Wall St. journal article

[lsinger9404]

Does this sound any radio station's format that YOU know??

Adjusting the Dial
Hit by iPod and Satellite, Radio Tries New Tune: Play
More Songs

After Mergers, Bland Sound Left Giants Vulnerable;
Fewer Ads, Added Variety Engineering a 'Train Wreck'

By Sarah McBride, The Wall Street Journal, 3.18


The Web site of radio station KCJK-FM, known as 105.1
Jack FM, features a picture of an iPod and the taunt:
"Guess you won't be needing this thing anymore, huh?"

After years of tight playlists and narrow music
formats, KCJK in Kansas City, Mo., is trying to prove
that it can give listeners the same thing an iPod
does: an eclectic selection of music.

Previously, like most stations, 105.1 let computer
scheduling programs pick the songs from a library of
300-400 titles, with the same 30-40 songs playing most
of the time. Now the station is going against the
grain of the past two decades in radio, more than
tripling the number of song titles played on any given
day. With more than 1,200 songs on the playlist, most
songs get played only once every few days, rather than
several times a day. Program director Mike O'Reilly
and his assistants handpick the music and the order in
which they are played.

"It's all about train wrecks," Mr. O'Reilly says,
using radio terminology for two unlikely songs played
back-to-back. "If you hear MC Hammer go into the Steve
Miller Band, I've done my job." Indeed, the station
boasts that it might play a grunge rock anthem by
Nirvana alongside a disco hit by K.C. and the Sunshine
Band -- the kind of serendipitous combination offered
by an iPod.

The station, owned by closely held Susquehanna Radio
Corp., is attempting to tackle head-on a malaise that
has the entire radio industry on the ropes. Radio has
been an incredibly durable medium over the past seven
decades, beating back challenges from new media and,
as recently as five years ago, riding high on a vast
consolidation that put tremendous power in the hands
of a shrinking roster of large chains. Big owners
sought benefits of scale through strategies like
voicetracking -- having one set of deejays handle
similar stations across several cities, playing the
same songs at all of them.

But today, the industry is under attack from new
competition that was barely on the horizon five years
ago. Digital music players like Apple Computer Inc.'s
iPod let listeners carry thousands of songs with them
in a device the size of a pack of cigarettes.
Satellite radio services like Sirius Satellite Radio
Inc. and AM Satellite Radio Holdings Inc. are
beginning to blossom, offering higher quality sound, a
dearth of commercials and far deeper playlists than
most broadcasters. Internet radio stations are
siphoning off listeners by targeting small, devoted
niches.

To bored radio listeners, those alternatives have
tremendous appeal. "The opportunity created for XM
wouldn't have been there 15 years ago, because FM
wasn't too bad," says Lee Abrams, XM's head of
programming and a former consultant who pioneered
audience testing and playlists. Now, "research,
discipline and all that have gotten out of control,"
he says.

In a fresh signal of radio's travails, Viacom Inc.
this week floated the idea of splitting its giant
radio unit and other slow-growing businesses,
including its CBS television network, off into a
separate company. Today those laggards are widely seen
as dragging down the value of Viacom's cable networks
and movie studio. Viacom shares have jumped nearly 9%
since investors heard the news.

The nation's two biggest radio companies, Clear
Channel Communications Inc. and Viacom, both took
giant write-downs last month related to their radio
operations, in part due to changes in how intangible
assets like radio licenses can be valued. Clear
Channel's totaled $4.9 billion, and Viacom's was $18
billion.

Now, radio is taking steps to stop the bleeding. After
years of delay because of cost, some broadcasters are
now racing to embrace digital radio, which can send
multiple high-quality signals on one FM frequency.
Many stations are trying to program iPod-style mixes
of music -- often with the same "Jack" monicker used
in Kansas City. Jack, a format developed by Canadian
company Rogers Media, a unit of Rogers Communications
Inc., is licensed to eight U.S. stations and has
spawned about a dozen unlicensed imitators.

Viacom is looking to sell off stations, particularly
in smaller markets that are less profitable. And some
chains, notably giant Clear Channel, are trying to
make themselves more enticing to both listeners and
advertisers by cutting back on the minutes of
commercials per hour. Part of that involves steering
advertisers toward 30-second spots, rather than 60
seconds, so listeners won't be bored.

"Getting and keeping a listener's attention is so much
tougher" because of the increased competition, says
John Hogan, Clear Channel's radio chief, who is
betting that fewer ads will make listeners more loyal
to the company's stations. "We can't keep adding
interruptions and thinking there won't be casualties."

