Thursday, February 28, 2008

The shaky ground XM sits on

First off, an admission. I've been an XM subscriber for more than 6 years. I've seen the company grow from a few hundred thousand subscribers to now more than 9 million.
Their product is excellent despite the fact their customer service is beyond atrocious. But the latest financial results make me question how long they'll stay in business. When the company went public they said the break-even point was 4 million subscribers. Now, despite a $3 a month increase, 9 million subscribers AND commercials on their non-music channels they lost a staggering 682 million in 2007 on top of losing 719 million in 2006. That's 1.4 billion dollars in just 2 years. To give you some perspective that's a bigger annual deficit than the US Government, even with that money pit called Iraq. Then, with a straight face, their CEO says "XM substantially improved its business operations in 2007". Huh? This company has lost roughly 1.85 MILLION DOLLARS A DAY for the last 2 years, not to mention all the previous years losses. I didn't bother to look up the loss figures at Sirius, but you have to wonder how long these companies can do this. Eventually the credit lines will run out. I hope satellite radio won't be relegated to a half-forgotten "how satellite radio flamed out" wikipedia article like Pets.com or AOL's dialup business.

Seacrest out....please

So I'm reading one of the radio trade mags, and he's done it again. This guy Seacrest must have sold his soul to Satan. There's no other reason this Clay Aiken look-a-like takes over for such radio icons as Messrs. Casem, Clark, and Dees in one lifetime. Not only does he have a morning show in market #2, but also does a syndicated Top 40 countdown, New Years Eve, and he hosts the (yechhh) Idol. Today Clear Channel (his radio employer and syndicator of the countdown show) said "Clay...I mean Ryan, baby...you're not busy nor rich enough". Now the rest of the country will be subjected to more Seacrest. Really. Clear Channel, through its syndication arm called Premiere, will be condensing his LA morning show into a 3 hour midday or PM drive show for the rest of the country to launch this spring.
Here's where the Satan thing comes in again. Not only will he do all those things, not only will he own a part of the commercial time in his radio show ($$$), but will sell (for $eriou$ dinero)part of the inventory on his countdown show which is on about 4 grillion stations.
Alright, maybe there is a touch of the green-eyed monster here...but how much can one human being of questionable talent accomplish in one friggin' lifetime? If he keeps this up, look for him to replace Rush Limbaugh and run for President in his spare time. With this guys luck, he might even win.

Monday, February 25, 2008

WGOD

A fascinating study was released today by the Pew Forum on religion and public life. It found 51% of Americans are Protestant. 24% are Catholic with 2% Jews and 1.7% Muslims (?!!) As with any survey a quick look between the lines show something truly amazing. 16.1% of Americans (of which I'm one) have no religion at all...most of them younger than 35.
What, you ask, does this have to do with radio? I'll explain. Religion and Radio have been joined at the hip since the 1930's. It is one of the few things heard on English language shortwave stations, and many radio stations devote most or all of their broadcast day to it.
Since the Communications Act of 1934, radio stations must be operated in the "public interest, convenience, and neccesity". What exactly IS the public interest can be debated from now until St. Swithens Day, but do religious stations serve the public interest? In my opinion, frequently not. Religion, as if you didn't know, has become big business. Salem Communications owns 92 stations, of which most are religious music or talk. EMF owns far more stations than that, all airing national feeds of either what they call K-Love or Air1, which are Christian music formats. Let's focus on these for now. How does one serve the public interest when there's not ONE SCRAP of local information on these stations? It's the same feed from Salem NH to Salem OR.
I can hear it now....Shel, you're just anti-religion. Absolutely not true. While I'm against religion FOR ME...if anyone else wants it, great. I'm just not convinced these large radio companies are doing God's work so much as stroking some inflated corporate ego-the one that thinks He (pun intended) with the most staions wins. No one wins. These stations employ virtually no one, and will never again air anything that doesn't come off a satellite signal hundreds or thousands of miles away. No news (except for a few minutes of national headlines occasionally), no weather, not even local commercials. This benefits us how, exactly? This is all designed to do only one thing...get you to write them a check so they can continue to "do the Lord's work". You REALLY want to do the Lord's work? Build homes for the homeless. Run a food pantry. Help people who are in spiritual or other crisis. Fix a church roof. Do something other than play another Amy Grant record.
There are many good, kind, and devoted people who work in local religious radio stations that work to make their local markets better. It's a damn shame they don't work for Salem or EMF. They continue to thumb their nose at the FCC (who's too busy levying fines to enforce their own rules) and get rich in the process. I doubt that's what a certain Jewish carpenter had in mind.

