(Editor’s note: today is the last day to get the $300 discount on my January 27th Media Solutions Lab – learn more here). 

For years now radio executives have been screaming for FM chips in cell phones.

Their twisted little minds figured that just about everyone eight years of age or older keep cell phones in their hands and wouldn’t it be nice to put a radio there, too.

Emmis CEO Jeff Smulyan has been leading the FM chip charge but to no avail.

Smulyan argues that radios on mobile devices in Europe increase a station’s total listening. That may be so in Europe, but even there the increase is statistically insignificant.

Mark Ramsey came out with an excellent study this week in which he polled actual consumers who already bought a cell phone and asked them if they specifically looked for a phone that had FM radio.

88% said no.

4% said yes.

So, as we say in Philadelphia, “who don’t know that?”

Why all the fuss about putting FM on cell phones?

It doesn’t take a brain surgeon to tell you that young consumers barely even use their telephones as telephones let alone radios. And as Ramsey points out maybe Apple only has one mobile device that is FM ready (Nano) but there really are a lot of cell phones for sale with FM capability.

FM on cell phones is a red herring -- the definition of which is something intended to be misleading or distracting.

Why is the radio industry being played for fools by virtually every group CEO (that is a good question in and of itself) and by the very group that is supposed to represent their best interests – the National Association of Broadcasters?

And one more thing – are we as dumb as they think we are because I can show you how to look at consumers and read exactly what they want which begs the question what do potential listeners want and what does the radio industry want.

They are not the same thing. 

The back story is almost unbelievable. 

I have uncovered something very interesting about Cumulus CEO Lew Dickey that may give you some insight into how this powerful radio consolidator thinks.

When the term family jewels is used – say, to describe the pat downs that TSA is giving travelers these days – it is used to describe a person’s private parts.

In the Dickey family, the family jewel is the media operation that was handed down from father to son and siblings.

That is why it is a bit odd that in a lawsuit that Dickey inflicted upon his former Danbury, CT and Westchester, NY manager Kristin Okesson, Lew Dickey is asking a federal magistrate to in a sense pat his ex-employee down for resigning her job and leaving the company, but hands off of his family jewels.

It is apparent to some that the Dickeys are looking to inflict as much financial harm on this female executive who resigned, went to work for a more respected operator and then filed a discrimination suit against Cumulus.

In essence Dickey wants Okesson to pay him almost a million dollars for the financial hurt she allegedly brought upon his junk.

What he didn’t count on is that Kristin Okesson’s new employer is paying all her legal bills and that for the first time Tricky Dickey may not only lose his lawsuit but regret that he ever filed it.

This is a story of Thanksgiving to anyone who has ever been screwed by an employer who seemingly had all the power and money to get their way.

There are new developments in the Okesson case which read more like a soap opera than a legal action. Closing arguments were heard in Bridgeport on November 9th.

After hearing what is looming over the Dickey empire, Suing Lew will probably try to negotiate a settlement with the person he picked on probably because she stood up to him every step along the way.

Dickey appears ready to lose and wind up with unintended consequences, but until he settles and a gag order is imposed on how much that settlement will cost, this is a public story of vengeance and bad policy.

No one ever leaves Cumulus and lives to tell the story (let alone get costs and damages) but it could happen to Kristin Okesson.

And wait until you hear how this entire lawsuit may backfire in Dickey’s face. 

This is an early warning that 2011 will not be like 2010 or any other previous year since radio or record industry consolidation.

In fact, 2011 will not resemble anything the media industry has ever seen before because several circumstances are driving the owners of big radio and record companies to acts of desperation.

This is important because, if I am correct – and I wouldn’t be saying this if I didn’t believe it – hold on tight, it’s going to be a rough ride.

In spite of some of the scary things I am going to share with you, there are a few good opportunities that will occur that even a year ago would have been unthinkable.

Maybe some respect for good old mom and pop.

A second chance.

Investment banks are doing something so blatantly telling that it can predict what they are up to as owners of radio companies in the next 12 months. I’m surprised so few have noticed.

What Bob Pittman’s hiring foretells about the change in direction ahead.

And four documented examples that will illustrate how 2011 will be a year like no other in the radio industry.

Oh, and somehow even Randy Michaels may figure into all of this.

Rupert Murdoch and Steve Jobs’ secret plan to build a news site expressly for the iPad is a cable news killer.

But it could also be an opportunity for radio.

How so?

Not in that if cable news is crippled, more people will turn to radio again. But in a new way.

Cable viewers skew older, but this new iPad venture between the unlikely duo of Jobs and Murdoch will have to attract younger demographics to have a chance.

However, the plans which I am going to tell you about also offer an early warning to radio operators and ex-radio people who are smart enough to follow the lead of something Jobs and Murdoch call the Daily.

