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The music industry goes quiet for a couple of weeks. Other than Christmas tours, there isn’t much happening on the road. Radio is in Christmas music gear and as a result label radio promotion and marketing slows. Record companies are obviously hoping for a Christmas sales miracle.
Even as recent as today there are labels closing, people getting let go from their jobs, and rumors of a massive layoff at radio. Merry Christmas everyone! Keep them all in your thoughts and prayers if you are one of the fortunate.
2008 was a tough year for both the radio and music industries. It doesn’t look much better for the beginning stages of 2009. What I’m afraid of is radio groups and record labels being short sighted as they attempt to stop the bleeding and find a quick fix for the fallout. Sadly, a quick fix is the worst thing they could possibly do.
Despite the tough economy and declining revenue, there is still hope through vision and innovation. We must all look at the larger picture and embrace the opportunities that are available to revolutionize our business models. Instead of getting out of the foxhole and attacking, I see retreat. I see companies running away and ignoring the fight that must be waged. Doing nothing, and more importantly, doing the absolute wrong thing will bring defeat and set us back for what could be an unattainable resurgence.
In 2009 will radio get more local? Will they embrace new forms of original on demand content? Will they find a creatively new way to bring in advertisers and revenue? Will they set themselves apart and distinct from other forms of entertainment and media?
Will the music industry find more creative and intelligent ways to utilize technology? Will they adjust their business model to better reflect what is happening in the culture and marketplace? Will labels still be at the mercy of big box retail?
It may be another rough year ahead, but it can be salvaged. People will always want their music, personalities, and entertainment. Our job is to find out what they want and how they want it……and bring it to them on their terms.
Will 2009 be the year radio and records start becoming completely irrelevant or will it be an industry that will reinvent itself afresh?
Radio’s Digital Blue Ocean
Why radio needs to move away from the red ocean and into the deep blue seas…
by Daniel Anstandig
Future success can be accomplished with a new way of thinking and an adjustment to radio’s business model. The most arduous obstacle between our current status and future success is our thinking. Changing philosophies is difficult, and our industry is still clearly mired in legacy systems.
Nearly forty weeks of my year are spent visiting radio stations around the world working on digital strategies. We work on multi-platform strategies (on-air, online, mobile) and training/education of programming, promotions, and sales departments.
As our team enters the walls of different radio stations around the world, we find one commonality: The most progressive and successful radio executives are clear that radio’s business model is perfectly constructed to achieve its current results. In other words, the declining results are consequent of a deteriorating business model, and they’re finding new ways to accomplish their goals.
In other words, “If the business model isn’t working, try smarter.” Look for ways to expand your business beyond the product offerings and customer base it serves today.
For more on Radio’s Digital Blue Ocean, visit: http://www.mcvaynewmedia.com/feature/features-archive/radios-digital-blue-ocean/
I am back home in Nashville and still in recovery mode. I appreciate Chris, Elizabeth, and Brian for their contributions to the blog while I was away. It feels like I was out for a month, so forgive me if it takes me a while to get in the blogging groove.
Yesterday was the first day in two weeks I have seen any news. I have not watched TV, listened to any radio, read a newspaper, or surfed the net at all. Other than scanning for important emails, I had little idea of what was going on in the world of news and events. And I am one who likes to be aware of things, but to be honest, I find myself in a better place not knowing what was happening.
Now that I’m back, I don’t want to hear anything about Obama, McCain, or the Presidential election. I could care less what ‘disastrous peril’ or entertainment the media outlets are peddling as genuine news. My books and ipod have kept me good company for the last two weeks. I am slowly catching up with what is happening, but it is via online. I tried watching TV news last night, but just couldn’t do it.
Certainly I want to be aware of what is real and truly going on that impacts me and my loved ones, but this trip was not about me at all. It hasn’t been about what the world thinks is important or what the media wants me to believe is imperative. That has been refreshing.
