Mike Henry

In a way, things have come full circle for Mike Henry. He got his first up-close-and-personal taste of radio at the Univ. of Georgia, where he got involved with non-comm indie station WUOG/Athens, GA. He would eventually graduate to have a successful career as the founder and head of Paragon Media Strategies, where he has been responsible for the creation and success of JACK-FM, among others. Today, one of his favorite projects is the growth and development of one of his first loves -- non-comm radio. Here, Henry offers his insight into the current state of radio and explains why he remains bullish on its future.

A recent post in your blog, centered on Live 365's 10th anniversary, looked into what research found and predicted a decade ago. Were you surprised how often that research hit the nail on the head?

That's the way good research usually works. It's supposed to be ahead of trends and help you identify opportunities. I was a little surprised when I went back and looked at those predictions and now, 10 years later, see how much of that came true - and how much of it still is true.

You see it all the time. Just last week, Alan Burns release a study on what women want out of their radio, and a lot of those findings were very consistent to what we found five or more years ago. What are people looking for? Now, as then, they use radio as a way to identify the music they like. They then search it out and decide whether to buy it after listening to it, which exemplifies the need for pop radio to keep listeners informed and up to date ... that, to me is validation of good research all the way around.

Is there a problem -- or at least the potential problem - of clients using research firms to pose questions in a way to justify the clients' preferred conclusions?

I guess there is always a danger of that. The great thing about what we do is represent the listener. We always fight for the listener. We don't work with clients who, quite frankly, use research to validate an agenda they want to pursue. We do research to prove or disprove theories on what might be possible. There's a big difference between the two. The one thing we excel at is finding new format opportunities; we have a very long history of identifying and starting new format trends.

How did you develop the talent or desire to research new format trends?

The main reason for that is that I came out of radio. I've always known that research is critical, but just an individual piece of pie. I'm challenged to do format research because I've become very comfortable looking at new opportunities and options in formats that don't exist yet. Frankly, most radio researchers aren't comfortable going into new territory, but that is my comfort zone. It's due to my radio IQ and strong operations background, along with decades of experience creating successful new format positions. We are very much at ease going back-and-forth between creating new content ideas and researching them.

Why should a radio operator take a chance on a new, different format when there are current formats that are PPM-friendly?

More than ever, groups are looking for new solutions because in today's economy being the third Country ... or second AC ... or third Top 40 isn't as financially sustainable as it used to be. The economy is forcing the hands of innovation. As someone who is an innovator, I frankly relished the activity of the past two or three years. Ever since the economy collapsed, it made broadcasters start thinking about what else can they can do to crack this nut? What other ways can they make the model work? Those questions are long overdue in our industry; we need significant new content development to grow current audiences and attract new audiences.

How has the influx of PPM impacted your rollout of new formats?

In most cases, there has been a heavy overreaction to PPM. I've been very vocal about that. I realize we have to have a ratings methodology and that this one is better than the diary. But we have to recognize that in the end, we traded one flawed methodology for another. With the diary, we learned the programming tricks to play that game well. PPM requires a different set of tricks and games. It's all about manipulating ratings.

Let's be honest: This is all about how you can goose the ratings by playing games with the PPM methodology. I'd do the same thing. The problem is some folks tend to go overboard and lose sight what their brand identification is. Some things that define your brand may not play well in the PPM game. There has to be a good balance between what the brand stands for and the tricks that make the meters go up or down any given minute.

The big problem I have with the PPM is the problem that Arbitron is finally acknowledging -- the inferior sample size. They need a bigger sample to make ratings more reliable. Until I see changes in the sample size, we've created a system that only rewards the most mainstream and broadest-appeal radio stations - and there can only be so many of those in any market.

I see a day - and it's already starting to happen - when broadcasters with formats that are not PPM-friendly will not subscribe to Arbitron. If your format delivers results to advertisers but doesn't occupy a PPM-friendly position, then why would you pay for ratings that will never reward your strategy? That's what we should all focus on. Radio works best when it's ringing the advertiser's cash register. Whether or not it stacks up in the PPM is not necessarily where the rubber hits the road for every broadcaster.

Have you studied the PPM enough to know exactly what tricks work and what tricks don't work?

There are some pretty clear tactics you should adopt regarding stopsets, flow, decreasing interruptions, and creating occasions and tune-ins. However, playing that game shouldn't be the only game broadcasters play. Even in the largest markets, I work with locally-focused broadcasters. They understand the balance in programming to their audience and the PPM ratings; they seem have a better grip on reality.