Ignore what is about to happen at your own peril. Here is a blueprint, timeline and specific way radio people or ex-radio people can get a jump on what I think will be a huge growth business.  

Read this story today.
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Anonymous tipsters copy and paste internal memos or emails here.  

I’ve got five bold predictions for you in radio, new media and music that I think you’ll want to know.

• Which radio group will start selling stations – possibly as soon as next year – in spite of the fact that station prices will be very depressed and money is hard to come by. Learn why, how much these stations are likely to get plus what type of person is the ideal buyer. You may be surprised.

• The unintended consequence of the new music royalty tax on radio which, as you know, I believe is a foregone conclusion. Here’s my best thinking of when the tax will be settled and when stations will likely have to start paying.

• What’s up with streaming media, an industry that has already been mugged by the music industry royalty tax? However there is a workaround on the horizon. Details follow.

• Apple’s next move. The usual holiday sales should be brisk, but that’s not what I am talking about. There is a game changer ahead that will impact the music industry and terrestrial radio.

• How big will local new media ad sales get? There is evidence that it is surging in some local radio markets, but I’ve got the percentage of all local business that you can expect to go to new media and a time frame.

Read this story today.
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•••

Only 10 days left to get the “early bird” $300 discount for Jerry’s 2011 Media Solutions Lab in January. To learn more or register, click here.

•••

Anonymous tipsters copy and paste internal memos or emails here.  

A lot has been made of the recent appointment of former MTV and AOL head Bob Pittman to a high level executive position at Clear Channel – the presumption being that Pittman’s arrival signals a new day for its radio, entertainment and new media prospects.

But there is a developing back-story that could constitute more than an executive personnel change.

Clear Channel could have a new owner in the not too distant future.

The plot thickens because the wheels may already be in motion so Clear Channel owner Lee and Bain can escape from a huge investment gone badly for them.

This real time scenario is unfolding even as the company claims to be searching for a replacement to departing CEO Mark Mays.

But this is what is likely to happen.

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Cumulus Media just can’t figure out how to sell.

Harvard and Stanford grad and Cumulus CEO Lew “Tricky” Dickey has been beating up his employees for years about their underperforming sales ways.

He’s thinned out their ranks. Told me face-to-face in Philadelphia that maybe it’s not a bad thing to get some fresh blood into the company.

Dickey, who never enjoyed a career as a radio salesman, had a lot of blame to throw around for Cumulus account execs who actually know how to sell.

Sales meetings conducted from the Cumulus headquarters in Atlanta beamed to local stations via Skype. Local sales staffs hate this because it keeps them off the streets and away from clients who do spend money with them. Dickey likes it because he can badger them to sell to new categories like health care.

As the Dickey Empire totally remade local sales, it took key accounts away from the salespeople who attracted and maintained them and dished them off to so-called Key Account Managers who got paid a lower commission for managing the business.

Increasingly more local sales were made through Atlanta to prevent the higher local sales commissions from being paid – a big incentive for a sales profile. Of course, I am being sarcastic here. Nothing throws a wet towel on selling like messing with the seller’s commission.

Lew Dickey held his most recent conference call with analysts where he was snagged for the company’s underperformance in local business by blaming the economy. Truth to be told, many radio groups are doing poorly in local, but Dickey is comfortable simply blaming the recession.

CBS is up over 3% in local for the same period and interestingly enough, President Dan Mason uses a traditional sales approach with account execs deployed in local markets. Could that be something that would interest Lew Dickey?

Of course not.

The smartest radio guy in the industry (at least in his own mind) has yet another play date with local sales that is more like a senior project than a sales strategy.

It’s called Value Alert Notification.

And you won’t believe what it forces sales people to do and how it actually works to kill local sales.

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Nice move.

Hire the man who brought MTV and AOL to prominence and call it a step in the right direction for an outdated radio company to embrace new media.

And why would Clear Channel have to recycle the well-traveled Pittman?

Let me count the ways.

One, Clear Channel owes $19 billion in debt due in two years and has no earthly way to pay it back. That means the company will either be chopped up or sent to bankruptcy – neither of which sounds that bad to me when you look at how other radio companies did when they emerged from bankruptcy.

They did fine. Everyone else got screwed.

Two, go back and read one.

Clear Channel is lucky to generate a few billion a year in profit with its radio and outdoor operations. Not likely that it could repay $19 billion in debt at that pace.

So you do the next best thing.

Turn to unearthly ways to get into digital media and for investment bankers that means hiring one of their own to work with a “management team” so owners Lee and Bain can sell this as a great reason to help refinance that $19 billion in debt.

Or as one of my readers wrote upon hearing of Pittman’s appointment:

“Exactly the kind of call someone who knows nothing about radio would make. The smoothest move since Ted Forstmann tapped Farid Suleman to run Citadel”.

