Recognized as one of the brightest programming minds in terrestrial radio, Jon Zellner moved from the comfort of what he knew so well, to a new and more formidable challenge, Satellite Radio. We checked in with Zellner one year removed from terrestrial radio to get his take on life in outer space, handling various formats and personalities, and the direction of XM moving into the future.

Now that you have spent a year at XM, what were the biggest challenges adapting to the satellite radio world?
There are many similarities, but for the most part, it’s a lesson in rethinking many philosophies that have been engrained in our heads – not necessarily because they’re correct, but because it’s the way radio has always done it. There are still great radio stations left in America, but so many get trapped into not being innovative because of either lack of manpower or lack of creative control. So many PDs are overseeing multiple stations and markets and they have to do other things besides concentrating on making their radio stations remarkable. I remember in Kansas City and in Boston I never had time to write promos or imaging at the office…I did my best brainstorming at home. How many times are PDs doing promotions they have either done before or heard being done in other markets? Or, how many times are they letting the sales department dictate what gets on the air? My philosophy was always “if it’s new to our listeners, it’s new.” Maybe that isn’t the best way to look at it. At XM, we always avoid the temptation on the air of “sales pitches.” How many radio stations use the word “best” in their positioning statement? Best variety, best mix, biggest hits, more songs in a row…being remarkable doesn’t mean making false claims. The most exciting part of satellite radio is the fact that our programmers are tasked with one thing…making their product great. Since we don’t run commercials on the music channels, we can totally focus on branding our channels and doing great radio every day. Think about the passion level for radio now compared with 20 years ago. Back then, you saw people wearing radio station T-shirts, bumper stickers on cars, listeners showing up at remotes, jocks getting mobbed when they introduced a band on stage. Now, ask any high school kid who their favorite night jock is…they may not even listen to the radio at all. People have always been passionate about what radio provides (music, entertainment, information), but I’d like to think we’re making listeners passionate about radio again.

What did you draw from your past programming experience that possibly made the transition a little easier?
The nuts and bolts of programming are the same regardless of whether you’re doing a satellite channel, a local radio station or choosing the music for someone’s wedding. Guy Zapoleon taught me everything I know about music scheduling and rotations. That theory works everywhere. Dave Robbins, my other mentor, taught me everything I know about marketing warfare, but unlike competing against some other station across the street, we’re competing with any device vying for our attention…the iPod, the cell phone, the blackberry. Terrestrial radio stations should use the same philosophy. Rather than trying to out-do another station, do something that’s better than another medium. At XM, we offer music channels that target very sophisticated music fans and we’re providing channels that aren’t available anywhere on the FM dial in addition to channels and music that’s available all over the dial. It’s interesting to note that our most listened-to channels are the same formats that are available locally. Radio listeners know what they like and they like what they know. When you get XM for the first time, you’re inclined to go to the “safe zone” first – a new subscriber may say “Hey, where’s the country station, where’s the oldies station?” These “marquee” channels should send new listeners to the super brands and specialty formats. If someone tunes into Ethel, our premiere modern rock channel, they should hear about XMU, if they want to explore new, emerging and unsigned artists and Fred, if they want to experience the birth of alternative music. But, these exploratory channels usually have a smaller cume and a higher TSL. The beauty of XM is the fact that we celebrate music’s diversity and every channel serves a purpose and is important in its own way. We like to think of the XM music channels as more than just offering music. Every channel has a vibe, a spirit, an attitude and a point of view that stands out from traditional radio stations.

What has surprised you the most in the satellite radio world?
Spending a year in satellite radio has caused me to re-think so many things I learned during my 20 years in local radio. Most notably, my biggest surprise has been assessing the missed opportunities in terrestrial. Working in satellite radio makes it so much more apparent what local radio must do to survive. Since we live in an “on demand” world, I honestly don’t think that music fans are going to choose local radio to hear their favorite song in five years. There will be limitless ways for them to access music. More than ever, local radio should focus on being local. Every hour on my clock at Mix and Star in Kansas City were “live local relate” breaks, where the jock had to “sell the city.” These breaks are especially effective in markets like Kansas City where there is a great deal of hometown pride. Radio listeners want to know what’s happening in their backyard. Look what’s happened to local television over the years. Right now, the only local programming on TV is news. Every positioning statement for a local TV station revolves around their newscast. Voice tracking, cyber-jocking and liner card reading for local radio is expediting any local radio station’s demise. You can listen to countless small and large market radio stations and transport them anywhere in America…how is that different from what we do? The key to satellite radio’s success is turning the corner from “luxury item” to “necessity” the same way cable TV or the cell phone has done. I see this happening in the next few years.

