Big Studios are not the only ones having problems...

[Remoteness]

Here's a story written by: Jerry Del Colliano titled:

The Ugly Divorce of FM Radio and the Music Industry

In terms of marriages, the relationship between FM radio and the music industry was a long and successful one for more than 30 years. Today, emotions and business models are shattered, with both sides wondering what went wrong when things had been so good. Traditional terrestrial radio’s relationship with the record industry has been a mutually beneficial one that allowed the music industry to grow at unseen levels from the mid-‘60s until the mid-‘90s, resulting in a business that at its peak was selling in the neighborhood of 30 billion dollars of merchandise per year. Radio at the time was flying high like a dot com CEO the morning of his IPO. Thanks to Congress, radio was in the process of going from being a highly regulated industry to being highly deregulated, which allowed the acquisition of more than 1,000 radio stations by the same company when the historic limit was that one company could own was a total of seven FM, seven AM and seven TV stations. Radio’s feeding frenzy created zillionaires and gigantic players like Clear Channel and Infinity/Viacom. But it was specifically this unprecedented success and the arrogance it created that ate away what was left of the long-lasting marriage between radio and the music business.

In the days before MTV and the Internet, an artist absolutely needed radio to get his or her songs to the record-buying public. While FM radio is still a powerful medium today, it no longer reaches the record-buying public in the same ways. Nor does it carry the emotional branding that it did in the ‘60s and ‘70s. As hard as it is to believe for today’s youth, people actually used to associate themselves and their personal style with the radio station they listened to. That marketing power is long gone, but what remains is the immense pressure of running profitable radio stations under the corporate umbrella of gigantic public companies. My father, who is the former publisher of the radio trade publication Inside Radio and is now a clinical professor and Director of Executive Programs at the University of Southern California’s Thornton School of Music, notes the lack of any
new successful radio formats in more than 10 years. When you think about it, he is right. Arrow and Jammin' Oldies are just that – a reinvention of an oldies format. ‘90s music is hardly a hit format.

Norm Pattiz, the founder of the syndication company Westwood One, years ago pointed out that radio has never earned more than seven percent of the overall advertising market, falling significantly behind other media, including print magazines, newspapers and especially television. In a recent interview with Audio Video Revolution, Pattiz noted, “Since radio consolidation in the late 1990s, radio’s ad revenue has increased at a respectable rate, with the overall earnings increasing from around 15 billion per year in 1996 to closer to 20 billion today.” Part of the growth comes from the effects of the vast economies of scale from the consolidation of radio companies. If one group broadcasts the same classic rock station to 55 different cities,
then one person or a small team of people can program all of those stations, instead of having one well-paid program director in each city. The savings to the radio group are vast, but there is also a price, as the listeners now have more and more ways to get their musical entertainment. FM radio has in many cases added more and more ads per commercial break, allowing them more inventory to sell. Sit through a commercial set during the Howard Stern Show and you could develop hemorrhoids. Pattiz noted that, in terms of the business model of radio today, “[Due to] the consolidation of radio companies’ sales forces, lower-rated stations have been re-branded to reach niche audiences, thus getting premium ad rates that their more highly rated
sister stations get.” All of these factors have helped radio to
stabilize as a business that can expect to see at best, conservative growth in the coming years. Even optimists agree radio will likely never see the boom that it had in the late 1990s, even in the unlikely event of more deregulation being passed by Congress. Competition for the youngest and most desirable listeners is getting more and more stiff every day from players ranging from commercial-free satellite radio to increasingly good Internet radio stations available on your PC to people swapping out their trusty old FM Walkman for an Apple iPod or other MP3 device.