The truth and reality is what we witnessed and experienced in Ethiopia and Rwanda. This is what’s really going on. I am thankful to have put my hands on reality for a change. I’ll try to hold on to it.
The demographic of country radio is skewing higher. The more we chase the demo, the higher the age keeps getting. Logic would tell us that in order to grow the format we can’t rely on the older demo, but the younger. The future. They are the shapers of media and culture who are finding more and more on demand entertainment.
It would seem wise to catch the next generation of listeners while we still have the chance. Offer them not only the latest music and content, but create innovative platforms to feed their “self broadcasting” lifestyle. Engage them with podcasts, web sites, social networks, texting, and mobile. Catch them before terrestrial radio loses its rank among their entertainment options, of which their are already too many.
It doesn’t mean the older demo needs to be tossed aside since they are key targets for advertisers, but so are the younger demos. There is a way to get the kid and their parents. Country radio can be edgy, hip and play exciting new music right along with the safe superstars. After all, we are a ”family format” right?
Give them REAL music variety within a framework of multiple platforms and we just may be able to hang on to the next generations. How can it be done with a 15 or 20 song playlist? There is no discovery or excitement in that. It’s time to move forward. The format has a wealth of young and talented new artists to lead the way if given the opportunity.
The indications are that teens and twentysomethings find themselves currently apathetic to radio and if country radio doesn’t welcome them in and create a demand then we will lose them. You think ratings and records sales are hurting now? Just wait till we let the new generation slip away as we follow the increasingly older demo up the mountain and off the cliff.
A handful of companies are trying to make it happen, but the majority still focus on the way things worked in the past and making decisions according to an outdated model. There is incredible and unprecedented opportunity if we will just seize it.
Clear Channel is streaming a couple of Pandora stations on various individual web properties.
Will this testing of the waters turn into something more long term?
Check out the Wired article here.
Edison Media Research has announced their “30 Under 30″ honorees, which is the nationwide vote for 30 promising talents under 30 years of age in the radio industry.
A special shout out to my friends Daniel Anstandig, President McVay New Media and Scott Herrold, PD SOS Radio Network in Las Vegas. Both are not only very talented, but great guys. Daniel has written guest blogs on FOR THE RECORD, which you can find right here.
1. Tazz “Daddy” Anderson: Executive Producer, Rickey Smiley Morning Show, KBFB, Dallas
2. Daniel Anstandig: President, McVay New Media
3. Rob Anthony: Program Director/Operations Manager, WMAS, Springfield, Mass.
4. Jim Bezak: Director of Support and Training/Internet Services, Saga Communications
5. Ian Bush: Reporter/Anchor/Editor, KYW, Philadelphia
6. Charlamagne: Co Host, Wendy Williams Experience, WBLS, New York
7. Justin Chase: Program Director, KMXB/KKJJ, Las Vegas
8. Tommy Chuck: Program Director, WFLZ Tampa, Fla./Gulf Coast Regional Director of Interactive Services
9. Ryan Dokke: Assistant Program Director/Music Director/Night Personality, WKKT, Charlotte, N.C
10. Jennifer Megan Dowdy: Program/Promotions Director, WCLU, Glasgow, Ky.
11. Blake Florence: Assistant Program Director/Music Director, KTWV, Los Angeles
12. Sarah Harris: Director, Community Outreach, Emmis Communications, Indianapolis
13. Scott Herrold: Program Director, SOS Radio Network, Las Vegas
14. James “Doubledown” Howard: Program Director, WXTB, Tampa, Fla./ KYRK, New Orleans / WTZB Sarasota, Fla.
15. Talya Johnson: Music Director / Internship Coordinator, WPGC, Washington, D.C.
To check out the rest of the list go to Edison Media Research.
A federal judge has ruled that Yahoo, AOL, and RealNetworks could owe songwriters as much as $100 million over seven years as payment for streaming their songs on the web.
ASCAP has been caught up in a court case with the web giants over a blanket licence to compensate songwriters for the music they have created. More on this story here.
