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Thread: Soon! The coming Talk Radio tsunami...

  1. #1

    Soon! The coming Talk Radio tsunami...

    “Over my dead body” radio stations will pay record labels for airplay, vows NAB President David Rehr. From the grave, Frank Sinatra calls his bluff. Internet music sharing merely turned-up-the-volume. This dispute has been raging for generations, as Nancy Sinatra’s more recent Congressional testimony demonstrates.

    Labels – which have lined radio station walls with appreciative Gold and Platinum records -- argue that the longstanding airplay-for-exposure swap rips them off, and starves their artists. They note that, in other countries, radio pays.

    They should know, says radio. Some of the biggest labels are foreign corporations, seeing to “tax” USA radio stations. And labels have been starving their own artists all along. Bands make a living touring, and radio stations compete to promote concerts.

    This story is less about revolution than technology evolution.
    See that StubHub kiosk at the baseball stadium? If labels had embraced Napster that way, they might not be in trouble now. Radio could fend off 8-track, cassette, and CD…but iPod obsoleted FM as a music delivery appliance. Got an iPod? How many songs are on it? How many commercials?

    “Customers are now in charge. The control of products or distribution will no longer guarantee a premium or profit,” Jeff Jarvis announced in his best-seller “What Would Google Do?” For record labels, the status quo is a death march. For music radio stations – already choosing between paying employees and paying for electricity -- change will be fatal to the business model.

    It is unclear which inning this game is in, but smart stations aren’t waiting for the final score. Credit Rush Limbaugh for leading the vaunted Talk Radio Revolution that repurposed AM radio, back when AM radio became obsolete as a music delivery appliance. FM is already following.

    Why now?
    Why did a dozen years of “FM Talk”/”Hot Talk” hype fail to find traction? Bankers. If you asked them, they’d tell you that music = FM and Talk = AM. Now, they just want their money.

    Now, listeners are wandering away from programming that suffers from the lack of attention and care and nurturing that programming got when a single station had its own GM and PD and Sales department. Now, GMs are saddled with multiple major market oversight, programmers responsible for non-music stations are too-young-to-have-grown-up-listening-to AM, and local Sales departments have more cluster tonnage to peddle than they can sell like it’s special.

    FM radio works better than AM radio.
    WTOP/Washington – now a group of FMs – was a 1500AM stand-alone when I managed it in the 1980s. Sure, it was a kick to crank a 50KW. At night, I’ve heard that station in Canada and Florida. If we only could’ve gotten into West Falls Church, Virginia.

    There are also demographic limitations. Most of 25-54 grew up without an AM radio habit; and a pile of research demonstrates women’s aversion to AM radio snap-crackle-pop.

    Thus the trend, well in motion, to simulcast or migrate graying legacy non-music AM sister stations to FM, replacing mid-pack or cellar-dweller music formats which owners can no longer afford to fund. Sometimes the right thing happens for the wrong reason. Watch what happens next.

    If music royalty fees fly, The Talk Radio Tsunami will crest OVERNIGHT.
    Literally within hours, there will be hundreds of new News/Talk FMs, via simulcast, based on what exasperated station owners are telling me.

    Five minutes later, the second wave will be Talk start-ups, FMs-presently-playing-music, which will cobble-together a line-up of all-or-mostly-syndicated longform programming. Available programming will go quickly. In most markets, there is just-enough uncleared first-tier product available for one more talker.

    When I started consulting (January 1, 1995), much of my work was flipping Adult Standards AMs to Talk. By then, we were second-in. We were the Dr. Laura station, because there already was a Rush Limbaugh station. Now, owners and GMs I’m hearing from want to know who else is on-the-bird, and how to make them sound like part of the station’s on-air family and how to sell it.

    For syndicators I am also hearing from, “development” has become “scouting.” To satisfy the looming, sudden, overwhelming demand for barter longform, networks will sign in-place local Talk hosts whose acts have been bubbling under the tipping point until now.

    The new music FM will simply be a distribution system, yet-another channel to graze.
    Like TV stations suffering TiVo and competing with Hulu, radio is already losing TSL to iPhone and will soon contend with dashboard broadband access.

    Remaining music FMs’ business model will be a new normal, a pay-for-play that consumers will understand. Heck, listeners already spend their day perusing product placement schemes. They’re grabbing that free iTunes download card at Starbucks’ cash register; and “American Idol” judges are sipping from a Coke-logo’d cup while contestants perform this week’s Ford music video.

    Five years from now, there might still be music on FM. One year from now there will certainly be more talk on FM, even if radio is still arm-wrestling with record labels. Even just months from now, launching a Talk station will be harder, as syndicated shows get snapped-up.