So while others are reading about this game changing appointment of Bob Pittman as chairman of its media and entertainment divisions, you’re likely seeing through the move as one that has more to do with window dressing than substance.

If not, and with all due respect to Pittman, I could have named a hundred executives who could lead the digital way but no – the Clear Channel investment bank owners has to have Pittman who ironically also has experience running the real estate company Century 21 which means it really is all about the real estate.

Now you know that a smart organization doesn’t make a major appointment like this without having replaced CEO Mark Mays who leaves within the next few months. But that doesn’t stop Lee and Bain because whoever that puppet is, the investment bank owners are going to name Pittman as head of media and entertainment anyway.

Who needs to have the new CEO sign off on it?

After all, they are all puppets and Lee and Bain pull the strings.

But beware.

Think John Hogan.

Something big is up. 

For the past few years the big three consolidators have been firing people by the hundreds if not the thousands.

More cuts are happening even now ahead of the holidays (and the end of the year) and the prognosis is for more cost cutting in the year ahead on a continuing basis.

Many employees of Cumulus have told me that they can’t wait to get out – some have set deadlines for themselves in 2011.

Meanwhile Cumulus is hiring.

Hiring inexperienced people who will work for less without radio industry experience.

On the music side, record labels are not hiring.

The labels are beleaguered. EMI is about to fall and I wouldn’t bet the house on the surviving big three labels because, frankly, there is less need every day for a record label in the digital world.

Many of you ask – how can I stay in the media business and not work for people like the Dickeys, Farid Suleman or John Hogan?

Others want to know where the good jobs are and how to get them.

So, let me address these issues.

The trick is keeping a job you like even when you don’t like the people you work for. Never let them push you out by insulting you, terrorizing you (are you listening, Lew Dickey?) or freezing you out by cutting wages, adding responsibilities and adding insult to injury.

The strategy is: don’t react -- respond.

If you can survive poor employers in an industry that you love, then you’ll want to turn your attention to how to build your value while you are looking for the next career.

And that career, by the way, is either in local radio in smaller and medium markets working for non-consolidated operators or larger cities where people are valued (i.e., Bonneville).

In the year ahead great strides will be made in the mobile Internet. Radio and music industry people are ready-to-go for creating mobile content. I’m doing a segment on this at my upcoming Media Solutions Lab – that’s how strongly I feel about the opportunities ahead. 

That’s why you want to survive as long as possible so you can make the move to either an employer who sees traditional media in a future context or make the jump to new media.

In other words, you want to be bulletproof.

Here’s the plan -- what to read and how to prepare for a new way of thinking.  

If you want to know why local sales are down, you can find many reasons – most of them caused by poor decisions made by corporate owners.

Instead of fixing the problems – Clear Channel is now reportedly considering a new way to create even more.

According to Tom Taylor, there is some speculation that Clear Channel is considering revising its sales commission structure in a very unusual and potentially dangerous way. I wish it were a hoax, but Tom’s too good a reporter for that.

All of this nonsense is the best work of Lee and Bain, the two investment bank owners of Clear Channel. The plan is typical investment bank “think” as you’ll soon learn.

The incentive is not on selling more spots.

Not on selling spots in a certain time period such as morning drive.

Not based on any standard that radio sales has ever recognized in well over 50 years. And that’s because the new Clear Channel system is designed to pimp out salespeople because the company can’t give them a product that the marketplace will buy at a fair rate.

I’m sure you’ve noticed how most radio companies – even good ones – are having trouble selling local ads this quarter.

There is a logical explanation.

Take away local personalities and replace them with voice tracking from 1,200 miles away or repeater radio syndication from the home office and you’ve saved money alright, but you haven’t given advertisers and agencies anything to get excited about.

Therefore, local personalities are the best way to get premium rates that drive local billing growth. Okay, so much for that.

Then, owners like Cumulus are reallocating local sales to their home office in Atlanta and therefore the easy business is handled by a national salesperson whose main purpose is not to serve the local client better but to help the Dickeys get away without having to pay the local salesperson’s higher commission.

And finally, local sales is being driven – again – by national centers that dictate who to call on, how to do it, how many calls to make and so on. Therefore, radio selling becomes dialing for dollars instead of building mutually beneficial relationships.

Local sales staffs take their instructions weekly from headquarters and you see how things are working out.

Now the most amazing cockamamie plan of all from the makers of Less Is More.

This new plan could be called Screwy Sales.

Wait until you hear how it works. 

Mickey Luckoff has been out as President and General Manager of KGO/KSFO, San Francisco for about one month now.

Luckoff left with his hands in the air and two fingers holding his nose as Citadel CEO for Life Farid “Fagreed” Suleman finally got to him.

