Happy Fourth of July!
JacoBlog will return on Monday, July 7th. Enjoy your holiday!!
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In yesterday's blog, we talked about how the automakers may need to pay more attention to teens in order to better understand how consumers will eventually use dashboard media.
Too bad that radio never took that advice. A new study from Coleman Insights indicates that we're at a techno "tipping point" when it comes to teens and the ways they use new gadgets and media to access and enjoy music.
Of course, that's what our "Bedroom Project" was all about, and many of you remember those storytelling videos. But Jon's research inspired me to go back to our most recent Tech Poll, and just focus on those who are under 18. It's a sample of nearly 500 young Rock listeners, and their tech reality differs greatly from their older counterparts.
Here's how to read this Media Usage Pyramid. The pyramid is constructed in the same order as the total sample, so when you see various dimensions "widen," it's a deviation from the norm. So, at the very bottom, 85% of our teens own their own cell phone, while only 81% listen to the radio at least an hour a day. That radio listening percentage is lower than for any other age group, and it speaks to the phenomenon that Jon reports in his study. (TV viewing is also on the low side.)
But check out Internet use (at least one hour/day). It's at 93% and leads all other activities/media. We also have exceptionally high numbers for iPod/mp3 player ownership (87%), video streaming and social networking site usage (both with 80%), and of course, lots of text messaging (61%). But between the Internet, iPods, sharing music and thoughts on MySpace and Facebook, and using texting as a conduit to friends, these teens are on very different platforms than many adults.
Bottom line? It doesn't look like the 25-54 data at all. And that's the point. Radio's been talking to aging audiences to determine the status quo for at least two decades - instead of talking to the tech movers and shakers - teens - and attempting to understand what's next. Studying those waterfalls heading upward would be a smart investment in time and money for a medium that's struggling to get its mojo back.
Three years ago, this news story from late last week would have created massive "water cooler talk" in and out of radio:
In case you didn't hear (and you probably didn't), Artie Lange walked off the Stern show last Thursday after an incident with his personal assistant. This would have been the radio buzz, but instead, the entertainment headlines were all about Michael Johns getting booted from American Idol, Katie Couric's status at CBS, and a new Keanu Reeves movie that opened this past weekend.
It's about environment. While Stern's CPA is obviously reading this blog and laughing, the fact is that by placing himself on a much smaller stage, Stern has taken himself out of the mainstream of American media. People don't talk about his show because most of them can't hear it. Compare that to his terrestrial radio reign where even celebrities who were terrified of him went on the Stern show to promote their movies, books, and sitcoms.
We even saw this while working for Stern stations over the years. On the really well-positioned, solid stations, Stern pulled in those boxcar numbers that everyone remembers. But on the dogs - stations that were poorly programmed, also-rans, and or simply doing a lousy job - his ratings were not impressive at all. Even Howard couldn't compensate for being on a losing team.
Many personalities and operators make these same faulty assumptions when analyzing talent and environment. The aforementioned Katie Couric is either mis-cast on the CBS Evening News or the reality that she's moved from a great gig like Today to a much tougher putt in her new job is something that even she cannot overcome.
Many have suggested that terrestrial radio needs Howard Stern, because few personalities (if any) have stepped into his void. Or is that Howard Stern needs terrestrial radio?
This blog was inspired by KISW's Dave Richards, the guy who has most successfully replaced Howard Stern at his Entercom/Seattle station. He's still a big Stern fan, by the way.
We are big fans of using blogs to interact with the audience, and to dialogue about programming. A great example is K-Rock/New York (WXRK), where "Pete In Promotions" is doing a great job of bringing the thrill of victory and agony of defeat to "Bracket Brawl." (SEE BELOW)
A strong writer with something to say can truly enhance a station's programming, while connecting with station fans. Blog on, Pete!
Recap of the First Round...
-Pete In Promotions
Sigh of relief... If you did not hear, there was a bomb scare right across the street from our building. Everyone was a little nervous and didn’t know where it came from. In the end it was just some random person’s briefcase and not a package left by Hagar fans.
The first round is over and so is the chance to win a huge TV for some of you. I myself am a little worried after some of my sleepers overslept and screwed me, but I’m still optimistic. That’s why they call me Optimist Prime!!! BAM!!!
Below is a ranking of how hard you ROCK.
