Opinion: The Business of Radio

From Doug Erickson, Blog at Erickson Media

So, what is the business of Radio?

Some might say we exist to maximize profit for owners, including share holders.

In fact, the largest consolidated radio companies say they're forced to operate under this mandate. Unable to produce enough revenue to impress Wall Street, and/or meet their huge debt obligations, they must cut expense -- and they see most employees as an expense, not an asset.

I think the real business of Radio is still attracting and engaging listeners.

Attract and engage enough listeners and your station becomes an efficient and effective way for advertisers to spread their messages. Simple enough.

Except for that "engagement" part, which is in conflict with the differing ways consolidated radio and I see employees.

I think we're all in agreement that listener engagement is a good thing; it's one of the reasons personal endorsement spots work, and stations sell more of them now than ever before, at least in morning shows.

Yet, the relentless cutting of local staffs in favor of voice-tracking, and our defensive reaction to PPM are leading to ever less engagement.

Look, the more Muzak-like we become, the more we're just a music service, like Pandora, but with a lot more commercials and clutter, the more likely we are to push listeners away, not engage them. It just seems so obvious.

And that brings us to the topic no one wants to address, the words that cannot be spoken aloud inside any radio station: spot loads.

Radio is going to have to find a way to increase revenue while playing fewer spots.

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Doug Erickson  is an award winning programmer with over 30 years experience creating great content across all formats, media, and national boundaries. He is an internationally recognized strategist and branding expert who works with the largest media companies in the world. Doug@EricksonMedia.com

Research: YouTube Bests iTunes For Music Attention

Only about 16 percent of consumers bought a digital download in the last three months, even though the format ranks top amongst formats they would pay for.

According to a posting by Robert Andrews at paidcontent.org, consumption is overwhelmingly taken up by online music videos, ahead of free/illegal downloads. That means, while iTunes Store remains labels’ biggest single recorded-music payout partner, the likes of YouTube (NSDQ: GOOG) and Vevo actually command most consumer attention in the form of music videos, from which labels nevertheless get paid an accompanying royalty.

Interestingly, music videos rank just behind digital downloads as the format listeners are next most likely to pay for.

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Radio Show Challenges FL Gov. To 'Get To Work'

Florida Gov. Rick Scott is fond of the phrase “Let’s Get to Work,” using it on the campaign trail throughout the fall and now in the governor’s office.

But the governor never officially trademarked his campaign slogan. So, an Orlando-area radio host went ahead and claimed it as his own, according to a posting at Central Florida Political Pulse, at
orlandosentinel.com.



“We own it,” said Jason “Buckethead” Bailey, the host of The Buckethead Show on Real Radio 104.1 WTKS in Orlando. “He had never ever service marked it during this entire campaign. And we question whether he really means it.”

Bailey said the idea sparked from an on-air conversation about the governor and his job creation plans. Bailey’s co-host Oddo joked that the governor probably never looked to see if the phrase was trademarked. So Bailey asked a group of lawyers to look into it. When the phrase was available, he decided to buy it.

Now, Bailey is challenging Scott to a 30-day job creation contest.

The show is setting up a website and job fair for unemployed Floridians. It’s also airing a 30-minute job creation segment every Thursday and offering to stop any other segment if an employer calls in and wants to go on the air to announce a job opening. Bailey wants to see direct proof that Scott, during that time period, is putting more people to work than his show.

“At the end of this challenge, we want to lose,” Bailey said. “We should lose. We should lose. The governor should be able to put more people to work than we can in 30 days.”

If Scott wins, Bailey said he will hand deliver the service mark papers to the governor in Tallahassee. But if Bailey wins, he will ask the governor to stop using his trademark phrase.

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Tampa's Nancy Alexander Out At WMTX-FM

Nancy Alexander might be the Tampa Bay area’s best-known female radio personality, bringing her energetic irreverent personality to bear hosting local TV and radio shows since the 1980s — when she first appeared as “Nancy in the Sky,” a traffic reporter on WRBQ-FM (104.7).

