As Radio Changes, Invest in Innovators, Not Has-Beens and Never-Will-Bes

Quote: If you invest in any of radio's major players - terrestrial powerhouses such as Clear Channel (CCMO.PK), CBS Radio (CBS), Disney (DIS) or Cumulus (CMLS), or Internet pioneers like Pandora (P), or satellite radio's Sirius XM (SIRI) - it might make sense to park the name "Randy Michaels" somewhere north of the back of your mind. I could go on all day about Michaels, having very informally crossed paths with him when I was cutting my teeth at WGR in Buffalo at the ripe age of 18. At the time, Michaels had already become a radio legend, after heading up Jacor Communications, which would later morph into Clear Channel. Jacor was "The Noise You Can't Ignore," best illustrated by the aggressive radio wars it waged in Tampa, Florida. Fast forward to 2011 and the type of radio Michaels let rip effectively died when Clear Channel took over. After a well-publicized controversy at Tribune in Chicago, Michaels is back with Merlin Media. Long story short, Merlin has acquired several major market FM stations. It recently flipped the format of one of them, in Chicago, to all-news. Part of Michaels' rationale for the format should matter to investors in the above-mentioned companies: My favorite format has always been spoken (word) radio. I've had anostalgic love affair with the big AM stations known for the format, andtoday, as music moves to the iPod, it's time for spoken word to move toFM. Following Michaels' logic, you can apply my favorite quote to radio: I don't know what a radio is anymore. It's kind of an anachronistic term. The radio becomes little more than a delivery device in this world. Clearly, Apple (AAPL) is not radio, but it's a competitive threat to any company that fancies itself radio, be it terrestrial, Internet or satellite. Consider the following takeaways from Michaels' quote and the notion that radio is an anachronistic term. Unless you...
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