Thursday, June 18, 2009

The Downfall of the Brand

We've now lived long enough to see General Motors go bankrupt. So, how important is that event to most Americans? Since the “brands” are GM’s products it’s Chevrolet, Pontiac, Oldsmobile, Buick, and GMC Trucks that will take the hit.

I got to thinking of the Merle Haggard line, “When a Ford and a Chevy would still last 10-years…like they should.” Then I realized: I’ve never heard a song about a Toyota or a BMW.

The Beach Boys: She’s real fine, my “Beemer” or “Fun, Fun, Fun, till her Daddy takes the Lexus Away” or “Hey little Hyundai, Don’cha know you’re gonna shut ‘em down”

Jan & Dean: “I was cruisin’ in my “Toyota” late one night when a “Mini Cooper” came up on the right” or “Little Nissan, you’re really lookin’ fine”
(See REAL lyrics at bottom of this page, if you don’t remember the songs.)

You get the picture. When GM began buying up car companies, it bought everything: manufacturing processes, inventories, Intellectual Property and most important, those brand names. How cool! To amass most of America’s favorite car brands under one roof.

Almost immediately, GM began looking for economies of scale. The found they could save millions by consolidating manufacturing and design functions. Then, they began “vertical integration”—that is, buying up companies and using them exclusively to produce the frames, bodies, steering columns, air conditioners, engines, transmissions and just about everything else.

Before too many years, GM was producing “name-plates”--almost identical car models with different brand “name-plates” on them. It all worked for many years because of American’s loyalty to their favorite brands.

This isn’t exactly a scientific survey, but everybody I’ve asked has said they’re rather have a Chevy or a Pontiac or Buick, but they own Toyotas, Nissans, BMW’s and Lexus’ because “they’re better cars”.

That all-important brand name has failed. Most people still love the idea of being surrounded by American Steel, but now it’s Japanese, German, Korean and Chinese steel wrapped around them during their commutes.

What does that possibly have to do with Radio? Well, compare GM to Clear Channel, Cumulus, CBS Radio, Regent and all the others. What have they done?

They bought brand-name radio stations. They bought companies that allowed vertical integration of programming and services, even music scheduling software and automation systems. Before long, one station sounded pretty much like the others.

Here’s the point: GM abandoned “content” and focused entirely on branding. We’re seeing this at Corporate Radio Groups, too. Content has been sacrificed—jocks replaced by out-of-market voice-tracks, syndicated shows or just an image voice. Corporate Radio Groups have abandoned “content” and focused entirely on “branding”.

And today, GM is bankrupt.

Here’s the big difference: there aren’t foreign manufactures competing with U.S. Radio Stations for their audiences they way they are for GM’s customers. But that’s changing, too. Internet Radio, mp3 players, cell phone apps and music downloads create competition for cume. MySpace, Facebook and Twitter create competition for Time-Spent-Listening.

GM’s bankruptcy is something Radio should be watching very closely. GM’s time is probably up. Radio still has a ticking clock.

What will we do with the time we have remaining?

Beach Boys: “She’s real fine, my 409” (409cc Chevy Corvette engine); “Fun, Fun, Fun till her Daddy took the T-Bird (Ford) away”; “Hey Little Cobra (Shelby, then Ford Mustang), don’ cha know you’re gonna shut ‘em down”

Jan & Dean: “I was cruisin’ in my Sting Ray (Chevy Corvette) late one night, when an XKE (okay, that’s Jaguar—but the Corvette won) came up on the right; “Little GTO (Pontiac), you’re really lookin’ fine.”