XM started as a bunch of renegades blowing up the accepted norms of terrestrial radio. Is your goal to mainstream the channels up going forward or retain some of that rebel spirit?
(XM SVP of Creative Programming) Lee Abrams’ vision for XM in 1999 rings true more than ever today. The key is taking everything terrestrial radio has done right and putting our spin on it and looking at some of the mistakes that have been made and insure that we don’t let them happen here. In the early days of XM, Lee talked a lot about “maximization” – maximizing the XM sound. What can we do to make every channel extraordinary? Sometimes, it’s just about playing great music. Sometimes, it’s a musical journey into the surreal with organic imaging and content that’s a little “out there.” But, even for our mainstream channels (Country, Top 40, Rock, Urban), we challenge ourselves to experiment. While we can’t re-invent the wheel on certain formats musically, we make certain that the elements between the music sound different. So, in short – it’s all about balance. We offer mass appeal channels targeting mainstream America. We offer narrow-focused channels for every musical taste (disco, new age, classic alternative, classic soul and R&B, opera, folk, gospel and dozens more). These “super brand” channels have been successful in turning their listeners into fans and like in terrestrial radio, have smaller cumes but very high TSL. Because we offer so many choices, every channel can be pure. We talk about “format purity” a lot. This allows XM programmers to super-serve a very specific psychographic. Sometimes, terrestrial radio has to “cheat” a little and try to branch out because their success is completely dependent on their latest Arbitrend. At XM, we can fill niches that are non-existent across the dial (heavy metal, reggae, disco) or provide formats that are fading fast (beautiful music, oldies, dance). Again – every channel serves a purpose.

How much of a role do personalities play in the presentation of the channels?
There are some channels where personality is part of the architecture. There are others where it doesn’t make sense. Our decades’ channels should sound like the great Top 40 radio stations of their time. In fact, every Friday afternoon, Terry “Motormouth” Young (who spent many years at WCAU and Q102/Philadelphia), actually salutes vintage Top 40 stations of the 60s and plays old airchecks, commercials, jingles and imaging…it’s better than reelradio.com. Most of our marquee or mass appeal channels, for the most part, have personalities who don’t get in the way of the music. That’s the difference between XM and music providers like Music Choice or Muzak. The channels weren’t set up to sound like “juke boxes,” but there are some channels that don’t need jocks. On channels like Top Tracks and Big Tracks (our premiere classic rock channels), it’s unnecessary for a jock to introduce “Another Brick in the Wall” for the millionth time. However, on Deep Tracks (Channel 40), I actually look forward to hearing stories about the music from George Taylor Morris and Earle Bailey. We’re lucky to have Bill Wax as the PD of Bluesville. Bill’s knowledge of Blues makes this channel what it is…knowledgeable DJs (like knowledgeable record store managers) are a forgotten art forum. Remember the days of listening to people like Scott Muni or Allison Steele on WNEW when you would actually look forward to hearing their stories? That is a rarity in radio today, but it happens every day at XM. Listening to Robert Aubry Davis, Martin Goldsmith and Paul Bachmann tell me everything I need to know about classical music makes these channels come to life. Another channel that we create is XM Kids. This channel, programmed by Kenny Curtis, targets kids between the ages of 5 and 10 (we also offer Radio Disney which reaches pre-teens). The key element at XM is content. From sitting in countless focus groups over the years, I always remind my staff that radio (even satellite radio) is a secondary activity. It compliments something else you’re doing. And, any radio listener will tell you that DJ talk is a negative. The reason they say this is because all too often, the DJs aren’t saying anything interesting. They’re talking “at” listeners instead of “to” them. One on one communication is crucial. DJs aren’t giving speeches and addressing a crowd…they’re talking to every listener individually. So, because radio is background, jocks should remember that less is more…fewer words, natural delivery and content add to the music rather than interrupt it.

How do staffing issues differ, and how are they similar, to terrestrial radio?
The XM programming department has been able to do incredible radio with a very small staff. With only a few people on each channel, the content on these channels sounds like it comes from a staff of 10. And, as XM grows, so will the staff. While these channels probably won’t ever have as many people as a major market terrestrial radio station, I’d like to think we’ve found a way to create more with less.

