Eric Rhoads, CEO, Radio Ink: 10th
keeping with Media Man Australia's tradition of tackling
any subject, we explore the world of radio broadcasting
and what's right and wrong with the radio broadcasting
are your aims and objectives?
thrive on contrarian thinking. I don't really want
the same things others want. For instance, I am not
driven by big growth. Many of my friends want their
companies to get big, become public and afford them
the trappings... the jet, etc. Though I would love
to have some of the trappings, I also was fortunate
enough to peek through the window of what it means
to grow to a big company. Bottom line for me is that
you loose control, it takes on a life of its own,
and you are no longer doing the things that you love.
Instead you are managing people and processes, investors,
etc. That is not a world I care to live in. I get
my kicks from staying small.
number one priority is freedom and time. When I went
off to start a dotcom three years ago I thought I
was living my dream. Instead I became an implementor
of someone else's dream with some of my own influence
thrown in. Boards have their own ideas. For me time
is king. Its more important than money (not to say
money does not have importance). I like the ability
to work from home if I want, take a few days, weeks
or months off if I want, no one to be responsible
to (other than my family and their needs). Less stress
(though not stress free). I had a chance to acquire
a major company recently. We were down to the wire
on negotiations. I took my investment banker aside
and said, "what is my life going to look like
once we get this deal closed." His response..."it
won't be your life anymore. You'll be reporting to
the bank." After a few hours of thought I realised
he was right. I would loose my freedom and would end
up working much harder, and for what? More money?
Yes that is great to have, but not at the cost of
freedom, sanity, and the perfect lifestyle.
is your background and that of Radio Ink?
got into radio as an announcer/ DJ at age 14. Did
the DJ thing for about 10 years. Moved into programming,
program consulting, station ownership and then service
industries to radio. Promotional products and then
the magazine (13 years ago).
did you realize that you had a viable business model?
it was not viable. I lost $1 million of my hard earned
money in the 1st year. Almost went bankrupt. I had
to invent a way to make it work. Its a highly competitive
business (translation: lots of rate whores) and low
margins. Costs continue to soar... cost of paper,
ink, and postage. Unfortunately you cannot always
account for those increases in subscription prices
and ad rates, though you try. Consumer magazines can
sell at low prices because they have hundreds of thousands
of subscribers. Trade magazines have to sell at much
higher prices because the audience is relatively small.
But, I refuse to put out a substandard product, therefore
I suffer more expense because quality has to be king
in the world which I live.
is your company structured?
not. We are very loose. Very non-corporate. Very small.
We all wear lots of hats and we are all involved in
many things together. I try not to micromanage everything,
but at any given time there is one area that must
be micromanaged. Micromanagement gets a bad rap as
a bad thing... its not, unless you do it to everyone
all the time. In any company there is always one area
that needs attention.
CEO needs to get heavily involved in order to understand
the true direction it needs to take, and to learn
from the problem so it can be fixed properly. Once
that is understood, you hopefully teach someone the
proper way to deal with it, and let go.
parts of your business are the most profitable, and
do you have any "loss leaders"?
that is not that profitable can be a necessary element
to profit. For instance the magazine itself is not
hugely profitable. But the brand is solid and with
the brand comes credibility (hopefully). With the
credibility comes followers who will buy things from
you. In our case the most profit comes from seminars.
If we were some schmoe doing seminars we might have
fewer attendees, but when Radio Ink has a seminar
we usually sell out. Power of the brand. Sometimes
these other elements combined make for a strong profit
that would not occur if only one element were in place.
We find one feeds the other.
publish books, seminars and magazines. Soon we will
launch some new publishing ventures which we hope
will be embraced by the same audience. We also publish
outside of radio with other magazines, trying to spread
the costs across current infrastructure.
effect does the FCC ruling changes have: on you?
on me unless I get back into ownership. But, when
the stations are not happy or are not making money,
they do not buy from my advertisers. Though we all
know better, still advertising is one of the first
cuts and one of the last reinstated. So if the stations
are not buying products, services and equipment, than
the advertising drys up and we have to look for new
ways to make money. Consolidation and slim budgets
has had a dramatic impact on our clients and thus
our business. Its sad, many wonderful people have
had to close their companies because big conglomerates
are doing less promotion, less new building, etc.
on the press?
can say or do pretty much anything, and we do. We
frequently upset someone. We do not do it just to
do it, we don't do it to sell magazines, we just say
what we believe needs to be said to help the industry.
big mouth has probably cost me a few million dollars
in lost revenue over the past 13 years. It hurts.
Sometimes I have to be critical of people I like and
respect who are doing something that is misguided.
