Radio gold? Dial 1-800-Internet - SW Network's plans to reinvent radio - Nota Bene

Chief Executive, The, Sept, 1995 by Joseph L. McCarthy

"Every generation has to reinvent itself in a different way," to rebel in a way that offends the preceding generation, says Susan Solomon. The president and chief executive of radio syndicate SW Networks speaks from experience. A baby boomer, at 18 she married Gary "Chicken" Hirsh, the long-haired drummer of the 1960s rock band, Country Joe and the Fish, perhaps best remembered for entreating 400,000 attendees at Woodstock to help it spell out the king of four-letter words during a performance. This to the consternation of her parents, both of whom were classical musicians.

But sitting in her midtown Manhattan office, in a building astride New York's Harley-Davidson Cafe, a watering hole appointed with vintage hogs and studded leather jackets where entertainment types often mingle, Solomon is sizing up the future, not the past. In fact, she is outlining her plans to reinvent radio. In an era of multimedia and the information superhighway, many observers cast the medium as distinctly second-tier. But seizing convergence by the throat, Solomon is out to change that. Backed by Mickey Schulhof's Sony Corp. of America - which wholly owns SW - she is producing and distributing to stations nationwide a variety of music and talk programming. In a high-tech twist, she is driving her network onto the Internet, supporting shows with a smorgasbord of listener services and laying the groundwork for radio of the future - interactive radio broadcast via computer.

In the process, Solomon hopes to revitalize the business, restoring some of the luster of its golden age. Challenging the MTV generation, which craves spoonfed images from a screen, she aims to stage a "Theater of the Mind," an ambition underscored by SW's sobriquet, "The Radio Picture Co." Along with music from heavy metal to classical, SW will spotlight hip radio soap operas and serial adventures. The bits will conjure images, forcing listeners to use their imaginations, Solomon says, a dormant faculty that many youngsters equate with their parents' tales of penny candy, 10-mile hikes to school, and five-cent slabs of pie at the Automat.

"In the old days, listeners had only words and music to rely on. In some ways, that was more rewarding," says Solomon, who allows that she missed the era of "The Shadow" and other programs from radio's heyday, cutting her teeth instead on the likes of legendary New York rock jocks Murray "the K" and "Cousin Bruce" Morrow.

"It's like when you listened to baseball games on the radio as a kid," seeing the ballpark in your mind's eye, she continues, selecting a metaphor recently served up on the air by an SW talk-show host, former New York State Governor Mario Cuomo. "The MTV generation is the MTV generation. This generation has to be what's next."

Since its inception early last year, SW has epitomized the risks and volatility of the entertainment industry, in the spotlight recently because of the megamergers between Disney and Capital Cities/ABC, and Westinghouse and CBS. The fledgling company also illustrates the problems that crop up when elephants attempt to dance. Originally a joint venture between Sony America and the Warner Music Group - hence the "SW" moniker - Schulhof bought out his partners last March. Forbes originally estimated the capitalization of the venture at $25 million.

In watching the partnership dissolve, Solomon, herself a former Warner executive, caught a glimpse of the turmoil across the aisle that eventually would unseat WMG top gun Bob Morgado and several of his ranking lieutenants.

"We were interested in growing the business very aggressively, while they were preoccupied with internal issues," Solomon says. "And their mandate was much narrower; it was focused almost entirely on music. My orders (from Schulhof) were to create a broad-based entertainment business." Solomon adds that SW soon may take a minority partner - talks with prospective partners are underway. Rupert Murdoch's Fox Network is said to be sniffing around. An IPO is a goal at some point in the next few years.

Clearly, the Sony high command has lofty hopes for yearling SW. Though $14 billion Sony America helped its Japanese parent to secure a beachhead early in U.S. entertainment, its performance has been mixed. Music- and entertainment-related sales through CBS Records hit $8.7 billion in the latest fiscal year - Sony picked up the unit at a Larry Tisch fire sale in 1988 for $2 billion. But the company is smarting from the $3.2 billion loss it took on movie operations. With rivals fusing studios with networks, analysts say, Sony America remains somewhat disadvantaged in terms of distribution.

"Last year, Michael Eisner said that content is everything," Solomon says. "Then he cut the largest distribution deal in history," purchasing Cap Cities last month for $19 billion. The parable underscores a point: While SW won't be an Alaskan pipeline for Sony, its traditional radio, broadcast satellite, and digital cable venues are clearly intended to be more than a spigot. Aware of allegations in the press last year that a Schulhof-led investor group used its radio stations as a platform for Sony artists such as Michael Jackson, Solomon hastens to point out that SW's music jocks include performers from EMl, Polygram, and other recording companies. "Our producers and programmers have complete autonomy," she maintains. "You can't stealth-sell consumers. It's a quick way to turn them off."