Unfortunately, stations that are part of major groups face a huge top-down factor ... and the pressure is overwhelming. Doing nothing is akin to asking to be fired; if they do everything, at last they're viewed as trying everything they can. The thing is, some of those things aren't right, so they take two steps forward and three steps back.

As soon as folks learn how to correctly play the game, they'll be proficient in the PPM ratings without completely dumbing down their stations. At least initially, PPM is systemizing things to the point where many radio stations are losing their sense of soul. With no heartbeat and with no one pulling the strings behind the curtain, listeners can't be voyeurs ... and that's why so many people consider radio to be boring and predictable.

Many people agree with your assertion that programming for PPM is far different than programming for the diary. Yet there are those who believe that some of the things you need to do to win under the PPM - the minute-by-minute focus, for example - can help you win in the diary as well. Agree?

No. It's the difference between putting a helmet on to play football and a batting glove on to play baseball. These are two different games on two different fields with two different umpires. The rulebooks and the ways you keep score are different, so I urge people in diary markets not get polluted by PPM metrics. Ask a programmer in a PPM market if he or she leans on the rules of the diary market any more; the answer would be no. Why should it be different the other way around?

I know I'm blasphemous and a lone wolf on this, but I'm not a real big fan of ether type of ratings because of what they do to the creativity in radio programming, regardless of market. I have found that, be it PPM or diary, the best performing radio stations have a local strategy and the most creative PDs who take listeners on a journey that is special.

Sure, you have to have your stopsets positioned in one place and for a certain length of time in a diary market and a different position and time length in a PPM market. That's not programming creativity; that's just adjusting gears to a new terrain. What will always be special is the ability to create an aura around the station. Only so many programmers know how to do that.

I have maintained for a long time that if you can't program a station without research, then you won't program it any better with research. Research doesn't increase the creative flow. As much as you need to understand strategy and tactics, all of that has to be wrapped in a creative process and a unique personality. Radio stations that have that entertainment flair will always succeed.

Has any of the research you've done over the years reached conclusions that surprised you?

Every time I see a new format concept test as well as existing formats in a market that surprises me. There are still available format holes out there and low-hanging fruit, whether they are brand new concepts or variations on existing formats.

The creation of the Adult Hits format is an example. When we first tested the Jack format in Vancouver in 2002, it researched through the roof even though it was a new concept. It's always rewarding to see the ratings performance of a new format that we helped create, like Adult Hits, which continues to validate itself as the last franchise format to be created in radio's evolution of mainstream formats. It's hard to believe that the format is already eight years old; it's harder to believe that there hasn't been a new format created since then.

Another thing that has surprised me lately is social media, digital media and that whole world. In a sense, it's a whole new box of candy; we're all new learning about things we never even asked about before. We already know, for example, how long the videos can be streamed on station websites, based on the source of the video. There's a different tolerance level between videos from professional sources and user-generated content. That's just one example of how we're starting to see this complicated and exciting new digital media world that is ahead of us. It's rewarding to now consult media companies on their digital and social media strategies because it's a brave, new world.

I'm now well known for being the new format guy, but the reality is that I've been creating new formats intuitively since 1981. It's one of best jobs in the world ... to stay ahead of the game. Right now in Los Angeles, for example, we're creating a new multi-platform public media called "LAFWD" service for young English-speaking ethnic audiences. With over $300,000 in new CPB-funded research behind it, LAFWD is paving a way for the future of public media that targets young and diverse audiences. My client, Radio Bilingue and LA Public Media, and I feel so fortunate to be creating the next generation of public media. But again, it's long overdue. Public media has ignored young and ethnic audiences for too long; LAFWD will break that glass ceiling.

Is there more pressure today for new formats to do well right off the bat ... or is it still more difficult to maintain the initial first-listen boom months down the line?

Certainly I'm more interested in finding quick success than those that require long-term grooming. Obviously, all new formats won't have immediate success, but if researched correctly, most of them do. A station with a successful new format typically blows up a market because it changes things ... it shifts the chairs around.