ASCAP has posted a press release of the decision on their site.
One of the more interesting panel discussions of the Leadership Music Digital Summit yesterday was “Digital Retail: What’s The Future?”
On the issue of the future of CD product, UMG Nashville EVP Sales, Marketing & New Media Ben Kline said, “I can’t imagine CD’s ever going away. I can’t imagine Wal-Mart and Target not selling hard product. It’s the ones (retailers) in the middle that will be hurt. I don’t think you’ll be able to walk into a mall and purchase a CD.” Kline went on to comment, ”We still can’t afford to be in the singles business” when asked about the current state of selling digital singles and why labels are not being more singles driven.
One of the major discussions prevailing was how to grow digital sales as CD sales fall. Each panelist had their own ideas including:
- Better devices
- Ubiquitousness
- Multiple product offerings in one bundle
- Player compatibility and coordination between platforms
- Exceed experience of music ownership with consumers
- Stop narrow focusing on subscription based models
On the subject of future business models within retail, the industry vets responded with:
- Ben Kline: “Demand price models (where price is equal to the demand of the music). Not every song should be .99 cents.”
- EMI CMG VP Sales & Marketing Mark Adkinson added, ”Steve Jobs can’t run our business for us or he will run it right into the ground. He wants to sell devices, not music.” Mark also stressed the need for pervasive distribution within the music industry.
Leadership Music Digital Summit is going on today in Nashville. The keynote was delivered by the CEO of iLike, Ali Partovi, who mentioned that it was the first keynote he has given.
With all of the questions, concerns and potential regarding the future of music technology, Ali made a point to say, “What I’m most excited about is the discovery and promotion of music”.
Ali compared traditional broadcast media with new media:
**Traditional media is “untargeted, focused only on hits & singles, while album development suffers”.
**Digital media is “personalized, social, syndicated, targeted and enables artists to pursue their dreams.”
Partovi went on to say that digital media “could replace or solve the problems of traditional broadcasting”.
More highlights from the Digital Summit will be posted this week.
Radio Ink recently released the findings of a phone survey of 1,004 U.S. adults. Among the findings the survey showed that 53 percent of listeners said they stick with a station through commercial breaks, 35 percent change the station, and 8 percent turn off the radio. And those who change the station tend to do it quickly: Seventy-seven percent of those who tune away do it within 30 seconds after commercials begin. I‘ve seen other surveys where the numbers for losing listeners during commercial breaks are even higher.
Personally, I will punch out of a station that is playing a really bad spot, especially if the ad is poorly voiced by the owner of the company (hello Tom Shane?). I’ll also find another station if an advertisement is loud and annoying or if there are more than three or four 60 second spots back to back. Production and content of the commercial really does matter.
When I was in radio we had a full time production person and that’s all they did. Not many of those anymore with budget cuts and staff members wearing multiple hats and spreading themselves thin.
In thinking about the future, how much longer can the current advertising spot system last? Is there a better way to set up advertising and partnerships to better utilize time, money, positioning and ratings? Especially with the current battle that has emerged with other entertainment options (some of them commerical free).
The only time I find myself sticking around is if the spot is delivered with personality by the DJ or talk show host. If it is done live with improvisation, all the better. Give me authenticity and creativeness. If a host can pull that off, it is not only entertaining, but the represented company is better served. However, this can backfire when the host is delivering too many live spots and they suddenly become recorded “live” reads. Which leads us back to annoying.
An even better scenario for advertisers is the shorter and focused spots that are live or that “sponsor” an entire half hour or other segment of time. You know the type….”This half hour brought to you by insert company here…..”
Am I the only one that thinks something different should emerge in the way ads are produced, presented and scheduled? Maybe an entirely new and innovative type of advertising revenue stream will emerge through podcasting, texting, or social networking? There has to be a better way.
It will take a bold radio company to step out and set a new course.
