David Eduardo wrote:
"D Peter Maus" wrote in message
...
I found him real easy to work for, though. He's very clear about his
expectations. You meet them. He doesn't care how, as long as it's ethical.

His expectations are VERY high. But, then, so are his rewards.

That's a dream job, compared to some I've had.

A friend was one of his major PDs. But he left, and Mel was upset. A few
years later, my friend, who I will call Bill Smith, was on an elevator at
NAB when Mel got on. Mel turns to a person who was with him, and says, "I
would swear Bill Smith was on this elevator. But that can't be. Bill Smith
is dead, so he can't be here." The door opened, Mel got off and my friend
broke into laughter.


Yes, that's a common scenario, with Mel Karmazin.




I have never had any discussion either in-house or with members of the
industry committee, about pay channels. I think nearly all of us see that
associating "pay" with terrestrial radio is a mistake. While the
discussion may have come up, I never saw it progress. Most of us believe
that splitting the HD digital FM in two offers great quality (absolutely
marvelous, in fact, compared to iPod and satellite channels) and the
ability to market new free channels.

I actually disagree with you about the mistake of pay terrestrial radio.
And so do others in the biz. Truth is, that subscription radio, whether
it be the baseband channel, or one of the alternates, may be the only way
to create viability for some formats that are not supportable through
traditional advertising.

I just don't think they will be on AM and FM. The problem is that the niche
formats, after the major ones are covered, do not get sizable local
audiences, even to justify subscription based concepts. Thi sis where
satellite works. take a format that attracts 500 listeners in the average
metro, and you have 250 thousand listeners in the top 50 cities in the
USA... or 125 thousand in the top 50 markets. With that, you can do very
good programming, as it is the equivalent of a #1 station in LA or NY. But
market by market, is is the equivalent of a no-show, and not enough
subscriber revenue to support it.
My GM, for instance, desperately wanted to create a viable blues format.
(Imagine, the Blues not viable in Chicago...but there it is). He could
never get the perceptual data to support it. But subscription radio would
have made that possible. Just as a number of the niche formats on XM and
Sirius, now.

I just do not se blues just for Chicago working Not enough subscribers. But
nationally, very viable format.
\

XM does some nice things with blues, actually, and here, that is to
say, satellite, getting back to a thread past, is where a national
audience can be built and a few listeners here and there become a
sizeable contingent, yes, I agree. They can also be quantized, and made
salable.

What doesn't work for radio locally, does with satellite reach.

It's also a subscription based delivery system. There is a different
model on the business side than local radio.


Now, on the other side of that, Karmazin believed the ratings/revenue
relationship to be more myth than reality in the presence of REAL sales
people. He preached it regularly. That the only thing needed to overcome
weak ratings is more sales people, who could then create demand within an
single station. Even driving rates up the card. And the 30+ sales ducks we
had on staff were a testament to that. And he believed that any station
that couldn't convert at a minimum of 200% needed an new Sales Mangler.
We routinely converted at 200% and above.

There are fewer and fewer cases of this... there is a finite revenue base in
each market, and as one staiton overconverts share to revenue (power ration)
the others wake up and do the same thing, and it levels out. There is no
"undiscovered" revenue in any market.

That's exactly right. But if you get in there with a team of hired
assassins, you can pull it off. If only at one or two stations in a
market, and only for a short period of time, in most cases. Some
formats, Country Music being one of them, where overconversion is less
difficult to achieve and maintain. But it requires a ratings independent
sales pitch, which, often, we had to do.


So, though, it's a good bet that subscription terrestrial radio is bad
idea, questionable at best, it's not entirely a settled issue. Out of the
box thinking can make pay radio happen, and clever execution can make it
work. Especially, where there is little advertiser support.

I'd love to do some of these formats, well (not like XM, which is a bunch of
juke boxes, mostly) but with real talent and real PDs doing one format...
but on WiMax. If there is a system where you can "push star 113 for blues"
this will work. If we have to type in URLs, it will not.

You ever get to put this into practice, I'll come out of retirement
for it.



(One of Karmazin's other bone deep beliefs is that every service pay for
itself. No one gets subsidized. And if it can pay for itself, it can
profit. In that aura, pay radio is an eventual certainty.)

I think this was true in one window in time. In some cases,using one station
to protect or widen the moat makes another more profitable, so they,
collectively, do well. I did that back in the 60's, where I always tried to
have a spare station to use as the alligator in the moat to protect my big
stations from competiton. For those unfamiliar, consolidation is a very old
concept outside the US, going back into the 50's in places like Mexico. I
had a large cluster in Ecuador, built in the mid 60's... 4 AMs and 5 FMs in
one market.


It's still going on today. Bonneville is the major example here. WTMX
is the cash cow. WDRV goes after the demo that WTMX can't get. Together,
they do well. Not exactly blowing holes in the dial, but they do quite
well. And everyone pays for themselves.

At CBS, we all had numbers to hit, both revenue and profit. No one
got subsidized.

And the notion that everyone pays for themselves isn't new. Tisch did
it at CBS, when he declared that the News division was to be profitable,
and put it under Entertainment.