The record industry hasn’t had it as good as radio in recent years. While radio was booming in the late ‘90s, the music business was dealing with new technology the only way it has historically known how to do – by fighting anything new. It didn’t take long after high-speed broadband Internet services became commercially available for Napster to poke its ugly head into the marketplace. The business model of selling an entire album of songs was immediately under duress and the record industry started suing like mad. They sued peer-to-peer (p-2-p)
sites. They sued end users. They sued everybody. And none of it worked. Today, there isn’t a song you can’t steal from a p-2-p system. Lackluster CD sales, although up just slightly in 2004 after several years of decline, are forcing record companies to do all they can do to avoid more years of decline. When given the chance to add significant value to the discs they sold, the music industry – specifically the major labels – waged a feeble format war, leaving both SACD and DVD-Audio bleeding in the gutter to die. DualDisc, a format compatible with CD and DVD-Video, never seemed to even make it off the launch pad in late 2004. All of these factors left the music industry playing the role of the battered wife, complete with the black eye and deeply wounded emotions.

The value proposition of selling an album with one or two hit songs on a $16.95 disc is no longer competitive with the music consumers, especially the all-important Gen Y audience. DVD-Video movies cost a little more than $20 and offer an entire feature film containing an audio and video experience that lasts over two hours. Instead of embracing music in surround sound and higher resolutions at lower prices, the music business is now trying to reinvent itself by selling songs one at a time on legal download sites. Some progress is being made on that front, but it will always be competing with free downloads – a tough battle. Until the music business addresses increasing the quality and the value of their discs, they will be losing market share year after year as they cling on to the antiquated compact disc and
continue to believe in the questionable download model. Hollywood movie studios, in contrast, are getting ready to sell all of their catalog movies all over again on either Blu-Ray, HD-DVD and.or Windows Media 10. High-definition video is a good enough reason for mainstream consumers to buy their movie collections all over again. Little mention of how to sell music on Blu-Ray or HD-DVD has been made public, despite the format’s likely launch later in 2005.

Healing Deep Wounds in the Relationship Between Radio and the Music Industry Radio needs the music business to provide it with the content that keeps people tuning in. Oldies formats are great but people, especially younger listeners, can tire of the same 300 songs over and over.
Perhaps new formats like world pop music or a better electronic music format would lure younger listeners back to radio? But how does radio launch these new formats without the help of the record industry – a business model that holds radio stations hostage with crooked independent promotion deals and other mean-spirited business practices? Much like Peaches and Herb suggested, they need to get “Reunited” and they need to do it fast.

The record business is unquestionably its own worst enemy, but it needs to look to their former best friend, FM radio, as a way out of their troubles. They need to find a way to sell music on discs that are an excellent value and can compete favorably with HDTV-oriented discs that are only months away from hitting store shelves with two-hour-long movies configured for consumers’ enjoyment. Radio offers free advertising - worth hundreds of millions of dollars per year - to the music business, which is essential in breaking and developing new artists, even with new broadcast technologies like Internet and satellite radio. If major labels focused more on creating and nurturing talent, as they did when they were most successful, and less on fighting over signing high-priced established bands and has-been solo artists, they would be able to offer radio the better content they crave. More records are guaranteed to be sold. More people would tune
in for morning and afternoon drive radio. Radio and the music business would both win, no matter what the new technology challengers do.

Apple iPods are not going away, nor is peer-to-peer file sharing or any of the other technologies that have changed the musical landscape. But after a little counseling, a little self-improvement and some open-mindedness, the marriage of radio and the music industry have the possibility of working things out, with the biggest winner being people like us – music lovers.



Copyright ©1996-2005 The Audio Revolution, Inc.

[Jose Mrochek]

[gear chick]

I think radio has already finished itself off. Even I would rather listen to talk radio. People have already established the different traffic patterns in their lives for their entertainment. What are they going to do? Put out a PSA "Hey, we've changed. Come Back!!" The culture has changed. It just doesn't change back. Their only chance are those people trapped in their cars for 4 hours a day, and even those people have options: cell phones, talk radio, DVDs, play with their sat nav, plug their Ipod in that new little outlet cars now have. Once Dish TV is in cars, forget it.

MTV is preeminent because youth need images to access their music. Music now has to convey image as well. Much of this music would be unbearable without the video. The video sells it.
Radio is in a death throw. Stick a fork in it. Move on.

