March 3, 2015
Forty years ago, John Gorman and Jim Marchyshyn enjoyed a decades-plus run as the powers behind the WMMS/Cleveland throne. Both continued to have success in their future endeavors, but after a hiatus of sorts as radio entered the digital era, they have returned to team up and launch oWOW, an online radio station specifically geared for Cleveland and the Northeast Ohio region. Here, the two explain how they plan to compete and succeed in the new digital paradigm.
What were you doing before coming up with oWOW ... and what led to its creation?
GORMAN: It's a plan that was around for a long time. With timing being everything, we had to wait for the right moment. We were intrigued with the Net from its very beginning, back when it was theorized that one day we would transmit and receive digital quality audio and video online. When I was with Legacy Broadcasting, the east-west T3 NSFNET backbone was right in front of the building our WMJI was housed in. Carl Hirsch and I tried to tap into it for experimental use -- but no one in the city, state, or federal government knew how to.
Now, of course, we know what the Internet can and will do, but we could only theorize in those early days of 28.8 dial-up speeds. The one curious issue connected to those early online days was radio's lack of embracing it. CBS Radio, for example, put the Net on the back burner. Not only were they anti-streaming, they didn't even consider the Net as a possible new alliance their radio stations could utilize to reach their audience.
MARCHYSHYN: We worked for a GM who wouldn't allow anyone at the station to spend any more than five minutes a day on the Net. That was radio in the '90s ... which was kinda short-sighted.
GORMAN: That same GM also told us, "Don't be creative!" We always believed the Net would be the game-changer. Many European radio stations and chains interfaced their stations with the Net. They had a far more intelligent grip on how to utilize the Net. That brings up another thing: As the Net began growing and Broadband was made available to the masses, many radio stations began streaming, but they did not pay attention to the product.
Travel back to 2002. That's the year AFTRA wrote their new radio commercials contract, which entitled voiceover talent a 300% increase of their session rate fee when a spot recorded for a terrestrial radio broadcast was simulcasted and streamed on the Internet. The radio industry learned about the AFTRA deal only after it had already been signed, sealed, and delivered. When ad agencies were hit with augmented fees because their radio spots were also carried on terrestrial stations' Internet streams, they demanded the responsible stations pay that freight since they didn't authorize carrying the spots online. So the National Association of Broadcasters, an organization that's supposed to represent the radio industry and lobby for its causes on Capitol Hill, got caught completely off-guard because they were too busy popping champagne corks and celebrating the most recent radio chain acquisition. The NAB was unaware of the deal that had a direct impact on -- and it created still another financial burden for -- its member stations. The radio industry's negligence and isolationism had stations scrambling for streaming media ad insertion technology, which, 13 years later, remains a hit-and-miss affair.
And we've seen the ratings. No matter which way the numbers get spun, few audio consumers listen to terrestrial radio streams online. They listen to steams -- plenty of them -- just not those of terrestrial radio stations. iHeartRadio and Radio.com are failures. Radio has a difficult enough time trying to sell analog time and have no clue on how to deal with digital.
Pandora and Spotify served an important purpose. They transformed the Internet into a self-contained content delivery system. Prior to Pandora and Spotify, the Internet was a destination for downloading content to other platforms; music and movies to an iPod, laptop, or an external hard drive. Pandora and Spotify brought the critical mass audience online for entertainment. Pandora and Spotify made streaming acceptable and mass appeal. Does anyone really care if one has 60 million songs in their library? Does anyone really care that iHeartMedia's iHeartRadio or CBS Radio's Radio.com has hundreds of station streams from all over the country that all sound alike? Where is their element of surprise? Where is their entertainment factor? We have real people -- not an algorithm -- presenting music.
What were the biggest obstacles to getting oWOW together - getting financial support, getting audience support or getting air talent?
GORMAN: You are right about the first two, wrong about the third. As with any new business, when one brings a new venture to market, banks and investors have to be convinced that it will be a saleable, profitable product. Beginning a pitch with "new" is both good and bad. New is a fine marketing word, but not to investors because a lot of new things fail. In addition a potential investor, who understands new technology, will most likely be down on old media, specifically radio, so we had to fine-tune our pitch. Most consumers do not spend significant time spent listening to radio anymore, if at all. The general belief is that radio is not what it once was, which I won't disagree with.
There is a need for oWOW. What we are doing isn't unusual. The platform has already changed. What was once on terrestrial or satellite is now online. The horse was the primary means of ground transport for millennia until the combustible engine was invented. How about House of Cards, a well-written and acted series on the Netflix platform, which didn't exist five years ago in its current form? Would House of Cards work on another platform? Of course. It's the content. Provide a product that serves a purpose and it will be found and become successful regardless of most platforms. We are presenting oWOW on an online platform, which places it where its audience is. Who carries a transistor radio? Who carries a smartphone or a tablet or both? We went with the latter. By being online, we can be more interactive and fully in touch with the communities we serve.
