January 10, 2012
John Garabedian has been involved in a variety of positions in the radio and TV business, from on-air jock to radio network entrepreneur. Radiocraft, and host of the syndicated weekend series, Open House Party. Having his hands in so many different areas of the business has given Garabedian a unique perspective on where radio is now, how it got here ... and where it will go. Here's how he sees it...
You've certainly had a varied career, from radio on-air gigs to programming positions to ownership of radio and television stations, cable TV and radio networks, and to syndicated weekend shows. Was it all part of a strategic career plan, or did you simply go from opportunity to opportunity?
I look at myself as someone who passionately loves and has explored every aspect of broadcasting - on the radio, programming, engineering, as a TV and radio station owner, launching and running a national cable TV network, and starting a national radio network -- twice. I founded Superadio and sold it to Access One, then re-emerged with Radiocraft, doing our own distribution in 2009 - and suddenly Radiocraft became a network.
It's not as much that I was bouncing around as I was targeting and reaching one sequential goal. First I became a DJ, which was my first love. Then I became a PD in Boston of the Top 40 station I grew up listening to, then I became a radio station owner ... and from that I got into TV station ownership. After selling the Boston TV station to Home Shopping Network, I had the career and financial freedom to do anything I wanted, and the result was launching Open House Party.
Were there any parts of your career you enjoyed the most?
All of my opportunities have been awesome and I consider them great adventures, but above all I always loved being a disc jockey. When I was 14 years old, I was DJing high school dances and parties. It was what I loved to do. When I was a DJ I was often frustrated with the programmers over me. I thought radio could be a lot better, so I became a programmer, basically to enable producing the kind of radio I loved, where the programming would be compelling, fun and entertaining, as opposed to the no-fun "liner card reader" format. The first time I implemented this as a PD in a major market (Boston), we went from #15 to #1 in 90 days.
Did it take certain characteristics or qualities to be successful on every level of the business?
The rules of success are universal in any business - and it starts with passion, a total commitment and love for what you do. A couple of years ago I turned into a missionary for a YouTube video of the 2005 Stanford University commencement speech by Steve Jobs; I urged everyone I cared about to watch it and have their kids watch it. It's a 15-minute video laying out what you need to do in life to succeed. "...you have to follow your heart and do what you really love. You can't connect the dots in your life by looking forward; the only way to connect them is to look backward."
There would be those who would say that due to the economic situation and the current consolidated radio environment, that kind of advice is bordering on the naïve.
There's a funny saying that unless you're the lead dog, you only get one view of the world. It makes the point that if you follow the followers you will only go where they go, while all you're seeing is the ass of the dog in front of you.
Unfortunately, for thousands of people who were in radio five years ago, radio is no longer a career option. For several hundred employed today, the future is not bright, because there will be more "reductions in force." Radio is losing many of best and the brightest because the pay is not great and job security is worse. But you should tailor your goals to the opportunities. It's the evolution of business. There were people who enjoyed being telephone operators in 1980; there aren't many of them today. Does that mean people should expect that there will be more opportunities for them today? No. You have to aware of how technology is evolving our lives.
Personally, I am shocked that it took radio 30 years to implement voicetracking. We were doing voicetracking in Boston 30 years ago and no one could tell. Even with the primitive computer technology then, it worked great, allowing us get the best talent. It's ridiculous that it took the radio industry this long to automate; the unfortunate result is that it hit all at once and became disruptive to job security, sending thousands out on the street at the same time.
For listeners the bigger problem was when consolidation enabled groups to buy competitors and create clusters that enabled them to decide how to carve up the audience and eliminate in-format competitors. But the story continues. As we evolve the AM-FM listening model into the streaming model, there will be far more competitors in each market -- and the guy with the best product will win.
In this century, Clear Channel, under incredible financial pressure to deal with their over-leveraged financial structure, has implemented national programming more than anyone else. You can look in market after market, where they have only one or two local air personalities when they used to be six. The surprising result for the doomsayers is that their ratings are generally higher now than they were when six local, live personalities were on the payroll.
With a public company, or private venture capitalists, the bottom line is to deliver free cash flow in order to pay back your loans. So if you can deliver the same audience to an advertiser with less people on your payroll, you've struck gold. There will be still more of this in the future, not less, and it is astonishing it has taken so long for the industry to get here.