But Alexander won’t have a broadcast job in the Tampa Bay area for the first time in many years, following the decision by Clear Channel Radio Monday to remove her and co-host Kurt Shriner from the afternoon show at WMTX-FM (100.7), according to a story by Eric Deggans at tampabay.com.

Officials at Clear Channel declined to say why they took Alexander off the air or who would succeed her in the station’s 3 p.m. to 7 p.m. weekday timeslot. The host herself said she was blindsided by the news and unable to explain the move, which will see her leave WMTX after more than a dozen years as its highest-profile local host.

“I wasn’t let go — my contract is not being renewed,” said an emotional Alexander, when reached at her home Monday. “I can’t make sense of it.”

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More Music, Less Reading in Kids With Depression

Study: Depressed Teens and Tweens Spend More Time Listening to Music, but Music Probably Isn't Causing the Depression
The amount of time a tween or teen spends listening to music appears to be associated with his risk of major depression, a new study shows according to a story by Brenda Goodman at WebMD.com.

Study researchers are quick to point out that the music probably isn’t causing the depression, although it may be a way for children to find refuge or connection when they’re feeling bad.

“It’s very important not to interpret this as something evil about music. In fact, it may actually be very helpful to people who are very depressed,” says study researcher Brian A. Primack, MD, assistant professor of medicine and pediatrics at the University of Pittsburgh School of Medicine.

“I think the reason it was important to publish is because it is a very strong association,” Primack says.

In fact, Primack and his co-authors found that the most frequent music listeners in the study had more than eight times the odds of being depressed compared with those who listened the least.

The study wasn’t designed to measure total listening times, but based on previous research, Primack estimates that children in the highest-use group are probably plugged into their iPods or stereos for more than four or five hours a day.

“It’s an important thing to know about because it may help clinicians and parents and teachers to realize that very heavy use could be a marker for depression in some people,” he says.

The study also found that children who were depressed were less likely to read books, magazines, or newspapers, compared to children who weren’t depressed. That may suggest either that reading may have some protective effects against depression or that children who are depressed can’t concentrate long enough to engage in it.

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The Five Minute Focus Group

Kids React to 'Friday' by Rebecca Black.

Clear Channel Rolled Out Bonuses Again in 2010

Business improved in 2010 and that meant bigger compensation packages for top executives at Clear Channel Communications. After a year of greatly reduced bonuses in 2009, they were pumped back up in 2010, according to a story at rbr.com.

When things got tough in 2009 CEO Mark Mays took a cut in his base salary from $895K to $500K in 2009, as did his brother Randall, from $875K to $500K. Randall Mays was then CFO, but stepped down January 4, 2010. He remains as a director and Vice Chairman.

As noted in our story at the time, potential incentive bonuses were also slashed, but the year was so bad that the brothers ended up receiving only $236,670 each, down from $4.5 million each in 2008.

What a difference was seen in 2010. The base salary for Mark Mays automatically jumped to $1 million. As EBITDA shot back up he received an incentive bonus of more than $2.6 million. Additional compensation, including personal use of the company aircraft, was over $1.4 million. The incremental fair value of the put right which Mays exercised last August to sell 200,000 shares of stock back to the company added $5.97 million to his 2010 compensation reported to the SEC. All in all, his 2010 compensation total was pegged at $11,049,749, which was up 1,137% from the 2009 total of $893,332.

Clear Channel Radio CEO John Hogan had been the highest paid officer in 2009 and his compensation package more than tripled in 2010, from $1.1 million in 2009 to nearly $3.6 million in 2010. That included a base salary of over $825K, incentive bonus of over $1.6 million, discretionary bonus of $225K, $831K in options and other compensation of $51K.

Company founder and Chairman Emeritus Lowry Mays still has an employment contract with Clear Channel. He got an incentive bonus of $398K based on the company’s financial performance, in addition to his $250K base salary. Add in $223K of other compensation and his 2010 total was $871K.

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Report: Katie And Matt To Team-Up Again?

