The Pandora Effect

Pandora founder Tim Westergren appeared at USC yesterday as part of the Thornton School's "Hot Topics" program. Westergren is an easily likeable guy who appears to be very sincere and has a quality I love -- he's a good listener. Students, industry people and faculty got a glimpse of the next radio -- the one that gives listeners unprecedented choice in their music and the one that could elevate musicians to a status most can only dream of presently. Pandora is radio -- online radio that matches 400 identifiable qualities of tunes to the tastes of users, but the word radio has become so negative&hellip

This Makes The CD Officially Dead

Gen Y knows the CD isn't what it used to be. Record stores most certainly know it. The previously unimaginable growth of iPods and iTunes should have been a warning sign. Now, you can believe it. A Record exec has said the words -- "the CD as it is right now is dead". Okay, EMI Music Chairman and Chief Executive Alain Levy couched his language a bit -- maybe the way politicians in our country do just before an election saying one thing and meaning another. But it's out there -- he said it and can't take it back -- the CD is dead. In the interest of full disclosure Levy went on to say, "You're not going to offer your mother-in-law&hellip

Sports Is Next

It was unthinkable back in 1996 when the Telecommunications Act was enacted to usher in consolidation that radio would actually recede as an industry ten years later. No one would believe that TV, having survived cable competition, would be taken on by YouTube. Wasn't MTV high and mighty with youth? Who could have known even MTV would struggle with its online reason for being. Everyone seemed to know that newspapers were dying -- thirty years ago -- but why can't they see that online is today's news print and integrity covers a multitude of sins. Well, the unthinkable is going to happen again and it pains me to say it. Sports is&hellip

Payback Time For The Consolidators

Clear Channel owns 1,150 radio stations and apparently can't seem to produce a stock price over $30 these days. That is until it announced intentions to pursue other options (like going private or selling assets). Not exactly a vote of confidence. And they're not alone, the other media companies are hurting (CBS Radio comes to mind. Notice they are selling not buying). My radio friends knew in 1996 that consolidation wasn't going to work. Yes, they heard that bigger is better and big companies can do better things for their audiences but they also knew that the consolidators' audience was about to become Wall Street not Main&hellip

92% Do What!

There's a Coleman Research study being touted to the radio industry currently that "on average, radio holds onto more that 92% of its lead-in audience during commercial breaks." Arbitron took out a full page ad in my favorite radio publication, Inside Radio and other trades "on behalf of the radio industry." Jon Coleman is an excellent researcher who has been studying radio for a long time. I mention this because if radio executives really believe this stat, they are indeed misguided and incapable of making sound decisions about the tough competition that has already stopped this growth industry dead in its tracks. Anyone alive and&hellip

Trouble for Facebook and MySpace

You could see this coming on the college campus -- as good an early warning system for the viability of social networks as anything. Now a recent Wall Street Journal article quotes Nielsen/NetRatings as showing both Facebook and MySpace lost visitors in September. The Journal says, "the number of unique U.S. visitors at MySpace fell 4% to 47.2 million from 49.2 million in August and the number of visitors to Facebook fell 12% to 7.8 million from 8.9 million." You remember MySpace. Rupert Murdock paid about $600 million for it last year. And Facebook is rumored to be worth about $1 billion -- plausible in this post-YouTube/Google&hellip

The Apple Phone No One Wants

Rumors continue that Apple is secretly at work on a new mobile phone that will enable users to download music on the fly. This would involve Apple partnering with a mobile operator -- unlikely, since Apple would not retain the control it likes over their products and marketing. Apple could buy phone time and become a Mobile Virtual Network Operator (MVNO), but this option involves a lot of initial expense and management. The more important question is: do consumers want an Apple iPhone? Do they want a device that is both an iPod (a real one not a ROKR) and a mobile phone? My sense is that curiosity is spilt 50/50. Some like the&hellip

Clear Channel: Mission Accomplished

One can't help but think of George Bush's premature "Mission Accomplished" photo op before the Iraq war was over when one thinks of Clear Channel. Clear Channel yesterday announced intentions to evaluate "strategic alternatives to enhance shareholder value" just before it retained Goldman Sachs as a financial advisor. Translated for the common folk: Clear Channel may be considering a private buyout that would put the Mays family back in total control. In fact Clear Channel never accomplished its mission. It can't seem to get the stock price above $30 a share even with the industry's largest platform of radio stations. A lot of&hellip