There are a lot of creative, innovative people in Cleveland radio who are prevented from executing their talents because of corporate dictates. We ought to know; we've hired some of them. Our staff has a visible history in the market -- as air personalities, as management, actively involved in the arts and charity, as media producers, as frequent guests on other platforms, and as retailers. Their names are well known in the market, another plus, and another endorsement for the online platform.
We never gave up on this project. Pitching it was exhilarating, then frustrating, then exhilarating again. We had to find the right media-savvy investors who believed in and shared our vision - and we found them. We also met with the City of Cleveland, which also believed in us and provided us with a grant. oWOW is located in the 78th Studio Gallery, in Cleveland's west side Gordon Square Arts District, which was recently featured in the New York Times. We're also in walking distance to beaches, parks, and the city's largest residential development. We are in a funky, restored century-plus old building, which once housed the original home of American Greetings, the card company. Today it is home to some of the region's top art galleries, photography studios, recording studios, web developers, a vinyl record manufacturing company, the Alternative Press magazine, and now, oWOW.
MARCHYSHYN: Selling and marketing oWOW is an ongoing process. The Northeast Ohio advertising community has a "show me" attitude; it will take time to educate the ad community this is way to go - and we're still doing it. Fortunately for us, everything that's happening in the ad community is pointing in the direction of mobile in new media. Every ad agency, magazine and even radio is looking at mobile and noticing how all the new technology is motivating people. As FM replaced AM, digital will replace FM. Time and technology waits for no one.
GORMAN: It took two years from the time our business plan was authored to get everyone on board. It was a combination of early adopters and those who believed but preferred to wait and see. Now, we are reaching out to a large potential audience who get what we're doing and will back us. It took a while but we believed in our product and had a very thorough and honest business plan.
Normally online music sites are national or even global in scope. How do you make it work when you're so local-centric?
One of main advantages we have is fact that we are what Jim said - we're local owned and operated, and programmed live in dayparts when other stations in town are voicetracking from other markets. Our on-air people live here; they know the market; they don't mispronounce the names of the suburbs, and their subject matter is local and here and now as opposed to voicetracker's generic happy talk.
MARCHYSHYN: Speaking of being local, two weeks ago we were testing online -- not even promoting ourselves yet -- when a freak, unexpected early weekend snowstorm hit the entire region and there was a horrible accident with fatalities which closed the Ohio Turnpike. Our air staff was at the station at the time. They opened the mic, went on-air and got the word out. The terrestrial stations were voicetracking or carrying syndicated programming all day long. That's the key; people want a sense of community; they want to belong. Later than day it was the lead story on all the regional television newscasts.
GORMAN: Voicetracking does serve a purpose. I wish we had it back when we tried to schedule a staff photo, a staff meeting, or have everyone is one particular place at one time. But when voicetracking became the norm and eliminated most local personalities ... that changes things. Yes, radio still pulls okay cume numbers, but what does it tell you when the biggest radio station in Cleveland has no on-air personalities. Instead, the station employs a disembodied snarky voice barking the slogan, "We play anything we want." It makes one wonder what kind of people are listening to broadcast radio. It's not the same audience that listened a decade or two ago. The interest level has changed. If one studies the demos and financial makeup of the people listening to radio and to what formats they're listening to, you'll see that it has changed a great deal. Those listeners are not exactly the prime demos and regions that the ad industry and retail are looking for.
Do you feel you're competing against Cleveland radio - and what's your strategy to compete against them successfully?
MARCHYSHYN: We're competing for ad money in the market, and competition can be coming from anywhere -- radio stations, TV stations, newspapers, digital platforms that air commercials. The fact that we are an audio service means, yes, we're seeing a lot of same clients who bought radio in the past. We're competing for their advertising and dollars.
Your music direction seems to be very adventurous in playing non-mainstream and local artists. How can you be so adventurous and attract high listenership?
GORMAN: On the contrary, we aren't being adventurous. There is a huge void in the market for the kind of radio we're doing. It's not as much being adventurous than it is filling a void. We're playing local artists who are well known, established and who fit the format. We're playing many of the same artists as other Triple As, but we're playing for the Cleveland-Akron-Canton and surrounding counties region -- and not from some "must play" national playlist. We know what works in this market; we have successful history here; we have our own internal research and we also have our experienced gut. We know what Cleveland wants. Our staff is very plugged into the music and the local scene. Our personalities are also well known here and had a prior successful history on terrestrial radio here.