32 Correct – (Perfect Score) – You have taken courses at the school of Van Hagar and passed with a 4.0. (Some people should take a hint, if you’re gonna cheat don’t get caught)
28-31 Correct – You either failed the final test in the school of Hagar and it bit you in the bum or you do nothing with your life except listen to K-ROCK. Either way the TV is still in your grasp.
21-27 Correct – If only you could have taught your grandparents how to text on their cell phone. You went with Alice in Chains over Sublime, Bush over Offspring, Black Sabbath over Aerosmith, Smashing Pumpkins over Rage Against the Machine, Nine Inch Nails over Stone Temple Pilots. It was a coin flip every time and you stuck with tails. If you examined closely you’d see that Hagar struck again, heads was on both sides! UGH!
13-20 Correct – In the back of your head you can picture the huge 73” TV sitting on the bedroom floor. There is no room to move (or for your dresser which is now in your garage). But you are a die hard fan. You’ve loved Nickelback since the day you thought Chad Kroeger was speaking to you when he said “Look at this Photograph." You felt the need to tear when Live’s front-man spoke about dolphin’s crying. Looking back to your high-school days you remember that Beck’s song “Loser” was your anthem. So even though you know that these bands probably have no chance in winning you choose them anyway. What a good sport. Thanks for playing, have a nice day.
2-12 Correct – I have no idea what you were thinking. Did you cheat off of a Def Leppard? I take it back. There is a chance that you were just over thinking things. Well, you over thought a lot. Next time I suggest picking names from a hat.
1 Correct – Please sign up for the School of Van Hagar. They should be able to teach you a thing or two. I’ve heard that there is a new school that is open for half the price. It’s called “The School of Gary Cherone.” The rates aren’t bad, so it doesn’t hurt to check out.
0 Correct – Here is were you find all of the fans of Beck and Tom Petty. We appreciate you playing the game, thanks for the frustration and thanks for getting blown out!
Dave Beasing shares a recent article from Seth Godin. Here is part two (find part one here):
As part of the team that invaded the homes of young people during last year's Arbitron/Jacobs "Bedroom Project," I can tell you that we met a lot of young people who consider themselves to be huge music fans. Yet, we saw very few CD collections and even fewer radios. A reporter recently asked me if I'm "depressed" about this. Hardly. Why waste time thinking of yourself as a victim of change? Why not use change to your advantage instead?
In essence, that's author Seth Godin's first point in Part 2 of his blog about the sagging music business. With his permission, we bring you more of Seth's "Music Lessons."
Music Lessons - Part 2
6. This is a big one: The best time to change your business model is while you still have momentum.
It’s not so easy for an unknown artist to start from scratch and build a career self-publishing. Not so easy for her to find fans, one at a time, and build an audience. Very, very easy for a record label or a top artist to do so. So, the time to jump was yesterday. Too late. Okay, how about today?
The sooner you do it, the more assets and momentum you have to put to work.
7. Remember the Bob Dylan rule: it’s not just a record, it’s a movement.
Bob and his handlers have a long track record of finding movements. Anti-war movements, sure, but also rock movies, the Grateful Dead, SACDs, Christian rock and Apple fanboys. What Bob has done (and I think he’s done it sincerely, not as a calculated maneuver) is seek out groups that want to be connected and he works to become the connecting the point.
By being open to choices of format, to points of view, to moments in time, Bob Dylan never said, “I make vinyl records that cost money to listen to.” He understands at some level that music is often the soundtrack for something else.
I think the same thing can be true for chefs and churches and charities and politicians and makers of medical devices. People pay a premium for a story, every time.
8. Don’t panic when the new business model isn’t as ‘clean’ as the old one.
It’s not easy to give up the idea of manufacturing CDs with a 90% gross margin and switching to a blended model of concerts and souvenirs, of communities and greeting cards and special events and what feels like gimmicks. I know.
Get over it. It’s the only option if you want to stay in this business. You’re just not going to sell a lot of CDs in five years, are you?
If there’s a business here, first few in will find it, the rest lose everything.
9. Read the writing on the wall.
Hey, guys, I’m not in the music business and even I’ve been writing about this for years. I even started a record label five years ago to make the point. Industries don’t die by surprise. It’s not like you didn’t know it was coming. It's not like you didn't know who to call (or hire).
This isn’t about having a great idea (it almost never is). The great ideas are out there, for free, on your neighborhood blog. Nope, this is about taking initiative and making things happen.
The last person to leave the current record business won’t be the smartest and he won’t be the most successful, either. Getting out first and staking out the new territory almost always pays off.
