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Second Time Around (02/04/08)
Back For A Second Stint As CBS Radioís Leader, Dan Mason Has A Mission For His Company ó And His Industry

By Editor-in-Chief Joe Howard

Dan Mason is a man on a mission. Chief among his tasks is reviving the fortunes at CBS Radio, a company that boasts one of radio's largest platforms but that hasn't delivered the kind of results upper management and investors expect. Mason knows he's facing a challenge, but he also believes firmly that his company is capable of much more. And he should know; he served as the company's CEO from 1995 to 2002, and had been serving as a consultant until being tapped to return to the leadership post last year.

It's an opportunity he relishes. "I probably could have stayed in a consultant role, but I felt like I could contribute a lot more as a president and CEO than as a consultant," he says. "Had the company been doing great, there wouldnít have been a need. To me, it becomes a mission rather than a job. I need a mission or a cause a lot more than I need a job."

But the mission extends beyond his work at CBS. Part of Masonís objective is to build unity throughout the industry and promote radio to both advertisers and listeners. "The mission has become more complicated," he says. "At first it was simply to make some good programming decisions and bring back some great products to CBS Radio. Now itís gotten bigger itís turned into more of a mission among myself and other CEOs. We have to re-prove the value of the radio industry. Now the job has gotten a lot more complicated and, honestly, more exciting. Most of the people in leadership positions have been in the industry for some time. I think they see our industry the way I do ó as a service and pillar of their communities ó and everybody is ready to go out and tell that story. Satellite radio spent a billion dollars trying to re-position the radio industry as a cluttered commercial machine. Now our industry has to go on the offensive. It's like an arm-wrestling contest, and we have to go the other way."

RADIOINK: Leading up to your second stint as head of CBS Radio, you were consulting the company. Iím curious what motivated you to step away from that and accept the leadership post, especially at a time when the company is facing a lot of criticism from Wall Street?
DAN MASON:
I probably could have stayed in a consultant role, but I felt like I could contribute a lot more as a president and CEO than as a consultant. Had the company been doing great, there wouldnít have been a need. To me it becomes a mission rather than a job. I need a mission or a cause a lot more than I need a job.

RI: What are your goals for this mission?
DM:
The mission has become more complicated. At first it was simply to make some good programming decisions and bring some great products back to CBS Radio. Now itís gotten bigger; itís turned into more of a mission among myself and other CEOs. We have to re-prove the value of the radio industry. Now the job has gotten a lot bigger, more complicated, and honestly, more exciting.

RI: Does radioís value need to be proven to listeners?
DM:
No, and Iíll give you case in point: When Hurricane Katrina hit, Entercomís WWL was the only radio or television station on the air in those first few hours. WWL has nothing to prove to anyone because it singlehandedly broadcast information that helped save people in that community. When you ask if we have to prove ourselves to listeners, I say stations that are doing their job and becoming community involved are doing it every day. And itís not just CBS; itís other companies in markets large and small.

Take Clear Channel: They have a better fuel distribution system for their listeners in parts of Alabama, South Carolina, and northern Florida than FEMA! Or Citadel: Around 1982 they began a blood drive at KABC and KLOS in Los Angeles. When they started they got a couple of thousand pints of blood. They did that same blood drive recently and got almost a hundred thousand pints of blood. So when I hear stories that radio has to prove itself to listeners, I donít buy it ó we do that day in and day out.

RI: But these are cases where people turn to radio when they really need it like kids who tune in to News stations on snowy mornings to hear if schools are closed. In cases like that, people take it for granted that radio is there.
DM:
I disagree. Itís very true that News/Talk stations are sometimes more of a utility; when events happen, you go right to them. Itís like your lights ó you turn your light switch on, you expect it to be there. Thatís true. And I can see that happening as I research the streaming audiences of our News stations; they go up and down in listenership depending on news events.

However, itís a much different ball game with music stations. Take WCBS-FM here in New York; under the old Jack format, we were doing about 10,000 unique listeners a week. But since July, when CBS-FM came back, that population is now up to 50,000 unique listeners a week. The only reason I make reference to the stream is because thatís how strong we believe that the stream is going to be what PPM is really all about; the way to electronically measure something in real time. We research our streaming audiences because I believe streaming is really the PPM world of the future.

Whether or not we prove to the listeners will be dependent upon how good a music product we put out there. For example, B94 in Pittsburgh has taken right off, bringing it back from when it was the great Top 40 radio station in the í70s and í80s. Itís taken right off again. So, when you make comparisons about listenership, itís much different in news and talk than it is with music.

