Where Does The CBS Revenue Come From?

11-5-14

CEO Leslie Moonves made a point to emphasize that only 50 percent of the company revenue is now coming from advertising. That's down from about 70 percent just a few years ago. Obviously the point he wants to make is that the company is diversified and continues to diversify in other areas (like digital) and can withstand a downturn in the economy. In addition to revenue from advertising, CBS takes in revenue from content it creates and sells, and affiliate contracts that generate huge retransmission fees.

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Streaming. Where Do We Go From Here?

10-9-14

How much you pay to stream over the Internet will be determined over the next year. As you've been reading this week, filings with the Copyright Royalty Board have begun. The NAB is fighting on your behalf, which includes a special consideration request for those of you in the smaller markets. The questions that remain are: What happens now? How closely do you need to watch this? What should you do, if anything, to express your opinion? For answers to those questions and to sort out the entire royalty issue moving forward, we turned to broadcast attorney John Garziglia.

by John Garziglia
Streaming is too expensive.  Streaming costs are impossible to predict.  Streaming is not a profitable enterprise for radio stations.  Why should radio stations pay record companies for the privilege of having music played when record label promoters actively seek spins on radio stations?  These are all legitimate concerns voiced by broadcasters who stream or who wish to stream. 

The Copyright Royalty Board (?CRB?) proceeding to set the rates for broadcast station streaming in the 2016-2020 time period, informally known as ?Web IV?, is now in the phase in which initial positions are being presented.  The CRB, and the parties before it, are engaging in ?discovery? including the submission of direct cases.  The discovery/direct case phase goes through December.  Then there is a rebuttal phase.  In April and May 2015, there will be a trial in which testimony is offered and questions are asked.  Under the law, a CRB decision must be issued no later than December 2015.

The National Association of Broadcasters (?NAB?) recently weighed in with its filing on streaming rates.  The NAB advocates that the CRB should ?start from scratch? and set the rates to what would be ?agreed upon by a willing buyer and a willing seller in an ?effectively competitive? market, as required by the Copyright Act.? 

In support of the broadcasters? position, NAB notes that the last agreement reached by broadcasters on streaming rates was a ?take-it-or-leave-it result between a monopoly seller and a buyer that had no viable alternatives?.  The NAB argues that to the extent a broadcaster provides valuable promotional benefits to record companies from the streaming of recordings, a recording company would be ?willing to accept a lower ? and in some cases, even [a] negative ? price? in recognition of the promotional benefits of playing recorded music on established and popular radio stations.  The NAB?s filing is available HERE 

For all but the smallest commercial broadcasters engaging in streaming, radio stations now pay per-song/per-listener for streaming recorded music.  It is impossible now to forecast what will be the result of this Web IV rate setting proceeding.  If you wish to enmesh yourself into the kind of decisions that are rendered by the CRB, its 83 page decision in the ?Web III? proceedings is available HERE 

The current rate paid by commercial broadcasters for streaming is $0.0023 per performance, with a minimum of $500/year.  Per-performance refers to each listener listening to a single recording.  An average of 100 listeners per year results in a cost to a streaming broadcaster in the $25,000 range.  One of the broadcasters who will testify as a witness on behalf of the NAB suggests that if the per-performance rate was lowered to $0.0005, which for 100 average listeners would result in an annual charge in the range of $5,200, that might be a rate at which broadcasters could pursue streaming on a profitable and sustainable basis.

NAB?s argument, stripped to its essence, is that with lower streaming rates, more broadcast stations would choose to stream, streaming would then be a sustainable business enterprise, and recording companies would profit both with additional streaming revenues and with the promotional value of spins on radio which is the proven route to a hit record.

It is possible that the CRB could move away from a per-performance rate entirely and base streaming rates on a percentage of revenue such as is now the case with songwriter fees.  If the CRB sticks with per-performance fees, the rates could go substantially higher, be reduced or stay the same.

Whether the CRB sticks with the per-performance metric or moves to a different measure, the CRB is required by law to set the rate based upon what a willing seller and willing buyer would pay.  Unfortunately, it is difficult to imagine a real-life test scenario for establishing what a willing seller and willing buyer would pay for streaming recorded music.  Possibly if every new recording released in an upcoming single month had to be individually negotiated between recording company and streaming broadcaster, it might become apparent just what a willing broadcaster would pay, and a willing recording company would accept, for a recording to be played on a broadcaster?s stream.

This Web IV CRB proceeding illustrates the importance of broadcasters having a unified voice as radio moves forward with new technologies.  One way or another, streaming is going to continue to cost broadcasters money.  The only question is ?how much?.

John F. Garziglia is a Communications Law Attorney with Womble Carlyle Sandridge & Rice in Washington, DC and can be reached at (202) 857-4455 or jgarziglia@wcsr.com.

(10/10/2014 8:20:53 PM)
Is it illegal for a non-profit, supposedly religious station, to air NON-religious programming and sell advertising, and ON TOP OF IT, do an informal LMA for a portion of the day programming? Please advise, as there is a station doing exactly this!
(10/10/2014 12:20:31 PM)
As a internet streaming volunteer station and brand-new low power FM station (LPFM) we cannot sell advertising according to the FCC rules that we operate under. Thus, we have no earned income and must rely on grants and donations for our operating expenses. I don't believe we would have to pay high rates to stream and broadcast the music we play.
(10/10/2014 8:27:41 AM)
Here in Denmark it's free to stream your station's output on the internet. Whereas standalone netradios pay a fee.
(10/10/2014 7:50:45 AM)
"The NAB is fighting on your behalf"

Why does that not inspire confidence in me? When we need Winston Churchill fighting for us and we have Neville Chamberlain.

