JacoBlog - Jacobs Media's Blog

Getting Feisty

Tim Davis will want to take some credit for the discovery of singer Leslie Feist, known just by her last name. But the reality is that until she showed up in that iPod Nano ad, singing "1234," nobody knew who she was.  Since that spot started airing nationally, Feist and "1234" are bona fide hits.  And once again, radio has had little - if anything - to do with it.

And as the incessant Danny Buch emails keep telling us, Old Navy ads are making a star of Ingrid Michaelson.  Of course, if you watch Grey's Anatomy, you first heard...or saw Michaelson as part of that hit show's soundtrack.  Once again, radio is the last to get the message.  In fact in one of his missives, Danny actually was trying to get the single serviced to radio, long after it started becoming one of those "Who's that singing on those Old Navy commercials?" phenomenon.

It's more evidence that new music and new artists are being broken outside of radio, an industry that's often stuck either trying to catch up or just figure out what's all the commotion about.  Yes, the statistics continue to reinforce that radio is still #1 for exposure to new music.  But when commercials and TV shows are generating the real music buzz, it's time to start re-evaluating.

Calling All Satellites

Much has already been written about these new satellite radio ratings numbers released by Arbitron from the Spring '07 survey.  Some are questioning the accuracy of the data, suggesting that listening levels are understated, given the challenging task of recording channel numbers from XM and/or Sirius stations, and other methodological aspects.  I will leave this discussion to the ratings research mavens to haggle over, but the thrust of these numbers and their implications are obvious.

As we have been pointing out over the past couple of years, satellite radio is an issue for commercial radio operators, but there are other more encompassing threats that challenge traditional listening habits.  Mobile phones, iPods, and the notion of CVC - control, variety, choice - are issues that broadcasters will grapple with moving forward.

In fact, our most recent Tech Poll, conducted earlier this year, suggested that satellite radio's growth is stalling out, and this may be accentuated by this long waiting period that XM and Sirius are enduring as the merger question is being decided.  Clearly, the union of the two services, and subsequent pricing adjustments and packaging could make satellite radio a larger factor in 2008 and beyond.  But for now, XM and Sirius emerge as niche players, and satellite radio is rapidly becoming a medium that had potential but is not having the promised impact.

Consider that Howard Stern's reported cume audience is in the 1.2 million range.  In a good book at WXRK, WYSP, and WBCN, he easily topped those numbers.  Clearly, he is now broadcasting on a much smaller stage, which is one of the reasons why you just don't hear people say "Did you hear what Howard said this morning?"

It is also of note that many of the big names that XM and Sirius threw millions of dollars at are delivering at the levels of Des Moines FM stations - or lower.  Again, even if these ratings are 25% lower than "reality," satellite radio's chieftains have to be calculating the ROI on stars like Martha Stewart, Oprah, and other big name celebrities.  While terrestrial broadcasters may not be spending enough to attract and nurture household names, satellite radio's "drunken sailor" spending has to be questioned at some point. In XM's recent release of its third quarter financials, losses have widened from nearly $84 million to more than $145 million.  Can you imagine a commercial broadcaster having to continue to explain this level of failure to company shareholders?

As I suggested in an Inside Radio piece, the ratings results of the hundreds of satellite radio channels could serve as a template or primer for traditional broadcasters, seeking compelling programming for HD2 channels.  While it's true that the "Long Tail" effect of listeners seeking cool, niche programming is more definitely in play in these ratings, it's also a fact that the more mass appeal channels attract the most listeners.  Maybe Paul Drew and Bill Drake are somewhere laughing at this "revelation," because playing the hits has always attracted the most listeners - in whatever medium you choose.  Perhaps satellite radio's niche channels bring in a wide diverse audience of interested subscribers, but how can executives rationalize these incredible expenses in order to grow new signups?

Who Owns "Rollvember?"

As this amazing baseball season ends, two unlikely teams did battle in the World Series - the come-out-of-nowhere Colorado Rockies and the comeback kids themselves, Boston Red Sox.  Redsox Nation was convinced, of course, that their team should have been in the Series by virtue of fate.  But the Rockies story was truly remarkable.

