July 5, 2011
Gary Krantz boasts the resume of an executive's executive, having been at or near the top of successful radio franchises such as AMFM, Premiere and Westwood One. Since then, he has launched his own company that touches on a bevy of areas, from consulting networks and syndicators to representing new artists. Here Gary offers his unique insight into Krantz Media Group's place in the industry and many of the pressing issues of the day.
What made you decide to start your own company?
I started my career as an entrepreneur. I was the second employee at MJI in 1981 and participated in its growth through '97, when I left to join AMFM. Even in that role, as the first EVP/Programming and the progression of positions I held thereafter -- EVP at Premiere, President of Air America and Chief Digital Media Officer at Westwood One -- my role always seemed to establish and grow new businesses.
In 2008, after I left Westwood One, I did the "deep think" and it became clear to me that there were three clear opportunities for my company: 1) to help companies create and grow revenue through advertising, licensing and partnerships; 2) multi-platform content syndication, specifically focused on affiliation, distribution and sales of premium programming, services and brands; and 3) investment counseling and fundraising for young digital media companies, specifically in the media and music space looking for funding .
Those three disciplines are areas I operate in within broadcast, music and new media. Today, our partners include Premiere Radio Networks, TuneGenie, My Damn Channel, Studio Center Total Production, and BlogTalkRadio.
How do you maintain a balance of those disciplines?
This is what I have done for most of my professional life, and these disciplines are complementary to each other in a lot of situations. Many times I will begin a relationship within one area and it might grow into another.
You've worked at major radio groups and syndicators ... where is the "hole in the industry" that you see Krantz Media Group filling?
To me, there are two clear marketplace drivers:
Radio groups and their stations have to aggressively improve their on-air product and extend their programming and brand experience beyond their transmitter to all forms of online distribution and media. They will do this through internal resources and investment, but there will always be a place for creative outsourcing that they don't have the time, money or resources to do themselves.
The big networks will provide many of these services, but in many cases, have bigger fish to fry with their existing products and services. Because of the investments they have made, as well as the financial structure of some of these networks, the correct business move is to reduce risk and keep the focus on improving distribution and monetizing those investments. When it comes to development, it seems today they are embracing more of a sales rep role, which does not require a significant additional investment in program development and distribution. This is the sweet spot for Krantz Media Group.
I would imagine that creating quality syndicated content would have major appeal to these big groups.
Definitely. As I mentioned before, I believe that syndication provides media outlets with content, services and access to big brands and events that programmers and stations don't have the time and resources to create themselves.
I've got my own "Lee Abrams-style" history of syndication (and I have shared this with Lee!)"
You could say the '70s was the era of live concerts; every network had one - "The King Biscuit Flower Hour," Superstar Concert Series, etc.
The '80s was the era of countdown shows -- AT40, American Country Countdown, Countdowns by Dick Clark, Rick Dees, Lon Helton and others.
The '90s was about the "Big Event" -- the radio presentation of The Grammys, The Country Music Awards, The Rock and Roll Hall of Fame (all developed by MJI) and specialized fax and audio services (due to the invention of that amazing technological development - "The Fax Machine!").
The 21st Century is about digital solutions -- website development and content for station websites, CMS systems and other services. My company plans to be there now and in the future to partner with the most talented providers of "must have" content, brands and services on the "supply side," and all of the networks on the sales side.
You also must be quite cognizant of the "corporate mentality" at radio. While "economies of scale" certainly matter, what do you recommend corporate radio do to shore up their weaknesses?
Listen, I am not sitting in any one of these chairs at the moment, but to me you have to look at it in the way of whom you are serving. Radio's legacy constituencies have been to serve their local communities, listeners and advertisers. The fact of the matter is that the most important constituency has become the banks and investors, who in some cases overpaid for these assets. My recommendation is to embrace the former first; radio does have that power to super-serve their local communities, listeners and advertisers ... and the latter will follow.
Overall, what areas of radio need the most improvement or aggressive actions to serve both your listeners and advertisers?
Number 1: It's very simple, one word ...content! For some odd reason radio, which built itself on content, is in my opinion (at the worst possible time) forgetting what brought them to the dance in the first place. And that is content. The industry is focused on revenue and is forgetting that the listener comes first. My client, Jeffrey Specter, Founder/CEO of TuneGenie, says this perfectly, "We all want to follow the money, but remember, money follows the people, and people follow content!" TuneGenie is a killer content platform for music radio, which is now morphed into a viral network, enabling listeners to create, play and share playlists. Using music innovatively in an interactive capability as TuneGenie does is a great example of mixing radio's heritage with today digital capabilities.
Number 2: Embrace video -- and not just the "cans in the ears" Howard Stern/Don Imus model. Create separate, short and high-quality video content focused on whatever your assets are -- the music, the talk/information, your personalities -- that can not only live on your website but be pushed out to all methods of distribution. Look at what Rob Barnett's "My Damn Channel," is doing with stars and talent in film, TV, comedy and music. Read Steve Stockman's great new book, "How to Shoot Video That Doesn't Suck."
Number 3: Re-think and improve your commercial creative. Consolidation has hit the production room. Where have the great copy, creative thinking and superb production gone? There is a killer company called Studio Center, run by a second-generation radio guy, William Prettyman, that is doing award winning audio, video and digital creative for brands and advertisers ... coming to radio soon.
For a business that's dependent with supplying its clientele high-quality advertising to enhance their business, why would they cut back on production?
Consolidation first hit the management level, then the programming level. I'm not saying it's worse or better; it is what it is. Now it has hit the production department, where you see one production director handling multiple stations in a market. This is happening exactly at a time when listeners are tuning out for different listener experiences and advertisers are demanding more in the way of high-quality custom creative for each radio station, and more -- as well as targeted creative for the website and social media efforts.