(10/10/2014 5:17:44 AM)
Read my blog, at www.hazzardayre.blogspot.com the Internet and streaming is the only place to go to get a new station started.
If the NAB wanted to help, they'd push to get a new filing window open for new OTA stations, as it is now rural America got the shaft. The only solution is streaming.
We're doing well with streaming.

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How Do You Get Where You Need To Go?

9-2-14

The DASH connected-car conference is coming up fast -- October 15-16 in Detroit -- and innovation, both on the dash and in radio, is certain to be a hot topic. So we're pleased to announce that Cary Tilds, chief innovation officer at GroupM, will deliver a keynote address with this intriguing theme: "What Got You Here Won't Get You There."

Radio Ink Publisher Eric Rhoads said, "Cary is a key player in advertising, staying on top of every new trend and its impact on advertising and media. This will be a must-see session."

At GroupM, Tilds is responsible for identifying up-and-coming consumer technologies and assessing how those technologies affect strategies on digital media platforms; she finds, evaluates, and develops road maps for the existing and emerging technologies that keep GroupM a power user of search, social media, and other platforms. Tilds is a digital-advertising veteran, having previously worked as leader of digital media operations for Mindshare North America, evaluating and providing strategy and vision to integrate people, processes, systems, and media opportunities. Earlier in her career she led digital media operations for Team Detroit, leading a team of digital media strategists for clients including Ford's Tier 1 and Tier 2 business divisions.

Jacobs Media GM Paul Jacobs said, "Cary sees the entire playing field -- from the consumer perspective and how they interact with digital devices and their cars, to what her agency?s clients are demanding. There is no one better suited to showcase for DASH attendees what the trends are and the opportunities that lie ahead." This is a rare opportunity to get the viewpoint of someone on the front lines for both advertising and automotive -- and you need to hear what she has to say.

DASH 2014
October 15-16
Westin Detroit Metropolitan Airport Hotel
Detroit, MI

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Where is Casey Kasem's Body?

7-19-14

As if this story hasn't been bizarre enough already. Kerri Kasem, the most outspoken of the Kasem kids, is saying not only has her father still not been buried, they have no idea where his body is. She tells CNN ""We are not surprised. We expected something like this to happen." Wife Jean also spoke to CNN stating the body is not missing.  According to the News Network, Candace Corkum at the Gaffney Funeral Home in Tacoma confirmed that the facility had been in possession of Casey Kasem's body, but said that it was no longer in their care. Kasem died on June 15.

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Advertisers Going Where Consumers Are

7-2-14

It's no secret. We all know it, we all do it. The question is how is your mobile plan to deliver ads to your listeners coming along? Consumers are spending more time with their tablets and smartphones than ever before. According to eMarketer?s latest estimates, U.S. adults will spend an average of 2 hours 51 minutes per day on a mobile device in 2014. Last year that number was 30 minutes per day less. At the same time, time spent with desktops and laptops is declining. TV still dominates adults? media time with 4 hours 28 minutes per day this year, according to eMarketer.

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Where Are The Online Ratings For Radio?

2-13-14

As the radio industry patiently waits for a ratings company to accurately measure online and digital listening so those numbers can be combined with over-the-air numbers, the TV industry is boiling over with vendors getting into that game. The Wall Street Journal reports how Nielsen is "feeling the heat" from companies like ComScore and Rentrak to measure online viewing. ComScore says it can offer the TV industry a single metric that tells how many people watched a TV show across all platforms, including live and time-shifted TV, video-on-demand, and online streaming. Isn't that exactly what every radio station in America would love to have? Read the Journal story HERE

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Where Have All The DJ's Gone?

1-30-14

A customizable radio station might not be just a "feature" after all. Building upon the theory that local DJ's are becoming extinct, the company Gracenote has created "Rhythm," which they say is a new radio and discovery platform that will provide the right blend of metadata, algorithms and people-power to create the backbone for the next wave of Internet Radio Apps and services. "Back in the golden age of radio, music was delivered to us by trusted DJs ? people who lived and breathed rock, jazz, and rhythm and blues. These guardians of our airwaves had an emotional connection to what they were spinning and helped us discover new musical loves. Unfortunately, today, many of our music experiences are left solely to machines ? emotionless systems that recommend music from bits of data."

Ben Sisario of the New York Times is reporting that Gracenote is working with the company Next Big Sound on a plan for a customizable Internet radio program that would let consumer brands, car companies, and anyone else have their own music app. (Gracenote is a digital music service and Next Big Sound analyzes social-media chatter around music).

Sisario writes, "Gracenote?s Rhythm, could be used by virtually any company to create a radio service tied to its own product or websites on a global basis." Car companies could develop a system to be used in all of their cars around the world." Sounds like more competition in the DASH might be right around the corner.

