Two Things I Wish Had Never Changed

Over the years there have been two specific changes in my business, broadcasting, that have contributed to our tight squeeze. I wish the underlying rules had never been touched!

It’s not a good time for media. Print and broadcast are suffering greatly with the emergence of new technologies and the tanking economy. Over the years there have been two specific changes in my business, broadcasting, that have contributed to our tight squeeze. I wish the underlying rules had never been touched!

It was once illegal to traffic in broadcast stations. That meant an owner stayed an owner for a minimum period of time. It made operators more interested in a longer term outlook.

There was also once a limit in how many AM, FM and TV stations a company could own. It was the 7-7-7 rule. Now broadcasting is dominated by more and larger companies. Unfortunately, in many cases their acquisitions have been leveraged based on historic cash flows… which no longer exist.

Clear Channel, as an example, “Operates over 800 radio stations reaching more than 110 million listeners every week across all 50 states.” When they last updated their website they employed 20,000. There have been multiple rounds of layoffs. The chart of their stock price looks like the world’s scariest ski jump!

It’s easy to wish for a return to a gentler, easier time. The genie’s out of the bottle. You really can’t go back. I still can envy those who work for owners who haven’t succumbed. One friend at station owned by the same people who’ve owned it for decades wrote: “Live and Local 24/7 Independent non-corporate…we are grateful every single day.”

Valuing News By The Pound

The struggling company has looked at the column inches of news produced by each reporter, and by each paper’s news staff. Finding wide variation, they said, they have concluded that it could do without a large number of news employees and not lose much content.

As hard as economic times are for TV, they’re worse for newspapers and other print outlets.

So, what do you do to get the bottom line up? I don’t know, but I suspect it isn’t this. Here’s a story from The International Herald Tribune. Michaels is Randy Michaels, CEO of the Tribune Corporation, now owned by Sam Zell, and heavily in debt.

…the struggling company has looked at the column inches of news produced by each reporter, and by each paper’s news staff. Finding wide variation, they said, they have concluded that it could do without a large number of news employees and not lose much content.

Michaels said that, after measuring journalists’ output, “when you get into the individuals, you find out that you can eliminate a fair number of people while eliminating not very much content.” He added that he understood that some reporting jobs naturally produce less output than others.

He said that The Los Angeles Times produced 51 pages of news for each journalist there, while the figure for two other Tribune papers, The Baltimore Sun and The Hartford Courant, is more than 300 pages.

Michaels had been CEO of Clear Channel Communications. When he left there, Radio Ink reported:

…industry message boards were swollen with vitriolic postings vilifying both him and Clear Channel. Various diatribes claimed that Michaels was everything from “the antichrist of Radio” to “a blight on professionalism” to “representative of the heinous crimes perpetrated by Clear Channel.”

Today, it seems Michaels is valuing content the way a butcher values meat – by the pound. But in the real world content is not equal word-for-word. You would hope some of the LA Times lower word count has to do with the depth its stories contain.

It will be sad to see newspapers disappear. I’m afraid that’s going to happen… and sooner, rather than later.

Right now, TV is incapable of providing the depth and story count papers do (though TV kills print in immediacy, emotion and a number of other categories). Few of the Internet news sites really produce their own content, and those that do seldom produce local news.

My daughter and her generation don’t read many newspapers nor do they watch much TV news. No one has yet figured out how to make traditional news more attractive to them.

It’s all very sad.

Stern to Sirius

Howard Stern announced today that he’d be going to Sirius, the satellite delivered radio service, a year from January. Whether Viacom will find it in their best interest to keep him on the air for that year plus period is certainly being debated now.

I had speculated earlier that Stern would be part of the post-Janet Jackson fallout. Mel Karmazin is no longer at Viacom, and he was Stern’s biggest supporter. I was probably wrong in connecting this to Janet Jackson… though maybe not 100%.

The whole Super Bowl, wardrobe malfunction affair has driven radio station operators, like Clear Channel, to reassess. Maybe Howard is feeling reigned in a little.

I see two interesting outcomes from this move. As little as I personally appreciate Howard Stern, he is a powerful force with his audience. He will give credibility to Sirius – get them additional subscribers. Their stock (not particularly pricey to begin with) is up almost 15% as I write this.

The second effect will be felt by people who don’t listen to Stern and don’t subscribe to satellite radio. Just as more adult or racy content on HBO, Showtime and even MTV, led the broadcast networks to spice up their programming to compete, a good showing by Stern might force the same shift on radio.

It would be ironic if Stern’s move off-air ends up moving on-air toward his type of content.

This is a story that isn’t completely played out by any means.

Another Media Prediction

After the Janet/Justin Super Bowl incident, I predicted there would be repercussions at MTV – even though MTV is not regulated by the FCC. It didn’t take long before some of the more explicit videos they play were pushed out of prime time.

Videos are no longer a big thing on MTV, so this move isn’t as significant as it might seem. Still, a change is a change. It is certainly a reaction to an upwelling of public sentiment.

Now, in light of Howard Stern’s banishment by Clear Channel, I predict he’ll soon be gone from Viacom&#185 as well.

Let me preface my explanation by saying I have no political ax to grind. What will be will be. It’s fun to make these predictions in the blog because I really can’t hide from them later. Just remember – this is only my read on the situation.

Here’s the set-up. Tuesday, Howard Stern had the ‘other’ participant in the now infamous Paris Hilton video, on-the-air. They talked, and took some phone calls. One listener asked some questions which were crude and racist, to say the least.

Wednesday evening, Matt Drudge had a short transcript of the conversation on his website. I’m glad I got to read it. I’m just as glad it’s no longer there.

I would hope Stern has the ability to monitor and censor inappropriate material before it hits air. In this case, he did not.

On Wednesday, after hearing an aircheck, Clear Channel Communications took action and issued this press release:

“Clear Channel drew a line in the sand today with regard to protecting our listeners from indecent content and Howard Stern’s show blew right through it,” said John Hogan, president and CEO of Clear Channel Radio. “It was vulgar, offensive, and insulting, not just to women and African Americans but to anyone with a sense of common decency. We will not air Howard Stern on Clear Channel stations until we are assured that his show will conform to acceptable standards of responsible broadcasting,” Hogan said.

Though America’s largest broadcasting company, Clear Channel only runs Stern on a handful of stations. Viacom is the actual syndicator of the show, and also runs it in many markets nationwide.

In this case, the tail (Clear Channel) will wag the dog (Viacom)!

Viacom is between a rock and a hard place because of statements earlier in the week. From Reuters:

Viacom president Mel Karmazin reportedly has imposed a crackdown on sexually explicit material on Infinity stations, declaring in a recent company-wide conference call: “This company won’t be a poster child for indecency.”

So, what can they do? Considering the Congressional hearings post-Super Bowl and Karmazin’s own public pledge, how can they stand behind Stern… especially in light of what Clear Channel’s CEO said?

They can’t. End of story. Hang out the “Help Wanted” sign. Stern is done.

&#185 – Stern is syndicated by Infinity Broadcasting. Infinity, in turn, is owned by Viacom.