XM has Oprah Winfrey, Opie and Anthony, Bob Dylan, Ellen Degeneres, Derek Jeter, Ludacris, Tom Petty, Bob Edwards, Al Franken, Quincy Jones, Jimmy Johnson, Coach K. Sirius has Howard Stern, Bubba the Love Sponge, Lance Armstrong, Martha Stewart, Richard Simmons, Little Steven. Are we detecting a trend here? How important is it to obtain the high profile personalities?
XM sells a great deal of our subscriptions based on our 90-day free trial period. Our conversion rate hovers around 60-65%, which means that nearly two-thirds of America don’t consider themselves necessarily disenfranchised with local radio until they experience XM in their car, on an airplane, through Direct TV and AOL or in a rental car. Once you experience commercial free music and over 160 channels of everything you’d ever want, it’s hard to go back. High profile personalities help raise the awareness level of satellite radio, but more importantly, many of these shows aren’t available anywhere. This original content makes the cost of satellite radio negligible for any fan. We’ve heard from baseball fans that being able to switch from game to game brings them back to the days of their transistor radio as a kid trying to pick up stations from across the country to hear major league games. We’ve heard from women who love watching Good Morning America and Ellen Degeneres, but aren’t always near a television when the shows are on. We’ve heard from NASCAR fans, hockey fans, ACC and Pac 10 fans, World Cup Soccer fans, along with the millions of music fans who listen to us every day. I can tell you that, moving forward, it is our plan to push out the content that we already have rather than invest in a lot more.

How can the record industry best use satellite radio as a marketing tool?
We can do so many great things with the record labels. We just hired Steve Kingston as our Senior Director of Label Relations, who spends two days here in DC and three in New York. Between Steve, Lee and me, we have dozens of opportunities for the labels to use us to generate sales with new releases. Outside of normal airplay, we have two performance theatres in DC and several in New York. Once the artists see our facilities, they want to play, but sometimes, we’ll even go visit them at their home, hotel or concert venue. That’s how we’re able to create shows with some of the major stars who may not want to make the trip to New York or DC. Last summer, we entered into a joint venture with AOL, AEG, Direct TV and Regal Cinemas called Network Live. This company, run by Kevin Wall, enables us to broadcast a live concert on XM, a live webcast to 30 million AOL users, across the country in 14,000 Regal movie theatres and to 15 million Direct TV households. So far, we have done amazing performances like Bon Jovi from New York, The Rolling Stones from Rio, Madonna from London, the John Mayer Trio from Las Vegas, Keith Urban from the CMA’s and many others. As far as audience, it’s important the labels recognize just how big the XM audience is. With more than 6 million subscribers (and growing by about 10,000 a day), XM has close to 13 million listeners (more than two listeners per subscriber). This doesn’t count the people listening via AOL (30 million households), Direct TV (15 million households), XM Canada, three airlines (Jet Blue, Air Tran, United), rental cars (Avis, National, Alamo) and more. In other words, right now, our Top 40 channel (20 on 20) is the third highest cuming Top 40 in America with a cume of 1.7 million. It will be the number one cuming Top 40 in American within a year. Our current-based country channel (Highway 16) is the highest cuming country radio station in America with a cume of over a million. With 20 million subscribers by 2010, our channels are poised for huge success and massive reach across America. We hope to continue and strengthen our label and management relationships and provide our listeners with quality programming that will lead to record sales through our Napster partnership.

How do you respond to some label critics who feel that satellite radio is subscription-driven, not cume-driven, therefore its difficult to weigh the effectiveness one channel can have on a current project?
I whole-heartedly disagree. Radio is radio. As we continue to grow and become more of a household name, I see XM and satellite radio in general as critical in the marketing of any project. There are two reasons radio will always survive in the iPod world. #1 – the element of surprise. It doesn’t matter how many songs you put on your iPod and whether or not you’re in “shuffle” mode, there are NO surprises. How about that song you haven’t heard in 20 years that you forgot you knew? How about a comedy routine you haven’t heard since you were a kid? How about a great break from a personality who just said something you weren’t expecting? An iPod doesn’t have any of this. And #2 – you still need a way to hear new music. An iPod is simply an easier way to store the CDs you already bought, but you still need radio to fall in love with a new song. We did a major promotion with Bon Jovi last fall called “Have a Nice Gig,” where XM found local, unsigned bands to open for the band all over America. The winning band gets to play at Giants Stadium this summer and also gets a record demo deal with AEG Music. Right after the Bon Jovi performance for Network Live from the Nokia Theatre and all of the airplay we were giving the first single, the band had their biggest week of opening sales ever. We get hundreds of e-mails every day from listeners wanting to know where they can buy the music that we play. Remember that while some XM listeners are music connoisseurs, EVERY XM listener is a music fan. We have the reach, but we also have the right kind of listeners who will go out of their way to purchase a song they’re passionate about. There are countless win/win opportunities for XM and labels, managers and musicians.

Now that you have spent a year at satellite radio, how difficult would it be to go back to terrestrial radio?
I actually think anyone who has spent time programming a satellite radio channel for XM would make a better terrestrial radio PD. There are many aspects of programming that I would handle differently knowing what I know now…the importance of innovative local and compelling content being the most crucial. During my first 20 years in radio, I learned about marketing, branding, communicating, researching, writing, selling, managing and living. During the past year, I learned how to do all of these all over again.

[QB Content by Fred Deane and Mark LaSpina]