Quantcast
In the end, what many key managers at AMFM didn't know was that the company was being built to go public and sold off as a franchise.

THE FIVE IMPORTANT LESSONS
FOR THE NEW RADIO WORLD

Not As Hard As The 12 Steps, As Pure
As The 8-Fold Path Of The Buddha
Or As Fun As The 7 Deadly Sins
By Michelle S.

Lately, everyone in and around radio has sat back with an interested eye on the inner workings of the business.

With so much at stake (like, for instance, your programming careers!), you have to wonder: How is each broadcasting company choosing to handle its product, and how are the higher-ups navigating through the unproven land of deregulation?

Although the story is far from over, there's already quite a tale to tell. But to illustrate how clearly operational acumen and autonomy drive the success of radio today, all we need to do is focus in on the short life of one wildly profitable, yet equally controversial, company—AMFM. A former major-market executive for this team for over five years, I have an unflinching inside view of how they ran their company. As the imminent merger with Clear Channel comes to fruition this August—bringing with it the closing chapter of one of the most colorful business contingents in the FM game—it's time to examine the decisions that led to their dominance, and later, their downfall.

Just two short years ago, AMFM was a broadcasting juggernaut. They garnered a huge stable of winning stations, dominating the top 10 markets. To their credit, in the beginning, the company agenda was to take risks, invest back into the product, champion programming as the driving force for growth and use creativity as the means for NTR revenue. How do you think they became a major force so fast? LESSON #1: You get out of this world exactly what you put into it.

Soon, the company boasted a top-heavy group of executives that liked to refer to themselves as "The Brain Trust," led by a CEO who was brilliant, but whose professional ego will go down in history as rivaling that of Donald Trump. A zealous sports memorabilia collector, this man also took to collecting on-air talent and programming gurus with the same trophy-case fever he would have for nabbing a signed Jordan jersey—a major reason why the company got over-staffed with corporate heads so fast. LESSON #2: Quantity has never meant more than quality.

The function of the programming Brain Trust was simple and one-dimensional: They went into a market, commissioned extensive research projects that cost hundreds of thousands of dollars and then launched a flurry of Jammin' Oldies stations. Initially, the strategy garnered huge ratings everywhere. It was short-lived, though. As most heritage broadcasting companies know, there is a major ceiling of success attributed to recurrent-based formats. But the Brain Trust thrived more on clique and ego than they did on strategy and results. The new formats quickly peaked and went backwards. LESSON #3: Focus on your audience, not on yourself.

Soon the Brain Trust had exhausted all their "national" tasks. Scrambling to justify their positions, the corporate echelon promptly swarmed in on individual properties, micromanaging every move. Meanwhile, the "cluster" concept, assigned to this team to make it functional, was having problems in every market. The initial programming strategies were based solely in research, so the data supported the notion that two properties with a similar music styles could coexist successfully with different target demos. This was the BASIS of the AMFM cluster theory. Unfortunately, music can't be sliced and diced so conveniently. Research did not account for the tricky business of music lifestyle—a major foundation for contemporary formats, but an obstacle never considered. LESSON #4: Research can only tell you where you've been, not where you're going.

In the end, what many key managers at AMFM didn't know at the time was that the architecture of the company wasn't set up for longevity or to improve the standard of broadcasting, either. It was being built to go public and to be sold off as a franchise. Not a bad strategy for the precious few who were to benefit from it. But the scar this visionless agenda left on the face of FM still runs deep to this day. Actually, in time we might look at the gentrification of radio this company ultimately forged as being a major catalyst for Internet music's gain on listenership in the year 2000. Which business do you think all the former AMFM company heads are working in now? It ain't broadcasting, folks. LESSON # 5: Behind every great fortune, there is a crime.

Unfortunately, AMFM went from having the ultimate respect to morphing their legacy into the poster child of how NOT to operate a radio company. They made millions, but they compromised the integrity of FM in the process. Maybe their intent was never to serve broadcasting in the first place. FINAL LESSON: Actions speak louder than words.

THIS IS ANOTHER STORY ABOUT ADELE BREAKING RECORDS
Big news from the Spot. (10/15a)
KACEYGATE: ESQUIRE EVISCERATES THE GRAMMYS
This is getting ridiculous (10/14a)
ADELE BY THE NUMBERS: ALBUMS, SINGLES RTD
It all adds up. (10/13a)
GRAMMY CHEW: A ROTY/SOTY PLAYLIST
(20 FOR 16)
Beer and Glickman collaborate on the Spot. (10/13a)
30 HAS A DATE
Your Thanksgiving weekend soundtrack (10/14a)
ADELE ADELE ADELE
Adele; Adele Adele?
ADELE ADELE ADELE ADELE ADELE ADELE
A... dele?
ADELE ADELE
Adele Adele; Adele.
ADELE ADELE ADELE ADELE
(Adele.)
 Email

 First Name

 Last Name

 Company

 Country
CAPTCHA code
Captcha: (type the characters above)