Thursday, February 21, 2008

HDTV, DTV, NTIA, and m-o-n-e-y.

Most of us have heard something about the upcoming change from analog to digital TV in April 2009. Like the breakup of AT&T back in 1984 there are lots of people crying "the sky is falling" and even more people who have got the story completely wrong. Here's the scoop...
An aside here-HDTV and digital TV or DTV are NOT the same thing. DTV is simply the new digital method of transmitting TV signals. Those can be in standard definition (SD) or high definition (HD). You do not need to buy a new TV for this transition if you don't want to.
First off, anyone who subscribes to cable or satellite TV will NOT be affected-the set-top boxes already do the required conversion.
If you're one of the roughly 10% of Americans who use an antenna to watch TV you will need a converter box to continue watching TV after April 2009 unless you already have (or will buy before April 2009) a TV with a digital tuner. The boxes are already in Best Buy and will be in other stores very soon. The National Telecommunications Information Administration (a ridiculous waste of government time and money) is giving away $40 coupons good for the purchase of a converter-the rationale being people who still use antennas can't afford the price of a converter box. Yeah, right.
From the "why aren't I surprised department" comes a study done by MASSPIRG recently on the DTV transition. It secretly shopped 132 electronics stores in MA and found:
81% didn't know about or gave wrong info about converter boxes.
78% gave wrong info about the NTIA $40 coupon plan.
42% gave wrong info about the digital TV conversion date.
Shameful, isn't it? For more info on the digital transition go to www.ntia.doc.gov.

Sunday, February 17, 2008

NPR and PBS might fend for themselves...maybe.

Finally, after 7 years in office the President actually did something right. Really. Yeah...I was amazed too. What was it? To the horror of uber-liberals everywhere, he chopped the 2009 budget allocation (handout) to the Corporation for Public Broadcasting (in their own words, a private company funded by the American people...much like jumbo shrimp or military intelligence) from 820 million to 420 million. There's no money at all after 2011. According to the LA Times and the CPB, the money is about 16% of an average stations budget, and of course they're already whining about having to shut down stations. Yeah, sure...like the televangelists who beg for money are always on the verge of going off the air. We've been down this road before...Congress will no doubt reverse all or most of the cuts but it begs the question "Why are we supporting mass media with our tax dollars?" If you really believe NPR/PBS should be funded publicly, how about a check box on our tax forms like the one that asks if you want to give $3 to finance elections? Public broadcasting needs to find other revenue sources than the interminable beg-a-thons twice a year. That would, however, require a totally different approach to raising money as well as massive listener support and I don't see the will to do that on either side.

Saturday, February 16, 2008

5 years later, it's deja vu all over again

Last week ABC-TV appealed a 1.4 million dollar FCC fine against it for indecency. Why? You'll love this. 5 years ago (!!) an episode of "NYPD Blue" showed buttocks and one side of a breast. Oh, the horror!
But here's where it descends even further into madness...they're only fining the network for the Central and Mountain timezones, which aired the show at 9pm as opposed to 10pm in the East and West. The FCC's "safe harbor" indecency provision starts at 10, but all this is nothing but a naked (pun intended) cash grab on the part of the Commission. Where's the indecency? How many children watch that show? Even if they did, I doubt they suffered any harm.
A better question is why would it take 5 years for the FCC to act on this? What changed? The crusading FCC commissioner Michael Copps, who has let his power corrupt him into substituting his morals for the entire TV audience. Let's not forget the premiere episode of "Blue" (15 years ago) also showed buttocks...at 9pm Central/Mountain. The world is still spinning on its axis last I checked. ABC released a statement saying in part "when the brief scene in question was telecast almost five years ago, this critically acclaimed drama had been on the air for a decade and the realistic nature of its story lines were well known to the viewing public."
Remember, after the "wardrobe malfunction" 99.1% of complaints came from one source-the Parents Television Council. It was a form letter campaign from people who for the most part didn't see the show themselves. These people are free to have their opinions, but they have no right to determine what we can and can't see on television. And in my opinion, neither does the FCC. If the show was that obscene, it wouldn't get viewers and get cancelled. The free market has a way of handling these things, and maybe the FCC should back the hell off and stop standing in loco parentis...loco being the operative word.

Wednesday, February 13, 2008

Your tax dollars at work...