Doomsayers predicted radio's demise back in the 1950s,
when television became widely available and
long-playing records made listening to music on record
players easy. But the industry adapted to competition
from television dramas by cutting many of its own
dramas and playing more music. And it turned out
people who bought LPs didn't stop listening to radio
broadcasts. Once the 1960s hit and the invention of
the transistor made receivers small and portable,
radio boomed again.

When FM and stereo sound started to take off in the
1970s, conventional wisdom held that AM radio was
finished. Instead, it became the home for talk radio,
while music stations migrated to the FM dial. Radio
overcame another perceived threat in the 1980s, when
Sony Inc.'s popular Walkman became the first device to
make custom-selected music truly portable.

To shore up radio's finances, Congress in 1996 greatly
liberalized station ownership limits by passing a
landmark telecommunications bill. Until then,
companies could own only four stations in one market,
and a total of 40 nationwide. Today, the same company
can own eight stations in a market, with no limit on
its national reach.

The move unleashed a wave of consolidation that
ultimately led to some of today's problems. Spurred on
by revenue that rose annually in the double digits
during the '90s economic boom, radio companies gobbled
each other up. In 2000, industry revenue totaled close
to $20 billion, almost double the amount of five years
previously. Two titans emerged: Clear Channel and
Infinity Broadcasting, now owned by Viacom. But
assumptions that had driven their acquisitions didn't
pan out.

Revenue growth slowed to a near halt when the Internet
bubble popped, eliminating many free-spending dot-com
advertisers. At the same time, consumers were starting
to look elsewhere for music: Internet file-sharing
sites like Napster took off in 1999, and the first
iPod hit the market in 2001.

More recently, satellite radio arrived on the scene
and has continued to broaden its appeal. Satellite
companies have locked up deals for game coverage of
professional football and baseball as well as luring
away popular radio personalities like Howard Stern.

Radio companies ignored advances that could have
blunted some of the competition. They dragged their
feet on digital radio, a technology that promises to
provide CD-quality sound and allow radio stations to
split their signals into several channels. That could
allow the stations to serve the same niche audiences
that satellite radio does and perhaps charge
subscriptions in some cases.

"The industry did not invest in its future," says Joel
Hollander, Infinity's chief executive since January.
"If we had invested three to five years ago, people
would be thinking differently about satellite" and
other competitors.

That is starting to change. At the beginning of the
year, 21 radio groups announced plans to accelerate
the transition to digital radio. Industry executives
say they will convert about 2,000 stations to
broadcasting in digital signals, along with analog, in
the next three years. Currently, almost 300 of 13,000
stations in the U.S. are broadcasting digitally

But the conversion is expensive -- about $100,000 per
station -- and most consumers won't notice the
difference yet because most radio receivers are still
analog. Some auto makers are installing receivers now
and home digital radios are on the way later this
year. Eventually, digital radio could offer some
purely practical benefits, too, like traffic
information streamed into display screens on the
receiver. A TiVo-like function would also allow
listeners to record and replay shows whenever
convenient.

The Internet has proved largely disappointing for most
radio stations. Many started simulcasting their
programming over the Internet in the late '90s, only
to get bogged down in music-royalty issues that
prompted many to turn off the streams.

Now, stations are starting to experiment once again
with selling music over the Internet. "The Internet
and iPod are not challenges -- they are business
options for us," says Mr. Hogan of Clear Channel,
which pipes more than 200 of its stations over the
Internet and plans to start allowing listeners to
download programs to their iPods, a hot trend known as
podcasting.

Most radio executives continue to believe strongly
that audience research tells them which are the best
songs to play, and most stations are still run by
programmers who believe in the power of playing the
most popular songs over and over again.

But some are starting to broaden their playlists,
including the adherents of the "Jack" format. Mike
Henry, chief executive of Paragon Media Strategies and
a consultant on the format, says listeners want to
hear familiar music, but a larger selection and
variety of it. So Jack plays only songs people will
recognize, albeit from a variety of styles and
timeframes. "You're only challenging them on a
stylistic level," says Mr. Henry. "You're not
challenging them on a familiar/unfamiliar level."

Just over a year ago, Clear Channel helped launch a
largely unformatted 1970s-style rock station in Los
Angeles, Indie 103.1, that features a former member of
the Sex Pistols holding court over the lunch hour each
weekday and rocker Courtney Love dropping in for the
occasional guest slot.