Gracenote creates, consumes and analyzes billions of data points every day, touching hundreds of millions of music fans and TV viewers. Gracenote is supported by a large source of music and video metadata, featuring descriptions of more than 180 million tracks and TV listings for 30+ countries. The database receives more than 550 million queries everyday and more than 16 billion every month. If you measured Gracenote against a search engine, it would rank among the world?s biggest.

The Gracenote descriptive music metadata focuses on six main categories:
?Genre of the song (Rock, Hip Hop)
?Mood (Rowdy, Somber)
?Era the song was recorded (1980s, 2000s)
?Tempo (Fast, BPMs)
?Origin or region most associated with the artist (London, New York)
?Artist type (Mixed, Female, Male)

Rhythm will be available next month.

(1/30/2014 6:47:27 AM)
I was born and raised on the radio listening to cats like The WolfMan, Hot Rod, Casey Kasem, Fat Daddy and Larry Dean (to name a few). These were some of radio's golden age local and national icons. And while there are some amazing DJs on radio today, I think the coming extinction of local DJs is probably just an evolutionary reality rooted in the fact that younger listeners just don't care about radio personalities and promotions and commercials. They just want the music the way they want it.

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Do You Know Where Sports Radio Is Headed?

1-30-14

As part of his duties as ESPN's SVP of production, business divisions, Traug Keller heads up ESPN Audio, one of the most successful parts of the top sports brand in America. The division formerly known as ESPN Radio has become a leader in sports over the air, but there's also a wildly popular live stream at ESPNRadio.com, a huge library of podcasts in the website's "Podcenter," and tons of on-demand programming from such top ESPN personalities as Mike & Mike and Colin Cowherd, all accessible with just a click or two. And of course there's the free ESPN Radio app in the iTunes store.

At Radio Ink's Sports Radio Conference, set for March 10-11 in San Diego, Keller will give a "State of the Sports Radio Industry" presentation. He'll discuss the transition from a radio business to a comprehensive audio business, and how ESPN became an industry leader, reaching fans across both established and emerging audio platforms with a compelling mix of talk and play-by-play.

Sports is one of the hottest and fastest-growing formats in radio today, and at the Sports Radio Conference, you'll have a chance to hear from someone who's been helping to lead the way for nearly a decade. If you're running a Sports station or considering a flip, this is a presentation you need to hear.

The Sports Radio Conference is the radio industry's exclusive Sports and Sports Talk summit. With an agenda focused on growing audience and revenue at Sports0formatted stations, attendees get the chance to hear from a wide range of experts on topics that include programming, promotions, sales, marketing, and digital platforms as well as local, collegiate, and professional sports teams and events. If your station covers any sports or sports/talk, the Sports Radio Conference should be part of your game strategy.

Register HERE

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Where Does Radio Fit Into the Vehicle of the Future?

10/25/13

Day two of DASH started off with a panel of national automotive representatives who provided insight into radio's future position on the dash of the connected car, and the news was good. Greg Ross (pictured, second from left) from General Motors said infotainment is big, and right now radio makes a lot of sense. "Radio is a core feature in our cars for the foreseeable future," he said. "There is great content. It's efficient. There are customer demands for getting it in different forms or at the time customers want to consume it."

Toyota's Wayne Powell (pictured at right) said out loud exactly what the radio audience wanted to hear: "We love radio. We put three tuners in many of our cars. We don't see removal of the radio tuner at any time at all. The data is clear that terrestrial radio is the number one source in the car. We don't see it going away. We're using the radio pipe in a more expanded way. That keeps the pipe alive."

Powell also said Toyota has key partnerships with companies like Clear Channel for both voice and data. "It's not just Internet connectivity," he noted. "It's total connectivity." Powell pointed out that Toyota vehicles even seamlessly switch from HD to analog when a customer listening to an HD station drives into an area where it's not available, and said Toyota needs partners like Clear Channel to make that happen. "Partnerships are critical," he said. "We can't deliver this alone. We use carriers, content providers, and
pipe providers." Toyota has even opened up an office in Silicon Valley specifically to seek out nontraditional, cutting-edge partners.

GM's Ross also said that eventually every car will be connected "to other cars, to the road infrastructure, and to the Internet." He went on, "All cars will be programmable, with the capability of adding and updating software after the car is purchased. It will be more precise to the tastes and needs of the consumer. 4G connection will be rolled out next year in GM cars. Virtually every vehicle over the next 18 months will have it."

(10/25/2013 1:32:06 PM)
Was there any discussion or insight given to Apple's mobile operating system being installed in autos?
(10/25/2013 6:03:30 AM)
"Automakers Get HD Complaints"

"But even when HD stations do implement HD Radio or put a multicast channel on the air, they’re not always able to pay attention to the alignment of the analog and digital signal. That’s a problem, because complaints about audio quality are starting to arrive at dealerships. IBiquity Senior Vice President of Broadcast Programs & Advanced Services Joe D’Angelo ticked off several: customers say the HD often echoes as if two signals are being received slightly out of time, or the audio sounds as if the station is skipping. Other complaints include the radio doesn’t pick up HD stations, ever. Or, the HD goes in and out. Owners have been slow to embrace the advanced data features that can make a radio display look like its competitors, such as satellite radio or Pandora, in the dash. Only some 400 stations have so far and that’s a problem, according to HD proponents; they believe that if stations don’t step it up, automakers will move radio down the center stack of priorities in the dash, so to speak."

http://www.radioworld.com/article/radio-eyes-all-forms-of-%E2%80%98digital%E2%80%99/

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(SOCIAL) Where Social Media Growth Comes From

9-6-2013

Most people spend their time trying to figure out how to take shortcuts. A lot of people simply don?t want to do the work. They want the spotlight of game day (as they say in sports) without the commitment to working out consistently that makes you a champion. That?s called watching. Not doing. We are in the ?doing? business. In fact, you could argue that local radio is in the ?doing for others? business. So, let?s experiment with social media.

