JacoBlog - Jacobs Media's Blog

The Merger - What, Me Worry?

After more than a year, the DOJ has spoken, and the dreaded XM/Sirius merger is finally off to the FCC, where it will undoubtedly be approved - in some form.  For traditional broadcasters, this has been one of those gut-wrenching issues that has inspired much debate in boardrooms across the country.

But that's been the case with satellite radio from Day One.  In a style reminiscent of old radio war horses like Randy Michaels, satellite radio began calling out broadcast radio from the beginning.  Remember, "Beyond AM, Beyond FM...XM?"  Why wouldn't AM/FM operators get a little nuts when they saw these ads?

But today, while satellite radio is an irritant, it has been losing momentum for a couple years now.  We've seen evidence of this in our Tech Polls, conducted among 25,000+ rockers each year - just the kind of consumers that XM and Sirius have been targeting. In our newest poll, we're already seeing that when XM or Sirius ends up in the new car or truck you buy or lease, one's propensity to renew the service is much lower than average.  And overall, we're only seeing about a 56% absolute commitment to retain XM or Sirius among current subscribers - not exactly the numbers they want to see, merger or no.

While we won't know the new restrictions that satellite radio might have to follow once the merger is approved, we can only look at the DOJ's next to last paragraph for a clue about what the future may hold:

Any inference of a competitive concern was further limited by the fact that a number of technology platforms are under development that are likely to offer new or improved alternatives to satellite radio. Most notable is the expected introduction within several years of next-generation wireless networks capable of streaming Internet radio to mobile devices. While it is difficult to predict which of these alternatives will be successful and the precise timing of their availability as an attractive alternative, a significant number of consumers in the future are likely to consider one or more of these platforms as an attractive alternative to satellite radio. The likely evolution of technology played an important role in the Division’s assessment of competitive effects in the longer term because, for example, consumers are likely to have access to new alternatives, including mobile broadband Internet devices, by the time the current long-term contracts between the parties and car manufacturers expire.

And that's precisely what AM/FM operators ought to be thinking about, too.  If you want to worry about something, consider the day when most consumers have the Internet available in their cars.  Where will our stations be positioned in that tech smorgasbord when that day arrives?  If you're in denial about that eventuality or you've rationalized that it may be many years away, consider iPod/mp3 player penetration - right now.  Our same Tech Poll tells us that nearly six in ten respondents already own one, including nearly three-fourths of 18-34 year-olds.  What does that tell us about radio's continued ability to be the "go anywhere" medium?  And what does it also signal us about the incredible potential for creating and monetizing programming in the form of podcasts for these devices?

There's a future out there for AM/FM radio, and while satellite radio just got a second wind, the true forces that will most clearly impact traditional broadcasters are far more ominous.  But radio has the opportunity to play in the new media sandbox, if it focuses - once again - on creating great content, while providing multiple distribution outlets for that content. 

Today's Breaking News

Two headlines on a slow pre-holiday Tuesday:

1. FCC Passes Controversial Cross Ownership Rules

2. Oasis Dries Up, KOSS Now KIIS Simulcast

So, on the one hand, the FCC passes the measure allowing media companies to own both a newspaper and a radio or television station in the same market.  And on the other, Clear Channel brooms its entire staff in their Modern AC in Lancaster, CA and has replaced it with a simulcast of KIIS-FM/Los Angeles. (By the way, their sister station, KVVS, is already simulcasting KIIS-FM, so Lancaster must have a Ryan Seacrest thing.)

Ironic, is it not, that both of these stories broke on the same day.

So what part about this FCC decision is good for listeners, good for communities, good for radio - and based on past performance - good for broadcasters?

Figure It Out

Radio has many challenges that have been discussed constantly in the press, as well as in this space.  Unfortunately, many of the factors facing terrestrial radio - economic, technology, etc. - are out of our control.  How are we going to take iPods out of people's hands?  How can you stop TV viewers from using their DVRs and whizzing past commercials?

But one thing we have going for us as an industry is outstanding local air talent.  Unfortunately, it is disappearing all too quickly.  It started with Opie & Anthony, and was followed by Howard Stern.  Already this year radio has lost Don Imus and Elvis & AJ.  Why?  Because of content issues.  The very talent that made them popular - being outrageous and sometimes bordering on offensive - has now been turned against them as a cause for dismissal.

Personality radio has been redefined, and the problem is that many programmers and personalities haven't gotten the message.