[boody]

Originally posted by gear chick
MTV is preeminent because youth need images to access their music. Music now has to convey image as well. Much of this music would be unbearable without the video. The video sells it.
Radio is in a death throw. Stick a fork in it. Move on.

Sorry, but I think thats crap. Sure, loads of people have fun surving the net, copying music from their cd into i-pods and the likes and yes, a lot of kids like to sit in front of mtv watching crappy videos. Most people however, including kids, do something else while listening to music. They drive around, work, do homework, clean etc.... Those people, the majority I think, would find it very handy if they could just push a button and hear music they like, that entertains them and makes the things they do go easier. Problem is that radio is programmed to a false outdated formula by a few people. I think everybody, young and old, would be happy and well served if radio got back to its pioneer function; bringing new music next to the assumed hits. Not by offering 50000000000000 pre=programmed cable-stations with very narrowminded programming, but by giving new talented eager program-makers a chance to make good radio. Give that show/station an image that reflects the real society so everybody nows exactly what station is playing their kind of music and they will be in business again. Silly if you think of it: they grab back to old music while they should grab back to their old ambitions.

my 2cts ofcourse...

[gear chick]

I'm just saying that to many other things are competing for peoples attention. If programming improved, sorry, I'm no longer interested. I've got better things to do. I might also add that to have better programming, you might need better music. It's probably out there somewhere, but it's not reaching me in my traffic pattern currently. Let's not forget the multi billion dollar video game industry that I'm sure is gutting interest in listening to music on the radio. That's just one more thing that's competing for peoples attention. It's not the 60's any more. People have much more compelling and interesting things to do with their time.

[biggator6]

there was an interview a while back with one of the bigwigs at CheapChannel.. he basically said '"we're not in the entertainment business - we're in the advertising business"

that tells me everything I need to know.
"-(

[paterno]

Originally posted by gear chick
I think radio has already finished itself off. Even I would rather listen to talk radio. People have already established the different traffic patterns in their lives for their entertainment. What are they going to do? Put out a PSA "Hey, we've changed. Come Back!!" The culture has changed. It just doesn't change back. Their only chance are those people trapped in their cars for 4 hours a day, and even those people have options: cell phones, talk radio, DVDs, play with their sat nav, plug their Ipod in that new little outlet cars now have. Once Dish TV is in cars, forget it.

MTV is preeminent because youth need images to access their music. Music now has to convey image as well. Much of this music would be unbearable without the video. The video sells it.
Radio is in a death throw. Stick a fork in it. Move on.

I thought the same thing until recently. Clear Channel, of all companies, has started a radio station here in LA called Indy 103.1, where actual people are picking their own music to play. It is quite a bit of fresh air [sorry, the phrase just seems to fit], and there are a lot of folks talking about it. And they are not shy about ID'ing the artists, new and old. I have added to my record collection because of things I have heard on the station. I'm even playing it in the house instead of throwing on the TV. I too was going for NPR or talk radio over music stations, but I am now tuning into 103.1 on a regular basis. It even SOUNDS decent -- not all hyped, compressed, and pummeled to death.

We can't do anything about the past, but if this idea of DJ's starts catching on again, and music fans playing the music they like, it could be a whole new radio renaissance, which would be a great thing for all of us.

Cheers,
john

[gear chick]

How does it work? Do people just call in and request?

[paterno]

Originally posted by gear chick
How does it work? Do people just call in and request?

They appear to take requests, but the main thing is that they have different 'shows' during the day with different people playing different things. Steve Jones is on from noon 'till 2, and it is pretty cool what ends up coming out of the speakers. Here's a link to their site:

indie 103.1

there is a listing of shows, but there is also a link to listen live if you'd like to check it out. It may not be the ultimate solution, but it sure is an interesting start...

John

[bunnerabb]

Mtv has videos now?