Thirty years ago, we created Open House Party because weekend programming was an afterthought. In most markets, weekend programming was 19-year-old kids who couldn't put two sentences together. Today much weekend programming is voicetracks slammed out on Friday night at seven o'clock with everyone trying to go home for the weekend.
So you subscribe to the long-held notion that radio is best when it's "live and local?"
No. It's nonsense. Who thought that up? Unless you're an all-News station, being "local" was always an unproven urban legend that turned out to be an empty ideal: Really, in the real world, "relevance" wins - as in, does the core listener find what they're listening to be compelling and relevant to their life and interests? Even Talk radio is dominated in nearly every single market by national shows. Does the listener prefer home movies or Hollywood?
Five years ago, a friend of mine spent a day listening and logging breaks on stations in four or five markets, writing down what he heard that was "local" aside from commercials. Once he excluded promos and the morning show, there was virtually nothing local ... and today, even the morning show is probably not local. On music stations there isn't even local weather or news -- and the liner cards restrict the DJ to promote the website and the morning show. And the website is filled with national entertainment features from a service, lots of little ads, a music list, and sales promotions.
Howard Stern really put that "local" thing to sleep when he became nationally syndicated and one by one, killed almost every local morning show he went up against. Today you have winning morning shows like Elvis Duran doing the same thing. When we first launched Open House Party, we found in market after market, we over-performed, frequently doubling shares over the station's 6a-midnight. A year after OHP debuted in Atlanta, the PD told me that although they had high six shares 12+, it was "kind of depressing" to think that on the weekend they would push a button to air a satellite show and we'd consistently deliver 12-14 shares. On the other hand, one of the "secret sauce" ingredients we build into Open House Party are subtle programming elements that make the listeners think the show is local.
Is it tougher for an independent syndicated show like Open House Party to succeed in an era of in-house syndication and Premium Choice?
It's certainly more difficult today because of consolidation, when you've got Clear Channel "cramming down" their own shows to their stations. If you're a Clear Channel PD, you're very familiar with corporate priorities. You are pressed to run Premium Choice wherever you can and the Premiere shows that are in-house. It's a natural thing to want to promote from within. But top programming people at Clear Channel have always said great programming will always win for them and have a place ... and if a great non-owned product is better for a time slot, they'll want their PDs to lock that up to keep it away from a competitor.
So how does Open House Party compete against that?
Easy. We have to consistently deliver a superior product that delivers better results than what they're currently running. We show programmers ratings stories in comparable markets where we outperform what that station does in other time slots. It is not uncommon for us to deliver one of the highest share dayparts on a station. Everybody wants to succeed, so when we say to the PD, "Here's where you are now, here's what we have done, and here's what you can expect it to be on your station," it becomes an easy decision. Plus, sales departments can package and sell specialty showcase programs like Open House Party for premium rates, something even in-house staff eliminators like "Premium Choice" cannot offer.
What kind of tweaks have you done over the years to keep Open House Party fresh?
We're always tweaking. The biggest change is when PPM came in and the wizards of Arbitron analysis discovered that when you run spot breaks, the tuneouts can be serious, losing you 10-20% of your listeners. So instead of three stopsets an hour, we dropped to two. And the breaks became formatted over the break between quarter-hours to maximize quarter-hour counts. But even with these mathematical tricks, there is no substitute for breeding high TSL fans from listeners and building extra tune-in through forward promotion and the resulting "stickiness." Double the quarter-hours and you double your TSL and share.
We've always been meticulous in tracking audience requests to determine which hits a weekend P1 listener wants to hear on a Saturday or Sunday night. Our target is people listening to the radio at that moment -- and for weekend music targeting, nothing beats requests.
We have well-paid, trained operators taking requests on the phone and through Twitter. The results are instantly tabulated with our highly refined custom software, which screens out fan clubs, call clusters, repeat callers, etc. Thus we can program music that precisely reflects immediately what actual listeners want to hear. It's a much better primary gauge for programming, although the spin charts and Airplay Intel are useful to show consensus airplay and tune-out.
How much of a problem are fan clubs jamming request lines?