The rules of the game have changed.  Crossing the line is no longer being tolerated by advertisers, corporate leaders, and even many listeners.  From the unexpected Janet Jackson at the Super Bowl to the fiasco at St. Pat's to the tragedy in Sacramento to the Imus dis of the Rutgers ladies' basketball team, reality is changing rapidly.  And subsequent coverage by the media is redefining the shock jock model.  In fact, you could make a case that many listeners, advertisers, and pundits are fed up with it.

It's time to wake up and smell the coffee.  Personalities need to work on being funny, compelling, topical, and local.  The easy, lowest-common-denominator shock antics are over.

This recipe has worked pretty well for Jon Stewart, Conan, Leno, Kimmel, Letterman, SNL, and scores of great local morning shows.  Radio personalities need to figure it out - quickly - because the future of our industry depends on top local talent, now more than ever.

In fact, you could make a case that many listeners, advertisers, and pundits are fed up with it.  XM's suspension of O&A yesterday says it all.

Rosie

The news that ABC is not renewing Rosie O'Donnell shouldn't come as a "shock" to anyone.  As media pundits have pointed out, she has essentially played the role of "shock jock" on "The View."  Not unlike what Howard Stern brought to radio, Rosie's outrageous comments about religion, politics, and of course her war with Donald Trump got viewers talking, while driving the ratings higher.

But as the media world changes, getting great Nielsen numbers isn't the whole deal.  Maybe it's about enraging advertisers, or the network's executives worrying what a loose cannon like Rosie is liable to do or say next.

The implications of a more sanitized approach to talk and entertainment are clear.  In spite of how "shock jocks" are depicted by special interest groups and "concerned citizens," the fact is that consumers listen and watch.  Howard Stern was compelling and Rosie was shocking.  You couldn't take your eyes off Dennis Rodman.  And John Daly continues to draw attention even with commercials that he makes.  These people are the flavor that makes media consumption fun and interesting, while giving us something to talk about.

It's about conflict, and that's what Rosie represented on "The View."  We relish confrontation and the media battles that perhaps take our minds off of some of the bigger issues of the day, like the Iraq war or the cost of gasoline.  This is why wrestling, NASCAR, and major sports are what America talks about.  We love competition, rivalries, and knocking heads whether on the gridiron or in a studio.  Barbara Walters will get more sleep at night with Rosie out of the picture, but her ratings are going to head south.

Scratch another high-profile talent from the ranks of terrestrial television.  It won't be long before the only really edgy stuff will be on HBO, Showtime, and satellite radio.

A Short Bench

As the NBA Playoffs get underway, one of the truisms of the sport is that coaches tend to play fewer guys when the games really count.  That's not good news for the guys near the end of the bench, but the reality is that you go with the guys you know who can play when the games really count.

As the Wall Street Journal pointed out last week, radio's bench is awfully short.  We made this same point in our Imus blog recently.  Whether you agree or disagree on any aspect of the Imus controversy - that he got screwed, that he should have been fired, etc. - the truth we're left with is that radio has lost another star.

And in the wake of the Stern exodus in 2006, radio's ability to replace all-star talent is certainly suspect.  Blame it on voicetracking, syndicated morning shows in small and medium markets, or the fact we the industry simply doesn't appeal to many teens looking to make a name for themselves.  Whatever the root causes, the talent pool has become a puddle.  And most stations just don't have a Plan B or farm team if their main show goes down.

Whether the Imus mess will have the same chililng effect on talent that Janet's Jackson's "breastgate" had remains to be seen.  But radio is operating with a finite number of great morning shows, and they're not getting younger.  Where's the "new guard" going to come from?  Can terrestrial radio really grow talent in 2007?

But there may be some good news.  If we actually played our HD cards well, and used those HD2 stations as the sandboxes they really are, we might just be able to grow some talent.  And in the process, replace the Stern's, Bubba's, and Imus's with fresh voices and ideas that could energize our business.  I'm watching that happen in the petri dish known as riff2 here in Detroit.

It can be done.  But it's not going to happen organically, or because radio has always found a way to develop talent.  It needs to be an initiative, and it needs to start soon.

A Lot Of Nerve

Today I'm glad to welcome back Jacobs Media's Keith Cunningham for a guest entry:

Has Rock Radio Lost Its Nerve?

Did you hear about the station that did a Mark Foley weekend?  They gave away lotion, boxer shorts, and tickets to see Panic! At the Disco whenever an inappropriate text message was heard on the air.  Is that crossing the line – or is it the kind of programming stations need to be creating?