    Got a music FM? Think Musical Chairs.

    Tell me I'm wrong.

    HC
    www.HollandCooke.com

  2. #2

    Re: Soon! The coming Talk Radio tsunami...

    Ah, to be a Talk Radio consultant on the eve of the Talk Radio Tsunami. LOL!!!! No, Holland, you're not wrong. And I know where to find you!

    Your analysis is dead-solid perfect. The unknowable part of the equation, though, comes at the market level where each individual property will be scrutinized. Top billing music FM stations will see their margins lowered, but may continue to be extraordinarily profitable. Watching that 60 percent cash flow sliced to 50 percent or 40 percent won't be fun, but the net will still be outrageous.

    But for marginal properties--for that 4th or 5th FM in the cluster on its third music format in three years--it will be a no-brainer.

    That is, until the flip. That's when the brains come into play. Because, as you can attest, it ain't just a matter of slapping any-old-talk onto the stick and walking away.

    And once the third, fourth, and fifth FM in a given market moves to talk, what exactly do the sixth, seventh and eighth converts crank up on the frequency modulation band?

    Should be fun. And, Mr. Cooke, will you need a chauffeur?

  3. #3

    Re: Soon! The coming Talk Radio tsunami...

    I have many thoughts on this subject.

    One of them is that the bulk of the royalty battle is over the stations that make more than $2 million a year. They are the ones that will pay a percentage of revenue.

    I just finished doing my taxes, and it struck me that the easy way to circumvent the royalty in the cluster world is move most of your revenue generation (ie, commercials) to another station in the market. The music audience hates commercials anyway. So you play more music, you pay the low $5K fee, and generate revenue in other ways.

    In my next life, I'll become a tax attorney.

  4. #4

    Re: Soon! The coming Talk Radio tsunami...

    Radio can survive and thrive in the future, but it means first admitting the industry is broken and rethinking radio.. Shell games and squeezing more blood for short-term gains and executive bonuses, is a sure race to the bottom. The consolidators are winning the race.

    Consolidators have one core value, greed! And they'll screw anybody to get what they want

    Competition makes every one that much better. Problem is, consolidators gobbled up the traditional competitors so crap has become the new standard. They're clueless when it comes to new media! It's like teaching an old dogs new tricks.

    This is your brain..

    This is your pilot speaking. Enjoy your flight with consolidated crap airlines.
    Our mission is greed and to nickle and dime you to death, while delivering crap service.
    Enjoy your peanuts and flying with pilots with less experience who work cheap! To save on fuel, customers must first step on the scale.. And if you're fat, you pay extra. Bathrooms are coin operated.
    Blankets and pillows are self service. See the vending machines for over priced drinks..

    If this doesn't make you happy.. we don't care... take the trains instead...uh..

    We except cash, credit or check?

    Thank you for flying with consolidated crap airlines..

    Any questions..

  5. #5

    Re: Soon! The coming Talk Radio tsunami...

    pocket-radio:

    I like your comparison.

    Radio and Airlines were both affected by 1980s deregulation and neither industry will become what it was before the rules changes. Even if the laws were rolled back to 1977, there's no guarantee that full meals would return to a flight from New York to Denver.
    "Its music what makes a radio station, and at Live FM, we play the last music around."
    After receiving that copy, I quit the VO industry.

  6. #6

    Re: Soon! The coming Talk Radio tsunami...

    Quote Originally Posted by pocket-radio
    Radio can survive and thrive in the future, but it means first admitting the industry is broken and rethinking radio.
    Maybe you're not paying attention. EVERYONE is rethinking radio. Not a day goes by when I don't rethink approaches to radio. And most of the biggest companies, the ones everyone hates, are rethinking all the premises on which radio was built. There is no status quo. It's all in the garbage, and has been for a couple of years. I think THAT is what has a lot of old timers in radio scared.

    The reason they're scared is the old timers only know what they've done. They don't know new media, they don't know how to make money without :30 spots, and they don't know how to create content that appeals to Gen Y. The old timers are confusing the idea of rethinking radio, which means creating something unique, with retro radio, which means returning to pre-consolidation ideas. The latter is not going to happen. You can't put the toothpaste into the tube. Congress is not going to re-regulate. It's up to the people in the business to chart a new course. Change is coming, and those who can't adapt will be on the street.

    I think change has begun to happen, and the old timers aren't going to like it. Why? Because the future won't look like the past. So you have bloggers like Jerry Del Coliano who, on the one hand, speaks in glowing terms about the big future for new media and podcasts. While on the other clings to the past with live & local DJs. No one cares about live & local DJs. No one needs a live & local DJ is all they do is front and back sell music. No one needs live & local DJs for music discovery. The audience already knows what they like. The audience just wants to hear their favorites, and they want to be part of the show.