To be historically correct, the Adult Hits format existed in Canada for two to three years before it was finally attempted in the U.S. Jack-FM immediately shot to #1 in Vancouver, then in Calgary, and then it spread across most Canadian markets. During that time, researchers and consultants here in the U.S. were very vocal that the format would never, ever, ever work here. It's seems funny now, but there was a loud and vocal reaction against the new format because American consultants and programmers didn't understand it. During that time, we developed the new format in Canada until some brave broadcasters in the U.S. finally tried it. The rest is history.

As long as the industry's first reaction is to shoot down new concepts, then we'll keep blunting progress. We have to be more open-minded about change. Unfortunately, radio is caught in a ratings bubble created by the big groups and Arbitron that restrains most in our industry from even thinking about innovation. Radio lives in a false reality that is reinforced by a fading business model and doesn't attempt anything significantly different.

This is unhealthy. Radio has to break out of this bubble before it bursts. It's no different than the Wall Street and real estate bubbles. When you see how radio is used and viewed by those on the outside of our industry, a very large number of people are underwhelmed by radio today. Still, I am bullish on local radio. We just have to be better - and I strive to do that.

You mentioned earlier a second-place or third-place Country, Urban or Rock station may not be financially sustainable in this economy. So what do you counsel a station that is the second or third-place station in a format - and there are no obvious format holes in the market?

Talk to the audience; let them dictate where you go. Do your research and be prepared for new answers. Swim downstream, not upstream. Find an underserved audience that the advertising community wants and deliver it. There can only be so many big Top 40, Country, Classic Rock and Urban stations in a market. You can't have every station competing for a handful of franchise positions. Those positions are completely taken by incumbents, so the other stations have to figure out how to move an audience to buy your advertisers' products and ring their cash registers. Granted, doing that successfully without a franchise mainstream format in a PPM market is very stressful, but what are the options? That's just the reality of this business.

So how can a Smooth Jazz station ring cash registers in a PPM market?

Here's the problem of Smooth Jazz: I know it's the poster child of formats PPM has murdered, but Smooth Jazz always had a tough time selling its numbers. The format's very nature of being background worked against it from a sales standpoint. It's not an example of being successful without ratings, because it's not a very friendly format to the advertising community.

Triple A is an example of a so-called niche format that is foreground and has earned local credibility. Advertisers gravitate to formats with revenue that index above their ratings. Even before PPM, Smooth Jazz revenue never indexed above its ratings.

How can a passive, background format like Soft AC not suffer the same fate as Smooth Jazz?

Soft AC is sitting in a position that Smooth Jazz wanted to be in. Most of those stations have significant morning shows that have been in the market for years, if not decades. Soft AC indexes higher in revenue than in ratings. Formats that deliver on the revenue scale are incredibly important - and that's why Soft ACs have done very well.

Can the Smooth Jazz formats of the world find a successful home on HD? If not, what formats would be good for HD?

From my research, the one thing people don't want from HD Radio is the same old thing. Certainly to have HD stations that are more adventuresome and cutting edge positioned around a broadcasted franchise format is absolutely the way to go. The promise of stretching radio's format boundaries is great. But the problems with HD are twofold: 1) The penetration is still extremely low; and 2) what's the business model? Would it be good for radio if HD radio stations flooded the market with 10 times more frequencies, but without a business model? If HD stations accept advertising, wouldn't the greater number of available spots lower the price of advertising on the rest of them? Just what is the business model for HD Radio? I still don't know what it is -- or met anyone who knows what it is.

You've taken a particular interest in non-comm radio. What do you see in it that appeals to you?

I started in non-comm radio. I was lucky to be in Athens, GA in 1979, working at college station WOUG when R.E.M., Love Tractor, Pylon -- our local bands -- would bring up cassettes and reel-to-reel tapes of new songs before they even put out an album. We'd listen, put 'em on carts and play them; that was our new music. At a really early age I learned about the power of local music and of being an indie-type station, because when we moved in that direction, the percentage of UGA students listening to WUOG grew from 3% to 35%.

As I've gone through my career, I never lost my love and appreciation for public radio. In 1998, after a 15-year journey through commercial radio, I re-entered public radio with NPR by researching and consulting their newsmagazines, Morning Edition and All Things Considered. NPR had about six million listeners weekly at the time we implemented a programming strategy to appeal to new listeners, so we created the "NPR News" brand that is now well known Today NPR News has over 35 million listeners.