From Bill Carter, The New York Times

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For Katie Couric, the offer in 2006 to become the anchor of “CBS Evening News” came with another incentive, one she prized almost as highly, according to two of her friends: the chance to report for “60 Minutes,” the newsmagazine that for Ms. Couric stood for the kind of serious journalism she had always aspired to.

Regular appearances on “60 Minutes” were written into her $15 million-a-year contract with CBS, but once she arrived at the network, she found a chilly reception from some of the staff members at the venerable program. Some of Ms. Couric’s associates said that the chilliness seemed to stem from the top, the show’s executive producer, Jeff Fager. That view was disputed by people close to Mr. Fager, who said that Ms. Couric has praised his stewardship of her “60 Minutes” pieces.

Still, her appearances on the show have been fewer than she hoped for — averaging not even five a year. Even after the show won an Emmy for her interview with the airline pilot Chesley B. Sullenberger III, Ms. Couric’s visibility on the program never increased.

“They never let her learn the secret handshake there,” said one former NBC colleague.

In February, when Mr. Fager was named chairman of CBS News, his tepid response to the hugely public question of whether she might continue as anchor (Mr. Fager said he hadn’t thought about it yet) sent an additional signal to Ms. Couric and her representatives: it was time to move on.

Ms. Couric and CBS are now negotiating how and when to end her five-year run as anchor, one marked by early criticism, later journalistic successes and disappointing ratings over all.

Ms. Couric is pursuing the idea of her own syndicated talk show, possibly with her former “Today” show co-host, Matt Lauer.

Chicago’s No. 1 Station ‘Finally Getting Its Props’

From Robert Feder, Time Out Chicago:

The hottest radio station in Chicago never plays any music. It boasts no wacky disc jockeys, no larger-than-life personalities, and no incendiary talk show hosts. It generally steers clear of hype, controversy or drama. In fact, it’s been churning out the same type of programming day in and day out — delivered by some of the same voices — for more than 40 years.

And yet as measured by both ratings and revenue, the undisputed No. 1 radio station in town is WBBM-AM (780), the CBS Radio all-news outlet. While that may come as a surprise to some, it’s been the case for quite a while. It just hasn’t been widely acknowledged until now.

Newsradio 780, as it’s known, is in its third year as the consistently top-rated station among all listeners age 12 and older, according to Arbitron Co. And in revenue figures for 2010 recently published by media analysts BIA/Kelsey, WBBM led the market (and ranked seventh in the country) with $42.5 million. With rare exception, it’s been the top biller locally since 2003. No other Chicago station finished among the top ten nationally last year.

“It’s been a great station for a long time,” said Rod Zimmerman, senior vice president and general manager of the 50,000-watt AM powerhouse, and chief of CBS Radio’s seven-station Chicago cluster. “It’s nice to know it’s finally getting its props.”

With veteran news anchors Felicia Middlebrooks and Pat Cassidy (pictured above) solidly entrenched in morning drive, Newsradio 780 boasts a lineup of experienced professionals. Matching their longevity is that of their bosses: Zimmerman first made his mark as a sales account executive at the station in 1978. Ron Gleason, director of news and programming, began his initial run there as a sports anchor in 1985.

In some ways, CBS Radio is reaping the benefits of seeds that were sown a decade ago. In 2000, Newsradio 780 regained the rights to Bears football broadcasts in a move that coincided with the demise of sister station WMAQ and its competing news/talk format. One year later, 9/11 put all-news front and center.

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WBBM Website.

Goodbye, Glenn: Beck Gets Sliced And Diced on CNN

From David Zurawik, Z On TV, The Baltimore Sun:

I had a chance to join the Glenn-Beck-gets-dumped-by-Fox postmortem on Howie Kurtz's "Reliable Sources" Sunday, and here's some videotape of the takedown courtesy of CNN.