With the spectre of HDTV on the horizon, Karmazin as much as declared
that there would be subscription based alternative services delivered
with stolen bandwidth from the HDTV main channel. An announcement that
was followed by NBC and Time Warner. This when HDTV was approved but
prior to the first implementation. Now that Karmazin is gone, there may
be different cultures in place, but the boys running the show are sharp,
and revenue enhancing opportunities are tough to pass up. Especially, as
you point out, radio or television, shares, and revenue are finite.


As far as quality goes...that's a better marketing point than it is a
broadcast reality. Everyone talks about quality, and everyone has a
standard, but where quality is defined as absolute faithfulness to the
original material, it's failed everytime. If you use the tone control, on
your car radio, you're not that interested in high quality. If you have an
equalizer on your audio system....you get the picture.

Just look at the amazing percentage of listeners to FM who do not listen in
stereo... it is about good sound and good programming together. Hey, I
listen to an iPod while biking, and we know what that quality is...


Absolutely. We discussed this very point a year or more ago. Quality
is a factor only when content is widely available from more than one
source. But the notion of quality is subjective. And highly personal.


HD Quality is, and will be, perceptual and personal. Right now, it's
being presented at its optimum. That will change. Stealing bandwidth will
begin. And look straight into your monitor and tell me you can name 5
engineers who can resist the temptation to 'tweak' their audio. Name me 5
more who don't believe they can 'improve' it.

In all fairness, engineers who know their stuff get a panel together when
tweaking and adjust the audio for a compromise sound for a range between
cheap and good radios, so that all can hear the station nicely.


Which was the situation with the Optimod. But you've worked with
more engineers than I have. You know the percentage who really do know
their stuff. Sturgeon's Law applies. 99% of them are crap.



The Quality pitch is temporary. Once HD is established, and there is a
significant user base, the whole 'quality' issue will no longer be
mentioned, except to say 'digital quality.' Which is what they say about
Sirius and XM...and some of that is pretty ratty.

I am not pitching quality, I am pitching digital. We know that there is
sucky digital, but it is a buzz word. Whatever works.



Exactly my point. And it does work. There is no argument there.


Since there are only 100 shares in any market, there will be no expansion
of radio listening, but there may be a slowing of any erosion. At the
same time, selling today is about clusters and combos, not single
stations for the most part... so having more specifically targeted
stations will definitely help. Low spillage and finely honed targets get
better rates than broad, vague targets, as sports AMs demonstrate.

No question. And HD formats will be, as cluster formats are now,
selected strategically, to protect the cash cow, and mop up any periphery.
Likely to be sold in unwired combo packages. With lip service paid to
innovative and alternative programming. At least in the short term.

Some of the new HD 2 formats are very clever, and others make up for what we
would have done if we had 5 instead of 4 statins in a market. In essence,
the formats are picked in descending order of audiencepotential, with
attention given to potential for taking your competitor's lunch a the same
time.
And at least for the time being, you may indeed see a slowing of
erosion. New, exciting toys, with fresh options for things not commonly
heard. But as XM did recently, gutting a number of the channels I enjoyed,
and replacing the music I preferred to hear with things that are more
'salable' and adding commercials to some music channels, eventually
terrestrial and HD will fall into the same patterns as terrestrial radio
exhibits, today.

Only in a static world. All broadcasters arelearning that there is a much
lower commercial load that will hold listeners, and there is better
understanding of listeners. That will enhance the experience as product is
re-emphasized.


I do hope you're right. But my optimism is pretty thin, there.


Especially since, as I've pointed out here, there is little radio
serving me anymore. And I am one of it's true believers.



The pith, here, is this statement:

"Since there are only 100 shares in any market,
there will be no expansion of radio listening,
but there may be a slowing of any erosion."

With evermore options for listening, and fractionalization of the
listenership into potentially thousands of niches, eventually, programming
offerings are going to have to be sold in combinations.

Many are now. Clusters sell together for national and regional, mostly. And
lots do combos locally. It will increase.

Actually quite large clusters of programming issues. That means that
programming offernings, whether on the baseband or the HD's, will have to
fit into certain packageable categories. Since the target demos
essentially do not change, and the maximum share is 100%, The total
numbers are fixed. Competition will have to be within the existing
numbers. Robbing Peter to pay Paul, as it were. Combo programming
packages will have to be selected, or created, with some target demo
participation. To remain salable in that context, some alternatives will
be too far off the target to be salable, in favor or more mainstream,
salable content.

Not necessarily. Efficient targets get better rates So targeting that is as
precise as magazines can be obtained, and advertisers pay more for less
spillage.

More channels, less revenue per channel. More channels, less expense
per channel.

Unless we use HD2 to develop very good regional or national concepts, those
that will work bess by summing stations to pay for better talent and staff.

Now that has some interesting potential. To bring things nearly full
circle...with national, networked or not, channels with reach and intent
beyond the local contour.

That would be an exciting development.


Which is the point. Because after all, in the US, Radio is ALWAYS about
the money.

That is and has been correct since about 1921.



Damned straight.