MARCHYSHYN: Our market includes both Cleveland and Akron; we program to the region and not the specific city. Reaching out our advertising and marketing efforts to the 17 counties in the region makes our market the 15-18th largest in the country as opposed to just Cleveland, which is market #31.
GORMAN: Look at the Boston Metro. It used make up just few surrounding counties. Now, the Boston market covers nearly half the state -- and the market was right to realign itself that way. We look at Cleveland, Akron and Canton as one market. From the farthest point, Cleveland is little over an hour's drive from the most distant county we are servicing. We're not basing our market on AM frequency delivery, which is 1950s technology. With the Internet, we're worldwide -- but one mistake a lot of Net stations made in the past was to debut and market as a national or even international station, which set them up to fail. How do you sell a national client that you have seven people in Des Moines, 16 in Milwaukee and five in Toledo? The best way to sell advertisers is to deliver in a specific market. We super-serve local areas and whatever we get beyond that will be gravy until we geo-target or license. We'll do that after we complete conquering this region.
On top of turning on large numbers of listeners to oWOW's sound, how do you sell it to advertisers?
MARCHYSHYN: We've already got positive early indications where the numbers are surpassing our original expectations. The one great thing about online is we can see exactly where the listening is coming from. It helps us when we compete with traditional media -- radio and TV -- for ad dollars. We're having success with some of our first sponsors. They believe in us; they know that when we put their ads on-air, we'll also come up with ancillary features to keep their brands current and in step with the community.
I spent the last 15 years in event promotions, working sports events, and I bought media. When I used to ask radio AEs what they could do for me, maybe tie me in with other clients, their answer, 90% of the time, was, "We can sell you spots." Plus, they often admitted to not listening to their own radio stations, and they rarely came out for promotions. If I had a dollar for every AE who actually attended the event I worked in those 15 years, I'd have less than 10 bucks. Their passion for my events was not there.
We're also sticking to the old concept of CNA -- client need analysis, because what our clients really want is results
How do you ultimately gauge success for oWOW - through ratings and/or revenue?
GORMAN: We're a revenue-driven station. But the ad industry in this region is rightfully second-guessing today's ratings services. For radio, that began with the introduction of the PPM - the people meter. Arbitron, now Nielsen, changed everything, including the criterion on what one household is worth ... and how long ... meaning how many months or years that one household will represent an x-factor amount of radio listeners. And how often will this PPM system be abused? Arbitron diaries weren't accurate, either. Anyone who ever took a trip to Maryland and sifted through Arbitron diaries could find many examples of listening that went unrated because of a diary holder's mistakes. In this market, one Arbitron diary represented 3,000 people. How reliable were those diaries? It was always reliable when you were winning; it made no sense when you weren't.
Instead of focusing on programming to manipulate a people meter -- and playing only music that can be detected by their PPM -- we are fully focused on growing our number of clients who believe that results are the only thing that really matters. The ad community doesn't even know what ratings mean anymore. They get behind platforms that produce results. If a client buys time on our station online and sees direct results -- based on what new customers come in and buy - they'll continue to advertise. Our advertisers are results-oriented businesses. There's so much voodoo out there when it comes to ratings criteria. The true measure is "how many asses you put in seats," or how many responded to a spot selling specific products. That's the name of game today. The bottom line is still, "Show me the money."
MARCHYSHYN: We're under no delusions. The reality is we have a business plan we have to adhere to. We're very focused on meeting our budgets and projections. We met them in February and March ... and April is looking good ... and we expect to meet them for the entire year.
How big do you want to get with this? Do you want oWOW to stay local, or could there be a string of oWOWs around the country?
GORMAN: That makes a lot of sense, doesn't it? Our success here could easily apply somewhere else. But remember, what works in this region can't automatically be duplicated. Take the type of music we play. The format can be moved somewhere else, but other regions' tastes can be so different that most of the songs we play here won't work.
What we do want in this market is competition. We welcome other online stations and various formats to enter and serve this market. There are others already, but none with full-time schedules yet. That, if you remember, is how we built the FM frequency in the 70s. We don't want to be the only restaurant on the street. We want more restaurants to draw more people.
Online radio has far less overhead than a terrestrial. We don't worry about massive, consuming overhead debt or fears of mergers and further downsizing.
People are interested in their own communities today. They want their money to remain in their region. Look at the growth of farmers markets, locally owned, and locally produced. Consumers will spend more to support the regional farmers - and are aware that local produce is fresher, more reliable.
MARCHYSHYN: We hope to eventually expand, generate more allies and investors, but we're not going to get ahead of ourselves. Like any new business, we'll make mistakes. This is an organic, fluid process. We have a plan for Cleveland, and we have a goal to take the plan elsewhere, but we must make it fit the individual market. I grew up in Pittsburgh; I could definitely could see an oWOW there.