My capsule analysis: The fact that Beck is leaving the world of cable news is a good thing for all who care about our civic discourse. He helped take the TV portion of our conversation about democracy to a new level of toxicity when he used the Fox News Channel to invite viewers in 2009 to send him any damaging information they had about members of the Obama administration -- information like the stuff he gathered on Van Jones, who had served as the president's green (energy) jobs czar, before Beck used his show to get him fired.


Putting a bounty on public officials is not what anyone in their right mind would consider a proper use of a cable news channel. And Fox News deserves the harshest criticism for letting that sort of crazed warfare go on long as it did -- until so many advertisers fled that Beck was no longer economically viable.


But let's be fair -- blame for the other half of the toxic, national, political, cable TV discourse goes to folks on the left like former MSNBC host Keith Olbermann, who responded to Beck's call for damaging data on Obama administration officials with his own call for dirt on Beck, Fox News chief Roger Ailes and/or Beck's radio producer.


That's just as bad as Beck, and don't talk to me about "false equivalency," courtesy of your liberal, think-tank talking-points memo.


But here's the point on which I think we can all agree: The fact that both Beck and Olbermann are off their major cable news platforms and headed for more marginalized media places is great news for anyone who cares about this democracy. And it couldn't come at a more crucial time -- as the budget battle enters of phase of what looks to be hand-to-hand combat, and we begin a presidential election cycle.

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T-Mobile Customers Pay More Under AT&T Plans

Among the arguments raised by opponents of AT&T's proposed $39 billion acquisition of T-Mobile: the deal would remove a wireless carrier known for catering to budget-conscious consumers, according to a story by Mark Walsh at mediapost.com.
Indeed, T-Mobile has long positioned itself as a lower-cost option to larger rivals, including AT&T, Verizon Wireless and Sprint. But does T-Mobile really offer better deals on service plans than AT&T?

Yes, according to a new analysis by Consumer Reports. It found that T-Mobile wireless plans typically cost $15 to $50 less per month than comparable plans from the carrier planning to swallow it.

The consumer watchdog said the finding also validated concerns that T-Mobile customers migrating to AT&T plans would likely pay more for service than they would have with T-Mobile. And that T-Mobile's exit from the market would eliminate a lower-priced alternative from the market.

The Consumer Reports finding comes as Congress is preparing to scrutinize the AT&T/T-Mobile merger, with the Senate scheduled to hold its first hearing on the deal May 11. The FCC and the U.S. Department of Justice must also approve the merger before it can be completed. At the state level, New York Attorney General Eric Schneiderman recently announced plans to review the transaction.

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NPR, PBS Survive 11th Hour Spending Deal

Despite several ugly recent episodes and considerable movement by conservative activists to defund it, federal funding for the Corporation for Public Broadcasting and National Public Radio survived an 11th hour deal on a spending bill to fund the government for the rest of the fiscal year.

According to a story by Jonathan Strong at The Daily Caller, the continuation of funding for public broadcasting is one of several significant victories for Democrats regarding the policy riders in the bill still emerging 12 hours after Democratic and Republican leaders struck a deal to avert government shutdown.

NPR surviving stands out given the considerable momentum held by its critics following two recent episodes that brought its alleged liberal bias to national attention.

The first involved the firing of anchor Juan Williams for comments he made on Fox News regarding his experiences on airplanes.

“Look, Bill, I’m not a bigot. You know the kind of books I’ve written about the civil rights movement in this country. But when I get on the plane, I got to tell you, if I see people who are in Muslim garb and I think, you know, they are identifying themselves first and foremost as Muslims, I get worried. I get nervous,” Williams told Fox host Bill O’Reilly.

Critics blasted NPR not just for firing Williams over the comments, pointing out that Williams underlying point was how important it is to overcome unintentional feelings of nervousness.

NPR also drew criticism for the way it fired Williams: over the phone; the executive who fired him later resigned.

In a second episode, an undercover sting by conservative provocateur James O’Keefe caught a top NPR executive blasting the Tea Party as “racist” to what he thought was a Muslim group with ties to the Muslim Brotherhood contemplating donating $5 million.

Ron Schiller, the executive on the video, also said NPR would be “better off” without federal funding.

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