August 12, 2014
There is busy and then there is ... really busy. Darren Davis has to be the latter. Already overseeing the largest radio network in America in Premiere, Davis recently was handed the reins to iHeartRadio. Naturally he plans on optimizing the clout of both platforms, utilizing whatever synergies that exist, yet he also has to stand up for his products against any external challenges they face. Here's how Davis expects to succeed in his new world order.
Overseeing Premiere Networks is a lot of work as it is. How does one balance those duties with overseeing iHeartRadio?
It all goes hand in hand. I'm very bullish on the network radio space to begin with. It plays a big role in the future of medium, as radio stations will continue rely more and more on really high-quality content from various sources. Our goal is to have Premiere Networks, our Total Traffic and Weather Network and our 24/7 News Network positioned to be the leaders of awesome content and to provide that content affordably to the marketplace. We give stations across the country the power to associate themselves with the top shows and talent and the best content. The real proof in the pudding is that thousands of stations rely on our services already -- which mean we're providing great content for advertisers, too. There's always going to be a marketplace for brands who want to associate themselves with top talent and content. That's why the future of network radio is bright.
In terms of me and managing my time, the folks who have worked with me a long time -- and I've been here 22 years -- have heard me talk about this so much, they roll their eyes. They've never heard me complain about working. If I'm awake, I'm working. I love it, and I wouldn't have it any other way. Not a day goes by that I don't look out the window and see what real people do for a living -- and thank my lucky stars about what I get to do. I have fun every day. Even on my worst day, it's not all that bad. So it's unseemly for people who do what we do to grumble about "working too much."
I help create awesome content; I help brands solve their marketing problems, and I put smiles on peoples faces after they achieve great results, so I have no complaints. If someone asked me what I see myself doing in 20 years, I hope it's what Im doing now. And 20 years from now, I'll say the same thing if someone asks me what I see myself doing 20 years after that. I'm that passionate about it because from day one, all I wanted to do for a living was be in some form of the radio business -- and I just can't imagine not doing this.
Do you see synergies between network work and iHeart, or do you look at them as separate silos?
I'm not a big fan of silos. There are definite synergies here, both for advertisers and our teams internally. It's all about making great content and giving great solutions to advertisers. And tearing down the silos is the best way to do that. Historically, there was always a natural divide based on the cultures of traditional radio programmers and that of the digital team. They come from very different places. What's exciting now is how we're getting them to work together. To put it another way, I say we've taken the red water and blue water, and we've poured them together to make wonderful purple water. No more lines of division. Everyone on the same team.
iHeartRadio just released its fifth generation app. It has an annual concert and an awards show. Where is this platform in its development process?
It's been a great few years going from zero to 70% brand awareness in America. That's an awesome accomplishment. The first thing I told the iHeartRadio team when I started here is that no one should expect massive changes. Obviously, we've been very successful so far. The 5.0 app came out in June and boosted engagement in terms of increased downloads and registration.
I look at this as if iHeartRadio is at the halftime of a football game. This is a chance for us to step back, catch our breath, look at what works well and do some other things differently to make them better. We have to decide how we want to play the game in the second half. It's been a tremendous accomplishment to get to 50 million registered users. The big challenge is in what we have to do to get the next 50 million registered users. Where are they going to come from? We're going to try different things while we keep developing and enhancing our product.
How much of your efforts will be towards improving the iHeartRadio listening experience, and how much of it would be towards non-listening experiences, such as merchandising and things like iHeartRadio tours or your own YouTube channel?
It could be some of the things you mentioned. They're all things we've thrown on our white board at one time or another, and they may become a big part of iHeartRadio's evolution. We'll continue to invest in our digital team, the people who built and enhance our app, as we'll help those who create events on the concert and TV production side. They're all big deals that go to the challenge of where the next 50 million users will come from.