I've lost friendships. I have paced the floors in
the middle of the night trying to make a decision
to withhold information so I do not hurt a friend
or lose an account. Bottom line, I usually opt to
do the right thing. Its painful. But I made a decision
when I got into the publishing business that radio
was my passion and that I would do whatever it takes
(as long as its ethical and morally sound) to grow
the industry and help the people in the industry.
Its my lot in life....at least one of my lots.
is internet broadcasting a good and bad thing?
this a trick question? Its a good thing. It provides
the ability to give every listener exactly what they
want when they want it. Its not a mass medium. Its
a medium with a mass of individuals. No one has figured
out how to make money with it. It will be huge, but
mountains need to move first. It will be stronger
when the next generation starts running the world.
(about 10 years)
have been the highlights of your career?
Dreaming and seeing my dreams materialize. What a
wonderful world where you can come up with an idea
in the middle of the night and end up making money
from that idea a few short weeks-months-years later.
I loved being on the air. I loved owning stations.
I loved consulting. (I still do a lot of consulting).
I loved programming. I loved working my butt off to
convince a client to buy my marketing plan and watch
his business soar and make him rich. I've loved most
of the people I have encountered. This is a colorful
industry. My biggest charges have come from setting
high goals or challenges and accomplishing them. Standing
in front of 3000 people in a chicken suit or doing
a fire and brimstone speech in a revolutionary war
outfit, or doing a strip in front of them (don't worry
it did not turn out as people expected thank goodness).
love to do things which when I first hear of them
it sends chills of fear down my spine. Its a kick
to do them. I always wanted to become a film actor.
I recently played a role in an upcoming film-festival
short. Nothing too big but still I beat 100 professional
actors for the part, and now I have a film on my resume.
do your staff describe you?
Ask them. They either love me or hate me. Those who
hate me leave usually. We spoke about contrarian.
I think they think I am crazy. I come up with ideas
and build businesses around them. Some work, some
fail. Most are considered insane. Usually someone
speaks up and tells me its a bad idea. I do listen
and have changed my mind based on input. But, I get
driven on an idea and its hard to stop me. I had an
employee leave me once for a better gig. She told
me many years later that of all the people she worked
for I was her favorite. I was surprised. I never hear
the good things. When I asked why, she said, "
you're fair". I guess that was a compliment.
I do try to give people a chance to shine, I try to
let them do what they need to do, I don't yell, I
try not to belittle people, and certainly not in front
of others. I have done it, and I don't like myself
when I do. Like anyone young, I was a jerk when I
was first managing, but I eventually grew out of it
when I realised you have better results pulling people
than pushing them. It took a while to figure that
out. SO, they would probably say I talk to much. I
am in love with my own ideas. I am cheep (I am). But
most of them have been there a long time. Chuck Renwick
11 years, Tom Elmo 10 years... many others many years.
(Remember the company is only 13 years old). I don't
push them too hard because growth is not what drives
me. They work harder than I push them. It works better
have you and your operation made a positive difference?
I doubt it. We all would like to think so. I'm sure
everyone always lies to themselves (and you) and trys
to say that they have made a difference in the world.
I'm not too hung up on that. I may have written some
things which changed direction of a company, or the
FCC, or some of the industry organizations. It may
have helped radio, it may have helped a career. But
no one seems to care about those things. I think the
difference I make comes from being frank and willing
to be bold at the expense of insult. I try not to
lie. I try to give people my perceptions and help
their careers. But most importantly, I try to make
my reactions and actions a reflection of someone who
is living a life as a loving person. What I really
care about is my kids. If I can make a difference
in their lives, maybe they can go on to do the same
for their kids, and so on. I'm sure that some loving
person... a great, great, great, great grandfather
or grandmother set the tone which I am living today.
I hope I can do at least that for my kids. My family
is the most important thing in my life. Work is a
means to an end for them.
aspects of radio broadcasting need to be changed?
an extra 300 pages? This is a hot button for me.
best and the worst thing to happen to radio was Bill
Drake and top 40 formula radio. It has been huge and
very successful, but the proper training did not continue,
Therefore most radio programmers today are braindead.
What happens when you keep sharpening a pencil? Eventually
it is rendered useless. This is the state of radio
today. Though I believe I created one of the primary
forms of call out research in the 1970s which is still
used today, it worked then because no one did it and
everyone was programming from gut.
everything is over researched and no one is using
their gut. No one is inventing or innovating. I recently
met with John Hogan the President of Clear Channel.
I told him that he needs to pick 10 dog stations in
10 different markets, hire 10 young inexperienced
programmers and tell them they can do anything they
want to do. The only rule is that you cannot do what
is being done, you cannot listen to us or any of our
advisors. Cut them loose. 9 will fail and if lucky,
one will stumble into something which will revolutionize
radio. We are too safe, too formulated, too predictable.
what? Kids do not listen to the radio anymore. When
I was a kid all I did was listen to the radio. Today
we compete with games, cell phones, mp3s, internet,
etc. We are not relating to them and as a result they
are not listening to us. So, what happens. Today these
MP3 generation kids are 15. In 10 years they are 25
and are the money demos advertisers need to reach.
