John Gehron

Few figures in radio are more accomplished and respected than John Gehron. In the '70s and '80s, he programmed and managed heritage stations such as WCBS/New York and Chicago's WLS-A/F, WODS and WNUA. In the '90s and '00s, he held top executive posts at ARS, CBS/Infinity and Clear Channel. In 2006, he segued to Oprah Winfrey's Harpo Radio before dabbling in consultancy and, most recently, taking on a new challenge as COO of AccuRadio, one of pioneering Internet radio ventures. How does the quintessential Old School radio power player transition to the New World Radio Order? Here's how...

What made you decide to work at AccuRadio?

I've known Kurt Hanson for a long time and admired what he's been doing here. I've seen the Internet radio sector grow over the years and thought this would be something I'd like to be a part of. There's another good story to this, which is to always be nice to your interns. Kurt was an intern for me at WLS-A here in Chicago ... and now I'm working for him.

You enjoyed a successful career on terrestrial radio, and then worked for a while with Oprah Winfrey and her Sirius channel. What was it about Net radio that made you want to give this a go?

At this point in time, this seemed like something I wanted to try. It reminded me of when I first got involved in the Smooth Jazz format at WNUA/Chicago. I left CBS' WODS/Boston because I wanted to be part of something different, which I thought could be successful but hadn't worked outside of Los Angeles. It's fun working with a team to come up with the formula needed to make something work. That's how I feel about Internet radio. It intrigues me; I see tremendous potential here. It's something I want to learn more about ... and be a part of.

AccuRadio literally has hundreds of music channels for the user to choose from, from Mainstream Pop to Classical and even Celtic music. How are oversight responsibilities delegated ... and do you spend more time with the more popular channels than you do with the eclectic ones?

Some channels are obviously more popular than the others. We try to give all the channels a relatively equal amount of time to make them best they can be. We have a group of people who have responsibilities over certain channels. We've been adding more people to look after specific channels, too. We just hired Bill Gamble to improve our18 Country channel. We're constantly looking to improve.

What are the main differences between programming an AccuRadio channel a programming a radio station in the same format?

The basic goal is the same; you want create something that is going to make it easy for the consumer to listen to. What we do in AccuRadio is put together good streams of music, much like you'd put together the music programming in terrestrial radio, that would appeal to the consumer's interests and tastes. We're also trying to use the marketing techniques of audience flow to make sure we have the right songs and are making them attractive to listeners. In that sense, we're basically using the same skills of terrestrial broadcasting.

The Internet offers other opportunities, too, such as allowing customization, where listeners can literally "personalize" channels to suit their own musical tastes. That's one thing they can't do in terrestrial radio, which only presents the music to the listener. It's fascinating; we provide a great stream of music that we let the listener craft by skipping songs they don't like. If they don't like a particular artist, for instance, they can delete that artist from their channel.

Terrestrial radio, in all my years, worked real hard to push the music out to the consumer, something the best stations became very good at. Yet we had to hope that what we were pushing was something they'd like. Here, we also try to push out a good product, but the consumer has the ability to make changes if they want. What's more, their own personal tastes, in what they choose and don't choose, give us an immediate reference point to work from in future programming.

Just how big is AccuRadio's audience?

We now reach over half-million in a week, a number that has grown almost entirely on word-of-mouth. We're focusing on getting a new round of financing so we can grow faster. The biggest issue is how we market ourselves. We're doing what we can to get the word out. We need to step that up and work harder to find better ways to market what we do.

As it's currently set up, AccuRadio is essentially hundreds of musical jukeboxes, much like Pandora and a couple others. Has there been any thought into making it more like radio and adding some personality into the mix between sets of songs?

We're doing an experiment with Chicago Radio Online. We've taken some of our most popular music channels -- ones that represent great music eras in Chicago -- and have taken personalities strongly identified with that music to become the voices of channels ... although they're not performing like DJs. We have Patti Haze and Mitch Michaels for Classic Rock; our Oldies channel is voiced by Clark Webber and Scotty Brink; and Smooth Jazz is done by Danae Alexander. Our '60s channel is hosted by Fred Winston and Tommy Edwards. We're trying it as a beta test find out how the audience reacts. It's just another way we try to add another level of entertainment.

What kind of research do you use when programming these channels?

We do audience research with our listeners and we know what music they're choosing and not choosing. We also do research to find out more info about our listeners.

Are you satisfied that AccuRadio, as is, is a working business model?

The company is profitable right now all; it's all advertiser-supported. We have banner ads on our website. We do video gateways when customers launch the player; and we run three to four minutes of audio commercials an hour.

This reminds me very much of when music migrated from AM to FM. It happened for three reasons. The first reason was a lower commercial load; FM stations had far fewer commercials. They also offered more music variety as well as better fidelity. Now we're seeing music migrating from FM to Internet for some of the same reasons. Internet radio has a much lower commercial load as well as infinite variety. We have channels from Classical to Rock to Celtic ... and there's no limit to the number or variety of channels.