For one month, focus your social media totally and completely on others. No posts about you. Post about others. Comment about others. Do good things for others. Give helpful tips when someone is expressing frustration. Post information that will offer people help in doing things that are important to them.

Consider this:

1. Real growth in social media success comes from realizing that people seek validation. They want to feel they matter. They wish to belong and often our modern society leaves a lot of people out there struggling in their daily lives to belong to anything.

2. You?ve seen those people on Facebook that complain Facebook doesn?t have a dislike button, right? Why do people want a dislike button? Because human instinct drives negativity, but people actually crave positive thought and energy. So give that to them in social media (along with validation) and you will see your social media efforts become much more ?sticky.?

3. You tempt people to follow you by investing in them. Put effort into thinking about your ?target listener? and what can improve their life in your local market. Give it to them with strong visuals and content that makes them feel smart to share with their friends. While you may want to focus on promoting what is important to you, being all about ?them? lights a passionate fire in those individuals that will be rewarded.

4. Resist the desire to think contesting is great content. I am personally not against contesting in social media or driving people directly to your radio station (in fact, I am 100 percent for it). However, I do believe in ?dialing back? to the basics of why people really go on social media platforms like Facebook and Twitter. I encourage clients to hyper-focus on their local market and what the listeners who they most want to attract are passionate about in their format. That?s so much more than focusing on purely trying to get people to listen to your radio station. Give them reasons that matter to them for tuning in.

5. Expose your vulnerabilities and concerns. Making yourself human relaxes others and encourages connection. Without the human element in your social media, you might as well be using a technology trick. I?m not against technology, but people naturally crave authenticity and that cannot be consistently faked even in social media. So, be yourself, be open and try to encourage others and bring real value to your content.

Maybe your social media is on the right track. Perhaps you have a plan that includes vibrant visuals and engaging content that is truly focused on your core target listeners that you most want to attract to your brands. Maybe you have a strategic plan for your social media content that includes specific content goals by percentage of types of content and individual daily assignments, and a voice for each person on your team posting content and engaging local listeners on social media platforms. I hope that is true. But this is fall. It?s a good time to review your goals, your content, your strategy, and to determine the value of your overall social media to your actual brands. This includes the social media strategic plan for your sales department. What? You don?t have one? Seriously. It?s almost 2014.

If you can?t point to the value you receive from your social media efforts, maybe it is time to think about developing a different strategy that focuses on the key to driving your business:  doing for others. After all, there is a lot of local profit in doing for others. Radio gets power from being local and connected.

Here?s to a great connective fall where you strengthen your strategy and results in social media. You deserve it, your listeners deserve it, your advertisers certainly deserve it, and your business deserves it.

Loyd Ford is the direct marketing, ratings, and social media strategist for Americalist Direct Marketing and has programmed very successful radio brands in markets of all sizes, including KRMD AM & FM in Shreveport, and WSSL and WMYI in Greenville, WKKT in Charlotte, and WBEE in Rochester, NY. Learn more about Loyd here:  http://about.me/loydford. Get his radio-social media content sent directly to your smart phone or email for free here:  www.rainmakerpathway.wordpress.com. Reach out to Loyd via e-mail HERE.  Visit his Facebook radio social media page HERE.

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(SOCIAL) Where Social Media Growth Comes From

9-6-2013

Most people spend their time trying to figure out how to take shortcuts. A lot of people simply don?t want to do the work. They want the spotlight of game day (as they say in sports) without the commitment to working out consistently that makes you a champion. That?s called watching. Not doing. We are in the ?doing? business. In fact, you could argue that local radio is in the ?doing for others? business. So, let?s experiment with social media.

For one month, focus your social media totally and completely on others. No posts about you. Post about others. Comment about others. Do good things for others. Give helpful tips when someone is expressing frustration. Post information that will offer people help in doing things that are important to them.

Consider this:

1. Real growth in social media success comes from realizing that people seek validation. They want to feel they matter. They wish to belong and often our modern society leaves a lot of people out there struggling in their daily lives to belong to anything.

2. You?ve seen those people on Facebook that complain Facebook doesn?t have a dislike button, right? Why do people want a dislike button? Because human instinct drives negativity, but people actually crave positive thought and energy. So give that to them in social media (along with validation) and you will see your social media efforts become much more ?sticky.?

3. You tempt people to follow you by investing in them. Put effort into thinking about your ?target listener? and what can improve their life in your local market. Give it to them with strong visuals and content that makes them feel smart to share with their friends. While you may want to focus on promoting what is important to you, being all about ?them? lights a passionate fire in those individuals that will be rewarded.

4. Resist the desire to think contesting is great content. I am personally not against contesting in social media or driving people directly to your radio station (in fact, I am 100 percent for it). However, I do believe in ?dialing back? to the basics of why people really go on social media platforms like Facebook and Twitter. I encourage clients to hyper-focus on their local market and what the listeners who they most want to attract are passionate about in their format. That?s so much more than focusing on purely trying to get people to listen to your radio station. Give them reasons that matter to them for tuning in.

