Radio's Next Steps

The Zapoleon Media Strategies team of Steve Davis, Mark St John and myself are bullish on radio. We all believe that while there is a ticking clock on our business, radio has the potential for a very bright future, regardless of the challenges of the Internet music sites and the challenge we'll face from the XM/Sirius merger.

RADIO'S SAD CURRENT STATE AND HOW IT BEGAN

Sonoco Audio and Mark Ramsey's Mercury Radio Research showed in recent studies that overall, radio is still the leader for music consumer. However, the Mercury study had a black cloud within it, as it showed that teens -- while still loyal to radio -- placed it second to listening to music on an MP3 player and the Internet. The good news for radio is that when it comes to providing a source for listening to music, there are no music sites that dominate a format or a demo. The bad news is that teens and young adults are growing up with radio being their big sister's and their parent's medium for music and entertainment.

Our problems really began to mushroom with the 1996 Telecom bill that allowed consolidation. Bill Clinton addressed broadcasters in 2001, telling them that he wasn't happy about the results of this consolidated media world. After three years, he didn't see the diversity and improvements in the medium that he was promised when he approved the bill. If anything, you saw more duplicated programming at more radio stations, and a massive exodus of people and talent due to consolidation. He challenged radio to provide more diversity (and more compelling content) and make the necessary improvements to hold on to the millions of radio consumers who were growing dissatisfied with what they heard on radio. President Clinton gave radio a challenge that it desperately needed to hear. Satellite radio picked up his gauntlet and answered his challenge with the greater diversity of content, with an amazing diversity of narrow channels by genre, providing much deeper music libraries to satisfy the avid music fan. They also have created some great channels that are brilliantly produced with great content and great talent. Radio's #1 talent, Howard Stern, certainly banked on that by joining Sirius.

For a while, Satellite radio appeared to be the biggest challenge to radio's crown. But as we've seen, America never adopted satellite to the extent that the satellite broadcasters had hoped, which really necessitated the recent merger for their financial survival. To radio's credit, major broadcasters finally woke up and tried to answer satellite's threat and their diversity of channels challenge with their HD channel initiative a few years ago. But alas, very few people have acquired HD radios. Radio has spent millions of dollars and a lot of its energy on this initiative, when the real challenge actually was what many broadcasting leaders thought it was back in 1996 ... the Internet, with a soon-to-be explosion of developing music and entertainment brands.

THE IMMEDIATE FUTURE

We've also recently seen a trend toward syndication, which on the surface may seem very positive to many, but instead will most likely be taken to an extreme and will spell the end of radio as we know it. Taken to an extreme, syndication has the potential to recreate the radio landscape that existed back when radio first became popular in the 1940s, with multiple national radio networks of talent and music formats. You already have successful Rock morning shows all over the country with Bob and Tom, John Boy and Billy and Lex and Terry. Ace and TJ are a strong brand, especially in the South for Top 40.

But the avalanche is just beginning. You've seen a roll out of Clear Channel's talent from New York and Los Angeles in multiple markets, as the Ryan Seacrest afternoon show has been launched in multiple Clear Channel markets, Elvis Duran's excellent morning show is now in Philadelphia and Miami. Entercom has created format-based morning shows with Alan Kabel at Country stations. You have Triton media gobbling up every national format and talent company in sight (Dial Global and Jones) to corner the syndication market to provide programming for medium and small companies trying to compete with the major's strong national and regional talent (including parent lender OakTree's burgeoning list of stations). By 2015, if this trend continues, a vast majority of the talent at every format across the country will be regional or national, with very few local hosts.

You may ask, why is this bad? After all, it's short term. Just as consolidation improved the programming at the weakest stations, so will national and regional talent. It will also build some strong nationally known talent. But long term, it's the same kind of short term thinking that's been killing radio for the past 12 years since the Telecom Bill passed in June 1996. Its taking the quick money route that publicly held companies have been taking for over a decade to create good quarterly results and make the stock price go up ... but doing nothing to address radio's future.

Today's radio broadcasters are paying for that shortsighted mentality, as many radio stocks have plummeted 30- 50 dollars a share to penny stock status. Because of the financial result of this shortsightedness, as well as the recession our country is in, many broadcasters will pick up what is cheaper for now ... syndication ... versus building local talent. Belief in our industry is at an all-time low, as most banks and private-equity companies have lost interest in backing potential broadcasters who want to buy radio stations.

RADIO'S NEEDED NEXT STEPS

Bill Clinton challenged us in his 2001 speech, and he knew something then that still remains true today: Radio's future rests with how much effort we exert RIGHT NOW to engage music and entertainment consumers with compelling content. The future is truly in our hands, but we have to immediately create a vast radio initiative to make deep footprints on the Internet through establishing music and talent brands there. A generation of teens have grown up without radio being important to them, and if we want to get them back and prevent that from happening again with the next group of teens, we need a fresh crop of young programmers and talent to relate to this group with fresh ideas, and to revamp our industry. These future broadcasters need to be trained with brilliant radio basics, but then be turned loose and allowed to create their own version of radio for their peers and future music and entertainment fans.