It went away for a while; now it's back. It used to be the labels hiring promotion companies that called in the "fake" requests. Now it's the fan clubs telling everyone to call us. When we see errant request patterns we often go on artist fan social sites and find out they're publishing our request number and telling everyone to pound Open House Party with requests.
So you attribute all request-line jamming to fan clubs?
I wouldn't quite say "all." But it's not directly the labels; they have too much to lose violating their covenants with the former attorney general of the State of New York. However, artist management has no such agreement to abide by, so there's nothing to stop an artist manager to call a fan club president and say, "Hey, listen, you can really help us out here by pushing this song." Yet that is relatively easy for us to detect and eliminate.
What kind of web presence does Open House Party have?
We're in the radio programming business, not the web revenue business. We're a guest on people's radio stations, so for us to be pushing our website hard is stealing traffic and revenue from our affiliates. Our website (openhouseparty.com) is a place for listeners to go to replay interviews, check the guest artists, and be interactive with each other. We always link to the websites of our stations to feed them page views.
How have the changing music trends impacted Open House Party?
Popular music of the current time is ever-changing, but Pop radio has never been in a better place than we have been in the past few years ... and the PPM ratings show it. The research is better; the influence of labels on stations to play the wrong music, a huge problem before consolidation and label downsizing, is not as strong as it once was. The days of Radio & Records' P1s, P2s and paper adds are gone. Young people in radio cannot imagine how bad it was, where labels directly or indirectly paid for stations to charts and report songs that they never played and play songs they don't report.
One of the reasons for our success through that era was that we could easily weed out the charted stiffs using our national request data. We still see things that conventional callout or spin data does not reveal.
We learn from requests and confirm with Airplay Intel that the listeners are not sick of songs many stations have pulled from current rotation, such as LMFAO's "Party Rock Anthem," Wayne's "How to Love," and Nicki Minaj's "Super Bass," all still drawing top-five requests from active weekend listeners.
On the other hand, Adele's "Set Fire To The Rain" started #24 in requests six weeks ago, way ahead of national airplay, and we confirmed it was real through iTunes. Lately we see songs breaking out on YouTube, Vevo or iTunes way before radio starts playing them. Some songs that radio ignores show up big, such as "Shots" by LMFAO, which has been top-20 requests nearly every week this year.
So how do you deal with burn?
The short answer is that we use every piece of research we can get and play it against the requests. There is inherent misleading information in most research -- and especially in callout, the dominant tool of radio for 25 years. It is a weak system to directly measure what songs audiences like or dislike. Callout is like what Winston Churchill once said about democracy; "Democracy is a bad form of government, but all the rest are so much worse."
Playing four seconds of a song to gauge what audiences like will give you some meaningful data. But then if you examine Airplay Intel to determine what listeners actually do when a particular song comes on, it's often a whole different result. The amazing thing is that songs that show high burn in callout sometimes, on Airplay Intel, will show negligible tune-out in actual listening. Like Steve Jobs famously said, "Often you can't ask people what they like and expect them to know."
So what do you see in store in the foreseeable future?
Growing Radiocraft continues to be exciting, and the next five years will see a major transformation get underway similar to what happened to music switching from CDs to an online model. It is probably that by 2020 a majority of "radio" listening will be on IP, and the exclusive access to mass audiences formerly held by only by FCC licensees will be greatly diluted.
Radio screwed itself by adopting the current system of HD radio. Rather than a new radio band that could accommodate all FM and AM stations in digital format, radio pushed the current system with HD "sidebands" of existing frequencies in order to keep out competition. The lack of a flourishing digital band with 40-80 HD formats in every market will now instead help a migration to over-the-air IP. Radio will then be dominated by aggregators such as Pandora, XM/Sirius and Clear Channel's iHeartRadio, which is now clearly ahead of the curve, making recent deals with Cumulus and Greater Media. We can feel the impact of iHeartRadio now, with listeners calling us from markets where OHP isn't airing locally who are hearing us on out-of-market Clear Channel stations.
The value of great talent in this environment will be greatly enhanced as competing channels lose exclusive access in their markets. In order to differentiate brands and build audience loyalty, they will be under pressure to develop national brand personalities, such as Ryan Seacrest, the Geico gecko, the AFLAC duck, or even the Wal-Mart greeter. In this future, more competitive environment, there will be a need for the brand value of proven winning products such as Open House Party.