In a few markets, quirky stations owned by smaller
groups flourish. Monterey, Calif.-based KPIG, which
plays an eclectic selection of adult-oriented rock
music, is the area's No. 7 radio station out of 40
ranked by Arbitron. Its owner, Los Angeles-based
Mapleton Communications LLC, started simulcasting it
last year in nearby San Luis Obispo, and the format
thrived there, too. Now, Chief Executive Adam
Nathanson is mulling introducing the format to another
area station in his 27-station group. "If it works in
one market, maybe there's a chance to build it
around," he says.

On the business side, radio companies are also cutting
down on commercials, one of listeners' biggest beefs.
A study from J.P. Morgan last year showed that radio
ran an average of 15 minutes in advertising per hour,
with some shows running up to 22 minutes an hour.
Listeners say they loathe it.

Clear Channel has made a big push to run shorter
commercials and less total advertising time per hour.
The hope is that with fewer commercial hours
available, they will be able to raise prices, and not
lose listeners during lengthy commercial breaks.

Across its chain, Clear Channel ran an average of 9.4
minutes of advertising an hour in February, according
to brokerage Harris Nesbitt, likely down several
minutes from a year ago, although the brokerage didn't
track advertising minutes then. And it has boosted the
number of quick-hit 30-second ads that the company
says hold listeners' attention better than 60s. For
competitive reasons, Clear Channel doesn't say how
many minutes of advertising per hour it runs.

For most of their listeners, traditional radio
companies say, the tradeoff of a few ads for free
content will be worth it. "You can buy satellite,"
says David Field, chief executive of Bala Cynwyd,
Pa.-based Entercom Communications Corp., "or you can
pay nothing for us."

[robert]

Arrow is now a "Jack" station. It started on thursday night or Friday morning.

93.1

[Glenn]

The relovution is now well under way. You cannot stop the revolution.

[Glenn]

Surprised to see you reading the WSJ also larry. Got any hot stock tips?

[MicheBel]

<<"If you hear MC Hammer go into the Steve Miller Band,>>

Yeah, that sounds like a "train wreck" to me. Luckily for us, the "train wrecks" Indie chooses to play are consistently good music.

<<Lee Abrams, XM's head of programming and a former consultant who pioneered audience testing and playlists>>

Good God. So much for XM, I guess.

<<Many stations are trying to program iPod-style mixes of music -- often with the same "Jack" monicker used in Kansas City. Jack, a format developed by Canadian company Rogers Media, a unit of Rogers Communications Inc., is licensed to eight U.S. stations and has spawned about a dozen unlicensed imitators. >>

"Jack" is to radio what Microsoft's "Bob" used to be to computers.

<<"Getting and keeping a listener's attention is so much tougher" because of the increased competition, says John Hogan, Clear Channel's radio chief...>>

Funny how when you play music that doesn't SUCK, like Indie does, you don't have that problem.

<<"The Internet and the iPod are not challenges -- they are business options for us," says Mr. Hogan of Clear Channel, which pipes more than 200 of its stations over the Internet and plans to start allowing listeners to download programs to their iPods, a hot trend known as podcasting. >>

Who in their right mind would iPod ANYTHING on a Clear Channel station? (Except maybe the people quoted in this lame article?)

<<"You're only challenging them on a stylistic level," says Mr. Henry. "You're not challenging them on a familiar/unfamiliar level." >>

In other words, same old shiite, just repackaged. No one will notice. Cause you know, giving them something "unfamiliar" is so scary.

Actually, I don't think a day goes by that I don't hear at least ONE unfamiliar song on Indie. And that's a good thing. This is why radio sucks so bad, they so completely don't get their listeners.

<<Just over a year ago, Clear Channel helped launch a largely unformatted 1970s-style rock station in Los Angeles, Indie 103.1, that features a former member of the Sex Pistols holding court over the lunch hour each weekday and rocker Courtney Love dropping in for the occasional guest slot. >>

Shows how behind they are in their research. Courtney? When was the last time she was on air? And guess "'70s style" means the DJs have freedom. Dunno, but I see it as more "2005" style.

<<"You can buy satellite," says David Field, chief executive of Bala Cynwyd, Pa.-based Entercom Communications Corp., "or you can pay nothing for us.">>

See, the thing is, I'd PAY for kickass radio. I'd pay for Indie, if it was only offered by subscription, and especially if I could hear less commericals by doing so. I'd pay for a podcast of Halloran's or Mars' radio shows. Absolutely. Would I pay for radio that sucks? Um.... Or even listen to bad radio for free? What do you think?