5. Expose your vulnerabilities and concerns. Making yourself human relaxes others and encourages connection. Without the human element in your social media, you might as well be using a technology trick. I?m not against technology, but people naturally crave authenticity and that cannot be consistently faked even in social media. So, be yourself, be open and try to encourage others and bring real value to your content.

Maybe your social media is on the right track. Perhaps you have a plan that includes vibrant visuals and engaging content that is truly focused on your core target listeners that you most want to attract to your brands. Maybe you have a strategic plan for your social media content that includes specific content goals by percentage of types of content and individual daily assignments, and a voice for each person on your team posting content and engaging local listeners on social media platforms. I hope that is true. But this is fall. It?s a good time to review your goals, your content, your strategy, and to determine the value of your overall social media to your actual brands. This includes the social media strategic plan for your sales department. What? You don?t have one? Seriously. It?s almost 2014.

If you can?t point to the value you receive from your social media efforts, maybe it is time to think about developing a different strategy that focuses on the key to driving your business:  doing for others. After all, there is a lot of local profit in doing for others. Radio gets power from being local and connected.

Here?s to a great connective fall where you strengthen your strategy and results in social media. You deserve it, your listeners deserve it, your advertisers certainly deserve it, and your business deserves it.

Loyd Ford is the direct marketing, ratings, and social media strategist for Americalist Direct Marketing and has programmed very successful radio brands in markets of all sizes, including KRMD AM & FM in Shreveport, and WSSL and WMYI in Greenville, WKKT in Charlotte, and WBEE in Rochester, NY. Learn more about Loyd here:  http://about.me/loydford. Get his radio-social media content sent directly to your smart phone or email for free here:  www.rainmakerpathway.wordpress.com. Reach out to Loyd via e-mail HERE.  Visit his Facebook radio social media page HERE.

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Where Are The Celtics Headed

8-23-13

There's been no word about the radio rights to the Boston Celtics after Entercom's WEEI decided to leave the negotiating table. The Boston Globe is reporting that a likely landing spot would be 98.5 The Sports Hub, owned by CBS. The station already carries Bruins hockey and might have conflicting game nights. However, with four other stations in the market, the paper speculates that CBS could probably juggle games using other signals. FULL STORY HERE

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More Questions About Where Radio Goes Next

7-31-13

(Radio Ink Publisher Eric Rhoads) The mantra, it seems, is "Stay strong, deflect criticism, remain positive at all times, avoid conversations about change, and understand that we will remain strong no matter what we face." Sometimes radio sounds like a politician, remaining blindly committed to a position even when times have changed.

Today's radio CEO, whether the company is public or private, big or small, is faced with a difficult challenge. For the sake of the continued health of their business, they must keep investors, advertisers, and employees engaged and interested in radio, and they must deflect all the hype about the shiny new objects popular in the media at the moment.

Since I got into radio in 1969, the threats have been the 4-track in-dash tape, the 8-track tape, cassettes, the CB radio (almost every teen had one in the ?70s),  CDs, satellite radio, and the smartphone. It?s no wonder many radio CEOs don?t seem to believe the predictions of radio?s demise. Each of those technologies  was supposed to destroy radio, yet it?s remained strong.

But is it different this time? My friends in Silicon Valley say an era of self-selection and ubiquitous wireless signals does not bode well for radio?s future. That  said, keep in mind that Silicon Valley is targeting radio because online audio services want what radio has: loyal listeners, mass audiences, and billions in ad  revenues. It is in their interest to say that radio will become irrelevant.Though evidence exists that online audio listening is growing and that a fairly high  percentage of consumers are using these services, there appears to be no indication that radio listening is on the decline.

But that does not mean radio CEOs can play ostrich. At the moment, radio is all but ignoring Pandora, which claims to have amassed an audience equal to a top -rated large-market station. Many don?t believe its business model is sustainable. But Pandora is building out offices in 50 top markets and hiring top local sellers  from radio. One Pandora seller told me of taking 80 percent of a big local radio budget in a major market after the advertiser conducted a brief test. And  Pandora is on over 1,800 devices and has a position on the dash of every new Internet-enabled car. Can it be safely ignored?

As an industry, I think we have to seriously consider the two biggest movements in consumer adoption: the smartphone and the connected car. By 2014, there  will be more users accessing the Web through mobile than the desktop. In 2012, 600 million smartphones were sold, and smartphones are now outselling PCs.  One expert tells me that the typical 15 hours a week of radio listening, along with normal Internet usage, will not exceed what?s allowed under most data plans.  Many in radio insist data costs will slow online audio consumption -- yet 68 percent of Pandora?s monthly 1.4 billion listening hours are on mobile devices.

The connected car not only has Internet access, most can access a smartphone and replicate it on the dashboard. Though AM and FM still have a place in the  car, the consumer will have more choices than ever -- apps for Pandora, TuneIn, and iHeart will be in almost every vehicle. Local stations will need a strategy to  make sure they have an icon on the dash, or that they get a precious ?favorite? spot on one of the aggregators.