How would you feel about a music site that organizes music according to your moods? What would be your thoughts about a destination where you can legally download MP3’s based on emotions?
Guitarati is conducting this grand sonically visual experience by assigning colors to music.
It is certainly unique and outside the box, but will it resonate?
If not, why not? Radio will need to embrace aggressive podcasting and video strategies to compete for the attention of future listeners. The age of P1 demo of many country radio stations is rising because they are losing younger generations of consumers. These tech savvy “self broadcasting” demos are getting what they want when they want it. They aren’t waiting around through ad spots and countless other songs to hear their new favorite.
Creative and innovative use of podcasts, video, web sites, and mobile based activity will not only enable radio to stay in the game, but be active in the lives of listeners. This could also answer the concerns of being local and developing engaging personalities, but radio companies need to make a commitment in making it happen. Will they?
These new media outlets will not only expand the brand of the station, but also be more easily monitored and accurately measured for advertising purposes. For example, YouTube users can now better analyze the viewing patterns of videos far more easily according to this story from Media Week.
The bottom line is creating entertaining content value and connecting to the listener and consumer. The more ways radio can do that the better chance they have to compete and win in a quickly changing landscape.
RADIO IN 3D
by Daniel Anstandig
Radio cannot grow if its operators insist on constricting the delivery of their brands to the sense of sound. Sure, there is no way around the fact that “speakers to ears” is our primary delivery method. Still, listeners and advertisers are now challenging radio stations to “think outside the speakers” into the interactive world. They want three-dimensional radio.
Many advertisers are now convinced that an audio ad is no longer enough to reach their customers. New Media has opened up new options to reach consumers—outside of television and radio, and local direct advertisers are buying campaigns that are “diversified” in nature. Radio/advertising companies that offer a multi-dimensional solution to advertisers (including audio, online showcasing, online lead generation, etc.) are more likely to win the lion-share of the business. Many of the radio companies we consult on building their digital marketing/sales strategies have reported that the street-level enthusiasm for radio buys with an interactive bend is at an all-time high.
McVay New Media’s 2008 Interactive Revenue forecast is calling for a 9% increase in this year’s spending on local banner ads alone. Across the United States in 2008, we will see approximately $10 Billion spent on local internet advertising by local direct buyers. Last year, radio is estimated to have pulled a whopping 1% share of that revenue.
These numbers concur with a study done by Borrell and Associates, which estimates that only 1.1% of last year’s $8.5 Billion spent in local online advertising (banners, audio/video streaming, and paid search engine placement combined) went to a radio station. Approximately $1.2 Billion dollars in streaming audio/video advertising alone will be placed online by local advertisers in 2008 (up 317% from 2007). It is estimated that $6.3 Billion will be spent by local advertisers on banner ads alone.
Broadcasters now stand at a cross-roads on whether to further include interactive media into their advertising-product-portfolio or not. The operators that effectively include interactive media in their strategies for audience and revenue growth will see returns this year. The operators without a vision for including interactive in their plans will leave money on the table—and sacrifice dollars to local internet portals.
Does anyone think it is interesting that Lee Abrams left XM to work for Randy Michaels? Jerry Del Calliano thinks it is not only interesting, but suspicious. Find out what he means on his blog Inside Music Media.
Lee, in his own blog, makes a comment about his new partnership with Randy: “We ARE going to re-write the future of media. He’s the kinda guy you want to do it with.”
I look forward to hearing more.
I attended several tech panels today, which I am glad to see on the schedule. One in particular was a panel that had Sean Ross from Edison Research, Dean Ernst from Play MPE and Jim Kerr from Pollack Media Group.
