Innovation Sets You Free…to Make Money

| April 27, 2012

By Walter Sabo
President
Sabo Media

NEW YORK — What a great idea!  The Commercial Broadcasters of Australia give out awards for: Best New Manager.  Best New Program Director.  Best New Station.  Best New Format.  They celebrate the “new.”  They encourage it, reward it and showcase it with a black tie dinner.  I had the privilege to attend that dinner in Melbourne and you would not believe the passion and pride in the ballroom.

Sadly, in American radio, we tend to find ways to mock the new and celebrate contempt prior to investigation.  As a business we have set ourselves up for a tough, very risky and vulnerable existence.  No laboratory.  If you come up with a new format or promotional idea, where and how do you test it?  Success in a live medium depends on a specific dynamic with a live audience.  As a rule you can’t ask people how they want to be entertained.  You can present them with entertainment and see if they applaud.  Television tests pilot shows, not show concepts. (How would the Kardashians have tested as a concept?)

When presented with new ideas, most programmers ask, “Where else is it being done?  Who else is doing it?”  They will ask that question while proclaiming, “Our market is different.”  Different than where?  A town that doesn’t have McDonald’s?

The Vitality of a Lab

When Steve Jobs needed to create the Mac computer, at a time when his company was making Apple IIs, he recruited a separate team and housed them in their own building.  No one was allowed into that building if they weren’t on the Mac project.  He wanted to control the growth of the idea and the spirit of innovation without suffering jaded objections from other employees. Pharmaceutical companies have always had labs focused on discrete projects.  Without a lab it’s very difficult to even think about doing anything new.  Instead, some radio companies have scary entities like “format factories” which regiment a single approach to a given format with little tolerance for deviation.

We look to small markets and independent owners to “try stuff” and quickly steal it when it works.  Formats are, indeed, copyrightable but as an industry we have not gone that route. Television knows how valuable a format is; try copying “Who Wants to Be a Millionaire?” without a license fee.

Radio’s atmosphere for new ideas: Sink or swim.  If it works, it will be copied and there is no financial reward.  At this moment in time, innovation is the medium’s most efficient, economical tactic in competing for the consumer’s time.

Whenever I’ve put on a successful new format I’m asked, “How did you come up with the idea?”  Who asks?  Television executives, print reporters and people in other media – never, ever radio programmers.  TV execs know that gold is found in the thinking that leads to the successful idea; they are mesmerized by that process.

Underground Radio Started Underground

In the basement of the Pasadena Presbyterian Church there used to be an FM radio station.  In the late ’60s, realizing there had to be a better way to present rock music, two brilliant radio stars convinced the church to let them test programming on the station at night!

The hosts were B. Mitchel Reed and Tom Donahue.  At the time they were screaming Top 40 jocks.  But after experiencing the Monterey Pop Festival, they realized that a new rock order was coming and radio needed to reflect it.  They tested their ideas on a small, non-com station, KPPC-FM.  It worked and their programming concepts evolved on FMs in L.A. (KMET), San Francisco (KMPX) and New York, (WNEW, WOR and WPLJ.)  The church basement studio was their lab.

TV tests their pilots on cable channels in isolated cities and on the crowds at Epcot!  You can test your ideas too:

• Finally, a good use for HD channels: Experimentation.  If you want listeners to try a new medium, give them something new to listen to.  It doesn’t cost more money to play different songs.  The promise of HD radio is breathtaking.  New programming attracts early adopters and that’s what new hardware demands.

• Non-coms need money.  For shockingly small amounts your company could test ideas on a free-for-all theatre on local college or non-com stations.

• Several times a month schedule and share with your audience that you are trying something brand new that might fail.  Promote it, sell it.  Then air a multi-hour experiment.  Engage the audience with requests for feedback, online voting, phone calls, texts and tweets.  Radio invented audience engagement.  Build on our audience engagement expertise to exploit every digital platform, shaming new media entries for their lame efforts.