[jack]

Arrow is now a "Jack" station. It started on thursday night or Friday morning.

93.1

Bleh... I liked arrow! They've been around forever!

[Glenn]

That Jack channel is OK at best.

[lsinger9404]

Surprised to see you reading the WSJ also larry. Got any hot stock tips?

To tell you the truth...I actually saw this article in my Yahoo Portfolio as it talks about iPods and that's related to the 1 stock I track, AAPL.

I do have a portfolio and my dad is my "broker". He likes to play the market, so I trust him to have at it. I only follow Apple, being a dyed in the wool Apple fan. He makes fun of me for my dedication to it, but i'm having the last laugh with the recent split. I had apprehensively asked him to buy me in at 14 about a year and a half ago, or so...but he gave me the old "are-you-sure-you-want-to-buy-in-when-it's-so-low" guilt trip and I backed off. I had already bought in after the last split at 54 and was still smartin' from the severe drop, so I didn't want to seem like I was making a stupid decision (then again, we're talking about a leading innovative tech company with a few billion in cash reserves...upon reflection who was stupid?) When it started inching back up, I bought back in at 19 and made a pretty penny from that. Then I wanted in with some more before the split and made some more stupid mistakes (bought and sold at 65 and 63 respectively)...and finally settled on 88 (damn fickleness of the market!) and figured i'd let it ride. Now that it has split, i'm just waiting out the quarterly financials and new April product announcements. Their current new products are flying out the door, and they're flying out Apple Store doors, which means one thing - PURE profit for Apple.

So...in answer to your question...hot tip? Well...a year and a half ago, it would have definitely been AAPL. Mabye now it's a warm tip...but it's definitely a "hold"er to the holiday buying season. WITHOUT a holiday season, these things aren't staying on the shelf, but when holiday season comes around again, they'll have these products plus some more insanely great products for the consumers to spend their hard earned on. Look what happened this past holiday season.

So..was it a rhetorical question coming from you, or did you want all that??

This post contains forward-looking statements about the Company’s estimated revenue and earnings. These statements involve risks and uncertainties and actual results may differ. Potential risks and uncertainties include continued competitive pressures in the marketplace; the effect competitive and economic factors and the Company’s reaction to them may have on consumer and business buying decisions with respect to the Company’s products.

[Guest]

Arrow is now a "Jack" station. It started on thursday night or Friday morning.

93.1

Bleh... I liked arrow! They've been around forever!

I used to, but it's kinda hard to love a radio station that rotates between "life in the fast lane," "born on the bayou," and whatever Beatles song is handy. Don't get me wrong, all great music, but it begins to feel like torture if you have to listen to the same three songs OVER and OVER, its like KROQ, only in a weathered, vintage kind of way. Plus everyone at indie plays a "classic rock" song every once in a while (like when Jonesy was playing all that Boston and Styx and REO, that was cool, and funny cause some people got pissed).

[Guest]

Surprised to see you reading the WSJ also larry. Got any hot stock tips?

I wasn't expecting all this but it was interesting anyhow. I used to play with Ameritrade but got burned pretty bad with the dot bomb. I also just bought a book (I haven't read it yet) called blood on the street which I am looking forward to reading regarding all the hype and rip offs etc before the bubble burst.

About 3 years ago the company I worked for in the telecom sector went bust so I started a family buiness with my brother & parents so At the moment just invest in our own venture. Seems to make more sence.

I did see on television just the other day that for every dollar you invested in Microsoft in 1984 when they went public is now worth $7000 asdjusted.

Have you seen the movie "The Pirates of Silicon Valley" which is a great story about the PC battle between Steve Jobs & Bill Gates? I supose the story needs to be updated now given Apples come back, low cost computers, ipods & pixars successes. Apple are now the #1 most recognised brand globally. (mostly due to ipod)

[MicheBel]

Arrow is now a "Jack" station. It started on thursday night or Friday morning.

93.1

Bleh... I liked arrow! They've been around forever!

Jack--

I know you're young, so let me give you some advice:

LIFE is all about CHANGE.

(And that's a good thing, though it might not seem like it...)

--MIche

Oh, and if I had money to invest in stock, my money woulda been on Apple and Pixar. (Would STILL buy Pixar right now.) And sell Disney.

[Guest]

Got it. Buy buy buy sell sell hold hoollllld!. O I forgot which ones.

What about Jacks Shack trading as JACK on nasdaq. Some kind of reverse-merger-buyout-split-hostile takeover might be in order using Viacom as a black night or poison pill.

Just a thought.