They each debated and rated the hottest tech trends as “Boom” or “Bust”. Here’s a quick rundown on how they voted:
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HD Radio: Majority BUST
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iPhone: Majority BOOM (shows you how fast technology moves because this has been an obvious boom for a while now)
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Internet Radio: Majority BOOM (although they said it would take a while to get up to speed)
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Podcasting: Majority BOOM
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360 Label Deals: Mostly BUST (in my opinion this is relative to which artists and managers)
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User Generated Content: Majority BOOM
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Mobile Content Distribution Channel: Majority BOOM
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DRM-Free Music: Majority BOOM
Jerry Del Colliano from Inside Music Media lists the 5 new rules for radio PD’s (addressed to consolidators or other serial abusers), so look out:
1. One PD per station. It used to be that a successful program director lived, breathed and experienced his or her one radio station 24 hours a day 7 days a week. This was an acknowledgment that the program director of a successful radio station is a specialist not a generalist. Consolidators anxious to get the most bang for the buck have spread otherwise qualified PDs beyond their core competency. If you want great radio stations that can program to the available market (which does not include the next generation), then suck it up and pay for one quarterback per station. Stop with the shortcuts and you’ll see a better return on your investment. And don’t tell me about the handful of PDs who are programming more than one station for you — imagine what they could do with one?
2. No airshift. (Does anyone know CPR for our consolidator friends?). The PD is responsible for talent, commercials, promotions, music or content, audience and community relations. Need I go on. If yours is a small market, an exception is allowed. Bigger markets — no exceptions. You don’t need your brain surgeons cleaning up the operating room at the end of the day. I know you don’t like this one but look at the results you are not getting by repurposing your PD. If you accept the suggestions so far, read on.
3. Outline goals and expectations on one page. How do you expect your content quarterback to do that which you ask him or her to do if you don’t articulate your goals and expectations on a piece of paper? I know. I know. Legal told you not to so when you fire an otherwise good PD who has achieved their goals you won’t have to lose the ensuing lawsuit. But really, put the items on a list. Make the program director sign off. Then, proceed to step four.
4. Give full authority to the PD to do his/her job. No meddling. No backseat programming. Leave your PD to either do what they promise or risk being replaced at the end of the year. Oh, no changing the rules in mid-stream. No using “corporate is making us cutback” as an excuse to stay involved. Warren Buffett, the billionaire who knows a little bit more than the Mays family about making money gives the people who run the companies he acquires full autonomy to do their jobs. Unlike the geniuses in radio, the Oracle from Omaha butts out. In fact, legend has it he only meets in person once a year for about two hours for an accounting of goals.
5. Fully fund the programming budget. Too many PDs have no real budget or the budget they have looks like Swiss cheese. If you suspect that corporate is going to ask for further givebacks during the year, under budget programming by the percentage of cutback you anticipate. You can’t expect a PD to do their job without knowing how much money they have to spend. In fact, put the amount on the goal sheet(#3 above) and make him or her sign off on it. Channel your inner Warren Buffett.
Check out the entire article here.
Chris Anderson & economist Jacques Attali speaking at the 2007 Midemnet Forum about the future of the music business. The revolution is happening……
Chris Anderson, Editor In Chief of Wired, is currently writing a follow up to his incredible book “The Long Tail”. The subject is the interesting phenomenon of FREE. In the spirit of the subject, a free 6,000 word preview and relating video can be found here.
You can also get a FREE copy of Wired featuring a preview of the much anticipated book here.
Finally, go to trendwatching.com for another informative article on brands making the most of FREE.
Inside Music Media is the blog of Jerry Del Colliano, founder of Inside Radio and current professor of Music Industry at USC. I could not decide which article to link to because they are all extremely relevant and well done, so I will just encourage you to check them all out.
Thanks to Chris Huff at KSCS/Dallas for the heads up.
Tell Me a Story
By: Daniel Anstandig
Music legend Ray Charles once said that he “was born with music inside” himself. It could be said that the best loved songs in history are the ones that resonate and harmonize with the music inside of us.
Country music is best known for producing these songs that reach into the souls of their listeners. The stories told by many Country songs can make your heart race, put a lump in your throat, and send tears down your face. They’re the songs and stories that have turned country radio stations into empires.