Back in early 2001, I wrote a trade column that ruffled some feathers.  The premise was that Rock radio was being programmed by the advertisers.  You know what I mean – Rock radio was slowly but surely being forced to sanitize its product and handcuff talent in the interest of avoiding controversial content altogether – to please some advertisers.  Economic pressures were building. I know I wasn’t the only one feeling the pain – most programmers and sales pros were there with me.

At the time, I had just resigned after programming a Top 5 market station that was #1 with Men 18+, and the morning show was beating Stern.  My resignation was due in part to my GM telling me we had to "change" the morning show and the station because advertisers felt it was too controversial.  Translation:  The local distributor for one big beer client didn't like the station; he thought it was too risqué.  That left me scratching my head and asking myself – how is it that advertisers want our audiences, and the audiences obviously want and love our stations, but now we have to change our big brands because a few clients think they’re too edgy?

It would have been more understandable if FCC fines were waiting in the wings or if ratings were in the crapper, but they weren’t.  Sadly – Rock radio was caving to the pressure and beginning to water down its brands.  Isn’t that exactly what Rock isn’t supposed to do?  Isn’t Rock supposed to be rebellious?  Isn’t Rock supposed to punch pressure in the face and tell it to “F*** Off”?  Isn’t that what the listeners want and expect?  For the record, that once Top 5 market, #1 with men brand did change - they let the morning show go across the street, they lost their edge in other dayparts, the ratings plummeted, and now it’s a Spanish station.

Would HBO do this?  Would ESPN?  Would Maxim stop being edgy, or cover up their models?  Ironically enough, the same advertisers that were complaining about Rock radio being too edgy were advertising in Maxim and FHM, WWF programs, and in most other male-targeted entertainment.

It was clear to many of us back then that at the expense of listener satisfaction and the product itself, Rock was going limp; Rock was losing its nerve.

We all understand the concept of pleasing advertisers, but at what cost?  If it’s at the expense of the listeners and the product itself, it’s suicide.  And for years, while Rock radio was being self-censored, all of our non-radio competitors have been enjoying major success in creating edgy content for Men.  And although satellite radio isn’t off the mat yet, we’re nuts if we think their attempts to reposition terrestrial radio haven’t been effective.  Perception truly is reality.

And think about this:  If you walk into any 7-11, you’ll find half-a-dozen magazines at eye-level showing partial nudity. Most of them sell millions of copies each week or month.  But some radio stations aren’t allowed to show these types of photos on their websites.  So dating back to around 2000, Rock’s white flag began rising faster than Foley’s pants in a teen chat room (sorry, couldn’t resist, but don’t repeat that on the radio these days, you’ll get in trouble).

And then the bomb dropped.  Janet showed her nipple.  I’ve never been so happy and pissed at the same time!

Janet's unidentifiable and not even fully nude breast, along with new advertising pressures, created a climate where Rock programmers and talent became scared to death of offending anyone.  Then companies started telling DJs they would be liable for anything they may accidentally say.

I know I’m not saying anything that others haven’t thought or said before, but fast forward to today and the climate for radio hasn't changed much at all.  But on the contrary, the lingering effect is that Rock radio has become even more milquetoast in many cases.  And for what’s quickly reaching a decade, Hip-Hop has been the edgy and topical format for hipsters, not Rock.   And even AM talk has more “edge” and ‘tude than many FM Rockers.  Just click here to read a high-profile, LA Times piece on KFI’s AM Show host Bill Handle.  The column points out that the controversial bent of Bill’s show has helped it achieve #1 status (12+ English) in Los Angeles for 10 out of the last 11 Arbitron Books.

So what prompted my coffee-induced diatribe today was that one of the stations I consult, 107.7 The End/Seattle, just did a Mark Foley Weekend. And as they were ramping up for the weekend, there were many who thought it was too racy -- many who thought it would be too risqué to do such a promotion.  I understand where the concerns stem from -- but are we kidding ourselves?  Have we really lost our nerve?

A Mark Foley Weekend is not too risqué or racy -- it's satire, it's funny, it's topical, it’s mocktacular, it's not actionable by the FCC, and it's not hurting anyone (except maybe an alleged Page predator).  A promotion like that causes TALK – and we’ve got to do more of it.

And as I was running this debate through my head, it struck me so clearly that for the past five-or-so years, Rock radio has been handing all the laughs, all the controversy, and all the viral marketing to Jon Stewart, Conan O’Brien, Jay Leno, Jimmy Kimmel, David Letterman, SNL, Magazines, Cable TV, bloggers, AM Talk, Satcasters and Internet stations or websites.

And as we’re now seeing very clearly, big corporations are now chasing eyeballs on sites like MySpace, even though the content can be risqué and controversial.  As has always been the case since the dawn of advertising, money chases a hot advertising vehicle.  MySpace does not apologize for its content.