I?m not anti-radio, nor do I want to see this industry I love suffer a moment of decline. Yet I believe it?s important to embrace change, understand it deeply, and  have a solid strategy in case some of the prognosticators are right.

Months ago I wrote a piece saying some automakers were planning to drop AM and FM from their vehicles. I later retracted that, because my facts were slightly off. But I felt the need to get exact answers, and to help radio understand the looming reality of the connected car. That is why we have created a new  conference.

We have partnered with Jacobs Media and Shuman Consulting Group for the first Radio Ink conference designed to bring radio, automakers, online radio  companies, and advertisers together for a dialogue, and a chance to become aware of each other?s most important needs.

DASH: The Connected Car AudioTainment Conference will be held October 23-24 in Detroit. One and a half days away from the office, to gain a real  understanding of what you need to know right now. DASH will deal with the issues of mobile and in-dash Internet audio, explain how you can make money on  new interactive components, and pin down the exact realities radio is facing from the auto manufacturers.

This will be an important moment in radio history, and one we believe will impact your business quickly and help you prepare for what is happening right now.  To learn more, visit www.dashconference.com.

DASH Conference
October 23-24, 2012
Westin Metropoitan Airport
Detroit, MI
www.dashconference.com

(7/31/2013 5:03:46 AM)
Eric, where's your pitch for HD Radio?

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Where Will Sotelo Pop up Again?

7-22-13

Although his manager did not return a call to Radio Ink last night you can bet listeners have not heard the last show from Eddie "Piolin" Sotelo. His show is too popular with the exploding Hispanic audience. Some of the speculation surrounding the show being canceled had to do with Sotelo's ratings in Los Angeles, where he is heard on KSCA-FM.  Last month he was beaten in the ratings by Ricardo "El Mandril" Sanchez who's heard on KLAX-FM. One affiliate expects Sotello to be picked up quickly by another syndicator. His show is just too popular to fade into the sunset. Of course, there is also SiriusXM.

(7/23/2013 4:42:43 AM)
I surely doubt that ratings had to do with his departure. In the Los Angeles market, the battle for Spanish speaking listeners is being waged between Piolín, Mandríl, and Don Cheto. They would battle back and forth for the #1 position in 18-34 and the coveted 18-49 demo.

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Where Is Peter Boyles?

7-1-13

Boyles was supposed to start on Salem's KNUS Radio this week after Salem hired him to do mornings shortly after he was fired from Clear Channel-owned KHOW. The Denver Post is speculating that Clear Channel is trying to block the hire. Boyles was allegedly fired after having a physical confrontation with KHOW producer Greg Hollenback. We're told by Salem everything should be finalized today with Boyles hitting the airwaves Wednesday morning.

The KNUS Facebook page says, ?Due to circumstances beyond our control ? we are unable to debut our new program this morning at 6 a.m. We will air our regular programming today and are working diligently to add a new program to our daily lineup at the earliest possible date. Stay tuned for breaking news and intelligent talk. Good things are coming."

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Where Are They Listening to You?

6-25-13

A new study of 1,000 audio listeners provides some very interesting details about exactly who the audio listener is today and where audio listening is headed. The study called, "The Internet Radio Marketplace: Who Listens, Where They Listen and Why You Should Care," was conducted by GroupM Next. GroupM Next is  a unit of GroupM, the world?s largest global media investment management operation that serves as the parent company to WPP media agencies including Maxus, MEC, MediaCom, Mindshare, as well as Catalyst Online and Xaxis. The first conclusion the study comes to is that the average age of the Internet listener is 34. And yours is 47.

The authors of the study say the findings on age were surprising to them. "The average age of the High Internet segment is 34, where as the average age of the High Broadcast Listener segment is 47. The High Internet segment achieves the same average income 13 years earlier than the High Broadcast segment."

Something broadcasters have heard from other broadcasters as they set goals for the future is they need to be everywhere. That's a smart move as the study points out because those who listen to Internet radio listen to it everywhere. "High Internet Radio Listeners said that they primarily listen at home (91%), but more than 40% of respondents say they listen to Internet radio at every location listed in the study (home, work, car, gym and/or while running errands). Our research reveals when it comes to smartphones and smart TVs, desktops and laptops, tablets and other connected electronics, all devices are used to access Internet radio."

And now a little news about your 8 to 10 minute stopsets. The study says Internet radio listeners are more engaged with their services and more receptive to advertising, making the platforms much more valuable to marketers. "Not only are Internet radio listeners more open to receiving advertising, they are also less likely to take steps to avoid advertising. Seventeen percent of Internet radio listeners are less likely to try to avoid an advertisement on Internet radio than on broadcast radio. Our research also shows that Internet radio listeners are more responsive toads. High Internet Radio Listeners are twice as likely to have purchased a product they heard advertised on the radio in the past 30 days compared to High Broadcast Radio Listeners. Adding it all together, an ad on Internet radio is likely to be heard by a young, affluent consumer with little desire to avoid the ad, who has a high likelihood to purchase the product in the ad. This combination is a perfect scenario for audio advertisers."

And finally to the car, which has been a very big topic for discussion in the radio industry. Where will radio be when all automobiles have access to the Internet and access to as many Internet audio selections as the consumer wants? The GroupM Next study included an experiment. "We gave respondents a description of a car and asked if they were interested in purchasing the vehicle. Half of the respondents were given a description of an average car, with four doors, power windows and locks, and other average features The other half received the exact same description, with the addition of an in-dash Internet radio.Those who saw the in-dash Internet radio are 14% more likely to be interested in purchasing the vehicle. With that degree of lift for a change in the on-board interface, it's not surprising how quickly automakers are adopting Internet radio."