New Tool Makes Everything iPod Compatible

That is until founder Jon Lech Johansen is sued into oblivion by Apple. Johansen's new tool will make it possible for labels and other digital music copyright owners to sell iPod compatible music and consumers will not have to use Apple's iTunes store. It's like Apple's FairPlay DRM and it fools your iPod into playing the song. The repercussions are great for the record industry if Johansen's Doubletwist company survives the almost certain litigation. Labels can implement the variable pricing scheme that Apple CEO Stephen Jobs is stubbornly preventing. Of course labels should be careful what they wish for because Jobs may be saving&hellip

YouTube Could Encourage Litigators To Cut Out the Middleman (Them!)

Don't worry about parent company Google getting sued. There is some speculation that under the Digital Millennium Copyright Act YouTube may be able to have the litigator bypass them and let the user collect a lawsuit. How can this be? The law doesn't protect users who access copyrighted content. Google may find it expedient to turn over info on who is illegally posting video clips as self-protection. According to Online Media Daily precedent exists. Journalist Robert Tur who is suing for copyright infringement was encouraged by YouTube's attorney to pursue litigation against the person who posted video clips of his coverage of the&hellip

NAB Selling Out Radio (Again) on Consolidation

The National Association of Broadcasters is at it again. The group that helped tuck in legislation to enable radio consolidation in the Telecommunications Act of 1996 is now urging the FCC to allow further consolidation. Cross-ownership, a loosening of the limits. It argues that radio needs to be more competitive with other platforms and more consolidation is how they can do it. But broadcasting's own trade association is only finishing what it started -- the demise of localism and pandering to evil empires of consolidators answering to Wall Street not Main Street. And radio broadcasters sit idly by while their lobby group acts in&hellip

Caution: Gen Y Makes Sharp Turns

I'd like to share some insights I've gained from my Gen Y students at USC. Their generation wants what they want when they want it (who don't know that, as they say in Philly). But when they get what they want, they may not want it for long. Can you say instant messaging? It's so on it's way out. While texting is hot now, even my Gen Y'ers can't guarantee that it has a place in their lifestyle much longer down the line. Facebook -- the college social network has peaked. MySpace could be on thin ice if Rupert Murdoch's News Corp makes it too much a business. And while YouTube has never been hotter -- well, you get the point. This&hellip

Latte Lessons From Starbucks to Tower Records

When Tower Records finally ran out of steam and closed its doors it made me think of how unthinkable it was that such a large record store could go belly up. Maybe one store. Maybe a chain, but even though Tower Records was the chain that closed its doors forever everyone knows all record stores are in big trouble. Big trouble because the majority of the next generation loves the convenience of the virtual record store and because, frankly, record stores have lost their reason for being. Contrast that to Starbucks -- perhaps the prototypical remnant of the genre -- and you see a glimpse of the future. Starbucks -- the coffee company&hellip

Unsocial Networks

The dark side of social networking -- media's future, past or simply a dalliance -- is starting to rear its ugly head. Aleksey Vaynor, a Yale student is the latest victim of "video gotcha". His resume, letter and, yes -- video -- was somehow leaked allegedly by UBS (remember their slogan "You and Us"?) to staff and then YouTube. The video according to a New York Times article was "...staged to look like a job interview, is spliced with shots of Mr. Vayner lifting weights and ballroom dancing and has&hellip

New Media Needs Old Media

Do you want a utility -- say, a mobile telephone company -- creating the content that is on your future mobile device? Do you think they have what it takes to produce compelling content or should they just stick to efficient and economical delivery of content? With technology becoming the leading edge for everything Internet or mobile, one would think utilities are qualified to be the creative force that markets mobile media. Not so fast. They've failed miserably. The greatest provider of content on the face of this earth is still traditional media. They act like they forget this as they wade into the unfamiliar and uncharted turf of&hellip

Gen Y Did What Eliot Spitzer Couldn’t

Even a politically ambitious New York Attorney General, Eliot Spitzer, couldn't stop payola. Congress has never been able to. Radio never wanted to. And record labels still in their heart of hearts believe it's just the price of doing business. So the latest news that CBS has settled its problem with Spitzer in exchange for a $2 million charitable donation while admitting to payola practices should appear to be another nail in the coffin of this "dreaded disease". Clear Channel, Emmis and Cox are among the major groups to be subpoenaed as part of Spitzer's jihad. Entercom is fighting Spitzer but hasn't had much success so far. So&hellip

I Invented WiFi — Really!