So, if you can’t tell, here's what's on my mind, and I’m sure it’s on many of your minds as well:  Rock radio needs to stop being so paranoid and milquetoast.  We don’t want FCC fines and we all know we have no clear definition of where ‘the FCC line’ is, but Rock needs to responsibly get its nerve – and swagger – back.  If not, Rock radio may dip to being a 3rd or 4th entertainment preference with Men.

And for those that are curious, I followed-up with Lazlo after his Mark Foley weekend to see how it went.  Here's what he had to say.

“The weekend went great. We forced ourselves into the conversation. Some complaints. Some compliments. The end result was talk. It isn't easy to get people to talk about radio anymore. T&A just doesn't cut it. It has to be smarter and more offensive. It has to offend some people on different levels. It has to attack party lines or a core belief system. If you are going to do it, really do it – push it. Lesbians making out isn't offensive. In today’s world it is sleepy.”

Kudos to Lazlo for having the Rocks to step-out and show some nerve. It’s working for The End, much as it’s working for Keith Olbermann on MSNBC.  The more edgy and controversial he gets, the more his ratings skyrocket.  Here’s hoping the type of stuff that actually creates talk will once again become the norm for all of Rock radio.

What's So Indecent

You know it's an election year when the indecency monster rears its ugly head.  Even though the majority of complaints filed with the FCC are coming from the Parents Television Council (and other organized groups), Senator Brownback - with an assist from the always politically correct Senator Frist - is fast-tracking a Senate bill to boost indecency fines TENFOLD from $32,500 to $325,000.  Holy Opie & Anthony!

Of course, this critically important Senate action is occurring amidst other indecencies - the Iraq war, the sorry state of New Orleans, $3 gas, rampant phone bugging, stalled out lobby reform, a staggering budget deficit, global warming, and deteriorating international relations.

Hey, but what do I know?  Maybe DJs talking about body parts is indeed the top Senate priority.

Up The FCC

Leave it to the geniuses who produce "Family Guy" to make the ultimate statement about the FCC and indecency (click to watch).  You have to love the way these guys push the envelope.

Say What?

It's been a tough year for the radio business.  New media is getting all the headlines, revenue is off,  payola hearings have made the headlines, Howard Stern (and others) are leaving terrestrial radio for apparently greener ($$$) pastures, and it's getting tougher and tougher to find good salespeople.

So as the year winds down, it's easy to think about getting through the holidays, recharging the batteries, and fight the good fight again in '06.  Think again.

Just yesterday, Senator Ted Stevens (R-Alaska) held an indecency forum, featuring the Christian Coalition and  assorted media companies.  Who knows how these meetings will play out, but once again, the congressional turret continues to aim at our business.  It's noteworthy that all of the Stern Sirius advertising to date is focusing on how Howard will now be free to do the show he wants to do, unrestrained by the FCC and radio regulation.

Meanwhile in related news, college radio stations around the country are now finding their licenses challenged by Christian groups who sense an opening to wrest away these stations.  To date, none of these challenges has worked, but they are generating huge legal fees for college radio stations that are just trying to stay on the air.  Think you've had a tough year?

And if I sound like another whiner on the editorial page, all apologies.  But doesn't the Senate have a little more on its plate right now than yet another indecency investigation?  Isn't the nation facing considerably more important issues than whether Eva Longoria shows too much skin or morning DJs talk about who got lucky over the weekend?

Where Are The Democrats?

Last week, our blog commented on Representative James Sensenbrenner's (R-WI) (SP) senseless concept to make on-air indecency violations a criminal offense.  Somehow, we just can't picture visiting some of our favorite morning shows in federal prison.

Now former Rep Bob Barr, a staunch Republican conservative, has commented on Sensenbrenner's idea.  In a recent guest column written for the Atlanta Journal Constitution, Barr writes that Congress needs a cold shower.  To quote him, "...the proposal to expand our already bloated federal criminal code to cover "indecent broadcasting" is a terrible idea. Not only will it likely not solve the problem of distasteful programming — just consider the megadollars and massive publicity that "defendant" Howard Stern would reap if he were indicted for the garbage he plies over the airwaves — but what about the First Amendment?"

Maybe it helps to be out of office and beyond the Beltway, but if this issue is so clear to Barr, why aren't we hearing from members of either party - especially the Democrats?  And instead of jailing disc jockeys, where's the plan for dealing with the high price of health care, or even gasoline?  Visit www.saveradionow.org for more info on this important topic.