We have the same mindset we had three-and-half years ago when we were in a room and came up with the iHeartRadio Music Festival as a way to bring awareness to the new app. When you have people like Tom Poleman, John Sykes and Darren Pfeffer working with you, who are masters at creating events, it's fun to watch their ideas become realities and then to be a part of them. The app service wouldn't have grown so quickly without these big events bringing awareness to a critical mass.
Today we have a Music Festival, an awards show and a Country Festival -- and we have at least three new ideas on the board right now. We're not just going to do the same ones year after year. We want to create events that make people turn their heads to look at us. We're constantly trying to get iHeartRadio's promotional tentacles into more parts of the American music environment. It's really a great challenge. We can't keep fishing in the same pond; we have to cast our line into other waters to grab attention.
It's interesting; five or 10 years ago, any radio programmer would say how important it was to have a finger on the pulse of pop culture, to keep up and know what's going on. That was hard enough, but today we go way beyond that. We're in the business of creating pop culture through the biggest entertainment events in the world. We create news that gets reported on TV shows; we take over social media. That's pretty heady stuff.
That sounds like a lot of different balls to juggle. Are you concerned about having enough resources and manpower to do them all?
Right ... there are only so many hours in a day for the team to be putting on concerts and events, so limitations are there, but we're blessed to be a big, very successful company with considerable resources and manpower to invest in the projects we choose to do. That's a luxury other digital players like Pandora and Spotify don't have. We have a massive 850-radio station juggernaut of business to support us. There's a whole lot more pressure on a Pandora or Spotify, who needs to immediately drive a massive financial return directly from their digital music products.
I have to add that everyone seems to look at the digital space as iHeartRadio vs. Pandora, and how we stack up against all the competition. I really don't believe it's a clean and easy Coke vs. Pepsi comparison because the products are so different. To me, it's like comparing an umbrella to a raincoat to galoshes. They're completely different products that all keep people dry in their own way. That's what comes to my mind. It's not about us not trying to kill Pandora, per se. Pandora does a good job; that's why we built a Pandora-like feature into iHeartRadio. It's very popular for us and something we will keep improving.
How does Adswizz impact the amount of advertising on iHeartRadio?
Adswizz is not putting advertising on iHeartRadio where it didn't exist already. The custom stations are still commercial-free and that's not changing. Pandora has to jam messages in between songs in their music collections as their way to make money; our plan is to keep our custom stations clean. Adswizz will be used on live station streams. When you hear live radio stations on the iHeartRadio platform today, every listener hears same spots. Adswizz can target commercials to specific users, which can range from contextual target criteria to listeners of a particular station format. It can even go as far as listeners on AT&T smartphones hearing a different commercial than listeners on Verizon phones. It could be demo criteria, different commercials for listeners who've thumbed up a Katy Perry song vs. someone who thumbed up Garth Brooks. Our sales team can offer specifically targeted audience that advertisers didn't expect to reach before. It'll be rolling out across all live stations very soon and be fully operational in September.
Let's talk about network radio, specifically on the Talk side. Do the aging demos of AM Talk stations have any impact on the Talk talent you represent?
The traditional talk hosts - Rush Limbaugh, Sean Hannity and Glenn Beck -- have been a tremendous business for us ...and they continue be tremendous business. Rush is, far away, the most successful program on radio, and a huge focus for me is to have Rush be appreciated for what he truly is. He has been unfairly painted negatively as a mean conservative, but the truth is that he's a champion of American business and someone who creates jobs. When he talks about a business on-air, that business thrives -- and jobs are created. The big story - and what we have learned - is that virtually all the negativity around him over the last two years has stemmed from very small number of people in social media. We have found that 70% of the attacks are coming from just 10 people. Ten people around America - and we know who they are -- sit at their computers all day sending out tweets, then use computer technology to amplify them. What's unfair about this is that it's not hurting Rush or Premiere; we're fine. It is hurting small businesses in America, causing small businesses in particular to shy away from advertising on the most effective radio show to grow business. We're really committed to countering the negativity.