    The role of the DJ has changed, but no one told the DJs. Whoops! If you're a DJ and you're not on Twitter or Facebook, you are part of the problem. Not your boss, not your company, not consolidation. DJs are on the front line of the battle for new radio. If you're a DJ who is twice the age of your station's target demo, you have a lot of work to do. If your station appeals to people in their 20s and you are in your 40s, maybe it's time for a makeover. Look at your photo on the station web page. Do you look like Aqualung? Maybe it's time to loose some weight and use some hair color.

    EVERYONE needs to rethink radio, not just the owners. That includes the bloggers. That includes the haters, who think it all begins and ends with ownership. It doesn't. It begins and ends with the product. Product and ownership are two different things. Ownership is simply the landlord. Don't look to ownership for creative inspiration, because that's not their job. That's YOUR job. All you need to do is let them know what you're doing. Then do it.

  7. #7

    Join Date
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    Re: Soon! The coming Talk Radio tsunami...

    Sounds good, Big A. Holland, I like your post but at the same time I'm wondering about a couple of things, one being your prediction. It's almost May and it seems you were predicting taht Rush, hannity, et al would be free-falling in the ratings and a new "caller-driven talk radio" would be skyrocketing. Thanks to a certain President O, Rush's ratings have been the best in years, and I still haven't heard this "caller driven" format.
    It seems like attempts to "young up" talk radio haven't been too succesful, witness LA losing it's hot talker. The demos are coming down as AMs switch to or simulcast with FMs, but not from any new up and coming younger-skewing hosts.

  8. #8

    Re: Soon! The coming Talk Radio tsunami...

    Quote Originally Posted by gr8oldies
    you were predicting taht Rush, hannity, et al would be free-falling in the ratings and a new "caller-driven talk radio" would be skyrocketing.
    I SURE DO wish that most radio talkers would read-the-room-better.
    Radio TSL erodes, even as cume inches up a tad...while people are adopting social media in unprecedented fashion.
    (Various estimates peg Facebook's DAILY new member sign-up rate at 250,000-450,000).

    Meanwhile, many radio talkers seem-to-be:
    a.) talking-at, rather-than-with, people;
    b.) talking-about-the-same-thing-every-day.

    Can anyone NOT guess what-Rush-will-be-talking-about -- other than himself -- tomorrow?
    Does Rev. Jeremiah Wright exist anywhere-else-in-media -- 5 months after the election -- besides The Sean Hannity Show?

    So I've been preaching-to-anyone-who'll listen about making what-we-do more dialogue, less monologue.

    As that topic got lively here a while back, I recall predicting that radio would fall-on even tougher times SOON.
    Headlines since will address that-part-of-your-query.

    But I want to respond as-specifically-as-I can.
    Please copy-and-paste-into-Email what-I-posted that-you-reference about Rush/Hannity?
    Send to [email protected], so it doesn't get-smothered-in-spam at my AOL address.
    Although I'm in breakfast-to-dinner convention mode this coming week, I'm checking Email at least daily.

    THANKS
    HC

  9. #9

    Re: Soon! The coming Talk Radio tsunami...

    Quote Originally Posted by Holland Cooke
    Most of 25-54 grew up without an AM radio habit; and a pile of research demonstrates women’s aversion to AM radio snap-crackle-pop.
    Radio has much bigger problems in the next 30 years as most of the under-30 crowd today is growing up without either AM or FM, never mind the format.

    Personally, I can't think of a better example of an electronic wasteland than today's hate talk radio.
    Illegitimi non carborundum

  10. #10

    Re: Soon! The coming Talk Radio tsunami...

    Quote Originally Posted by landtuna
    Quote Originally Posted by Holland Cooke
    Most of 25-54 grew up without an AM radio habit; and a pile of research demonstrates women’s aversion to AM radio snap-crackle-pop.
    Radio has much bigger problems in the next 30 years as most of the under-30 crowd today is growing up without either AM or FM, never mind the format.

    Personally, I can't think of a better example of an electronic wasteland than today's hate talk radio.
    I am more of the mindset that people are tired of having information thrown at them from any direction. Whatever happened to that great big wave that hit Indonesia? It's all dried up. The old Vapors cover of Talk Talk comes to mind. I like to listen to a local station for a short time in the morning. From then on I concentrate on my work and listen to music. Weekends I enjoy my music. I read the newspapers ( ) and get all the information I want as a result of being literate, and I form my own opinions. It's a simple plan. Simplicity simplcity.
    No irony there.

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