• Use your air time and credibility to promote podcasts that specifically allow your hosts to expose “dangerous” thoughts and productions.  But do not simply make a 10 minute monologue and put it online.  Make it a full production with video, requests for interactivity, polling, graphics — a show!  From the feedback you will see a pattern of content that could enhance your on-air offerings…a lab experiment and results.

Sirius Newness

For eight years, from pre-launch, I worked on-site at Sirius Satellite Radio.  I recruited the programming team that is still there and set a tone for experimentation.  We used to laugh when terrestrial broadcasters were amazed at all the press Sirius programming received.  Other broadcasters imagined that Sirius had a team of outside PR firms placing stories.  In fact, Sirius had two in house publicists for a multi-national broadcast platform.  Two people sending out press releases resulted in thousands of articles.  Why?  Because Sirius was programming new, innovative audio offerings.

It was fascinating to learn which music and talk offerings on Sirius would have mass appeal audience shares if aired on FM in any city.  We kept wondering when station owners were going to try some of them.  So far, the coast is clear.  Joe Clayton and Leon Black made it financially possible for Howard Stern to come to Sirius.  More importantly, Howard and the other major talent are allowed to make magic.  Innovation and experimentation make Sirius a valuable experience for its subscribers.  22,000,000-plus subs later they are doing just fine.

Innovation Is a Necessity Now

Trying new formats and concepts is no longer fun; it’s a necessity for the medium to continue to thrive.  Early adopters of new radio programming have options such as SiriusXM and audio apps.  Ten years ago you could easily launch a viable new format because the early adopters were still listening to radio regularly.  However, for about 30 years we have trained the public that there is nothing new here.  (Morning Zoos started in the 1970s.  So did Howard Stern.  Those are Dad’s morning shows and I say that with love and respect.)

For the medium to thrive it must present programming so unique and compelling that listeners say, “Oh my God, you’ve got to hear this.  Can you believe this?”  Words are free.  Music costs the same regardless of the cut.  Radio is in the car, the shower and the kitchen.  The medium has unprecedented distribution – for now.  What are we doing to with that distribution?  Take a feed?  Air 30 in a row?  That won’t work much longer.  From the confidential research I’ve seen, it might stop working next week.

New Is Profitable

Celebrating the new is pragmatic.  Music apps are, at root, boring.  To quote Howard Stern, “I am sick of every song on my iTunes.”  At some level, regardless of the software, music programmed by the listener becomes boring.  Radio has the power to surprise, engage and shock in a manner no medium can touch.  That’s not a kick for us, that’s a hard business fact that should NOT simply allow the medium to hold its own.  It’s a fact that mandates the medium to exceed its current success.

Innovation is the effective marriage of proven factors mixed with stunning novelty.  Pure novelty does not sustain.  For change to work, it must be based on proven principles.  When I start successful FM talk stations – stations that sound like nothing you’ve ever heard and that are unique in each city – they are based on the “safest” format ever – Top 40.  Play the hits.

BULLETIN: Adult Contemporary a Failure

When a station starts a new format, it takes control of the business.  A new format, new approach immediately stages other stations as old and out of touch.  The new station defines the marketplace in dollars and creative standards.  No, the first year is not easy.

The hardest year I ever had in my life was 1979 when our team put a brand new format on FM stations in New York, Chicago and San Francisco.  The format became known as Adult Contemporary.  We didn’t have a name for it because – it had never been done before.  Nobody thought it would work and the ratings sucked.

By the end of year one, San Francisco was #1 Adults 18-49 (you know, that big AM market.) And WYNY, New York had a 5 share by year three.  Why did they allow it to run longer than the first, awful year?  NBC was run by a TV guy who was the greatest mass market programmer who ever lived: Fred Silverman.  He’d look at me and say, “Is it going to work?”  I said, “Yes.”  And that was that.

By explaining that your new idea is based on known, predictive concepts, it becomes much easier for management to embrace.  I’ll be happy to explain to you personally good ways to present ideas – up.

At the New Media Seminar I will present 15 action minutes about innovation, how to profit from it and why it is time for you to take the ideas from your head and put them on the air.

 

Walter Sabo can be reached at Walter@sabomedia.com or 646-456-1000.

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