Radio companies must begin a recruitment process at the high school and college level to re-attract the best and brightest back to our business, bringing in a new generation of radio programmers that are the Kevin Weatherlys and Tom Polemans of tomorrow, along with a cast of thousands of the best specialists in every key area to create the entertainment media of the next 20 years. If we don't become pro-active immediately and address the needs of this Lost Generation to radio, radio will shortly become ONLY a 50+ medium, and this will eventually guarantee that most of the compelling existing radio brands of today cease to exist.

WE CAN'T FORGET THE BASICS- Zapoleon Media Strategies Programming Checklist

As part of our role as consultants, we've worked as part of great teams and built a lot of great radio, but throughout that we've trained some of the best programmers in the business in Brilliant Basics. Personally, the most rewarding thing I've experienced is mentoring some of the programmers and air talent who are the future of our business. Great minds are the key to radio's bright future, and we won't have a future without them.

Here's the Zapoleon Media Strategies Programming Checklist

http://zapoleon.com/zms/checklist.html

***Many of these Brilliant Basics become even MORE important in a PPM World!

Top of Mind

Your station must be top of mind for listeners to recall you when they fill out their Arbitron ratings diary or answer their ratings call.

Are your station elements (station name, music position, and positioning statement) easy to remember?

In a PPM world, creating top-of-mind awareness remains critical, especially in your fight to remain one of the main brands any listener uses on a daily/weekly basis.

Time Spent Listening

More TSL is about getting more P1s or station "fans" in your audience. More than 70% of your share comes from P1s, who represents around 30% of your cume audience.

Time Spent Listening is also about winning the "usage war" -- getting more "times at bat," more listening occasions per week for your station versus the competition.

Remaining consistent with your programming and not creating tune-outs is essential in getting TSL in a PPM World

Target

"Narrow Focus = Broad Results"

Do you have a clear understanding of your 8-10 year demo cell and which music life group you need to win?

Which key "narrow" music life-group drives your station? (Pop, Dance, Rock, Rhythm, etc?)

Staff

Is every member of your programming, marketing and on-air staffing the best they can be?

Does every member of your air staff have a second job that assists you and serves to make them more a part of the station's success?

Does each player clearly understand the station mission?

Does each player clearly understand their role and how they contribute to creating the product?

Do you have a backup for each key member of your staff?

Ratings

What are your ratings share and rank goals?

Do you have goals for each rating period and are they realistic?

Do you know what numbers you need, both cume and TSL, to reach your ratings share goal?

Branding/Positioning

Know your product category! (Top 40, Dance, AC, Classic Rock, Country, etc.)

Does your station name and positioning statement clearly sell the station brand?

How many times per hour are you using your entire positioning statement?

Is your station brand being sold effectively in every single quarter-hour of the day?

Are you wasting branding opportunities?

Are you teasing and recycling all key elements in each daypart though the day?

Are you hooking your listeners through every quarter-hour?

Have you registered all your key identifiers with Arbitron so you get credit for your brand?

Do you have a music quantity position?

Are you a great LOCAL radio station? Are you taking advantage of every possible opportunity to own local events and keep your listeners connected to their community?

Usage

Do you have an understanding of the needs of your target demographic and music life group?

Do you know exactly how, when, and where your P1 listener uses you?

Is there anything you can do on or off-air to create more usage?

Is your brand as top of mind as it can be?

Are you creating enough powerful content? Do you have enough "Content Hooks" every single day to make someone who listens on Monday listen every day throughout the week?

Marketing and Promotion

Have you addressed your quarterly ratings goals through external, database and event marketing?

Do you know your marketing warfare position and appropriate actions? Are you in an offensive, defensive, flanker or guerilla position?

Do you have all key promotions and marketing planned for the year? Is there room to seize a key market promotional opportunity when it arises?

Does your marketing and promotional strategy contribute to the brand?

Do you have too many messages on the station at one time to be effective?

Make certain your marketing budget adequately provides for both tactical and strategic marketing.

Focus your marketing on your key usage target.

Are you marketing to the workplace?

Do you know what type of marketing works best for your ratings goals and competitive situation

Mornings

Is the morning show the doorway to introduce all major benefits and events on the radio station?

Do you know your morning position in the market? (Are you the nice show, the funny show, or the outrageous show?)

Do all of your morning show players understand how they contribute to the show?

Do they all have well-defined roles that they understand?

Do you have vehicles to guarantee listener interaction? Do they promote listener interaction through phone topics, contesting, etc.?

