November 13, 2012
Jerry Lee has already accomplished enough in radio to last several career lifetimes. Almost 50 years ago, he created the "Beautiful Music" format ... Five years after doing that, in 1968, the only station he has ever owned WBEB (B101)/Philadelphia, was the first in the country to bill $1 million in a year ... One year later, he produced the first TV spot for a radio station ... In 1978, he developed The Broadcast Minority Fund, providing loans for minority ownership of broadcast properties ... he spent over 20 years on the NAB Board ... Jerry Lee's list of accomplishments goes on and on.
On top of his broadcasting efforts and his unparalleled community outreach, Lee continues to chart his own path as the most successful sole operator of a radio station in the country. He refuses to stream WBEB because it doesn't make financial sense for him - and he never does anything "just because everyone else is doing it." But more important, his innovation days are far from over: Lee has come up with a novel proposal that will not only make his station's ad revenue grow significantly, but could fuel an industry-wide revenue renaissance. Here is part one of a two-part series on the unique insights of Jerry Lee...
Why did you want to get into radio in the first place?
I couldn't afford to go to college, so I joined the Army to take advantage of the GI Bill. I was shipping out to boot camp when I heard a song on the radio called "St. James Infirmary." I said to myself, "I'm going to get into radio" ... and I have the same passion for radio today that I had 52 years ago.
So when did you get into ownership?
In March of 1963, I read in Broadcasting Magazine that David Kurtz had just received an FM license in Philadelphia; I was running an FM station in Baltimore at the time; I called him and asked him to have lunch. After an hour-and-a-half at lunch, he said that he had to get back to his engineering job at Philco. I said that I was only in town for the day and persuaded him to have dinner with me. We went out for dinner at 7p. I sensed that, as an engineer, I had to offer him an outrageous proposition in order to get the job of running the station. By 10p, I got a three-year contract on the back of a napkin which stated that I would be fired if we were not the #1 FM station in Philly in one year ... and the rest is history. I became half-owner by 1969 and become the sole owner in 2005.
Were the secrets to succeeding in radio different than the secrets to succeeding in radio now?
Not really. My secret to success back then, as it is now, was research ... research ... research. Bill Moyes has been a researcher and strategist for the station for more than three decades. Because of the research that we do, it affords us the opportunity to peek into the future and to be able to see what's around the bend before it happens.
How did you and B101 handle the transition to PPM?
It's really a dramatic difference. In the diary world, 50% of the people fill out their diaries once a week, so recall memory and top-of-mind are critical, but all that means nothing in the PPM world. We used to advertise heavily on TV, but we found out that the main use for TV advertising in the PPM world is just to keep your name out there. TV can help maintain a station's image, but that's about it.
Did you change the way you programmed B101 or the way the DJs did their shifts?
There was no change in our on-air product. We never did a lot of talk between the songs, but what we did do is adopt the philosophy of Bill Drake, whose philosophy was to say very little, but whatever you do say, make sure it's meaningful and very short. We do that so our announcers sound more interesting.
We also brought in the thinking of former Tonight Show host Jack Paar, who figured out a way to talk directly to his audience. So we used his principles along with Bill Drake's. That's why when people listen to our station ... it sounds personal to them. The music has to fit their tastes, but it's the things around the music that bring a texture to the station.
How do you train your air talent to be effective in a PPM environment?
It takes a lot of effort. You have to really be dedicated. My PD has done a great job of training the on-air staff. This is a big priority for the radio station.
In a PPM world, do you find yourself adjusting your M.O. according to what your rivals are doing, or do you primarily focus in on what you're doing?
When it comes to competition, we focus on what we do at B101. We have a big advantage over our competition in our ability to make instant decisions. My competitors, by and large, are not able to make decisions on the spot.
B101 was one of the few major-market stations to refuse to stream its signal. As the time has gone on, have you ever had second thoughts about that decision?
We're still not streaming - and it's not that I'm happy we didn't do it. It's just a bad business model. The royalties that we have to pay to the Royalty Tribunal, together with the cost of streaming, would cost us about 35 cents on the dollar. ... that percentage will be going up and up and up with every new contract. The Royalty Tribunal can charge more and more money because they have no restrictions on how much they can charge, so there's really nothing to negotiate. I don't want to encourage my audience to go to another platform.
In retrospect, when you look at the steaming ratings, less than one-half of 1% of a station's revenue comes from streaming, so there's essentially nothing there.
What do you think about iHeartRadio?
I've been quietly applauding Clear Channel for doing this. It is a defensive move against Pandora. iHeart is not running commercials now. What's going to happen when they start? I don't think anyone really knows.
The one big thing Clear Channel has going for them is Bob Pittman. He's a very bright guy. Bob is the greatest thing to happen to radio in the last 50 years. He is a great cheerleader. He's definitely going to help build this industry, because when he talks, people listen. He understands the dynamics of radio and why it's such a powerful medium.
Next week, Jerry Lee will unveil his new "Engaging Commercials" initiative, which uses the basics of "facial coding" to analyze radio spots and highlight the truly "Engaging" commercials. Stay tuned!