But did it all go to the Rockies' head?  They tried to cash in on all this serendipity by trying to "own" the copyright on "Rocktober" - which is what they named their amazing phenomenon.  This whole thing got out of control many years ago when Lakers coach Pat Riley copyrighted the term "Three-peat."  Now everyone wants a piece of the pie.

Well, excuse me, but a few dozen radio stations have been doing their version of "Rocktober" for a few years now.  And shouldn't the Rockies have focused a bit more on their to-do lists than to mess with this stupid copyright issue?

(And yes, we own still own "The Edge.")

A CVC Lesson

Jacobs Media's Ralph Cipolla talks about the potential writers strike & CVC:

A work stoppage looms, one that will impact nearly everyone in the mainstream of contemporary American society.  No, it's not the UAW - they've struck a deal with GM, and are now well into finalizing discussions with Chrysler.  I'm referring to the Screenwriters Guild; the brethren of New York and Hollywood-based men and women who pen the scripts for TV and film.

These are the people behind the one-liners used by Jon Stewart and Jay Leno, the scripts for every prime-time sitcom and drama series, and all those big-screen productions in the pipeline (note: Reality shows like Survivor, Big Brother, and Dancing With The Stars are not bound by the existing screenwriters contract - I guess all those bachelorettes really are that witty).  That epic Paramount Studios re-make of Star Trek slated for 2009 release?  It looks like the Enterprise will sit in dry-dock if this dispute doesn't get settled soon.

So, what are the issues?  There is really just one, and it's another conspicuous case of an old business model trying to catch up with new media reality.  The writers want their share of digital residual royalty revenue generated from the sales of DVDs, their cut of on-line downloads, payment for free on-line streaming of TV shows from network websites, and even compensation for product placement in films (I guess someone gets paid to write - "Camera angle changes, music swells as we see James Bond call M on his Nokia N81 cell phone.")

If you write the script for a TV show, for example, Grey's Anatomy, you get paid when that episode airs, and paid again when it is shown as a repeat.  You then receive another check when that show becomes part of a full-season DVD boxed-set, and paid yet again when every writer's new-media-age-dream comes true - the show becomes available for download on iTunes.

Writing for TV or film is the gift that keeps on giving, but apparently not enough.  The last work-stoppage came in 1988 and lasted 5 months.  This was a time when no one had email, the internet was known only to upper academia and the military (and Al Gore), the consumer DVD player was still on the drawing board, and the idea of downloading video to a handheld device was the kind of fantasy pipe-dream found in, well... Star Trek.  A writer saw residual payments when his TV show went into re-runs, or her movie was released for VHS rental.  It's a bit more complex this time around.  The producers now contend that things are changing so fast, they don't even know how money is going to be made and what kind of numbers we'll be talking about.  So, Patric Verrone, president of Writers Guild West calls their bluff - "Our basic mantra is this - if they get paid, we get paid."

That was 19 years ago, and this issue has galvanized the writers' union.  The Guild contends that the old deal doesn't begin to account for the until recently unimaginable cash-generating schemes common to this on-demand, multi-platform, video iPod age.  Even the word "age" is outdated in this context, for all this will change, even before the "ink" is dry on a new deal between the writers and producers.

There's no new lesson here, just reinforcement of the conclusion central to the Jacobs Media / Arbitron "Bedroom Project" - it's all about C-V-C.  Consumers want, and the market will be driven by, Content - Variety - Choice.  These components are essential to any entertainment medium and delivery environment.  The writers may not have anticipated this in 1988, but they now want a new deal that maximizes the value of their content, as the variety of entertainment options competing for TV time and theater dollars widens, and consumers have an ever-growing degree of usage choice.  Just as these writers realize that it's no longer a small-screen/big-screen market, radio is coming to grips with the fact that it's no longer just an AM or FM or Walkman world.

Perhaps you need to negotiate a new deal with yourself, and make C-V-C a non-negotiable item.