My first program director job was working for a wild man named John Tenaglia in Philadelphia at a General Cinema radio station with a signal you could only hear in a helicopter or so it seemed. The call letters were WIFI (92.5 FM). I say I invented WiFi because I pulled the plug on our Drake-Chenault automation "Hit Parade" to introduce live "Stereo Hits". Worked with some great people like Bill Figenshu and Mike Anderson, now publisher of STL Media. Lee Abrams also tangled with Johnny T in his career and we all survived and I guess were better off for&hellip

Must See TV — Not NBC, YouTube

NBC Universal's plan -- the so-called "NBCU 2.0" -- is a frightening reminder to traditional media of what's coming. NBC plans to cut staff, stop producing expensive drama shows for the 8 pm slot, consolidate its operations and switch resources to digital media. The plan: cut costs and invest more in digital media opportunities where it expects its digital revenues to surpass $1 billion by 2009. But the house that Jack (Welsh) built has taken a hit from a few 22 year olds who were just screwing around in their garage -- not working on a car, but building YouTube. YouTube is fast becoming the new television. But traditional media has&hellip

Record Labels Doing Smart Things

Warner led the other record labels excepting EMI in working deals with Google's YouTube. And they did it the smart way by negotiating a stake in Google's new acquisition. In return the labels get a collective $50 million worth of equity, a system for helping control digital rights and a pioneering position in a hot property that means a lot to the music industry. Now this is more like it. Better than suing consumers through RIAA. Better than sitting on the sidelines while technology passes them by. The record label of the future has to do more of this.&hellip

Radio’s Loss of Young Listeners May Be Unstoppable

Larry Rosin, a great guy and excellent researcher, was quoted in the New York Times recently as saying radio's unwillingness to target listeners in the 12-24 year old demographic instead of the money demo 25-54 is contributing to a significant drop in listening. Rosin's Edison Research indicates that listening hours have dropped about 21% among 18-24 year olds in the last ten years. Other mitigating circumstances are cited including the usual culprits -- the Internet, mobile devices, video games, movies, television, instant messages, portable music players and music downloading. What's significant -- and what the radio industry must&hellip

Let The Lawsuits Begin (And Fail)

Universal threatened it and now they've done it. They are suing and for allegedly building traffic by encouraging users to share music videos without their permission. Note Google, which just purchased YouTube, was not included because they worked out a deal. Universal seeks compensation. It cites Mariah Carey's video "Shake It Off" as drawing 50,000 viewers on Grouper alone. Let me understand this. The major labels are hurting. The Internet because of illegal and legal downloading has cut into CD sales. Massive lawsuits from RIAA have not been able to stop the decline. So it makes sense that when the record&hellip

Stop Illegal Downloading — Sell t-shirts

I've been thinking that record labels are really taking it on the chin because of the next generation and their ubiquitous tool -- the Internet. How do you stop illegal downloading? Is it even worth stopping it? Better yet, how do the record labels get in on this revolution instead of being on the outside looking in. One thing that hasn't become virtual (yet) is merchandise. To my knowledge no one has invented a virtual t-shirt. Notice I am being careful to say -- yet. Well, it's not likely. This is my way of asking -- doesn't the record industry have the next generation by their -- computers and mobile phones -- if they become&hellip

The Real Genius of Steve Jobs

The Steve Jobs interview in Newsweek has a not-so-hidden lesson for Microsoft regarding its new Zune competitor to iPod. Jobs says, "I've seen the demonstrations on the Internet about how you can find another person using a Zune and give them a song they can play three times. It takes forever. By the time you've gone through all that, the girl's got up and left! You're much better off to take one of your earbuds out and put it in her ear. Then you're connected with about two feet of headphone cable." Something tells me he's right (other than my USC students). So how is the&hellip