Does someone think they will take a magic pill when
they turn 25 and suddenly decide to like radio. Won't
happen. Radio will die if this is not addressed. The
only way to address it is for people to take risks
and try something bold and new. Groups can do it without
hurting a thing because they all have some dog properties
that are failing anyway. Will they do it? I doubt
it. Thinking is about next quarter not 10 years out.
your views on the monopolizing of American radio -
eg Clear Channel and other big companies?
I think the press has had a lot of fun with it, but
I don't think all of it is so bad. There are some
good things that have come out of it. More radio profit,
better benefits for radio employees, etc.
biggest concern is about homogenization of thought
and programming. I recently met with another group
head who was bragging that they did all of their research
for several hundred stations in house. "What
if you're wrong" I asked. How stupid is it to
have 1000 stations and have one head of programming?
Even one head of programming for different formats.
What if this person was once good and is now lost
his touch? No one will realize it. Stations are falling
and no one seems to care because billing is holding
up by having more stations. I happen to like the senior
people at Clear Channel. I think the new Clear Channel
is a sound and responsible company in spite of the
negative press freight train. Most of that was a result
of a previous administration. But it will take years
to turn the tide.
current president is the best thing to happen to that
company. Lets hope they understand that. But, I can
find lots of problems too. Nothing is perfect. The
biggest disappointment for me is that some 22 year
old kid may never have the dream fulfilled of owning
a station. I had my first station at about that age.
A dream come true. It would be difficult for me to
do that today. That is sad.
one or two key people have made positive changes to
the landscape of American radio, and how?
Ralph Guild of Interep. He is brilliant. He is innovative
and he truly cares about radio. He is more innovative
today in his senior years than he was when he was
30. He really made radio advertising into a business.
Gernsback. No one has ever heard of him. He published
a trade magazine in the 1930s. He has been my mentor.
He shaped the industry with his ideas. His ideas are
still in play today yet I bet that NO ONE in radio
has ever heard his name.
needs to be done to preserve regional radio stations?
are your biggest supports and detractors?
My readers are my supporters. I recently issued an
apology over a marketing piece I had written for our
Roy Williams conference. Seems some people were offended
by statements which they believed were unfair shots
at an industry organization. I issued an apology (which
is rare for me) because it truly was not my intent.
I never received more letters before. I received hundreds
who told me I was right, that I should keep doing
what I am doing, that I should continue to be a voice
of the people. I think there is truth in that.
is controlled by a big clique of people. Mind you
there are some very qualified and wonderful people.
But, I think the people working in the radio stations
see this as old school. They see this as people avoiding
change. They see me as someone trying to make change
and receiving resistance.
not sure really. I don't think alot about who hates
me or is against me. Probably anyone who disagrees
with me. I get letters sometimes from people who say
I scold radio too much. Get over it. I scold out of
love. Radio is in trouble in many ways and it needs
to move forward not backwards. People hate change.
I know I do. I have to work very hard at forcing myself
to accept change and make change. It does not come
what rate is the American radio industry growing /
By what measurement? It is growing in % of total ad
revenue and growing in share of local market because
for the first time the aggregation of local radio
clusters can rival the local newspaper. This is helping.
I have no idea what rate.
are the most impressive new radio technologies?
I have not seen any which impress me. Satellite radio
is ok. It will succeed. Give it a few years and we
will be blown away by its success.
of channels and low commercial loads. Radio is killing
itself by greed which means long commercial breaks.
I'm not against making money. But when change is necessary
to compete with satellite radio no one will want to
let go of the long stop sets and the revenues (can't
blame them). Radio is playing into their hands.
the PPM a better ratings system?
is no good ratings system. PPM is about cost savings
(automated). Will it reflect real listening? Yes,
in most cases. But it will record things you are listening
to that you don't listen to.... environmental radio
in places visited. Plus, is your people meter on when
you listen in the shower or before you get dressed?
Is it there when you're having a romantic candlelit
dinner with your wife and some love songs? Its not
with you all the time, there are times you remove
it. I think it will alter morning (pre-drive) listening.
It will create new cume for stations in demos that
don't listen (you're in a kids dress shop buying a
gift. They have the radio playing, you're there for
more than 5 minutes and you just recorded a cume of
that station. Is there anything better? No. Diaries
are flawed and phone solicitation is over.
has your website been good for business?
Its hard to say. A website is a necessity just like
a listing in the phone book. You cannot not have one
today. I have not yet figured out how to make it what
it needs to be and still make the investment in it.
