Reese: 'Odds Stacked Against Us' On Performance Royalty Bill
July 16, 2010 at 2:17 PM (PT)
On the opening panel of CEOs on the second full day of the CONCLAVE Learning Conference in MINNEAPOLIS, BONNEVILLE's BRUCE REESE warned that regarding Congress and the performance royalty debate, "They really want to do something for the artists. They really want to pass this legislation." Praising the NAB leadership's lobbying effort, he nevertheless said that the law might be attached to a "must-pass" piece of legislation, especially by an outgoing lame-duck Congress. "I would love to cut a deal" that would trade a royalty for certainty in the amount to be paid, REESE said. "I can't tell you how badly the odds are stacked against us" on the issue, he added.
They really want to do something for the artists. They really want to pass this legislation
REESE said that business is "really darn good" this year, with revenue up 15% and profits "approaching the 2007 level. He added that business "looks decent for the rest of the year." CONNOISSEUR's JEFF DINETZ said that 2009 wasn't bad for his company and "we're having a good year this year," with the first six months up 10-11% although pacing is slower for the rest of the year. Things were a little less rosy for MAVERICK MEDIA's GARY ROZYNECK, who said that business was improving but that "it's a very difficult environment in smaller markets... we're lagging behind" larger markets; his company is flat for the year but ROZYNECK said that business has increased 14-15% since APRIL and he is "optimistic" for the rest of the year. And NEXTMEDIA's JEFF DINETZ said "the bleeding has stopped" and noted that local retailers "are still not doing well," adding that "until banks start lending money" for consumers to buy homes and goods, "I still see it being tough out there." He agreed with REESE that growth will be slower in 2011 than in 2010.
On whether the industry was damaged by cost-cutting, WARSHAW said that radio companies have "cut muscle, bone, flesh, blood... it's damaged the industry, it's hurt the business." He said that "a lot of damage... has been self-inflicted." DINETZ drew applause by noting the lack of a farm system after voicetracking and syndication eliminated on-air positions nationwide, saying that "we gotta do something as an industry to develop talent... we have no bench."
The PPM, REESE said, has been "really good" to BONNEVILLE, and he responded to the perception that the meters favor music over talk by asserting that "it favors really good programming." REESE, whose News WTOP/WASHINGTON is dominant in the metered ratings, noted that there are "not enough meters out there" and that formats like Triple A and Smooth Jazz with more unfamiliar music don't do as well. "We thought we could keep doing what we did with the diary and get the same results," REESE noted, adding, "You don't have to repeat your call letters every 15 seconds" anymore.
On the industry's digital growth, WARSHAW said that the industry has learned that "slapping up banner ads, (and) assigning 10% of revenue to it" does not work, and that his company uses its online assets to do promotions and communicate with listeners rather than selling ads there. "We don't expect to throw out a bunch of digital opportunities and expect them to work," he said. REESE said that BIA projections for 2014 show digital being at 5% of radio's overall revenue, and "if that's what we're doing (as a company), we're probably losing." He said that he is looking for digital revenue for his company to be closer to 15-17% of radio revenue by then.
Asked about the industry's investment in HD RADIO and whether the money could be better spent on digital assets, DINETZ joked, "I'd rather spend the time talking about digital."
What To Do When Your Owner Goes Bankrupt
At a panel on operating under bankruptcy protection, BROADCAST MANAGEMENT AND TECHNOLOGY CEO JAY MEYERS, recently put in charge of the BUSTOS MEDIA operation in Chapter 11, asserted that "the banks are never gonna get their money back" but said that they "might get most of it back" if the companies are run correctly and other factors, including changing legislation and possible rises in valuation, come into play. MEYERS told station employees that the effect of bankruptcy on them is usually "nothing," advising them that the procedure mostly guarantees them that they will get paid and that they should just "keep doing a good job" and make themselves more valuable to the operation.
Broker and trustee LARRY PATRICK, running BORDER MEDIA in its present phase, said, "The person most in trouble (after a Chapter 11 filing) is usually the General Manager" if a cluster is underperforming, but other staffers are less endangered. He outlined the "three F's" affecting employees in the situation, fear, frustration, and (concern for) family, and explained the role of a receiver, who he said must manage the stations and retain value for the owners. He warned that contracts signed pre-bankruptcy can be "voided with the stroke of a pen," but a post-bankruptcy contract is "as good as gold." PATRICK advised prospective employees to ask the receiver directly what the plan for the company is, including whether the receiver's plan is to sell the operation.
PATRICK added that the reason many CEOs and managers survive Chapter 11 filings is that lenders prefer to work with the people with whom they already have a relationship.