Mobile is the New Radio

My dear friends in the radio business to a great extent see themselves in the 24-hour news, information and entertainment business. That is going to have to stop. Technology is at work. The TiVo and its clones allow viewers to take from TV instead of waiting for TV to give. Consumers like the control they are getting over their television entertainment. Radio has been awesome at being there for listeners since it was invented, but being there is not going to be enough in the mobile future. I see mobile radio "stations" (if I can call them that) as shorter form offerings. Maybe 30 minutes worth of programming that mobile users can&hellip

The Chances of Stern Succeeding on the Internet

I always liked Howard Stern. Thought the move to Sirius Satellite was brilliant. Not because they paid him $500 million plus stock incentives. That too. Because radio was declining and satellite was the new frontier. Now Sirius is launching a new non-satellite satellite service on the Internet for $12.95 a month. No need to buy the radio. October 25 and 26th are freebie preview days. Sirius also has 74 other channels on its Internet service, but they're going to go to the dance with the guy that brung them -- Howard Stern. Makes sense. But think it through. Stern appeals to older listeners who currently constitute satellite's&hellip

Old Media, Meet The Real Enemy

Sometimes you wonder how radio has been able to buy up everything allowable by law and still come away with a declining business model. Must be that damn iPod, right? You wonder how the mighty TV business can be kicked in the butt by a few 22-year old "kids" who while screwing around invented YouTube. That leads me to the question is traditional media in trouble because of all this new technology and a new hard to tie down generation of interactive monsters? Or are they to blame for their own mess? I'm thinking the old model doesn't work. Take a look. New Internet start ups actually hire people -- lots of people -- sometimes when&hellip

Digital Rights Management — Isn’t Gonna Happen

If I've learned anything working with the next generation at USC it is that DRM, the concept worth going to war over for the record industry and the RIAA is doomed to eventual failure. What I mean is that yes, the record labels succeed for now and stand in the way of the true digital revolution. But, they'll never win the long term battle. Every protection can be hacked. Standing in the way of true interoperability is like Custer's Last Stand. In the end the labels will die -- no matter how noble -- fighting for the old way of doing things. Here's what's worth considering: music made for distribution without DRM protection will&hellip

I’ve Added “Must Read” Links

Thanks for your comments and time spent reading Inside Music Media. Although we're still in "beta" mode, I am encouraged by the number of people who appreciate straight talk and insight when reading about the music-related media. And we haven't promoted the blog much so feel free to spread the word if you like it. Starting today, if you scroll down the right hand column, you'll find the first "Must Read" links to people and publications I read and consider essential. I won't burden you with anything that I don't highly regard. We report, you decide. Did I say that? I take it back. Nonetheless, to start, you'll enjoy reading my&hellip

Google Gets The Last Giggle

Does $1.6 billion buy Google a raft of lawsuits over content rights or a massive new frontier upon which to continue building its empire. What do you think? How could someone not take the risk and could you think of anyone better than the deep pocket folks at Google? I like this move. You'll notice that Google is moving as swiftly as it did in buying YouTube to resolve outstanding potential lawsuits. Universal comes to mind. They're now on board. There's no doubt YouTube is a beacon for legal trouble over unprotected content, but the difference may be that Google recognizes this, is taking action and will have to consider such&hellip

The Anti-Clear Channel Factor

That's Saul Levine, the owner of "K-Mozart" in LA who has resisted (apparently easily) the fat cat money of large radio consolidators. He refuses to sell his station because he loves classical music and wants to keep it on the air. Now Levine has a deal to operate KKJZ (88.1) for licensee Cal State Long Beach and "nervous nellies" think he's going to water down the classic jazz format with smooth jazz. He says not. And what more do you need from an anti-consolidation hero but his word. The likes of these owners who really, really love radio is rarer than an uncooked steak at a Texas barbecue. Jee Lee, owner of WBEB-FM, Philadelphia&hellip

Oops, They Did It Again!

So Citadel is in the process of buying ABC Radio in a complicated deal only a lawyer or financial wiz like Citadel CEO Farid Suleman could love. The deal has been languishing in lawyers offices for almost a year and now comes the word that ABC is cutting costs in anticipation of the closing. Do these folks not get it? ABC was a once great group of radio stations that Disney lost the will to operate. You don't "uninvest" in your product to grow it. You invest in it. So now the winning formula for running radio stations (I am being sarcastic here) is cut costs. Duh! Where has that gotten radio since 1996 when the&hellip

Radio Should Compete With YouTube

So, Google is reportedly offering YouTube $1.6 billion to buy it. Yahoo is said to be eying Facebook. Rupert Murdock previously stole MySpace and many big media conglomerates are seemingly tripping over themselves to avoid the "humiliation" Viacom CEO Sumner Redstone said he felt when Murdock swooped in and stole MySpace from him. I agree with Mark Cuban. YouTube is potentially the legal professions' best friend. The lawsuits over copyright infringement will start flying when YouTube is awash with big media money. Universal is&hellip

The Record Store Is Dead (Or Is It?)

