Bob Pittman's influence extends far beyond the business world. In 1981, Pittman started a television channel called MTV, and he has had a continuous impact on the world's collective consciousness ever since. As a CEO, Pittman re-energized Six Flags amusement parks, and built Century 21 into a real estate giant. He was part of the leadership team that made AOL into the dominant player in the early online era. He's invested in other ubiquitous media such as DailyCandy and Huffington Post, and these days is CEO of Clear Channel Media Holdings, which owns 850 AM and FM radio stations in the U.S. and operates the popular iHeartRadio Internet radio platform. Pittman spoke with Kevin Maney at Clear Channel's offices in New York.
Kevin Maney: So let’s go back to when you were 23 years old, a top music programmer for radio stations. How did MTV happen from there?
Bob Pittman: NBC sent me to New York from Chicago. I was one of a group of guys that were “Herb’s boys” - Herb Schlosser was the president of the company. There was some young talent in the company that he sort of adopted. I was one of them, Dick Ebersol was one, Lorne Michaels was one.
Herb gave me a TV show after Saturday Night Live, and it was basically: “Do whatever you want to do.” And so I played music videos, did some music news, and got a little experience with that.
Maney: Were there many music videos available at that time?
Pittman: They were mostly British. In America, radio breaks music. But in Europe in those days, you broke music off TV stations because there were not many music radio stations.
Maney: Then you got hired by Warner Communications to program cable channels?
Pittman: I put together a plan to basically be a video radio station, and internally said, “We’re going to do to FM what FM did to AM.” It was a tough road to get the board of directors to say yes. We had to go to Steve Ross, who ran Warner Communications.
Maney: What was the board’s objection?
Pittman: First of all, no advertiser supported cable network had ever succeeded, so there was a question about whether that model even worked. And the second thing was whether this rock and roll stuff would work.
I think within about six months everybody began to say, “It’s working.” And within a year and a half they were begging to get their videos on MTV. At first we had a shortage. Within two years, we had too many and we were having a hard time fitting them all in.
Maney: When did MTV truly become a cultural phenomenon?
Pittman: Probably Michael Jackson. He was the first video artist. This was a performer. Great music, but a performer. And so we played “Billie Jean” and we played “Beat It,” and then CBS records said, “Well, we only do two videos per album, no more.” So the manager came to us and said, “Would you pay for the video?” And we go, “We can’t start paying for videos – we’ll go broke! We’re already not making money – this would be terrible!”
And what we hit upon, this scheme, that we would produce and pay for “The Making of ‘Thriller,’” a documentary -- and embed in it the cost of making the video. Everybody was talking about it; even people who weren’t interested in MTV wanted to see this video.
Maney: What did you learn at MTV that you took to other ventures after that?
Pittman: Absolutely ignore the conventional wisdom. I didn’t know a lot of stuff I wasn’t supposed to do, so it freed me just to go do it. If I knew then what I know now, I’d probably have never started MTV. I would have been afraid of it.
Maney: You’ve done such a variety of things: MTV, Six Flags amusement parks, Century 21. What’s the link between them?
Pittman: It’s all the same consumer. People love brands, and convenience always wins.
Maney: There’s a story about how you took a job as a street cleaner when you first joined Six Flags. Can you talk a bit about that?
Pittman: When I was at Six Flags, Disney had great customer service and we did not. So I said, “You know what, I just want to go be a street cleaner. I just want to go get a sense of it.” I put on street cleaner’s clothes and cleaned the streets with folks there. And I had an epiphany. We’d told them their job was to keep the park clean. Who makes the park dirty? Guests. Who do they hate? Our guests!
So we went back and redefined everybody’s job. Their job was to give the customers the greatest day of their lives. Behavior began to change.
Maney: You joined AOL in 1995, and then it took off. What was it that suddenly made AOL such a big hit?
Pittman: People began to understand the value of the Internet. People called us the Internet with training wheels – that was good because it meant we were easy. People didn’t want a geeky thing that they could play around with. They wanted it to be so easy that they could get the benefit of it without having to put a lot of work into it.
Maney: AOL amassed a gigantic lead in the industry. Why couldn’t it keep it?
Pittman: My view always was that AOL was the walled garden. You could only get to the AOL stuff and use AOL Instant Messenger and all that if you were a member of AOL. So the more people on AOL, the more people came to AOL. The network effect. After I left, someone decided that they would get more users if everything were open to the world. The network effect went away and suddenly AOL was just somebody else providing content out there.
And Facebook is the next walled garden platform. They’re very smart. You want to participate with Facebook, you have to join Facebook. The walled-garden concept, if you can get critical mass, is a wonderful one to play with.
Maney: Talk about the merger between AOL and Time Warner. What’s your take on that?
Pittman: Yeah, it was pretty disastrous. But I’m not sure that I agree with the reasons why. It was the biggest ad recession I had ever seen. You know, the reality is, the first year of the merged company, 9/11 happened. Everybody’s stock price went down. But, it was written about as if, you know, somehow the merger caused the stock price. I think once you start on that negative momentum it’s hard to pull it back.
Maney: What lead you to Clear Channel?
Pittman: Rich Bressler, an old friend and CFO at Time Warner, said, “Mark Mays is stepping down at Clear Channel, would you be interested in being the CEO?” And I said, “Absolutely not! Are you crazy? Those jobs kill you. I’m having a great time. I don’t wanna work that hard.”
But we worked that I would invest in the company, and then I agreed to be the part-time chairman. And then, along the way, they decided they really needed to get in the digital space and so I started developing. And the guys came to me and said, “Listen, you said you didn’t want to work this hard. I can’t imagine you working any harder. Why don’t you just be the CEO?”
Maney: Why radio? Do you see radio as a growing field?
Pittman: Well, one of the things I saw when I looked at Clear Channel was the fact that radio listening had not declined. About 92% of the people listen to the radio every week. The number of listeners actually has increased. So as digital was growing it wasn’t cannibalizing broadcast radio.
When you look at consumer trends, there’s a huge one out there. My entire career in the media business has been driving toward the connected home. But as soon as wireless came, people started spending more time out of home. In the last ten years, consumers spent 31% more time in the car. Americans spent 70% of their waking hours outside the home. You suddenly go, “Wait a minute. There’s a new trend.”
Now, if TV was perfect for the connected home, what’s perfect for the out-of-home? Radio is the original mobile media. And you just realize, there’s just a world of opportunity for anybody who’s got that kind of thing.
Maney: Is AM dead?
Pittman: Programmed correctly, AM stations do very well – WCBS and WINS in New York do well.
Maney: Can you do something else with those AM signals that would be better?
Pittman: Maybe. If I could figure it out, we’d be doing it.
The contents or opinions in this feature are independent and do not necessarily represent the views of Cisco. They are offered in an effort to encourage continuing conversations on a broad range of innovative technology subjects. We welcome your comments and engagement.
We welcome the re-use, republication, and distribution of "The Network" content. Please credit us with the following information: Used with the permission of http://thenetwork.cisco.com/.