You worked with SESAC on the radio royalty issue. Without divulging any info you supply them in that regard, what is your general take on performance royalties?
To be clear, SESAC was a one-time project. I'm not currently working with them, although, obviously, I currently have partners in both the radio and music industries - so I have a huge stake and interest in this issue.
The reality is that this is an almost 40-year issue. Back in 1925, Congress had intended to create Federal Copyright protection, but didn't get around to it until 1972. In 1972 Congress passed a bill that acknowledged copyright of ownership owners of recorded music, which obviously included the labels. It really hasn't been until about the last decade that the issue raised its ugly head due to the economic misfortunes of both the radio and music industries.
In '99, the radio industry was a $17.6 billion business, and then it jumped to almost $22 billion in '06. Now, according to RAB, in 2010 it generated $17.3 billion. The encouraging thing is that it had to go up from 2009 to be back to where it was in 1999, but it still fell $4.4 billion from 2006.
The music industry decline has been well documented and more dramatic. In '99 it was a $14.6 billion business. According to Forrester, in 2009, it shrunk to a $6.3 billion business, so you can see why this issue has become so important.
The argument is that airplay is still the primary promotional tool for the music industry, but is it anymore? A recent study showed that 57% of all measured Mediabase/BDS Airplay had release dates 18 months or older. If you consider all of the Classic Rock, Oldies and Jack-type formats, I would be really surprised if the average wasn't much older than that.
The PPM methodology favors familiar music, I get that. But with multiple stations in each market, I believe there is an opportunity to be more aggressive musically, not just with new music, but with the familiar music they play as well. Look at what Dan Mason is doing at CBS. Just identifying the music is a very big deal. More operators should do this ... and as I talked about before, use the web and social media to do the same.
Also, there was another study that showed that 80% of all radio-advertising revenues are derived from music formats, so radio does benefit from the "free" content it is getting.
There needs to be an arrangement, as there is in every other country in the world. I believe that in this regulatory quiet time, there's an opportunity to focus on a productive way to get the two industries to work together toward a workable solution.
Can a successful launch of iCloud help alleviate the labels' predicament?
Any initiative that helps create and reclaim revenues for the music industry, which is one promise of iCloud and other similar music subscription services and discover platforms, will be a great thing for the labels. Will it reduce the pressure completely? No, the pressure will still be there. The question remains: Can we develop a shared solution?
You're also working with clients who are online or clients who want to expand their digital business. How bullish are you on the digital/online side of things for radio?
I'm extremely bullish. Radio already has all the assets it needs to absolutely "kill it" online. They've got a heritage connection to their communities as well-known brands ... and they have strong relationships with the advertisers.
Take streaming, for instance ... there is so much debate on whether or not it is a viable business model today. It's a case-by-case issue. If it is not for you, don't do it. Instead, create all-new, separate, digestible content for the web, tablet and smartphone. This is where my company and others like it can be a resource.
Also, get past the :15s, :30s and :60s mentality and spend more time working on connecting your advertisers to the listener experience.
You also have a label of sorts. Why did you want to get in that end of the business, considering how tough it has been for the music industry in general?
As my friend and former colleague, Danny Goldberg, who now runs Gold Village Entertainment says, "You are the only person I know who WANTS to be in the music business!"
Seriously, I have always considered myself to be a creative guy. I picked up the guitar at age nine and have been surrounded by music my whole life. My grandfather owned nightclubs in the '40s. My dad played the trumpet and owned nightclubs in the '50s and '60s. My brothers used to manage the Lone Star in NYC, where I saw every great musician in the world onstage or in the audience. I have always had a love and passion for it.
In my corporate life, I have had the opportunity to experience every part of the music business except the actual point of origination - the artist. Now I have the ability to do that with a Nashville-based artist and singer/songwriter, Nikki Shannon Fernandez, and a hot NYC rock-power trio that is getting a lot of attention, The Young Presidents.
Has being on the label side changed your perspective on what it takes to get airplay and break artists?
There's no question that a major label has an advantage today in getting airplay. However, from what I've seen, the process that has been democratized a bit, based on the format you are living in. The barriers of entry have gone down. I've seen my project get significant airplay at Triple A without a major-label affiliation -- just based on the quality of the music as well as the artists' ability to connect with the audience live and present themselves in other media.
How do you handle any potential conflicts of interest when it comes to your label division's artists and the radio interests you work with?
That's not happened yet, but I'm extremely cognizant of that. As I tell the artists I work with, I probably can open some doors, but I can't do more unless the Program Directors and Music Directors feel the music can stand on its own and there's a clear and definable upside. Case-in-point: iheartradio -- obviously a part of Clear Channel -- devoted part of their re-launch to feature The Young Presidents as "an artist to watch" on its Discover and Uncover Program. My connections with the folks there helped, but they would not have been selected if the quality of their music couldn't stand on its own.
Overall, how do you judge the success of Krantz Media ... by the success of your clients or by how big or fast you grow?
No question that today it's based on the success of my clients. Going forward, the company is moving toward becoming a business with its own assets and products that will fuel our future growth.
Bottom line: Do you view KMG as a long-term decades-run proposition ...or are you doing this to earn some success and after all you've already accomplished, in some time hit the beach and kick back and enjoy the fruits of your efforts?
Long term. I wish I started this company 10 years ago, but the confluence of timing and opportunity wasn't there. But this is what I want to do for the next 30 years ... and with today's technology, why can't I do this from the beach as well as my office now?