The world’s most powerful and best loved radio stations aren’t without persuasive stories themselves. Case in point: KLBJ in Austin… not just another radio station. It’s the radio station that was rescued from bankruptcy in 1942 by young entrepreneur, Lady Bird Johnson. KLBJ does a terrific job of summarizing their rich history at www.590klbj.com/History. WMMS is known in Cleveland (and beyond) as a way of life for Clevelanders more than a music service. Its logo (the Buzzard) and the many bands it made famous have kept it alive in Cleveland pop culture for years. WSM in Nashville catapulted its way into music history with the Grand Ol’ Opry. Read the rest of this entry »
Here is an interesting follow up to yesterday’s post regarding Jim Cramer’s predictions. It is from Media Week and about the need for radio to get back to live and local personalities to compete for the future.
Personality Crisis: Will Cost Cutting Save Radio?
Paul Heine and Katy Bachman FEBRUARY 11, 2008 – “shut up and rock!” screams a message on the Web site of WEBN-FM in Cincinnati. The shut-up part of that order at the iconic Rock station is being taken quite literally.Late last year, Clear Channel canned 12-year WEBN midday host Ken “Mr. K” Glidewell and replaced him with a personality who doubles as one of several co-hosts on the station’s morning show. The dismissal was part of a massive wave of layoffs in at least 20 markets that gave a wholly different meaning to the company’s Less Is More mantra.While the numbers varied from market to market, the results were alarmingly similar: on-air jobs eliminated, positions consolidated, air shifts radically extended, personality teams split up and more dayparts yielding to voice-tracking and syndication.
What’s so shocking is that those on-air cuts may be only the beginning. Just a few weeks ago, a CC edict came down from the top to freeze all budgets—including monies set aside for research, advertising and promotion—for first quarter, and possibly longer.
When the nation’s largest radio group makes deep cuts to boost the bottom line, you know the radio business is challenged. Radio revenue, following several years of practically no growth, took a turn for the worse in fourth quarter last year, a condition that is bleeding over into first-quarter 2008. Despite radio’s efforts to stimulate a second revenue stream from digital initiatives, reluctant advertisers and a looming local recession seem to be working against a prompt turnaround.
One of the industry’s chief money savers is voice-tracking, the practice of prerecorded on-air disc jockey patter spliced together with music, commercials and other elements. Pioneered by Clear Channel in the late ’90s at the height of consolidation and widely embraced by the industry, voice-tracking sacrificed the jobs of countless overnight personalities years ago. Now the practice is spreading to nights, middays and afternoons. Often, voice-tracking is used across dozens of markets, similar to syndication.
Jim Cramer made an appearance on Wall Street Confidential on Friday and had some strong comments regarding the future of terrestrial radio. Cramer commented, ”It’s over for radio. The radio fundamentals are so poor. The industry is going away”
What is your take on his tough words regarding the future of radio? What must the broadcasting industry do to compete and be successful in a crowded media and entertainment marketplace?
Go here to check out Cramer’s video.
I don’t always watch the Grammys. It can be a bloated, over politicized, and a clueless evening. And they have a history of treating the Country format horribly. Or is that the MTV Awards? No matter.
However, there are always a number of good things happening at the Grammy Awards. It’s like Saturday Night Live, you have to sit through a lot of junk to see something very well done. I did watch the entire show this year and found quite a few things to be cheering about.
First and foremost was the quote of the evening from Vince Gill. Shortly after Kanye West’s pompous speech, Vince was presented “Country Album of the Year” by Ringo Starr. During his gracious acceptance, in grand Vince off the cuff style he said, “I just got an award given to me by a Beatle. Have you had that happen yet, Kanye?” The best moment of the night.
Ever stop to think about the newest generation and what their reality of the world is and how it will impact them as they grow up? An interesting article from Media Week on what the implications could be as it relates to media and entertainment. Check it out here.