I'd like it to be more of a resource center than it
is today. Were playing with some ideas.
there a funny DJ or Shock Jock story you can share
with our audience? (not expecting you to crucify anyone)
- just to lighten up the interview.
Stan Kaplan was a radio owner in the Carolinas. Short,
mustache, groucho marx kind of guy. One morning in
a sales meeting he was telling a story to the sales
staff. "I was visiting an advertiser who I have
known for 20 years. The phone kept ringing and interrupting
my pitch. So when the phone rang again, I got up,
ripped the phone cord out of the wall. I reached into
my wallet, threw down a $100 dollar bill and said,
"Get it fixed when I'm finished." They had
a good laugh over it. That night a green young sales
kid came in with his shirt ripped and bruises on his
face. When they asked what happened he said, I made
a cold call on a new client. The phone kept ringing
and interrupting, so I got up ripped the cord out
of the wall and threw down a five dollar bill and
told him to fix it later. They guy beat the crap out
are your current projects?
doing a lot of consulting projects I cannot reveal
yet. I also have a new start up company I cannot yet
talk about, but we think it will generate revenue
on radio without the need to sell ads. I am launching
a new consumer art magazine, and I am reinventing
one of my other magazines. Plus raising triplet toddlers.
What else should our audience
know about you and your operation?
Every company, every person needs to have an unbudgable
set of standards. You will be tested on your resolve
regarding those standards. Greed sets in and we can
easily violate the things that are our life principals.
We have a firm handle on what those are and we never,
never, ever violate them. Every company must have
these. Most do not. They make decisions clear. In
my case they keep me from having to deal with jerks,
they keep me from destroying my lifestyle, and I can
sleep at night knowing I am treating people fairly.
I may never own my own Gulfstream because lifestyle
and principal is more important to me than financial
success. If I can get financial success while having
these principals and values in place, perfect. But,
usually there are sacrifices.
Where do you turn for advice?
It's hard to get good advice. How many of us ask a
waitress if a meal is good? Yet, that waitress is
in a different place than you are. She may be eating
bologna at home because she has not been exposed to
what you have. You may have acquired a taste for gourmet
French food. Her recommendation of the dry-overcooked
meatloaf is because that's they way her grandmother
made it. Point being, few are in the same place you
are. So, advice is difficult. I call my dad a lot.
He has been there. I search for executives who have
owned small entrepuerneral businesses because they
lived my life. A guy in a big corporation cannot relate
to my struggles. I also read the book of Soloman and
Eclasties and Proverbs a lot. It is amazing that those
three books solve most business problems.
do you stay on top of all the latest trends?
do you stay sharp? I subscribe to dozens of magazines.
Most have nothing to do with things I am interested
in knowing. But, I learn from all of them. Almost
any free subscription I can get, I take it. I always
learn something. Also take at least one seminar a
year, preferable two. Out of industry is better. You
won't listen in your own industry. Also take regular
weekly classes in something like art, something that
takes you away and uses a different part of your brain.
does one revolutionize a business?
favorite story is one Roy Williams told me recently.
Henry Ford started out building one car at a time
and was going into bankruptcy due to the high cost
of production. He asked himself what industry could
teach him a better way to build cars. He studied other
businesses and looked for industries like his own.
He ended up at a meat packing plant one day. They
hung the cow on a rack and as it slid down the conveyer
each butcher cut off a different portion of the cow.
They did this in record time. By applying this to
his business, he reversed it and invented the assembly
businesses are similar to yours?
radio, who has inventory that expires and how do they
do business? Airlines? Hotels? Car Rentals? We need
to go out and learn from them.
is your current mission?
tired of the same people training our industry. They
are all competent, but nothing seems to change. I
intend to start with my own publication by seeking
new voices with new ideas. I plan to create seminars
with non-radio instructors teaching us from other
industries. I just hired a guy who trains car dealers
and asked him to tell us how to sell car dealers in
his magazine articles. I'm on a mission to reinvent
myself and my magazine.
mentioned taking classes in art. Do you do this?
and I take it very seriously. I schedule it like I
do meetings. I spend a lot of time on it because I
am working toward selling my oil paintings in galleries.
I'm almost ready. I have studied under some of the
masters of today's art world. I ws painting old masters
portraits and now am painting landscapes en plein
air (going out of doors on location). Its refreshing,
clears my brain, recharges me, and I learn things
in painting that apply to business. I had no art skill,
this is learned behavior. I highly recommend it. Its
frustrating for a while but very rewarding when someone
comments on a beautiful painting in your home not
realizing you have painted it.
note: An educational, hard hitting and interesting
interview, all in one. Eric Rhoads knows his stuff.
I have a feeling we will be hearing many more good
things about anything Eric Rhoads and Radio Ink get
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