(6/25/2013 6:19:46 AM)
Uh-oh.

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Where Are The Radio Deals? Day Three

In day three of our series called "Where Are The Radio Deals?" we hear from Larry Patrick. Patrick is the managing partner at Patrick Communications. In addition to being a successful broker, Patrick is also a small market radio operator, so he certainly brings a unique perspective to the question, "Where Are The Radio Deals?"

Would you call the past 12 months a good, average, or bad year for radio deals?
I would say that it was average and reflective of the new reality. Lower multiples and a difficult borrowing climate continue. Some of the last workouts occurred and a few new groups grew. But activity is down from a high of five years ago.

What surprised you over the past 12 months?
The drop in values for stations. To see quality stations sell for six times is disappointing. Radio seems to have lost its core growth and is existing on digital to move it forward. A new reality on pricing has set in for the industry.

What is the reality of multiples for radio these days?
Six to seven times for most groups. Slightly higher in larger markets and slightly lower in smaller ones. All driven by the level of financing available to buyers.

What do you think we'll see over the next year?
I think that some private equity groups will realize the returns that well-managed groups can produce (in the 30-35 percent range) and realize that this is a good place to park money. I would hope to see private equity rediscover radio.

Do you think we will see Clear Channel move any of its smaller-market stations?
I think that is unlikely as Clear Channel seems to want to be paid the multiple that it paid to acquire the stations.  That simply cannot happen in this environment of compressed multiples. They paid 10 times. No such buyers today.

Where will CBS be in one year?
CBS  Radio is trying to grow but it is difficult. I think that the CBS team is doing an impressive job with the assets.  It is hard to replace the big margin that CBS stations produce and the strong BCF for the radio group. Only if a real opportunity that has no negative tax consequence for the parent company emerges will you see CBS move. I think that is unlikely.

Do you think we'll see a blockbuster deal over the next 12 months?
I do not see any blockbuster deals on the horizon. If there is one, I would bet that Cumulus will be involved. But, most people are paying down debt, building up their margins, and trying to navigate the more troubled waters of the current industry.

Reach out to Larry Patrick at larry@patcomm.com

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Where Are The Deals?

4-10-13

Every April you can pretty much count on Spring flowers, the start of Major League Baseball, and very high-level radio meetings at some of the swankiest hotels on the Las Vegas Strip. The annual NAB show is an opportunity for those who have capital and those who have assets to get together to talk business. If a deal can be made, of course, Las Vegas is the town to make it. As the bigs meet in the penthouse suites of the Aria, the Wynn, and the Venetian, we wanted to get a feel for the dealmaking they might be discussing. Over the next few days, we'll hear from some of the industry's most well-known brokers and pick their brains on what they hear, what they see happening, and whether a blockbuster deal can be made in radio over the next 12 months. First up is Kozacko Media Services President Dick Kozacko.

What do you think we'll see over the next year?
I am not expecting to see any very different changes of what has been happening during the past year. I would like to see the FCC make things easier for stand-alone AM owners to obtain some type of FM companion. Yes, FM translators are fine. Stand-alone AM stations are very difficult to attract buyers, with the exception of major or large-metro-size markets where there is a large ethnic group that is pleased to have their own language programming on an AM station. This is even true in markets where a stand-alone AM has a profitable history and continues to show profits. Buyers, now-a-days, look at an "exit strategy" for the future and it's not very favorable for an AM by itself.

Would you call the past 12 months good, average, or bad for radio deals?
I would call it average at best. We are doing more deals with seller financing because there is no alternative when we are talking about stations in small and medium markets. Banks still have not come back into the market to any large degree. The exception which we see from time-to-time would be a local bank who has strong ties to a market or where the bank already knows the buying group because of their local involvement in the market.
What surprised you over the past 12 months?
This response actually ties into the last question and this is the fact that with the improving economy that banks have still stayed out of financing broadcast station sales. I think it was at the NAB Radio Show in Dallas last September that there was actual excitement because a new bank was in attendance at the show. No, I'm not expecting to see the turnout of banks as we had 10 years ago. Too many banks actually wiped out their media loaning departments, but broadcast stations still generate a higher profit margin than many industries and many banks are flush with funds to make business loans. Where are they?
What is the reality of multiples for radio these days?
They are improving. I know we hear about certain deals from time-to-time where a buyer will pick-up a cluster for something that works out "to five times cash flow." That may be accurate on some type of evaluation. However, I don't find many owners willing to talk at a figure of less than seven times cash flow. You also have to look at the assets included in the sale and if the station owns very attractive real estate, that's a little bit of a notch up in comparison with an owner that leases everything.
Do you think we will see Clear Channel move any of its smaller market stations?
They really haven't in the past, but I hope they do. I'm actually surprised that local merchants in some of these communities have been willing to support a station when they know that the "local programming" they hear comes from a source a thousand miles away. I also figured that the profit margin would be low with some of these stations because of lower local advertising rates that they wouldn't meet Clear Channel's profit criteria. It may be that Clear Channel recognizes they overpaid and would not receive anything in a sale close to what they paid -- so they continue to just hold the stations.
Where will CBS be in one year?
I think CBS has finished its "pruning" and will probably stay where they are in radio and the markets they serve. They own a lot of great stations and which, I'm sure, contribute well to the company's profit.
Do you think we'll see a blockbuster deal over the next 12 months? 
Ed, I wish you had asked me that question last year. When we moved to Raleigh last July after 42 years in Elmira, NY, my "crystal ball" broke during the move and I can't give you these accurate predictions like I could in the past. I am even willing to buy a "used" crystal ball if you hear of one available at a decent price.