P.S. How close are the two sides as the deadline looms?  Hint: the producers claim that this era of digital choice has cut into their bottom line, so get ready for more Desperate Housewives repeats, more amateur singing, more dancing with Jerry Springer, and bigger weight-loss contests in prime-time... or maybe you can just download that movie you missed at the theatre.  Or listen to the radio more.

No Average Joe

The drama surrounding the Joe Torre situation last week finally came to a head.  The Yankees - proving once again that legendary achievements don't necessarily translate into class - gave Torre a substandard offer (a reduction in pay, no less), and the manager did the right thing, and walked.  This ends an incredible era in Yankees history - and that's saying a lot given the team's accomplishments.  You can look up the Torre record of World Series appearances and victories, not to mention that he had the Yankees in the playoffs each of the twelve years he ran the team.

But perhaps his greatest accomplishment was his ability to manage - both up and down.  In George Steinbrenner, Torre had to deal with the most volatile of owners.  It rarely took much for George to cajole, intimidate, and shout at Torre, his players, and his coaches.

And throughout a 162 game season (plus exhibition and playoff games), managing all of those high-priced stars was an ongoing challenge.  From keeping A-Rod motivated and sane, to making sure Jeter knew he was still top dog, to dealing with Giambi's steroid controversy, to making all the other stars - from Posada to Matsui to Rivera - feel like they were just as important to the team's success - Torre demonstrated the ability to manage both up AND down.  And he did it under the glare of the predatory New York media, day in and day out.

Most radio programmers probably feel like Joe Torre much of the time (except for the multi-million dollar salary, of course).  On the one hand, it's the airstaff - frequently a high-powered morning show, and other needy staffers.  On the other, it's local management, and an increasingly demanding corporate team, headed up by a CEO who's under immense pressure.

Being able to relate to talent, make them feel good, and insulate them from the guys in the boardroom is a challenge.  And yet, having the ability to play the corporate game, deal with budgets, high-risk promotions, and still put an entertaining product on the air continues to be a tough putt in 2007.

The truly great ones are able to handle both management tasks deftly, serving as an advocate for both the bosses and talent, and doing it seamlessly and with class.  Last year at Summit 11, author Jeff Angus (Management by Baseball) put it together for us, providing examples of how inspirational field managers can tell us a great deal about how to do our jobs.

This week, the Yankees lost a great programmer... that is, manager.  And like the elite coaches in any field, Torre will indeed be back on another bench in a different town.

Sometimes, it's NOT about the music

At Lincoln Financial Media's FM 94/9 in San Diego, they proudly say, "It's about the music."  But when over 300,000 people have been evacuated and everyone else in the county is "on standby," it's about vital information.

So when the local public radio station that has a big reputation for news coverage had their transmitter go up in flames, FM 94/9 Program Director Garett Michaels and VP/General Manager Darrel Goodin acted quickly to air KPBS' continuous coverage.  As DJ Tommy Hough explained before throwing the switch on Tuesday morning at 8:30, the decision was simple:  "We have a signal.  They have a great local news team but no signal.  It's in everyone's best interest to hand over our airwaves to KPBS."

If you got into this business to make a difference, know that you do, every day.  Sometimes it's by playing a favorite song or making people laugh.  And sometimes it's by doing what's least expected but most needed.  Congratulations to FM 94/9 and KPBS for their unprecedented cooperation.

CVC - Whoah! - Part 2

In yesterday's blog, we previewed a new TiVo/Rhapsody service that puts 4,000,000+ songs in the hands of the consumer.  As we saw in the Arbitron/Jacobs Media "Bedroom Project," CVC - or control-variety-choice - are major attributes that separate desirable media devices and technologies from the rest of the pack.

The other innovation that is worth your attention is from - of all companies - Ford.  You may have already seen ads for their new Sync service, where they've teamed up with Microsoft to bring the Internet (streaming radio and just about everything else) into cars.

The implications of this technology are enormous.  Aside from radio needing to be a part of this technology by providing a solid, streaming product, many Ford owners in the future will be able to access just about anything from their web-connected smart phones and PDAs.  Additionally, Mp3 players come alive in Sync.  The driver can use voice commands ("Play artist Coldplay" or "Play track 'Who Let The Dogs Out'") and the system does the rest.