I've written before about Clear Channel trying to sell itself to a couple of private equity firms. Today, our Department of Justice, until recently run by Albert Gonzales, the demon spawn of John we-don't-need-the stinkin'-Constitution Ashcroft and now in the infirm hands of Michael no-opinion-on-torture Mukasey has decided CC must sell off stations in Cincinnati, Houston, San Francisco and Las Vegas as a condition of approving the deal. This is "to assure continued competition in markets where the transaction would otherwise result in a significant loss of competition." Oh, please. I'll still respect you in the morning and the check is in the mail. Turns out Bain Capitol and Thomas Lee Partners (the equity firms) have radio interests in those markets.
Let me see if I've got this right. The largest Radio owners in the world will be sold to a new company that will make IT the largest owner in the world and the DOJ thinks selling a dozen stations out of roughly 1000 makes a friggin' difference? As if somehow one big corporate owner is somehow better than another?
This could very well be the time when we look back and say this was the beginning of the end. Equity firms do one thing-buy companies and sell them for profit...usually by slashing costs (read: jobs) hence the term "strip and flip".
Radio has plenty of owners that don't give a shit about how good the station is as long as they make the numbers. Does anyone really believe an equity firm will invest in the stations to grow their value? No. They'll slash and burn them and then sell to another big company...assuming station values continue to rise. I'm not an economist, but I bet they won't. That could mean selling off the stations at fire-sale prices...to another big company. And the hits just keep on comin'.

Sunday, February 10, 2008

The wheels on the bus to nowhere go round and round...

Just recently, Clear Channel, the nation's biggest radio company with over 1100 stations, announced budget cuts that stunned everyone. The company is trying to sell itself to a couple of private equity firms, but the stock is down about 10 bucks from where it was when the deal was announced last fall.
I admit I know as much about the stock market as I know about nuclear physics-none. But, I'd like to think I know a few things about the radio business and these cuts, in my opinion,will make things worse.
CC has slashed all research and promotion money and put a hiring freeze in place, right after a bruising round of staff cuts in December. Great for morale, huh? It's hard to do great work when you're afraid you'll be unemployed next month. The promotion budget thing makes me laugh. Radio's whole business model is convincing businesses to promote themselves. How hypocritical is it that a station refuses to do that? What message does it send to advertisers? Without a marketing effort, the station fades away in a sea of competing media. Budweiser, despite being the number 1 beer,advertises heavily. Why? To stay that way.
Worse yet, other large radio companies are playing follow the leader. CBS Radio just laid off over 140 people last week, with cuts at other companies also. Look, I understand the need to control expenses, but these kind of draconian slash-and-burn tactics (for no other reason than to prop up a lagging stock price) will further degrade the product (which is what comes out of the speakers!) Poor product causes fewer listeners and advertisers, causing more cuts. I've lived this cycle...I've seen it destroy station owners profit and people's lives. Executives need to realize that investing in your product pays big dividends. Tell Wall Street and their quarterly earnings expectations to take a hike for a couple quarters and rebuild the station. Everyone wins. Even the CEO's and stockholders. There's more to the radio business than making the numbers.

Friday, February 8, 2008

Here we go again

A St. Louis jock has been suspended for 2 weeks without pay by Emmis-owned KIHT for what I agree were some incredibly insensitive comments. I won't comment on the suspension as that's a matter between JC Corcoran and his employer. In a rant against the local power company, Corcoran said "You publicity-obsessed public relations nightmare people, who I swear I am going to get on top of your building with an AK-47 and just start picking people off" and using the term "dickless wonder". I understand his frustration and will confess that I feel that way sometimes when dealing with unaccountable bureaucracies. That wasn't the worst of it. Referring to a black executive at the company, he stared using a (for lack of a better term) "ghetto" voice when mocking the man. OK, now we've turned the corner into inappropriate. I do not claim to be an expert in FCC regulations, but I don't see how any of these comments warrant an FCC fine. Inappropriate? Yes. Legally obscene? No fuc-ing way.

But...there is a radio gadfly in that city who has made it his personal cause to persuade the FCC to fine the station and fire Mr. Corcoran because "children might be listening". Bullshit. How many kids listen to classic rock morning shows? This guy (who obviously has too much free time on his hands) has started a web page and online petition for FCC complaints. No, I'm not going to give this crank any free publicity, but as the crank says on his web page " I am tired of one radio personality getting away with something like this while another has to go through firings, public humiliation, fines from the FCC, etc."
So...besides the fact that he is just plain wrong (he's referring to Imus-gate and there were no FCC fines levied from that) he then furthers his hypocrisy by saying "As well, I always preach about Freedom Of Speech. Its a belief I hold dearly within my heart that this Country allows us all to express ourselves freely."
Yeah, right...everyone has free speech until HE doesn't like something. That sentence directly contradicts everything else he's written.