Reach out to Dick Kozacko at dick@kozacko.com
Tomorrow, we'll hear from Bill Fanning and Elliot Evers of Media Venture Partners

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Where Do I Start? Who Do I Call? BHAG!

3-29-13

There I was in the moment of having made a big decision. I felt called to make it public. To make, in the words of one of my favorite writers Jim Collins, a BHAG?A Big Hairy Audacious Goal. I decided to post it on Facebook.  ?I?m making a BHAG! Within three years, I will own a radio station!? That was in November of last year. 
In that next moment, I experience fear. I thought, ?What in the hell do I know about buying a radio station?? I didn?t know where to start. Heck, I didn?t even know what an STL was. (I found this out later. I know, I know. Laugh it up!) I didn?t even know what I didn?t know, but I knew it was a lot! 

Coming from my sales background, I decided to address this as if it were my biggest client of all time. I needed to do some serious CNAs to figure out what I didn?t know. I needed to build the best proposal of all time?my business plan. And, I needed to ask a bunch of questions, first from a bunch of people that I didn?t know. 

My first step was to reach out to the circle of people that I did know that had knowledge in this area. Upon discussing my goals with friends Mark and Holly Levy, they directed me to have conversations with a couple of brokers and owners about the process. And from there the circle continued to grow. I spoke with engineers, business consultants, station owners, programmers, programming consultants, prior station owners, bankers, lawyers, and of course my ladies in the MIW.  

I remembered being smitten by a panelist at the Radio Show in Dallas that owned and operated Ohana Media Group which holds stations in Washington and Alaska, Trila Bumstead. She was exactly what I wanted to be?a woman owner/operator who had a healthy group of stations and a family. I found her on LinkedIn and asked her if she would be willing to visit with me. Trila graciously agreed, and we had a great conversation. The biggest piece of advice from her was that I submit an application to the NAB?s Broadcast Leadership Training Program. 

I compiled pages and pages of notes, each meeting presented me with a term I didn?t know or an issue that I needed to solve. Google became my best research buddy. As I was talking to someone, if I didn?t recognize a term, I would Google it. It is amazing what you can find out at your fingertips! 

What I learned from this phase was that, without fail, everyone I talked to either had the heart of a teacher and was excited about passing on wisdom or was a connector and wanted to help me by sending me on to someone else they knew that could help. This was increasingly encouraging and confidence building to me in what could otherwise have been an intimidating and scary process. 

The surprising thing to them was that a young broadcaster was even interested enough to ask. The thought seems to predominate that there is a lackluster next generation of broadcasters where any talent has been sucked up by the big companies, leaving little to keep the foundation of independent broadcasters strong and healthy. I hope they are proven wrong. 

While this process continues to be challenging, and at times scary, my hope is that those of my generation who are reading along have the courage to start asking the questions you have. Ask someone you respect to mentor you and connect you. Ask someone you don?t know to mentor you or connect you. It?s just one LinkedIn or Twitter message away. Explore what it might take to make that nagging dream on the far horizon of your future become closer and more achievable. Who knows? If you do, it might lead you in to a banker?s office as it did me. 

Next week, I?ll tell you all about the search for said banker. 

Erica started her radio career in 2003 working for Zimmer Radio Group. She began as a sales assistant and worked up the ranks to AE then D.O.S. in 2010. She started her own consulting company, The Ruckus Group, in 2012 and now works with other radio companies helping them to grow their sales teams. She's pursuing her dream of radio ownership and she'll be chronicling her journey - in real time - every Friday.

Have any advice for Erica? You can reach her at erica@theruckusgroup.com
Follow her on twitter @epeff
Or leave your comments about your ownership journey below.

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Radio IS Where Consumers Discover Music

8-15-2012

As we reported back on August 6th, a new study details how consumers are still coming to radio to discover new music, despite what others may tout as the latest online music delivery system or how many views a YouTube video receives. Today there are more details from the study called "Music 360," compiled by Nielsen research.

Nielsen collected 3,000 online consumer surveys. Topics addressed in this study include:  where/when music is consumed, through which device(s), apps and services; digital vs. physical purchases;  the process of discovery, and how/when discovery converts to purchase; insights around spending, share of wallet, and retailer preferences; live events; and much more.

Radio is still the dominant way people discover music (48%) ? followed by tips from friends/relatives (10%), and YouTube (7%). And despite a trend toward YouTube for younger consumers, radio still rates high. YouTube gets 64% followed by radio at 56%,   iTunes is at 53% and and CDs 50%.

Even more impressive is how radio is coming along on the smartphone, even without an FM chip in every phone. 54% of the consumers surveyed have music player apps on their smartphones, 47% have radio apps and 26% have music store apps on their smartphones

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