Luckoff stayed on after Citadel bought ABC from Disney hoping that he could keep the station he operated for 35 years together. To quote the Bible:

“What Mickey Luckoff has joined together, let no man put asunder”.

35 years – numerous owners later from ABC to Cap Cities and Disney – and then a catastrophic event.

True, Arbitron’s People Meter has been shorting news/talk stations all over the country probably because the drive-by listening rating service only seems to like hit music stations. Even at that, Luckoff kept churning out the money.

Now in one short month, Fagreed Suleman has managed to do what could not be done in 35 years – the dismantling of KGO.

But before we get to what Suleman plans for KGO, let’s look at Fagreed’s so-called life.

Suleman had to eat his $55 million stock award last week when Citadel attorneys had a little sit down with the judge in a lawsuit brought by investment partner R2 – a lender turned shareholder – that called Citadel’s compensation plan "one of the most egregious frauds by a company emerging from Chapter 11."

In all, over $100 million in bonus shares awarded (mostly to Fagreed, of course) just after Citadel emerged from bankruptcy had to be cancelled.

Stop!

Think about it.

Say you have money invested in Citadel and Suleman and company take a $100 million bonus almost as soon as the bankruptcy court gives Citadel to the lenders. You wouldn't like it, either.

Fagreed doesn’t need any introduction to greed – that’s how he got his nickname. Citadel is still in court defending itself against R2. R2 saying the stock awarded to managers vested over two years in their pre-arranged bankruptcy stipulated options that vested over three years. As The Wall Street Journal reported, “R2 complained the restricted stock would dilute value of R2's shares and others owned by the company's former creditors”.

No problem. Citadel just decided to turn these questionable stock awards into options.

There!

Wasn’t that simple?

What should be of equal or greater concern to the lenders turned owners is that Suleman is systematically wrecking the company.

Look at how Suleman is beginning to dismantle KGO right now. 

Lew Dickey’s nose is growing.

A few days ago on a quarterly earnings call with investment analysts, the Cumulus CEO went from “tricky” to “slicky” when he boldly reported that national and political ad sales were the leading sales categories.

But then a caller asked the ranter from Atlanta for a more responsive answer about why local sales were off – after all, investors should be concerned when radio, a local business, cannot produce growth in local sales.

Lew did his best imitation of Pinocchio.

Dickey said – only when pressed – that local was about 50 basis points short of flat. For those of you who did not graduate from Harvard and Stanford as Lew did, let me translate that – local sucks.

But you’re not going to believe why – and if you do I have The Holland Tunnel all ready to sell you right there in Hoboken, NJ.

Here’s what Captain Lew is peddling to the public and his employees in confidential memos about why a strategic move he imposed on Cumulus is failing so badly. 

Radio stations used to relentlessly compete with each other for the last listener, last ad dollar available and the hearts and minds of their local listeners.

Since consolidation, the recession and live, local radio cutbacks, stations have turned into transmitters and towers of outsourced programming. One wonders if that hasn’t contributed to the steady loss of listeners. Even the People Meter’s hopelessly inflated numbers that also include drive-by listening barely can keep station ratings treading water. 

How important is competition and where has it gone?

I’d like to get into that this morning because I believe it is crucial.

If you are already a subscriber, thank you very much for joining our group and you can click through now to unlock the content.

If you haven’t subscribed yet and would like to access this story, let me tell you what you will get in this piece.

1. Why investment banks want less competition (in their own words) and why radio needs more (in mine).

2. How Pandora has become a major competitor to radio and why radio is ignoring the popular customizable programming service even as Pandora gets ready to double down and be more of a local competitor.

3. What is the curse of buying your competitor?

4. Why do investors hate radio so much today?  No group has been more vocally against terrestrial radio than the investment banks that helped ruin it.

In the upcoming election tomorrow it appears the electorate is angry.

When they get mad at politicians, they vote them out of office.

Increasingly, in the media business, listeners, viewers and consumers of content have many more options than ever. And they have their own ways of voting the media in their life out. 

This morning, I’d like to delve into why our audiences are increasingly angry. And they have options. A lot of them.

If you are subscriber, thank you very much for joining our group and you can click through now to unlock the content.

If you haven’t subscribed yet and would like to access this story, let me tell you what you will get in today’s piece.

1. What it takes to get a good read on audience content preferences in the digital age.

2. Why it pays to take the pulse of consumers all day through Twitter and other means before problems emerge that could cause irreparable harm to your brand.

3. Apple’s secrets to customer success. I have a valuable link for you about how Apple works to please consumers.

4. How to sense when audience sentiment is changing in a world this fast and with so many options.

5. The one thing that audiences insist that you do for them.  Are you doing it?

6. How to avoid making listeners feel they have outgrown their need for the content you provide.

The answers start here.