If this all works as promised, Sync could put enormous pressure on both satellite and broadcast radio, not to mention HD Radio.  As has been the case during the tech revolution, consumers increasingly are being forced to choose how they wish to best spend their gadget dollars.

These are great examples of technology CVC applications, and they're coming soon - to homes and cars.

CVC - Whoah! - Part 1

In "The Bedroom Project," we identified CVC - or control-variety-choice as major attributes that separate desirable media devices and technologies (iPods, for example) from those that lack many of these same qualities.  Radio - as it exists for most consumers today - often fails the CVC test.

And as we also saw in "Bedroom," music is rapidly becoming a commodity.  Consumers have many different ways to control and arrange music.  Thus, for younger people, in particular, listening to it on the radio has become tertiary to their overall entertainment experience.

And as technology marches on, radio's ability to remain dominant will be seriously threatened.  A case in point is a new offering from TiVo.  They are pitching a free 30-day trial where TiVo owners can tie into Rhapsody to control 4,000,000+ songs in any way they want to hear them.  It's like having an iPod at home that is virtually loaded with a massive library, all accessible with a TiVo remote.  As we saw in "Bedroom," radio is already under siege in homes, and these types of CVC advances will only make the situation more challenging.

Yes, not many people actually have a TiVo, but the technology behind this new offer is what you should be considering as we move forward. 

Tomorrow:  another new CVC innovation - for your car.

Radio TiVo

As more and more people see "The Bedroom Project" clips, the power of DVRs and TiVos becomes more tangible.  Add that to the fact that the penetration of these TV recording devices is in the 18% range, and thus having a major impact on television ratings.  More and more people store shows on these convenient hard drives, watching them later that evening or a few days later.  Of course, television execs and ad agency mavens are grappling with the economics of consumers watching shows at their convenience, and how these new viewing habits impact the traditional commercial architecture.

And after seeing "Bedroom," many people ask, "What about a TiVo for radio?"

But aside from assorted talk shows, and morning personalities, what's worth TiVo-ing on the radio?  What are we producing that consumers would want to record and listen to at another time?  That's a difficult question, but it needs to be asked.

And in related news, TiVo has now banded together with RealNetworks to offer Rhapsody to its consumers.  Thus, with access to 4,000,000 songs, TiVo owners can now mix, reorder, and program their own playlists and formats.  And music videos are on the way.

So what can a local radio station provide that sets it apart from the allure of new technologies like this?  How can a radio station create an experience that's more entertaining than someone's iPod or TiVo?  These are the questions we should be asking listeners in perceptual studies.  And they are questions we should be asking ourselves in strategy meetings.

"Which station is the concert station?" or "Which station plays too many bad songs mixed in with the good ones?" is no longer relevant to the larger issues that are facing broadcast radio.  And as WiMax makes its way into cars, and iPods and DVRs continue to proliferate, radio needs to reinvent itself yet again.

Whole Lotta Phone

In the latest marriage of Classic Rock and digital technology, Verizon and Led Zeppelin are now offering wallpapers, ringtones, and full-song downloads of the band's catalog.

Check out this quote from the director of digital music at Verizon Wireless, Ed Ruth:  "Verizon Wireless is proud to be the exclusive over-the-air retailer of digital downloads from Led Zeppelin.  We are thrilled to deliver this anxiously-awaited catalog to existing Led Zeppelin fans, while also helping a whole new generation to discover this classic rock for the very first time.  All of this on the one device people never leave home without -- their mobile phones."

In Jacobs Media's Tech Poll 3, conducted earlier this year, we learned that downloading ringtones and wallpaper are popular mobile phone activities - yet another way to monetize these versatile devices:

We saw it up close and personal in "The Bedroom Project" - cell phones aren't just cool gadgets; they are fashion statements.  And now Classic Rock continues to extend its influence to its original fan base, as well as younger Zep fanatics, too.