Do you have enough benchmarked features?

Is there enough flexibility for the show to jump on big events?

Competition

Have there been competitive changes in the market? Be aware of changes that affect you.

How do these changes affect you?

Have you blocked all useful attacks and benefits of a potential competitor?

Do you have the tools necessary to shore up your weaknesses or take advantage or your competition's change?

Audio

Is your signal the best it can be?

Are there any new engineering techniques or products that can be used to improve your audio?

Are you playback systems and source material the best they can be?

Your Cluster

Does each station in your cluster form an Age/Sex wall? (Example: Your cluster owns women 18-49).

Do you utilize the brainpower among all the stations in your cluster to get as many good ideas as possible for your radio station?

Are you networking with all the key people in your company to gain every competitive advantage possible?

Website

Is your website a strong extension of your audio brand?

Does your website reflect the lifestyle of your target?

Does your website have the best audio as well as video content that it possible can?

A great radio station is like a friend with connections. Your website should offer exclusive content, promotions and opportunities that a listener could never purchase themselves.

Remember that your website will be where future generations will go first to discover your brand. Creating excellence on your website is paramount to establishing the station's brand for future generations.

Music

Is every quarter-hour a perfect slice of your musical universe?

Is the tempo and musical style matching the listener's moods and the musical expectation for your product?

Do you have a "double-check" system to guarantee balance without wasting a lot of time?

Planning

Did you take the time to get out of the office to listen to the radio station this week?

Is your daily schedule effectively prioritized to accomplish the critical details of your plan?

Do you have enough group and individual meetings with the staff to communicate key steps of the station plan, to delegate, to follow up, to critique performance?

Are meetings short and effective or time wasters?

Do you prepare a critical path of steps to completion?

Do you take the time daily to be aware of all key sources of pop culture (TV, movies, radio, print and the Internet)?

Spirit

Is the station spirit "positive" where the staff is protected from top-down stress so they can do their job effectively?

Does your staff feel like they are a part of the mission or are they "lone-wolves?"

Are there enough out-of-station get-togethers so the team can bond?

http://zapoleon.com/zms/checklist.html

RADIO'S POTENTIAL PART IN MEDIA'S FUTURE

We all know that radio's challenge comes from the Internet. Zapoleon Media Strategies' Steve Davis made a prophetic statement about radio to me last year, right now radio Internet sites are support mechanisms for terrestrial radio, in 10 years terrestrial radio will be the audio portion of programming that originates on that station's Internet Website. Several stations and companies have really ramped up their focus on building a large Internet presence.

CBS Radio realizes that a generation has bypassed radio for music discovery and consumption is lives on the webs. So CBS has bought or made deals with a few very popular Internet entertainment sites in an effort to reintroduce this group of music consumers to the medium by going to where those who have abandoned radio live. CBS partnered with AOL.com and now has its radio stations featured on an Internet radio player available on AOL.com. CBS bought Last FM, which has a buzz with a lot of young as well as older music fans. On that note from February, CBS-owned Last.Fm jumped 39%, to hit 1.9 million unique visitors. Clear Channel's Z100 probably has the best radio entertainment site I've seen filled with music exclusives, music news and gossip hosted by Z100 air talent like Romeo along with tons of great audio from Elvis Duran & the Z Morning Zoo and the other Z100 jocks. KIIS-FM is another remarkable Radio website, There is no reason that great radio brands like Z100 in New York can't be the world's hit music brand and KROQ can be a truly "world famous" brand for great Modern Rock.

Let's face it: We all know that all media radio, television, the Internet, andeven satellite will all converge and become available all on one device which is mostly like to be the cell phone as the ultimate entertainment consumption device. A study of one company, Apple, can give you a quick view of the future of entertainment consumption with iPod and now the iPhone For teens and preteens today, they'd rather cut off their arm than lose their cell phone. It's their ultimate link to their friends through texting and is a major key is maintaining their social status.

The Internet is their first destination for entertainment and the iPod is #1 for music with teens. There will be thousands of brands available at first, but only a small percentage of that will be consumed by the masses and in the end, survive. Radio should now be creating the compelling brands that live simultaneously on the Internet as well as terrestrially and that are adopted nationally and worldwide on the eventual convergence device.

With all the syndication that's coming to radio, being "local" has never been more important and never been a greater opportunity for radio. Having a great local morning show, focused on local content that keeps listeners in touch with everything from a lifestyle and news perspective about what's happening in their community, is critical for success and many stations' ultimate survival There is no doubt that radio should have a future even 20 years from now with several strong local format brands in every market and many lasting national and even worldwide radio brands, all helping to secure radio's presence in the future of media consumption. But it must make the financial and talent investment and focus its energies in building great radio brands ... NOW