is a "derivative from the radio business...."

Mr. Haley's words have other problems, too. In them he's lost on the definition of "mobile" by saying radio "invented this technology." No. Radio has always been mobile, but it did not invent "mobile technology." That's akin to stating radio was the original social network. Anyone who understands how a social network works knows there's an ongoing two-way flow between all parties - making that claim for radio void.

It's really your duty to read the words of both these men as they spoke to a room full of radio industry executives, and I urge you to do that. But let's wrap up by digesting Jeff Haley's comment of comparing "apples to oranges" when discussing how audiences are measured by radio and its new competition.

Make no mistake, a reason we see a flight of advertising dollars to new media has nothing to do with "scale." It's the growing desire from advertisers to see response metrics. I've said on many occasions that supplying this style of accountability is within the radio industry's power. We have yet to see movement in offering it.

And speaking of "advertisers," I found it intriguing that this word only came up twice, both times by Jeff Haley. One time he stated, "I'd like to thank our advertisers who have turned out at this show..." and then, "Let's respond in a united way to advertisers who want us to show them the road ahead." That's admirable, but it continues to lack any form of detail which is now offered by nearly all new media competition.

Numbers of other comments made in these speeches could be discussed, but what's the point? This could have been Eddie Fritz and Gary Fries, who both echoed the same rhetoric we hear today amid little new media progress.

There will be no change until we have movement within the radio industry towards these:
Adjusting content away from having a majority of programs voice-tracked
Truly serving local communities with a wide gamut of information during times
of emergencies - from a cross-section of local radio stations
Diving into delivering metrics from online and on-air campaigns that match
the very scalable numbers that I've worked with in an online world
Focusing on radio's core business and taking time to learn how
old business models change

Here's a "fact." There IS data suggesting growth in internet-related audio delivery. That's different from Jeff Haley's comment that "There are niche players who after ten years have barely scratched 20 million subscribers." He seems to refuse looking beyond Sirius/XM and Pandora.

The radio industry is not - and never will be - dead. But continuing to talk in this way without supplying follow-through action, and learning what it has to work with today, will not help the future of radio. (CBS Radio and Clear Channel are examples of companies taking action.)

People are moving to online and mobile with few equating this action to listening to a terrestrial radio station. The majority, however, do think that it is their way of getting away from what the radio industry now offers as programming.















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