There are other reasons for Net radio's growth. One is ubiquity; you don't need a radio to listen to AccuRadio. It's now available on computers and smart phones ... and it will be available in cars starting next year. The last and most important reason music is migrating to the Internet is personalization.

Clearly, for a music listener, it makes sense to migrate to the Internet for personalization. It's part of a natural evolution of music delivery, going from AM to FM to the Internet. I'm just as excited about the possibilities of providing the ability to build one's own channel; it makes everyone a programmer.

Yet isn't there a point of diminishing returns with these channels. I mean, isn't there at least a minimum number of users to validate the worthiness of a specific channel?

Yes, we don't want our channel's audiences to become too miniscule, but what I'm talking about is that there is a definite market for niches like Polka, Celtic music and Smooth Jazz. Judging by the recent format flips, Smooth Jazz is struggling on terrestrial radio, but it's clearly working for us on AccuRadio. A lot of things we offer on AccuRadio aren't profitable on terrestrial radio.

How has the performance royalty rate Net radio resolved with Sound Exchange impacted your business model?

I wouldn't say it's ideal but it's workable. About year-and-a-half ago, Kurt Hanson led the negotiations with SoundExchange to come up with fees that work.

AccuRadio has been going on for quite a while, but the whole Internet radio sector only started to really grow once the significant royalty issue was resolved. Once that was settled, then companies like ours could make a viable business plan because we knew what it's going to cost to run our businesses.

Still, you have to remember that Internet radio is a relatively new business with only four major players who offer personalization -- Pandora, AccuRadio, Slacker and Last.fm. This is not a particularly easy technology to build.

So what's your take on how the NAB is trying to negotiate a similar deal with the labels on royalties?

Since this issue going to come up in Congress again and again, the NAB is wise in thinking that they don't want to expend their political capital on this every year, so it would be better to come up with a solution that works for everybody involved, where they would at least get something back. They might get an FM chip in cell phones or a reduction in Internet streaming fees, among other things. There are a lot of things that can be traded off or negotiated. I think they're wise to pursue it that way.

What's your take on Pandora?

Pandora is clearly the leader in Internet radio and they've done a wonderful job of leading the way for the rest of us. Pandora has created awareness of Internet radio with listeners and advertisers.

They've recently started offering genre channels, much like what AccuRadio is doing. Do you see them as more of a competitor now?

No, I don't. Pandora is serving a need to a part of their audience, but their audience builds their channels from scratch, starting with an artist they choose. They're also more interested in music discovery. We're after a different audience. Ours are more used to the radio experience, where they turn on our channels and begin with a well-programmed channel of music. That's why we have over 500 channels; we're responding to what our listeners want. Clearly, our model is more comprehensive.

HD can offer a slew of niche formats. Are you concerned about them as a potential challenger to your audience?

Not exactly, because in the end, their programming is still "the push" model, which pushes their choices of music on to the consumer. At least for us, the consumer has the opportunity to filter out what he or she may not like.

Much like Pandora and terrestrial radio, AccuRadio has an app for smart phones. One of the arguments for installing FM chips in mobile devices is that the app audience will soon reach a critical mass where there won't be enough bandwidth to support the demand. Are you concerned about that?

I have two thoughts on that. First, every time someone has said that there's not enough bandwidth, the device manufacturers have come up with room for more. We've already progressed from 2G to 3G phones...and now we're beginning to get 4G. They keep coming up with solutions to the bandwidth problem. Secondly, the problem of bandwidth in terms of cost control is miniscule. Only a few people hog the bandwidth, and they usually do it with video.

One way to validate your legitimacy to the labels is to prove that airplay on your medium sells records; i.e.: show a correlation where an increase of airplay for a song on AccuRadio foreshadows an increase in profile and sales. In an earlier Power Player interview, Pandora's Tim Westergren expressed no interest on creating charts that could be used to illustrate Pandora's clout. Would AccuRadio consider creating charts of its own airplay?

We haven't thought about it yet. It's just come down to priorities; I don't think we can show labels and trades that kind of data yet. It takes time to put that information together.

Would we consider it? Absolutely; we have to build some systems that would make it easier to get that data together. Obviously, we use that information internally, but haven't thought about using it externally. We're certainly not opposed to it.

We have a number of channels whose main purpose is to plays lot of new music. Those channels have been breaking new music and exposing new bands.

So how do you see your career future dovetailing with Net radio? Is this a one-time or a longtime career move?

I hope it's long term. I'm challenged by how often I learn something new here. I always love to learn new things and continue to grow as an individual. This is a natural progression for my radio career. To work with Kurt Hanson and the staff we have here has been a terrific experience because they're teaching me new things as I'm teaching them some not-so-new things

So there's no retirement on the horizon?

Not at all. Not as long as my daughter keeps jumping horses!