What does that make of the advertising community, which seems to cower at the mere mention of a polarizing program or personality?
They don't know whats really going on. We funded some very extensive research to get to the bottom of these negative social media attacks, so now we're armed with all the facts. The trouble is if you run a small business and your phone rings four times a day ... and they're complaints about something ... that's probably an unnecessary headache you don't have time for. Even if it's the same person calling from halfway around the country to scold you about your support of Rush Limbaugh ... small business owners are busy people. They don't have the time to deal with that, which sometimes prompts them to pull their support. And that's unfortunate because there's no better way to grow a business than to have Rush talk about it.
This leads another very large point: 80% of the attacks come from a different state than where the business exists. It's really amplified when you look at it that way. A small business in New York is getting letters, Facebook posts and tweets supposedly from customers boycotting their business -- when it's all coming from a person who actually lives in Nevada. It's the biggest bunch of nonsense I've ever come across. We're definitely going to do a big job of telling the truth.
In a sense, Rush is like Oprah. When she mentioned a book on the air, it fueled sales. That's how it is when Rush talks about a product. Beck and Hannity are equally effective at driving results, but there's less negative hubbub around them. Rush is a magnet that catches the majority of the flak, and I'm committed to supporting Rush and telling the powerful positive story.
This seems eerily reminiscent of the "pro-family" groups e-mail campaigns to the FCC, objecting to the alleged "obscene" content of on-air talent who were on stations that weren't even in their markets. Why hasn't radio come up with an effective counter to such efforts?
I can't speak to why radio hasn't fought back more strongly in the past. But I can tell you we sure will going forward.
Back to the age issue: Talk radio's audience is aging and declining. Outside of the occasional play-by-play broadcast, younger demos have little or no interest in listening to anything on AM. Whats more, even Rush, Sean and Glenn aren't going to be around forever. How do you grow a future generation of Talk personalities who can attract younger listeners?
In terms of growing the future, in the near future it's going to continue to be Rush, Hannity and Beck; they're not going anywhere. At the same time, we're constantly looking for the next generation. The key for that next generation is to be authentic. We don't need young hosts doing their best impersonation of traditional talk hosts. That's just not authentic; we need to find a new generation who talk about things that hit home with their own generation. Premiere is committed to building those shows. In fact, we have one set to launch next month. We're going to provide a different kind of zig when everyone else is zagging.
Care to elaborate on that?
I can't reveal too much, but it starts with who the host is. It's very difficult to start from scratch with someone completely new, who nobody is aware of. You can start from a better place when you take a big, recognized name -- that's the idea.
That's another great thing of having iHeartRadio as well. We can try a lot of things on the iHeartRadio platform for potential talent, where before we wouldn't have luxury of experimenting terrestrially. We can see quickly what has traction and what doesn't. We can talk to a whole lot people and offer everything from on-demand opportunities to their own iHeartRadio channel 24/7. Through a combination of those platforms, we're not afraid try new things. We realize that not everything will work well, and we'll weed our garden over time.
Finally, with hundreds of radio station live streams, a Pandora-like feature, on-demand and whatnot, are you at all concerned that iHeartRadio is offering users just too much variety, that some valuable offerings may not be noticed amidst of the deluge of choice?
Simplicity should be something any product shoots for. We have to offer some level of simplicity for folks. There has to be a clear, clean story to tell. With iHeartRadio, we make it easy for the user to hear America's best live stations or create their own custom stations. Since the launch of the 5.0 app, we've seen a large upturn in the number of dual users, who use both the live stations and the custom features. Obviously, we want to offer the best user experience that's clean and easy to understand -- and achieving that is an ongoing process. Our iHeartRadio programming team is very good at building the best content... Our iHeartRadio product team is great at presenting the content in a clean, easy-to-navigate fashion on the app and on the website... And the iHeartRadio promotion and marketing team is doing excellent work in spreading our message. All of it goes hand in hand, and all of it needs to keep improving over time.