10. Don’t abandon the Long Tail.
Everyone in the hit business thinks they understand the secret: just make hits. After all, if you do the math, it shows that if you just made hits, you’d be in fat city.
Of course, the harder you try to just make hits, the less likely you are to make any hits at all. Movies, records, books... the blockbusters always seem to be surprises. Surprise hit cookbooks, even.
Instead, in an age when it’s cheaper than ever to design something, to make something, to bring something to market, the smart strategy is to have a dumb strategy. Keep your costs low and go with your instincts, even when everyone says you’re wrong. Do a great job, not a perfect one. Bring things to market, the right market, and let them find their audience.
Stick to the knitting has never been more wrong. Instead, find products your customers want. Don’t underestimate them. They’re more catholic in their tastes than you give them credit for.
11. Understand the power of digital.
Try to imagine something like this happening ten years ago: An eleven-year-old kid wakes up on a Saturday morning, gets his allowance, then, standing in his pajamas, buys a Bon Jovi song for a buck.
Compare this to hassling for a ride, driving to the mall, finding the album in question, finding the $14 to pay for it and then driving home.
You may believe that your business doesn’t lend itself to digital transactions. Many do. If you’ve got a business that doesn’t thrive on digital, it might not grow as fast as you like... Maybe you need to find a business that does thrive on digital.
12. Celebrity is underrated.
The music business has always created celebrities. And each celebrity has profited for decades from that fame. Frank Sinatra is dead and he's still profiting. Elvis is still alive and he's certainly still profiting.
The music business has done a poor job of leveraging that celebrity and catching the value it creates. Many businesses now have the power to create their own micro-celebrities. These individuals capture attention and generate trust, two critical elements in growing profits.
13. Value is created when you go from many to few, and vice versa.
The music business has thousands of labels and tens of thousands of copyright holders. It's a mess.
And there's just one iTunes music store. Consolidation pays.
At the same time, there are other industries where there are just a few major players and the way to profit is to create splinters and niches.
14. Whenever possible, sell subscriptions.
Few businesses can successfully sell subscriptions (magazines being the very best example), but when you can, the whole world changes. HBO, for example, is able to spend its money making shows for its viewers rather than working to find viewers for every show.
The biggest opportunity for the music business is to combine permission with subscription. The possibilities are endless. And I know it's hard to believe, but the good old days are yet to happen.
Did you miss Part 1 of Seth's "Music Lessons?" It's here.
How many blogs can you read each day? We're humbled that so many make this one a habit, and we highly recommend you find time for Seth's.
Dave Beasing shares a recent article from Seth Godin. We've split it into two parts, with part two appearing here tomorrow:
Author Seth Godin helps people "see the forest for the trees." No industry has ever been so in need of an objective perspective as the music business. To this day, many of our friends there are in denial. They still believe that the MP3-sharing "genie" can somehow be licensed and litigated back into the proverbial bottle.
No matter what business you're in, rapid technological and cultural changes are impacting how you market and distribute your product. Your choice in the matter is not whether to react, but how. As Radiohead just proved by debuting their new CD - previously free - at #1 on the sales chart, a good marketer fondly remembers the good old days; a great one wins today.
His recent blog about the music industry has been making the rounds, but many of you have not had a chance to read it. And as Seth walks you through the dark path the music industry has walked on, keep in mind how many of these "lessons" apply to radio. With Seth's permission, we share Part 1 of "Music Lessons."
Things you can learn from the music business (as it falls apart)
The first rule is so important, it’s rule 0:
0. The new thing is never as good as the old thing, at least right now.
Soon, the new thing will be better than the old thing will be. But if you wait until then, it’s going to be too late. Feel free to wax nostalgic about the old thing, but don’t fool yourself into believing it’s going to be here forever. It won’t.
1. Past performance is no guarantee of future success.
Every single industry changes and, eventually, fades. Just because you made money doing something a certain way yesterday, there’s no reason to believe you’ll succeed at it tomorrow.
The music business had a spectacular run alongside the baby boomers. Starting with the Beatles and Dylan, they just kept minting money. The co-incidence of expanding purchasing power of teens along with the birth of rock, the invention of the transistor and changing social mores meant a long, long growth curve.
As a result, the music business built huge systems. They created top-heavy organizations, dedicated superstores, a loss-leader touring industry, extraordinarily high profit margins, MTV and more. It was a well-greased system, but the key question: why did it deserve to last forever?