[Bob Olhsson]

Jerry is always good for an anti-record industry rant once a year. Unfortunately he hasn't got a clue about how the industry really works. He is an audio gear sales guy and like most chooses to blame the record labels for his problems rather than his own (our own) failure to support live music.

Virtually every new radio format was created by an artist or a group of artists and their fans. Not by radio and not by record labels!

People keep blaming the messengers...

[zxcv]

When given the chance to add significant value to the discs they sold, the music industry – specifically the major labels – waged a feeble format war, leaving both SACD and DVD-Audio bleeding in the gutter to die. DualDisc, a format compatible with CD and DVD-Video, never seemed to even make it off the launch pad in late 2004.

I actually always thought the idea of a disc with both live video or music videos and an album of music on it was a good product idea. So the whole music dvd idea is in the dumpster?

[Remoteness]

Originally posted by gear chick
I think radio has already finished itself off. Even I would rather listen to talk radio. People have already established the different traffic patterns in their lives for their entertainment. What are they going to do? Put out a PSA "Hey, we've changed. Come Back!!" The culture has changed. It just doesn't change back. Their only chance are those people trapped in their cars for 4 hours a day, and even those people have options: cell phones, talk radio, DVDs, play with their sat nav, plug their Ipod in that new little outlet cars now have. Once Dish TV is in cars, forget it.

MTV is preeminent because youth need images to access their music. Music now has to convey image as well. Much of this music would be unbearable without the video. The video sells it.
Radio is in a death throw. Stick a fork in it. Move on.

Well said!

[boody]

Originally posted by gear chick
I'm just saying that to many other things are competing for peoples attention.

I understand that, and if you are refering to people sitting around the radio silently listening; I think that already ended in the 50s with the arival of television. But you can't play a video game driving your car (at least I never tried it) or while cleanig the house.

All I'm stating is if a station (like the mentioned indie channel) is providing more intresting new music instead of crap that can't do without the video, there will be people tuning in. It's easier to discover some new music when a good team of programmers do the research than having to surf the net and download stuff in your own time.

As for the people stating that radio is advertising business: 1- they will scare listeners away and abandon the game, 2- as stated radio can be the best advertising medium for the record industry so instead of harassing people with more and more commercials record companies should find a fair way of providing fund for radio exposure. Since Reagan& Bush killed the anti trust policy in the u.s. it should even be possible for record companies to own radio stations, no?

Here in europe it will be like: radio earns from record industry promotions, record industry earns from record sales, artist earns from record sales and airplay. Ofcourse this will be game for big record companies, but that will always be the fact of life. Small indi-labels will need the marketing power & distribution chanels of bigger fish.

[gear chick]

I think your talking about a team of taste makers that really know music with eclectic taste, and would just play that they liked with no influence from payola. Sorry, I started to make sense there for a moment.

I'm not against the team of programmers you mentioned, Boody. I'm just dubious they could escape the political system of payola that currently prevails. The taste of the public is sculpted by a steady flow of money from what ever label is pushing what ever single that

http://www.hitsongscience.com/
ran through their computer and told them it lies in the same hit constellation as "I like big butts and I cannot lie"

[Ted Nightshade]

I only listen to the radio in the car, and recently I've been amazed to see how many commercials and impostors I'm willing to wait through to hear the actual REAL COUNTRY MUSIC! that they play a couple cuts of hourly on KRRM, the cream of country music, out of Grants Pass OR.

[boody]

Originally posted by gear chick
I'm not against the team of programmers you mentioned, Boody. I'm just dubious they could escape the political system of payola that currently prevails. The taste of the public is sculpted by a steady flow of money from what ever label is pushing what ever single that

http://www.hitsongscience.com/
ran through their computer and told them it lies in the same hit constellation as "I like big butts and I cannot lie"

True, and then they start to complain that the listener tunes out

But once in a while a radio dj comes on and fights the system, playing different music and people start to listen again.... then he will make some anti-establisment statement and he/she will be fired or put on nightshift. But they exist. Only problem is; they're not in charge

I just think we should not give up on them