Tower Records finally succumbed to the losses that music downloading wrought. A liquidator came in and bought the entire chain for under $170 million. A sell off is underway and 3,000 employees are headed to unemployment. What a long demise! Just as traditional media is hanging on to its traditional business models, record stores are reminding us what happens when we ignore the future. The record store began to die when Gen Yers figured out how to share music, steal music or buy music online. And what did record stores do? Remain the same. Few changes. And Tower won't be the only record store to bite the dust. When music was&hellip

Privacy — Be Afraid, Be Very Afraid

My mother never had a credit card. Thought it outrageous that cable could charge for TV. I'll wager that very few people other than the Social Security Administration had a line on her personal information. The next generation doesn't have the same kind of privacy. Future employers can check them out on Facebook, MySpace and yes, through emails and IMs they wrote even in their unguarded moments. This begs the question how digital do you want to be? How transparent can you afford to be? The Foley page scandal in Washington proves again that anyone who thinks he or she can keep their digital communications private and protected would&hellip

Fast Fowarding Online Commercials

Traditional television networks are beginning to discover the joys of streaming video preceded by a forced-view commercial. Disney CFO Tom Staggs has been quoted as saying that he's impressed with the online stats -- where viewers have to watch the ads. No fast-forwarding allowed. He says 87% of the viewers who downloaded shows can even recall the sponsors name -- that is nearly double that of TV. Is this a love affair in the making? Yes and no. The networks have been fighting TiVo and DVRs to no avail. Now, if this is any indication, they may learn to love streaming and the revenue they can derive from its associated&hellip

Radio To Go

Some of my students have expressed a desire to subscribe to content that could be produced by terrestrial radio operators. My friends in the radio industry, please take note. They envision a system that would allow them to plug in their iPods and download podcasts of highly specialized material -- about 15 minutes in length. They would tolerate a commercial sponsor. Might even enjoy plugging in at a Starbucks as an alternative to downloading the content on their computers before leaving for work or school. Might even pay a small fee for the content along with a latte. The kinds of content they might like: sports news, soap opera&hellip

Satellite Programming to the Wrong Audience

A well-respected radio man and friend hit the nail right on the head today when he told me that the problem with satellite radio is that its market is older adults willing and able to pay monthly subscription fees yet both Sirius and XM continue to make their best efforts in music programming aimed at the young -- the very audience that doesn't subscribe in great numbers. He adds, not only that, some of the music stations aimed at their subscriber base aren't adequate. For example, oldies. Where is the quintessential WCBS-FM since Joel Hollander took the legendary, moneymaking oldies station off the air in New York in favor of "Jack"?&hellip

Radio Can’t Stop Hawking Fewer Commercials

On a cab ride from LAX to my home in LA last Sunday I couldn't believe how loud the radio was. But after all, it was radio and as an ex-program director I was fascinated with why this driver who spoke minimal English was blasting KBIG. Heard Usher then a segue to Madonna singing "Borderline". Like an ex-Marine there is no such thing as an ex-program director so I could always second-guess the programming. But that wasn't what lit my fire. Working with Gen Y students as I do at USC I couldn't believe the jock -- a typical "puker" -- was selling "fewer commercials" to his listeners. Who is radio kidding? Go back to school. Any&hellip

Media Stirs The Violence

Fox News was having a discussion midday today about what could cause the violence in our society especially against children. There are two major contributing factors in my view. One is the willingness of the media to pander to the lack of civility in some human beings and their eagerness to drive society to the limit -- in sex scenes, language, acts of violence that are not needed dramatically to provide context and the dumbing down of news to pictures and outrageous stories. The music industry is also to blame because it doesn't just exercise its rights via hip-hop and rap lyrics but is the driving force in pushing language,&hellip