It didn’t. Yours doesn’t either.
2. Copy protection in a digital age is a pipe dream.
If the product you make becomes digital, expect that the product you make will be copied.
There’s a paradox in the music business that is mirrored in many industries: you want ubiquity, not obscurity, yet digital distribution devalues your core product.
Remember, the music business is the one that got in trouble for bribing disk jockeys to play their music on the radio. They are the ones that spent millions to make (free) videos for MTV. And yet once the transmission became digital, they understood that there’s not a lot of reason to buy a digital version (via a cumbersome expensive process) when the digital version is free (and easier).
Most items of value derive that value from scarcity. Digital changes that, and you can derive value from ubiquity now.
The solution isn’t to somehow try to become obscure, to get your song off the (digital) radio. The solution is to change your business.
You used to sell plastic and vinyl. Now, you can sell interactivity and souvenirs.
3. Interactivity can’t be copied.
Products that are digital and also include interaction thrive on centralization and do better and better as the market grows in size (consider Facebook or Basecamp).
Music is social. Music is current and everchanging. And most of all, music requires musicians. The winners in the music business of tomorrow are individuals and organizations that create communities, connect people, spread ideas and act as the hub of the wheel... indispensable and well-compensated.
4. Permission is the asset of the future.
For generations, businesses had no idea who their end users were. No ability to reach through the record store and figure out who was buying that Rolling Stones album, no way to know who bought this book or that vase.
Today, of course, permission is an asset to be earned. The ability (not the right, but the privilege) of delivering anticipated, personal and relevant messages to people who want to get them. For ten years, the music business has been steadfastly avoiding this opportunity.
It’s interesting though, because many musicians have NOT been avoiding it. Many musicians have understood that all they need to make a (very good) living is to have 10,000 fans. 10,000 people who look forward to the next record, who are willing to trek out to the next concert. Add 7 fans a day and you’re done in 5 years. Set for life. A life making music for your fans, not finding fans for your music.
The opportunity of digital distribution is this:
When you can distribute something digitally, for free, it will spread (if it’s good). If it spreads, you can use it as a vehicle to allow people to come back to you and register, to sign up, to give you permission to interact and to keep them in the loop.
Many authors (I’m on that list) have managed to build an entire career around this idea. So have management consultants and yes, insurance salespeople. Not by viewing the spread of digital artifacts as an inconvenient tactic, but as the core of their new businesses.
5. A frightened consumer is not a happy consumer.
I shouldn’t have to say this, but here goes: suing people is like going to war. If you’re going to go to war with tens of thousands of your customers every year, don’t be surprised if they start treating you like the enemy.
When is the best time to change your business model? Seth's thoughts on that begin Part 2 of his Music Lessons, reprinted in this space tomorrow.
We certainly touched a nerve with our blog entry on 12/20 about the new HD Radio campaign. Along with Dave Martin, we expressed the opinion that the new agency spots may not be congruent with what broadcasters expect from the Alliance. In our view, the campaign throws AM/FM Radio under the bus in order to promote HD, in much the same way that the Mac guy makes fun of the PC guy. In the case of the HD Radio campaign, however, these commercials strike us as much less effective, and needlessly parody AM/FM Radio.
Well, during a traditionally slow week, we set a record for blog traffic - not just on the day in question, but for the entire week. And the blog generated 28 comments - more posts than we get in a typical month. (OK, two of them were mine.)
So, what does this tell us about the campaign specifically, and HD Radio in general? If you read through the comments, there is a lot of emotion about HD Radio and the way it has rolled out - most of it negative. And also, from sifting through the many emails I received that were not for publication, I get the sense there's a growing schism between many CEOs and rank-and-file broadcasters about how HD Radio is being promoted, marketed, and even approached.
My takeaway on this situation is that it's time for a larger industry dialogue about HD Radio. An assessment needs to be done to honestly determine what's working, what's failing, and where to go from here. There are too many passionate broadcasters who are upset, frustrated, and disillusioned by what has transpired. On the other hand, I get the feeling that Peter Ferrara of the Alliance also cares very much about this initiative and making it work.
Perhaps it's time for the Alliance to open its doors and its mind to some of the creative, intelligent, and knowledgeable radio workforce. Let's be honest about HD Radio's progress report, and make a resolution for 2008 that real progress needs to be made.
Happy New Year! The JacoBLOG will return with an update on January 2nd.
The JacoBLOG will return with an update on December 26th. Merry Christmas!