RI: What about advertisers? Or the investment community?
DM:
As far as advertisers and investors go, technology has become very sexy especially with the iPod and satellite radio. Technology is changing so fast, but our technology has not changed that much since 1920 when KDKA signed on. The truth is that radio reaches 95 percent of the population, every day, every week, 52 weeks a year. Satellite reaches 6 percent of the population, so why are we having this conversation?

RI: To be fair, radio has an 80-year jump on these competitors. Shouldnít any new threat be taken seriously?
DM:
Iíll take satellite radio seriously when itís 50 percent. And, that probably will not be during my career.

RI: Where does streaming of radio stations fit in to the competitive mix?
DM:
The streaming world isnít like a radio station. Radio stations get high usage in morning drive from 6 to 8:30 a.m., when you see high peak listening levels, and again that hour and a half or two hours late in the afternoon on the way home. But the streaming world begins to show up about 8:30 or 9 in the morning, which is at-work listening. So hypothetically, the combination of radio in the drive times coupled with the usage of the product in the streaming world in midday would be a powerful mix. Itís tough to listen to a radio in a large office building because of the interference, but the consumption of the product is still there by streaming.

RI: Should the focus of streams be simply repurposing the broadcast signal, or should more unique content be created for the stream?
DM:
We have separate things running on our stream from time to time. This is small, but Iíll give you an example: We found out that some of WFANís streaming audience was coming from Iraq, so and the staff put some nice holiday greetings together to run on their stream while FAN is in commercials, thanking the soldiers for their service to our country and for listening to WFAN. So, there is an audience out there being cultivated like that.

RI: Getting back to your comments about cooperating with other group heads to re-prove radioís value, do you believe groups can unite and successfully work together while still competing in the trenches?
DM:
Itís a bigger issue than that. Most of the people in leadership positions now have been in the industry for some time. I think they see our industry like I see the industry ó as a service and pillar of their communities ó and I think everybody is ready to go out and tell that story. Satellite radio spent a billion dollars trying to re-position the radio industry as a cluttered commercial machine. Now our industry has to go on the offensive. Itís like an arm-wrestling contest, and we have to go the other way.

RI: Thereís been a lot of air time devoted to promoting HD Radio; should some of that airtime should be devoted to addressing these attacks?
DM:
We intend to devote a heavy portion of our airtime talking about the effectiveness of radio. And Iím not talking about CBS, Iím talking about all of radio. We are dedicated to doing that this year.

RI: Is there an initiative under way?
DM:
The commercials are in production right now.

RI: Commercials promoting the medium itself?
DM:
Thatís right, about the power of the medium.

RI: The HD Digital Radio Alliance for the second year in a row was radioís top advertiser, but there remains a lot of question about whether those spots are driving consumers to buy the receivers. After two years and over $400 million in ad time, why isnít there more impact?
DM:
I used to work for Ibiquity ó they were my clients in the consulting world ó and I went all over the country doing HD seminars and talking about HD Radio. In 2003, I went to Los Angeles to do a seminar to the radio industry about HD, and only one person came ó and that was an Infinity engineer who dropped by to say hello! How could there be a full seminar in Los Angeles that no one attended? But, fast forward to 2007 and look at the progress weíve made: From 2003 when no one came, the industry has made a lot of progress. Especially the announcement Ford made about installing HD radios in their cars. If you take a snap shot today, this has come from ground zero the past two years. Donít look back, because thatís an unfair comparison.

RI: Taking a snap shot of today, the consumer acceptance and excitement doesnít appear to be there.
DM:
Fair enough. Thereís still a long way to go and I believe that youíll eventually see HD branch out. It wonít be just about an HD radio ó it will be about HD chips in iPods, in some of the Apple products that are coming out, and possibly in cell phones.

RI: Is this integration with other products vital to the technologyís future?
DM:
With HD itís not about radios, itís about digital technology. We have to create a pipeline to be able to split our spectrum, and you canít do that in the analog world. In the digital world the signal can be split to datacasting and a number of other things, products that you donít even know exist. Go to Google and type in alternate uses of FM spectrum and see what people around the world think. A lot of smart people think there many yet-to-be-developed applications for FM spectrum, and the only way you get there is to have digital technology. You canít do that in analog.

RI: How do you feel about the HD Radio interface in its current state? Do you think it could evolve over time?
DM:
I think that will evolve. Iím not even sure that 10 years from now radios will look like they do now. They might look more like satellite radios with number and channels 1-500 or something like that. Iím not sure it will be frequency one, frequency two that we see now.