After several years of consulting NPR, I started to focus on the development of local public radio stations. Since then, I've been fortunate to help launch News/Talk KPCC in LA, Indie-Rock RadioMilwaukee, and Triple As KUOW/Laramie, KCPW/Park City and KKXT/Dallas. I've consulted Indie Rock KCMP ("The Current")/Minneapolis, community-formatted KDHX/St. Louis, Jazz-formatted KPLU/Seattle, and many others. We've helped create new radio shows for NPR, Minnesota Public Radio, American Public Media and Oregon Public Media.

I love working in public radio because it doesn't have the constraints of commercial radio. It's a blank canvass creatively from which to work. Public radio exists because of a local mission; it's important to society. Radio should have a very genuine relationship with its audience; it should be real and not just smoke and mirrors. Public radio represents the shortest distance between radio and a highly involved audience, which is why I love public radio.

At Paragon we're on a mission to create new formats that appeal to a younger public radio audience - and it's finally happening. We now see a greater concentration of 25-34 listeners to non-comm Triple As than to commercial Triple A stations across the country.

The new public media service we're helping develop in LA, "LAFWD," targets 25-40 year-old English-speaking ethnic audiences. Because of the groundbreaking research on the audience in the last nine months, we now know things about younger English-speaking ethnics that will surprise people. The audience is extremely digitally active, they are desirable and sellable. They represent the future of our country's population shift.

I'm always captivated by large groups of people that radio has missed. It's important that people in my position do what we can to make sure society benefits from radio -- and not just by having the biggest broadcast stations play up to PPM.

If what you're doing at non-comms grow a significant audience, are you worried that commercial radio will mimic some of the things you do that makes non-comm successful?

No, because commercial radio has not responded to what happens on non-comm radio. When I started working with NPR, they had six million regular listeners and they wanted me to help them strategize to hit a goal of eight million. Today, 35 million people listen to NPR News every week. Has commercial radio responded to that? No, not even in markets where the NPR News station is #1 25-54.

Do you think commercial radio's oblivious attitude towards NPR News' success is attributed to them thinking that it only does well in liberal markets?

NPR News stations do well in many, many markets. "Morning Edition" is the most listened-to syndicated morning show in America. Public radio isn't a geographic phenomenon. The specific level of success may be higher in more liberal markets, but you would think that most commercial broadcasters in Chicago, for example, would love to have the ratings of WBEZ. The ratings success of public stations was hidden over the years because you never saw their ratings in the diary reports. Now with PPM reports, you can see them.

Between the harsh extremes of commercial radio on one side and non-comms on the other, there's a tremendously large open content space in the middle. There are audiences for stations that combine the best of commercial radio and the best of non-comm radio. As time marches on, more stations will shoot for that sweet spot, that middle ground, by coming up with the right content and a new business model. Part of my current efforts now is to do just that.

Since you're making an effort to find that middle ground, what's preventing those in commercial radio from doing the same?

Commercial radio has an unyielding demand for making certain profit margins -- even at the expense of audience satisfaction. I've seen it for a long time. It's like a runaway train going hard and fast down the track one way. The consolidation effect has created an opportunity for alternate tracks that are completely different. That's why it's very important to stay focused on the audience and entertainment aspects of our stations. We're building a New Radio Model with hyper-local content that reaches listeners on multiple platforms and distribution points. I firmly believe that's the future.

Has your bullish vision of radio's future changed the way you view your own career, in terms of staying longer in this business than you initially perceived?

I'm only 49 years old with four kids in college, so retirement is not going to happen soon. But you're reading me exactly right; I love what I do. I don't feel I have a job when I get up every day and find incredibly fun things to do. I work with great people at Paragon and for clients I respect.

My personal satisfaction in 2010 is eons higher than it was in '85, '95 or '05 ... and that is because the shit has hit the fan. When that happens, people realize they have to change and evolve. Not everyone in this business is doing it yet, but enough are doing it to keep me engaged and busy.

There's a perverse correlation in that the better the economy was and the more money stations made, the more static radio's attitude became, which led to a real lack of innovation. Now that time is over; everything's upside down with radio groups going under or struggling to survive amidst a digital revolution ... it's the perfect storm. Radio has to change and innovate to survive. I'm glad to be right in the middle of it. It's a lot more interesting and exciting than the flat seas when there was little creative development.

We're in the middle of media renaissance, where we're building what I feel is the future of radio, one station at a time. It's a long, quiet process because these stations are basically invisible to most consumers right now. But that doesn't deter me or the people I work with; they understand that's all part of fulfilling the opportunity that radio provides us.