It's All About The Apps
JACOBS MEDIA GM PAUL JACOBS discussed "Moneymaking with Mobile Streaming" in a late-morning presentation, asserting that "apps have the potential to change broadcasting" and its revenue model. He warned that the biggest mistake a station can make in creating an app for mobile devices is to limit its functionality to just making a cell phone a Walkman for streaming.
JACOBS noted that mobile internet users are projected to exceed desktop Internet users in numbers at soime time in 2014. "At the end of the day, apps are going to drive the growth," JACOBS said, adding that the growth in apps is in iPHONE and ANDROID apps. He advised stations to consider apps "prime real estate" but warned them not to get "caught up in metrics" and to go for long-term deals like six months or longer. Opportunities include In-stream ads, banner ads, promotion support, product placement, ads associated to personalities, and events, JACOBS said, adding that the latter can be aided by use of geolocation to offer app users directions to the nearest bathroom or other service at an event.
Movin' On Up
An afternoon panel discussed how to move up the ladder to a programming management position, Moderator FT. MYERS BROADCASTING Hot AC WINK (96.9 WINK-FM)/FT. MYERS, FL PD CHAD RUFER, BEASLEY/LAS VEGAS' JUSTIN CHASE, UNIVERSAL MOTOWN's TODD GLASSMAN, ENTERCOM Hot AC KALC (ALICE 105.9) and Classic Rock KQMT (99.5 THE MOUNTAIN)/DENVER PD DYLAN SPRAGUE, and CLEAR CHANNEL SVP of Programming ROD PHILLIPS offered examples from their own experiences early in their careers as managers, how to gain the trust of talent, and how they have handled "trial by fire" experiences and other situations.
Conclave College In Session
The afternoon concluded with the 2010 CONCLAVE College, presented by ALL ACCESS and COLEMAN INSIGHTS.
ARBITRON VP Programming services and Development GARY MARINCE delivered his analysis of the changes wrought by the PPM, reminding the audience that listener habits had not changed, but the methodology to measure that listening had. MARINCE ran through the basics of cume (weekly in diary, daily in PPM), TSL, shares, and ratings and analyzed radio usage for insight into how listeners use radio and when they tune a station out.
Moderator JOHN GEHRON, the longtime industry executive presently CEO of ACCURADIO, welcomed EMMIS' JIMMY STEAL, CLEAR CHANNEL's ROD PHILLIPS, RADIO ONE's JAY STEVENS, and JOURNAL's TOM LAND for the "Exec Marks The Spot" panel, a discussion of the industry from the group PD perspective. The panel agreed with the day's opening CEO panel that things appear to be improving for radio, with PHILLIPS noting an increase in people as well as spending in the programming category.
LAND stressed the importance of PDs listening critically to their stations every day and regularly communicating with listeners. He said that JOURNAL mandates a "walkaway day" every few months for managers to leave the building and listen carefully to their stations. STEAL spoke about making sure the talent prioritize properly, spending enough time on their shows and not too much time on other things like social media.
The panelists advised prospective employees that e-mail is better than phone calls to reach PDs, but applicants should allow some time for a response. STEAL said that he prefers getting an aircheck submission with one or two breaks rather than more than that. He added that he is not concerned with market size when considering talent, noting that his Top 40/Rhythmic KPWR (POWER 106)/LOS ANGELES has several staffers without prior radio experience. PHILLIPS said that applicants should "spell the name right," saying that he gets letters addressed to "ROB" PHILLIPS.
Responding to an audience question about the effect of unfamiliar music on PPM numbers, STEAL noted that new music has demonstrated that it causes turnout, but that his stations feature and champion new music. He said that the key is in how a station packages and sells the music, minimizing the risk inherent in breaking new and unfamiliar songs. STEVENS stressed the need to front-sell and backsell new music and noted that competitive issues will play into the decision to play new music, with the risk that a listener punching away from a new song might find a hit on a competing station. LAND added that some stations' branding depends on a reputation for breaking new songs first.
The PPM's effect on talk radio, said LAND, has been to highlight the need to get right into a topic rather than starting with chat and pleasantries. "Lead with the lead," LAND said, noting that listeners' short attention span is applicable in talk radio as well and that his talk stations are finding that a higher story count -- perhaps 4 or 5 topics in an hour -- leads to better results than sticking to a single topic for the entire hour.
A performance by HALL AND OATES' JOHN OATES, ORLEANS' LARRY HOPPEN, and BETTER THAN EZRA's KEVIN GRIFFIN ended the schedule. Several attendees were scheduled to head to the new TARGET FIELD in a group trip FRIDAY evening to see the MINNESOTA TWINS in an AMERICAN LEAGUE Central Division game against the CHICAGO WHITE SOX.