People like Imus or Corcoran aren't the problem. It's these self-appointed "morality Nazis" who claim to speak for vast numbers of people because they weren't in line when the Creator handed out tolerance. In the words of William Shatner "get a life, will ya?"

Wednesday, February 6, 2008

Free the word "free"!

We've all seen them, usually on TV but radio has them also. The newest miracle product that solves a problem you didn't even know you had. In fact we're so confident you'll love this product so much, we're going to GIVE it to you FREE! All you need to do is pay for "shipping and handling". Bullshit. Does anyone really fall for this crap?
Let's take an example: The guy who sells the CD's about how to use computers says you pay NOTHING except a small handling charge. That charge is 6.95. A blank CD is about 10 cents. A mailer and 1st Class postage to mail a CD is 93 cents. (Yes, I asked at the post office). Where does the other $5.92 go? Free my ass. You can get a free 30 day supply of the new herbal weiner-builder for just 6.95 postage and handling. I got something you can handle, guys.
My other favorite(!) is that Billy Mays putz who screams at me about Miracle Putty, OxyClean and Lord knows what else. He'll DOUBLE your putty order FREE-just pay seperate shipping and handling. Hold the phone, there, Captain. It's bad enough you want $8.95 to send a 2 ounce package, but you want ANOTHER 8.95 for another 2 ounces? Bite me. I've now spent almost 18 bucks to send a 4 ounce package. The USPS gets $1.22. I realize you have to feed your family,but be honest about what something costs. As a Libertarian, I detest the thought of more laws, but here's one I'd support...to use the word "free" in any advertisement, there must be absolutely no charge made to the consumer. Free plus an overinflated "shipping and handling" charge is not free.

HD may or may not mean Happy Days

There's been quite a bit of buzz lately on HD radio, also called IBOC (in band on channel). HD radio is a digital stream embedded in the regular broadcast signal, and you need a radio that's HD capable to listen to it. There are some huge advantages to HD radio...
1. It makes AM sound like FM. Seriously, it's night and day.
2. FM stations can have up to 2 additional channels (HD-2 and HD-3) in addition to its regular (HD-1) programming in CD quality. Most big market FM's have commercial-free HD2's, while many NPR affiliates have HD2 and HD3 signals. HD2 and 3 channels are totally seperate from the main FM signal.
3. You don't have to pay for it.

BUT...there are a few problems...
1. You need a new radio (on the bright side, they're not expensive...100 to 200 bucks).
2. HD signals don't seem to travel as far as analog signals do.
3. There are no Walkman-type HD radios I'm aware of yet, and very few car models. Some excellent table-style radios are available.
4. There is some evidence of increased interference to other AM stations due to HD broadcasts.

It's kind of like where TV was in the late 1940's-there was little programming to justify buying a set, and TV stations didn't want to add programs until more TV's were sold. AM Stereo flopped badly in the 1980's but this seems to have wide support among broadcasters. Will listeners support this? Will radio eventually go all-digital like TV will in April 2009? And what about Naomi? :)
If you'd like more info about HD Radio, go to http://www.hdradio.com or if you'd like one, click on the radio at the top of the page to get one from my friends at Radiosophy.

Monday, February 4, 2008

From 80-90 to 04-233

Those numbers on the title don't make sense to anyone not in the radio business, but they've affected everyone.
FCC Docket 80-90 basically allowed certain FM stations to be closer together, meaning many hundreds of new stations became possible. The number of advertisers (and the money they spent) stayed the same giving each station a smaller slice of the ad pie, relegating many stations to "repeater" status-simulcasting with another station. Here in NH we have WLKZ/WNNH, WWHQ/WWHK, WXRV/WVFM, WXLF/WZSH,WWOD/WCFR, WOKQ/WPKQ and more I can't remember off the top of my head. These repeater stations obviously have no airstaff, so even in little NH that amounts to roughly 15 full-time and 10-15 part-time jobs that don't exist anymore.
Now comes Docket 04-233 and it could blow up the business model for Big Radio.
Among other things it would require stations to be staffed 24/7 and a stations' studio to be in it's city of license (all radio and TV stations are licensed to a community). Since many stations are run from one location (a cluster) many new studios would need to be built and people hired to man them. Big Radio, including the National Association of Broadcasters, is already rallying the troops to protest the proposal claiming it will force small operators out of business. I doubt it. Before roughly 1990 there were very few unstaffed stations-many owned by small operators who despite the "crushing economic burden" of 24/7 staffing managed to make a good living in most cases. They hired DJ's and newspeople, and local radio was a part of the community. Automation and simulcasting have made radio jukeboxes with commercials.
Maybe the FCC, long known for screwing up anything they touch, is on to something here.

