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Up Close With XM Satellite Radio
SVP Music Programming Jon Zellner

In his tenure since joining the XM Satellite Radio family, Jon Zellner has proven to be not only a quick study, but he continues to evolve and develop his understanding of the “big picture.” With a firm grasp on the daily programming tasks in front of him, and an army of stellar music channels, Zellner opens up about XM’s place in exposing new music, his competitive situation and the changes he’s seen in the satellite industry since joining XM.  

You've been on the job at XM for two and a half years now. What are the biggest changes in your job today versus when you first arrived at XM?
The job is the same but, my understanding of the business has grown dramatically. There is a huge learning curve here and it all comes back to the fact that every decision an FM radio station Program Director makes is because of Arbitron, while every programming decision we make at XM truly is focused on content and listener satisfaction. I believe that the "re-thinking" process takes at least a year. So many things have been burned in our brains about how to win the programming game...many are valid, but everyone in radio should constantly be asking themselves whether they do certain things because it's the right way or because it's the way it's always been done. The choices for audio entertainment in 2007 are staggering...radio (terrestrial and satellite) needs to maintain relevance to survive. The good news for us is that not one XM channel has to worry about the next trend or what promotion will cause a ratings spike. We can focus all of our attention on the product - the music and the magic between the songs. The one part of my job that has changed is the amount of traveling I've been doing recently, working with many of our business partners at the OEM and after market level.

How do you see the record industry's perception of satellite radio's role in the exposure and breaking of new artists?
Most labels finally realize that we have the ability to help break new music and artists, sell records and create full blown marketing strategies for new releases and tours. Plus, many artists, labels and managers also realize the reach XM has. Some of our channels are cuming over three million people, far more than any FM radio station in America. Our latest research shows XM 20 on 20 with a cume of 2.6 million, just ahead of Z100. And, that figure does not include the tens of million listeners we have via DirecTV, AOL, three major airlines, rental cars and two major cell phone companies. It's interesting when a label calls about a new release from a heritage artist and they have nowhere to work the project at radio. XM is committed to breaking new music. Billy Zero and Tobi on XMU (XM 43) listen to hundreds of unsigned bands every week. Mike Marrone on the Loft and Bill Evans on XM Cafe are months ahead of any FM AAA station. Steve Kingston on Ethel often plays several cuts off a new modern rock release, not just the single released to radio. Aside from airplay, we also offer effective marketing campaigns at retail. Our partners, Best Buy, Circuit City, Target and Wal-Mart are always looking for opportunities to work with programming. And, we have also done releases at Starbucks on the Hear Music label which include performances and DVDs of performances recorded at XM's performance theater. Recently, we started working with promoters on concert tours. Last fall when KZLA/Los Angeles changed formats to Movin', XM's Highway 16 presented the KZLA Country Bash and sold it out by doing an on-air blitz and a promotion at Best Buy. Last month, we sold out the Martina McBride concert at Radio City Music Hall. Some labels are still coming around, but I think we've made excellent progress over the past couple years.
 

Are the labels as promotionally proactive with you as they were when you were in terrestrial radio (less or more)? Why do you think that's the case?
The XM music channels don't do many promotions. There are some that make sense, like sending listeners to the Grammy's (we have a partnership with NARAS and create a Grammy channel every year), the BET Awards (we just broadcasted the show live on XM 67 The City), the MTV New Year's Eve Bash (20 on 20 was onsite). We also bring people to DC to watch our Artist Confidentials and other long form shows. Plus, we broadcast live from Live Earth, Bonnaroo, South By Southwest, Lollapollooza, Farm Aid, Virginfest, CMA Music Fest, the Montreal Jazz Festival and dozens more. Sometimes, we send winners to these events; other times we simply allow our listeners to hear it live. What we DON'T do on the air is giveaways you hear on small market FM stations like CDs and movie passes. We try to keep the channels clutter-free in addition to being commercial-free.

How can you measure satellite radio as a potent force in the breaking of new music and artists?
There are many examples of modern rock records selling in New York, country records selling in New York, LA or San Francisco and heritage rock artists selling everywhere with no radio airplay. Last fall, Bob Dylan had his best selling first week in his forty-plus year career. Aside from his weekly show, XM created a micro-channel showcasing the new release which had Bob walking listeners through it track by track. With regard to unsigned and recently signed musicians, we offer several channels that are focused completely on new and emerging artists including the RADAR Report, a weekly show on XMU. Plus, we do live broadcasts from the Knitting Factory and The Living Room in New York. And, last year, we encouraged unsigned bands to send us their demo for a chance to open for Bon Jovi at Giants Stadium and a recording contract with AEG Music.

What do you see as the biggest changes in the satellite industry since you first started at XM?
The biggest change has been the shift from the retail aftermarket sales to new car sales. XM's factory installed and factory activated radios are now available in hundreds of models from GM, Toyota, Honda, Hyundai, Lexus, Infiniti, Saturn and more and over half of all new cars that come with a ninety day free trial period end up converting into paying subscribers. That means more than half of America doesn't even know that they're disenfranchised with local radio until they sample XM and can't go back.
     We also spend less time these days talking about products and technology as our focus has moved toward marketing our unmatched and exclusive content. We understand that the radios are merely one means to experience this content. Because of this, we have moved toward making XM available over other pipes besides our own. We reach over fifteen million people through DirecTV, over twenty million people through AOL, over ten million travelers on United, Jet Blue and Air Tran and over three million people through AT&T/Cingular and All-Tel cell phones. While people don't necessarily relate to buying radios the way they once did, they certainly are buying cell phones, TVs and automobiles. Our audience and reach will continue to climb as we utilize different paths to make our content available.

What are the pros and cons of a merger from the programming perspective?
From a programming perspective, I can't think of any cons. The pros are obvious...satellite radio subscribers will get more choices, including the best of both services’ music, sports, news and talk offerings.

It's getting increasingly more difficult for top shelf air personalizes to exercise their full creative talents in terrestrial radio because of FCC sanctions. Should indecency rules and policies apply to subscriber based programming as well (or to what extent)?
We don’t believe any regulation is necessary. We do believe that parents should be able to control the content that is coming into their car or into their home. We currently are able to block out certain channels and they are clearly labeled as “XL,” which stands for extreme language. Either the consumers can do it on their own devices or we can do it from our end to make sure that subscribers do not receive any channel that somebody doesn’t want or feels is inappropriate for their family.

Who is your biggest competitor and what is your philosophy on counter-programming against them?
XM’s biggest competitor is any other entity providing audio entertainment and there are new ones popping up all the time. The challenge is determining which ones have the business model and distribution structure to make them a long lasting entity and which ones will be gone before they get up and running. Regarding competition, my theory is that we need to be as knowledgeable and aware as possible of what everyone else is doing, but not to let it get in the way of creativity, originality and pure common sense. I think research is an excellent tool, but too many radio companies and PDs let it dictate new directions rather than confirm or deny existing suspicions that are already apparent and sometimes obvious. The “blind leading the blind” is all too common in business today where someone makes a decision because flawed research told them to do it and then their competitor follows instead of listening to their gut. Radio (satellite and terrestrial) needs to look at the big picture and constantly re-invent itself to stay relevant with the next generation of music fans. Young people today are far less enamored with radio than we were. PDs should challenge themselves to find the time to do their own focus groups and brainstorming sessions, and try new initiatives that offer something unique and compelling to audiences looking for and expecting more. That will be the difference between your product having “fans,” as opposed to “listeners.”

**QB Content By Mark LaSpina**
 


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Chase Murphy, PD
KXXM, KQXT/San Antonio

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