In the next 10-15 years it will be all about the appliance. Go back and look at the basic tabletop and car models Sirius and XM used to have versus all the different products they have now. I think weíre going to see a revolution with the number of products in our industry. Youíve got to realize that radio is probably the dumbest appliance in your house right now. You can make the comparison to radios and microwave ovens; when microwaves first came out, you just turned the dial back, it went 60 seconds, and then the food was done. Now, a microwave oven has micro processors that detect temperature on food and timers that know how long popcorn and chicken should be cooked. The radio never really evolved in the past 25 or 30 years. With the exception of the nice LED screen, it basically looks the same. Thatís going to change radically with digital technology.

RI: Will usage change as the appliance evolves? Perhaps with less in-car listening and more on-the-go listening?
DM:
I think it will be a combination of both. But as you talk about uses, look at the announcement with iTunes tagging on HD Radio receivers. In our industry people can actually tag songs and buy from iTunes now. Thereís another use, and itís something we couldnít do in the analog world.

RI: CBS Radio has been actively expanding into new and evolving media. Is there a specific goal in mind, or is the company just being entrepreneurial?
DM:
We strongly believe that every radio station has the ability to be a television station someday, so we see a lot of video applications, especially with the strong radio brand names. I canít announce it right now, but within six months youíll see a pretty major announcement come down the pipe. Weíre aggressively trying to explore new ways to incorporate video. If you go to a lot of our websites now, youíll see some pretty brilliant applications of video, and weíre just scratching the surface. As far as streaming, our goal is to be the number one streaming platform in the world. We live that every day, and hope it happens soon.

RI: How do you feel about utilizing station websites as a platform for social networking? Is there value in those kinds of applications?
DM:
I think weíre way far ahead there. WXRT, for example, has micro-sites to splinter down off of the main stream. I have been pleasantly surprised by how far our company has come in digital applications versus where we were when I left in 2002. The measurement tools available now for the stream are one example. When we put certain programming on the radio, we can see the effectiveness right away from stream measurement. Itís just incredible. We have such quick access to information now that we didnít have then.

RI: Are you concerned about how the ongoing copyright battle might affect the long-term financial viability of streaming?
DM:
It may not be viable for a smaller company, but we think we have the people and enough radio stations in the space to make it a new source of revenue that would offset whatever increase we had to pay on the road.

RI: Do royalty payments create more of an opportunity for Talk versus music?
DM:
No, I wouldnít put it that way. Keep in mind that if you total up all of our streaming numbers, our top two stations are WFAN and KLSX, and theyíre not affected by royalty rights.

RI: CBS Radio was also an early adopter of the PPM. What challenges have you confronted with advertisers who have concerns about the new technology?
DM:
The challenges are no different than when Arbitron created the diary service. When they created the HDBA and HDHA zip code diary system, they had placement problems then, too. In 2004 when Nielson went to a metering system for TV, they had the same issues. Arbitron is going to have to work through it, and I have total confidence that they will, because you donít necessarily get this right on the first roll. It takes a while to perfect the product, but you canít necessarily stop the system and wait for the final, most beautiful product to come off the assembly line. Otherwise weíd never have had the diary; it would have been whatever Hooper and Pulse were doing at the time in telephone surveys.

RI: So were you unhappy that they delayed the further rollout of the PPM?
DM:
I was extremely disappointed.

RI: What about all of the concerns that have been expressed about panel sizes?
DM:
That would be worked out in the course of time. Iím sure they have ingenuity enough to get around the panel sizes; again, these are the same problems they had in diary placement. They figured it out then, and they will figure this out, too.

RI: Itís been a while since CBS launched the plan to sell some of its non-core stations. Are you happy with the companyís current stable of stations, or are more changes in the works?
DM:
With every radio company, whether itís CBS or anyone, thereís probably a combination of buying and pruning of stations over time. No, I couldnít tell you that weíll never sell another radio station, or that weíll never buy another radio station. We have some AM facilities especially that are very challenged. They came packaged in other deals that weíve done over the years, and itís possible that some of those could be better off in different hands, more local ownership.

RI: During your time consulting the company, did you learn any important lessons that you will apply now that youíre back in charge?
DM:
As leaders and CEOs, we have to bring tools to the table to help people. It isnít just all about pushing pressure down a pipe. I think thatís the sea change for me. Not that I did that before, but the leaders of these companies have to bring something to the table themselves. Whether itís sales expertise, programming expertise, or even technology expertise, they have to help people do their jobs better and to show them better ways. Or at least introduce better ways.


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