Sunday, February 3, 2008

Living with 18-1

A few minutes ago, Super Bowl 42 ended with the Giants winning 17-14 as more than 94 million people watched in the US alone. With (according to the US Census Bureau) 303,366,304 people in the US that means almost 1/3 of Americans watched the game.
Why doesn't radio have this kind of "must listen" programming? You can't tell me Clear Channel, Entercom, CBS or other large radio operator can't put together a Woodstock-like huge concert and simulcast it over all their stations. By not selling the TV rights you're guaranteed a huge audience. Yeah, I know..the TV rights would be worth a fortune. Maybe, but what would airtime on all 1100+ Clear Channel stations cost? Ironically, CC owns LiveNation, which promotes concerts and even owns 117 arenas (75 in the US) including 2 festival sites.
Radio needs to stop believing it's a bastard stepchild to television. Change will only happen from the inside, but courageous managers are the exception rather than the rule.

What hath we wrought?

I'm sitting in a radio studio now, and sometimes I wonder what the future holds.
In the 80's there was an explosion in the number of new stations, to the point where the advertising pie just wasn't big enough to support them all. Then ownership caps were, for all intents and purposes, eliminated. Radio station values skyrocketed at the exact same time automation became cheap and reliable. Stations became "properties" and many are nothing but investment vehicles for large corporations who run them unattended for days, even weeks at a time.
Many stations play the same over-researched 300 song library with DJ's reduced to reading pre-written liner cards and 12-15 minutes (or more!) of commercials per hour.
Radio has simply become irrelevant to many people, despite the hue and cry of a small number of radio geeks who think more local content and better DJ's will save the industry. It'll help, but not much...-where are these new DJ's to come from? The majority of stations are not staffed nights, overnights, and a good part of the weekend-the shifts where jocks cut their teeth and hone their craft. Program directors are too busy running 5-station clusters to critique and mentor new talent.
Many people use CD's/Ipods/satellite radio now in cars, with Internet streaming very popular in homes and workplaces. Why? Too many commercials and cookie-cutter radio formats.
In short, it's boring. But, the same corporations that have diluted what radio is are in the best position to save it. Yes, that's right. Instead of bean-counters making decisions, let radio programmers come up with new formats for stations and give them an honest chance. Yes, many won't make money at first-and some won't make it at all. Isn't that the same business model used by movie studios, drug makers, and Big Oil? Those companies aren't hurting for profits and offer great returns for shareholders. Big Radio has the knowledge and cash to save radio, but as long it's only fixated on next quarter's numbers Radio will continue it's slow slide into history.

Friday, February 1, 2008

The RIAA on another rampage

In the good old days of vinyl LP's and chrome cassettes, the RIAA was supposed to promote the recorded music industry. Somehow, like the Nomad probe on "Star Trek", its purpose has changed into a legal bully whose purpose is to slam their jackbooted heels onto the necks of people who just wish to make copies of music THEY'VE ALREADY PAID FOR!
I understand file sharing is wrong, and I support efforts to slow it down. But, how can you charge $25,000 for sharing a song you can buy for one friggin' dollar?
Now the RIAA has embarassed itself by suing XM. Yes, the company that already pays far larger royalties than broadcast radio, is being sued for "massive wholesale infringement" for songs they've already paid to use. See the story HERE: http://www.theiplawblog.com/archives/-copyright-law-the-riaa-goes-after-xm-satellite-radio-for-copyright-infringement.html

When will a song become "yours"? The RIAA wants to say never. Funny, they never said a word when kids taped their favorite songs off the radio onto cassettes. Dubbing tape decks came and went without a word. Now, the DMCA has energized these thugs like Underdog's secret energy pill. I have little expectations from Congress (especially as so many of them are lawyers) but the RIAA has to be stopped from its Bush administration-like tactics of threats, intimidation, legal terrorism, and the total disregard of the harm they cause. So what's next, they sue carmakers who equip new cars with hard drives?
There is a world of difference between sharing hundreds of songs through Limewire and someone who wants to copy a CD he already owns or rip into a media center or Ipod.